Atomix: Behind the Concept

Behind the Concept

It’s been an exciting time starting and building Atomix! For those of you who haven’t heard about us yet — which is probably most of you — here’s our origin and background! (12/10/21 update — check out our news coverage!)

“Atomix started from our realization that the process of shipping eCommerce orders has been too inefficient & systematized. We had two options — on one hand, doing it ourselves (‘in-house’) was too manual and time-consuming; and on the other hand, working with traditional 3PLs seemed to be a nightmare. Atomix set out to change the standard operating model and create the most personalized software platform & service provider to support modern-day eCommerce brands.”

First, the essence of starting a business is to find a problem you’ve experienced and create an innovative solution that resonates with customers.

While this can take many different shapes and forms, I’ll explain how we started and the importance of (i) innovation, (ii) making sacrifices, and (ii) having a clear vision. We believe, in order to create value for our customers, having all three elements is imperative.

For me, logistics and eCommerce have been my entire life.

• I grew up in a small business family — my father, alongside his brother and business partner, started a last-mile logistics company in Milwaukee, WI, and have grown the company to 150+ employees. They have inspired me, and their insight has been invaluable.
• After graduating Cum Laude from the University of Pennsylvania, I spent two years working on Wall Street in the Consumer Retail Group at CIT Bank covering retail and restaurant businesses. From franchise owners to Toys”R”Us, e-commerce and technology had an unrivaled impact on their business models and opportunities.
• After CIT, I joined an 8-figure, bootstrapped eCommerce brand (State & Liberty), where I learned the foundational principles on how to scale a successful brand. At the time, I made the (obvious) realization that eCommerce was going to be the future of retail, and I was going to be a part of it.

Entrepreneurship: Growing Up

While I wasn’t planning to enter the logistics industry as a child (does anyone?), my father’s ability to start, build and lead a last-mile logistics company always captivated me.

Through entrepreneurship, he taught our family the importance of sacrifices, taking risks, and creating value. I’ve always held onto his ability to view problems/challenges as opportunities and to learn through trial and error. As a result, I naturally gravitated towards creating business ventures.

In high school, alongside my older brother, I started my first business — we found a business mentor, incorporated our business, and hired our best friends to help coach and train rising lacrosse players. We even consulted with parents on the industry/recruitment process (and yes even they paid us!). The reason being —despite being in our late teenage years, we grew up playing on the first-teams in Southeastern WI and were fortunate to have had the experience of receiving scholarships to attend boarding school and eventually becoming captains of our D1 Teams. This experience eventually led us to our next venture where we designed and prototyped a software app at UPenn.

Enter Atomix: Ecommerce x Logistics

Seeing the logistics industry from the inside out at my father’s company, I quickly realized the gap between Third-Party Logistics companies (3PLs) and the eCommerce brand I helped scale.

“Instead of operating massive traditional fulfillment centers — which are organized around servicing thousands of brands — we structured our model with individual micro-warehouses tailored to each brands’ preferences. The Micro-Pods improve the customer experience with more reliability and are easily scalable at significantly lower operating costs.”

Previously, eCommerce Brands had the decision between shipping orders themselves (“in-house”) or utilizing a 3PL/Warehouse/Fulfillment Center (“outsource”). The process and software systems to find and work with a consistently reliable and scalable partner were broken.

More specifically, I noticed a few trends —

(i) Complexity: logistics is an “ambiguous” concept for most early-stage brands and easy to misunderstand,

(ii) Seems simple: fulfilling orders is a simple concept — pick, pack and ship a box. However, this process can be very time-consuming for lean times and eventually reaches a tipping point. (For example, it’s easy to use your garage as a warehouse and drive to the Post Office for the first few hundred shipments; but, in terms of scaling inventory management, optimizing business processes, focusing on higher returning activities (sales/marketing), or wanting to spend more time with family, the decision becomes more difficult),

(iii) Highly fragmented industry: ~5,000 incumbents with no clear market leader. Most “Mom and Pop” 3PLs (Third Party Logistics) do not have the technology or infrastructure to support scaling DTC brands. The reason is — B2B wholesale has been the standard model up until the rise of eCommerce fulfillment centers started in the late 1990s. On the other hand, some of the larger “technology-focused” fulfillment centers severely lack the customer experience required for smaller and high-growth e-commerce brands, and lastly,

(iv) A distinct language barrier exists between 3PLs and eCommerce brands: eCommerce brands and 3PLs fundamentally operate on different systems (pen & paper vs. scalable software systems). eCommerce brands use modern software systems and content creation strategies that are foreign concepts to traditional 3PLs.

So with this in mind, and our clear view of the underserved market, we immediately got to work.

After speaking with potential customers in my network, gathering data, and learning more about their pain points (which I also experienced first-hand), I knew how big the opportunity could be and how we would approach the problem.

I asked myself a simple question: Could we build a company to systematically re-align interests between a fulfillment partner and scaling brands? The core problem we realized was traditional 3PLs have been built for their own interests by solely focusing on efficiency and daily order throughput. As a result, the customer experience, as well as the employee experience, becomes secondary.

In practice, this meant we’d have to design a proprietary technology platform, own our own warehouse, and create a system to give direct visibility and insight to the ground floor operations. We believed the combination of (a.) user-friendly technology platform and (b.) high-quality, personalized services would be game-changing for the industry.

We launched in August 2020, and after a few months of working with several customers, we developed our innovative model. Instead of operating massive traditional fulfillment centers — which are organized around servicing thousands of brands — we structured our model with individual micro-warehouses tailored to each brands’ preferences. The Micro-Pods improve the customer experience with more reliability and are easily scalable at significantly lower operating costs.

Here’s a high-level depiction of the difference:

While this may seem simple enough, it’s incredible to see our growth from early adopters to over 50 customers today. (And several incumbents have balked at our mission and solution, which is expected, as most “innovation” seems unrealistic early on. That is, if you miss the converging trends of cloud software capabilities with the future of the logistics market.)

We’re fortunate to have established and up-and-coming startups reach out to work with us — e.g. Fourth Wall, which is a selling platform that works with “creators” and some of the biggest name celebrities. And we’re grateful for the first companies who believed in us to refer so many other brands and founders to us. Our top customers span the United States, with one in LA and another from NYC. Each brand has different preferences, which is why we strive to provide the most personalized and customizable fulfillment solution.

Here’s a brief overview of how our process works:

1. Consultation:

• After signing up, we primarily evaluate our brand partners by analyzing their historical order volume, SKUs, and current operations. In addition to their unique requirements, expectations, and goals.
• We provide an estimation for the timeline for the onboarding process, the amount of capacity and training required (if applicable).

2. Design:

• After consulting with the brand, our team executes setting up the necessary infrastructure and processes to effectively begin operations (if applicable).
• This is either predetermined or completed on-demand depending on the business's size.

3. Preparation:

• Depending on the situation, if we don’t currently stock the proper packaging or supplies, we source it from our network.
• We provide a technology platform to manage the end-to-end process — orders, inventory, warehouse receiving, and returns.
• We set up our direct lines of communication with the warehouse team and the customer support team.

4. Go Live:

• Once our system, processes, and team members are in place, we’re ready to begin operations. This can be as short as three days and up to two weeks.

Atomix: Sustainable Growth

While we’ve grown substantially from our first windowless, 100 sq. ft. office (pictures to come), we are only just beginning. I’m fortunate to be surrounded by supportive family members, advisors, and a growing team (I couldn’t do it without my childhood best friends — one graduated with a CompSci. degree from Carnegie Mellon and the other was a Sergeant in the military.)

And on the growth point — it’s important to understand what our priorities are. We are incredibly focused on sustainable and high-quality operations. Too many times have we witnessed high-growth startups in operationally-intensive businesses employ a growth-at-all-costs model. We believe this can be detrimental to building a long-term business.

Trade-offs of course exist (and investors have approached us), but we know one thing — working twice as hard, for twice as long will be imperative for our culture and incredibly rewarding in the long run.

I believe the only way to stay true to our mission — to fundamentally change how eCommerce brands launch, grow and scale without complexity or cost-intensive operations — is to care deeply about our team, our customers, and our vision while creating an inspiring place to work that people love.

We will continue to work tirelessly hard on creating a more sustainable supply chain for small businesses. One that is not only efficient, but able to drive loyalty among brands’ customers.

Additionally, we remind every prospect that it might not be the right time for their brand. Our operations and their requirements may not be best suited for each other at the current moment. But since we’re just getting started and plan on doing this for a very long time. we’re confident the right time will happen in the future.

We operate this way because our promise since Day 1 has been to give back control to brands. We can only accomplish that with high-quality execution and aligned interests.

Lastly, we’ll be launching a new website in the coming weeks, expanding to a much larger facility in Q4’21, and opening an additional facility in 2022 (West Coast) to continue to meet the growing needs of our customers.

If anyone ever has questions, please do not hesitate to reach out to our team. We’d love to hear from you!

The best email to reach out to — team@atomixlogistics.com

Or visit our site and let us know what you think— atomixlogistics.com.

Thank you for your time and if you’ve made it this far, it means so much to us and we can’t wait to build a better future for modern brands and small businesses…but now, it’s time to get back to work!

Very Best,

Austin & the Atomix Team

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