Saltbox and The Consumerization of Logistics

Childhood Avon Deliveries

I spent much of my early childhood living with my grandparents. They were two hardworking people and provided a comfortable life for my brother and me, but it didn't come easy. By day my grandmother was a coin laundromat manager, but her side hustle was selling Avon products, a home-based direct-selling model, which was popular back in the 80s.

I vividly remember her Avon business because I played a small but critical role in operating it. Every Sunday afternoon, we'd load up our pickup truck with that week's orders, and my brother and I would make the 20 or 30 deliveries to our customer's doorsteps. Little did I know I was a burgeoning last-mile courier at age 7!?

As my grandmother's business grew, she eventually had to take over my bedroom as her makeshift warehouse, forcing my brother and me to bunk together in the same bed. It was a harmless sacrifice for the benefit of living an otherwise happy life, all thanks to my grandmother's thriving small business.?

In retrospect, it was an incredibly early lesson in the ideals of small business but also the humbling realities of logistics. Although I'd never heard the word logistics at age 7, I was keenly aware that the activities we were engaged in were taxing on our family. These memories sit at the foundation of my consciousness and serve as a constant, albeit simple, reminder of the problems Saltbox seeks to solve and the hardworking, everyday entrepreneurs we're committed to supporting.

Our Retail Economy is Rapidly Evolving

In many respects, my grandmother's Avon business represented a very early example of a logistically-driven small business, which was clearly the exception rather than the rule at that time. Until the mid-2000's retail commerce was an almost entirely analog activity, i.e., the customer handed the merchant money, and the merchant gave the customer a product, all within the confines of a retail store.

While this analog modality of commerce continues to represent the majority of retail commerce in the U.S. today, particularly for small businesses, the landscape is quickly evolving. Today, e-commerce, or, speaking more broadly, digitally & logistically-driven commerce, represents approximately 20% of our retail economy. But, more importantly, e-commerce is expected to grow at ~15% CAGR for at least the next decade, representing some ~$10 trillion in GMV Globally by the year 2030. Therein, it is expected that small businesses (specifically those under $10mm in annualized revenue) will continue to represent some 15-20% of this commerce activity, representing millions of small businesses and trillions of dollars of economic activity.?

This incredibly rapid growth trajectory of digitally & logistically-driven SMB commerce is leading to a transformational rise in demand for the technology, logistics services, and physical infrastructure necessary to enable such activity. Simply put, we believe that in the decades to come, virtually all businesses, large and small, that are engaged in any form of retail commerce will need to be digitally and logistically enabled to remain competitive.

Thankfully, companies like Shopify, Stripe, Etsy, and many others have made tremendous progress over the past decade in providing the necessary digitally enabling solutions to power SMB e-commerce growth. As a result, starting, growing, and scaling a digitally-driven commerce company has never been easier.

Unfortunately, the same is not true concerning logistics. While the largest e-commerce operators in the world can afford the massive capital investments required to build their own best-in-class logistics infrastructure, and the thousands of smaller enterprises are well-serviced by a rapidly growing ecosystem of modern logistics service providers, SMBs have been left to fend for themselves. They're struggling to keep pace as the economy around them advances via a much more capital-intensive, operationally-intensive, and logistically complex form of commerce.

Today, SMBs Are Pushed to The Fringes of The Logistics Ecosystem

These hundreds of thousands of small businesses have effectively been pushed to the fringes of the logistics ecosystem, unable to find the essential infrastructure, services, and capital necessary to support their growing needs. Instead, they overwhelmingly find themselves operating out of basements, garages, self-storage facilities, and the like–environments barely welcoming to basic human presence, let alone logistically functional and operationally efficient. In their worst moments, they literally find themselves begging for space on Craigslist. Similarly, they must resort to assembling piecemeal and ad-hoc solutions to their broader logistics needs, as no purpose-built solutions are available to them.

From our perspective, holistically solving for the logistics needs of the modern small business represents not only a once-in-a-generation business opportunity but also a societal imperative. These companies and their hundreds of billions of dollars of economic activity, which we expect to more than double over the next decade, represent our economy's beating heart and collective entrepreneurial spirit. Simply put, our small businesses are too important to lose. But unfortunately, that is precisely what will happen if we do not find new and innovative ways to democratize access to the critical logistical capabilities that our modern economy demands.

Saltbox exists for this very purpose. Our mission is to democratize access to logistics. Our end-to-end solutions power the logistics journey of small businesses from startup to scale, and our products and services are approachable, comprehensive, community-focused, and human-centric in their design, reflecting our customers' core values and ethos.

Our deep understanding of the needs of our customers is developed through our first-hand experience as e-commerce entrepreneurs who have struggled through the journey ourselves.

Our struggles led us to start Saltbox so that millions of others will encounter much less operational friction and much more boundless opportunities.

Saltbox is Ushering in The Consumerization of Logistics

In some respects, our strategy could be summarized as the consumerization of logistics, turning the abstract concept of logistics, which has historically been the necessity of an important but understated corner of our economy, into one which is made so broadly approachable that it can readily service the millions of small businesses that will need to be logistically enabled in the future.?

As our tagline states, 'We Love Your Logistics.' The elegance of this phrase is represented in the fact that many of our customers hardly know what logistics even means (at least in a strict sense), and yet they're comforted and welcomed by the fact that Saltbox is an approachable and empathetic brand, but also a highly capable partner who loves their logistics. We believe this positioning has great power, not the least of which is its authenticity.

Where I'm Coming From...

Whereas my childhood memories of supporting my grandmother's Avon business sit at the settled foundation of my consciousness, my adult memories of running my own e-commerce business immediately before founding Saltbox sit at the still-painful forefront.

Motivated by a lifelong passion for small business and a deep interest in the future of commerce, In 2016, I acquired a beauty products brand named True Glory Hair. The company was started out of the trunk of the founder's car four years earlier. And while he'd built an incredibly strong brand that experienced rapid growth in its early years, operational challenges had begun to slow the business. At the time of the acquisition, nearly all of the brand's revenue came through its three retail stores. Thus I naturally saw e-commerce as a promising growth opportunity. I was confident that the simple playbook of injecting more capital, modernizing our operations, and introducing an e-commerce strategy would be a winning formula.

Thankfully, the strategy worked. We grew the business by nearly 400% over the first 3 years--a proud and profitable accomplishment. What we didn't expect, however, was the intense operational pain we encountered in the course of solving our logistics needs. Our first 'warehouse' was the break room of one of our retail stores. Our second was a self-storage unit (from which we were ungracefully asked to leave). Our third was a very old office space that oddly had a roll-up door and somewhat reliable carrier service but was otherwise an uncomfortable and embarrassing place to work. Adding insult to injury, my basement was our photography studio, my family and friends were our peak-season labor, and my personal credit card was our inventory financing lender. Not only was it all terribly inefficient, but it was frankly just unbecoming of the profitable and growing business we'd built. I felt strongly that we deserved better.

In contrast to the relative ease and elegance of the digitally-driven aspects of our e-commerce business, everything in the physical world was wrought with friction. Despite that, my team and I showed up every day, holidays and all, and got the job done. We had no choice.

My memories of those days serve as the inspiration behind the slogan, which can be prominently displayed on every Saltbox location's walls -- 'Always Be Shipping’. This simple statement is an homage to the unrelenting reality of running a logistically-driven small business, but more importantly, to the persevering spirit of the dedicated entrepreneurs to take on the task.

One of the more subtle but perhaps most profound feelings that my employees and I experienced during those years was a sense that we, as a logistically-driven small business, were alone in our struggles, pushed to the fringes of not only the logistics ecosystem but the entrepreneurial ecosystem at large. While our 'tech' peers, many of whom had nothing but a vision and a laptop, were comfortably sipping fresh lattes at their neighborhood WeWork, we were toiling away running a highly successful business in conditions that most would find entirely unacceptable. Beyond the measurable impacts on our business, it felt deeply unfair in a way that I simply couldn't ignore.

Fewer Bumper Stickers, More Pallet Jacks

For as much as our society celebrates small businesses, my experience, along with hundreds of thousands of logistically-driven small businesses, reflects a very different reality. To truly thrive in the years ahead, small business needs fewer charming posters and words of encouragement and more pallet jacks and working capital.

At Saltbox, this understanding is built into our DNA. We don't believe in pumping our members with encouraging words--we'll leave that to the corporate PR campaigns and "We Love Small Business" stickers. Similarly, we don't believe in marketing the virtues of 'community' despite the fact that we're building an incredibly resourceful one. Instead, we believe in rolling up our sleeves and working alongside our members to create real operational leverage in the hardest parts of their businesses. This is what it takes to democratize access to logistics for an entire generation of entrepreneurs. This is our mission, and this is exactly what we're going to do.