Our Warehouse – Updated Pics, Order Packing, and the Future

Our growth feels so slow and steady sometimes that I forget that we’ve actually grown a ton in a short amount of time. The visual representation of this is our warehouse.

Updated Pics

This is what our product selection looked like just after we moved in on 2/25/2008:

2008 Warehouse

Pretty bare. Like an empty cave. Compare that to yesterday:

2010 Pure Adapt Warehouse

2010 Pure Adapt Warehouse

2010 Pure Adapt Warehouse

2010 Pure Adapt Warehouse

Inside the little room there’s our shipping computer, laser printer, label printer (courtesy of FedEx), and printer/scanner/copier/fax that we bought because we have to send so many faxes to our vendors (eh):

2010 Pure Adapt Warehouse

Order Packing

Not much has changed since November of 2008 when I wrote a post about how we pull and pack orders. However, while I was taking the pics I realized that if I got up on top of one of our tables I could get a birds-eye view of almost the entire process. I couldn’t resist.

This is what it would look like if the iGuy tried to pull an order for us:

2010 Pure Adapt Warehouse

Essentially:

  1. The invoices are printed out along with the FedEx labels, both in alphabetical order so that each pile is in the same order. Now that we’ve done away with international, Tastefully Driven, and Amazon, it takes less than 5 minutes to process and print all of the orders regardless of volume.
  2. The puller (in this case the iGuy) takes the top invoice and top shipping label, checks to see if the name matches, and then proceeds to pick a box. Our box size system suggests a size. I’d say it’s right 85% of the time now.
  3. Because of our new layout and inventory zone system put in place last Summer, the invoice is ordered in the order that the products appear on the shelves, sending the iGuy in a zig-zag pattern through our warehouse to get all of the items for his order.
  4. After he’s finished, the iGuy checks his order, puts it on the table, and moves on to the next one. A checker will review the order and pass it along to the packer who seals it, puts the label on, and pushes it forward onto the table that is in front of the garage door where FedEx backs up to pick up the packages.

The Future

How long are we going to stay in this location? My answer: as long as we possibly can.

We view our warehouse as a competitive advantage for a number of reasons, namely how affordable it is. We can probably expand a few more rows with our current design. We just freed up a few shelving units by clearing out all of the TD products. By early 2011 we’ll probably need a full redesign. We plan on turning our rows the other direction and putting the shelving units back to back. The shape of our warehouse lends itself to fitting more shelves in the same space if we go in this direction. By going back to back you can eliminate one aisle for every two rows. We estimate that this will allow us to at least double capacity (plus, remember that inventory does not need to grow as fast as sales – you can double in sales and go up only say 25% in inventory if you order more frequently and do a good job of projecting sales).

The lease itself expires in February 2011. I see no reason why we won’t sign the new lease that will put us there until February 2014. We have a clause that allows us to renew at essentially the same rate for another 3 years (I say essentially because the increase is pennies on the dollar). We’re going to request a few minor improvements, but other than that we’re happy. Our proprietor also owns a ton of warehouse space in the area and we have a clause that allows us to break the lease at any time for no charge as long as we move to another one of their properties…a nice way out in the event that we need more space than anticipated.

Overall, I don’t think that we could have found a better fit. The place we almost moved into in the fall of 2007 would have been a disaster. Even if we made it out of that winter without going broke (I’m not so sure we would have), we would have definitely run out of space and we would have definitely had a hell of a time getting freight deliveries without a shipping dock.

In a lot of ways, we lucked into this place. Despite what some people will tell you, luck definitely plays a role in becoming successful. We’ve had our fair share of bad luck since starting the business. This warehouse, however, was one of the lucky things that has helped propel our growth.

22 comments on Our Warehouse – Updated Pics, Order Packing, and the Future

  1. Dale Ting says:

    Pretty cool Adam… Far cry from living in your parent’s house!

  2. Tim says:

    Quite the change since I’ve seen your warehouse. What I find most impressive is that this increase of inventory is compounded by the removal of TD’s inventory – very cool!

    Based on your last paragraph I think you would enjoy reading Outliers by Malcolm Gladwell, we have talked about him in the past and I think Bling and Tipping Point are over-rated and Tipping Point is not as relevant as when it was published. The bizarre twists of fate and circumstances that lead us in one direction over another is really unbelievable, Gladwell does a great job of defining some huge ones. For example I think our entire generation is pretty much screwed, the 30-18 year olds out there now really did get the short end of the stick when it comes to opportunity. We are way too young to have been on board as a true computer pioneer and we are a little too young to have been on the internet frontier, not that there aren’t exceptions, but as a whole we missed out on that too. Now we are getting too old to be able to be on board for the next big craze, chances of there being a Bill Gates net worth individual from this generation is VERY slim. While I think there are future opportunities, such as alternative energy and biomed. advances, but we are going to be just a little too old to be in the programs that will shape the future. The point of all this, is luck often works in mysterious ways and I’m not saying no one from this generation will be successful, but it won’t be to the magnitude seen in the past.

    • Adam McFarland says:

      Tim –

      I just added Outliers to my Amazon wish list…which means there’s a 50/50 chance I’ll get to it in 2010. Just haven’t had as much time lately for reading. 15 minutes at night doesn’t get me very far 🙂

      I often wonder how different I’d be if I was born even 5-10 years earlier or later. I think the answer is quite a bit.

      • bobby samsel says:

        i kind of disagree with you guys. i think there is always opportunity in every generation. every generation in history, without exception, has yielded some amazing individuals.

        zuckerberg or whatever his name is has a net worth over a billion dollars right? and he’s in that 18-40 demo. plus i think there are even more examples outside the u.s.

        i just kind of think the type of person you are makes more of a difference than circumstances. although i do agree timing always helps.

        • nethy says:

          It’s a combination of both really.

          No one created fortunes or companies of the magnitude that Gates did within 10-15 years in previous generations. No one created huge fortunes within a lifetime (except by war, which doesn’t count) before the industrial revolution.

          Most cities doen’t have as many self made multi-millionaires as San Fransisco or New York.

          Certain times and places have cerain opportunities. Only few really take advantage of them, but without these opportunities things don’t usually happen

          It’s not a coincidence that all those great masters lived within one or two generations and one or two days walk of each other in 14th century Florence. For whatever reasons, that place and time provided opportunities to become a da Vinci or Michelangelo.

          Incidentally, I disagree with Tim. I think it always seems like that from the present. We’re still moving fast.

          • Tim says:

            I think you misunderstood me Nethy, we will move forward there will still be enormously successful people and there will be significant changes to our way of life. That said the chances of there being as many billionaires in the US(using the current value of the dollar) from our generation is just not going to happen, we would already had to have been on our way to that end. The Gates, Allen, Jobs, Dell, Ellison, Ballmer, Schmidt, Bezos, and so on. Ultimately time will tell, we can argue to we are blue in the face but we will see. If I were a betting man, I would not be betting on the 18-30 crowd for creating a lot of ultra-high net worth Billionaires – and as I mentioned below, I think it’s a fantastic thing that creates a TON of opportunity for people in the 8-9 figure net worth range.

  3. Dave says:

    Great stuff, very cool insight!

    I know you already bought the printer for the fax, but why not use a service like eFax?

    • Adam McFarland says:

      Good question Dave.

      I’ve definitely made the argument for it before. Previously Greg was just using an old fax machine at his parents house whenever he needed to send one, so he didn’t have a scanner. We had an extra phone line with our Verizon plan (includes DSL + 2 phone lines) so it just sort of made sense to use the extra line as a fax line and save a few bucks. Even if we went with eFax, we still would have needed to buy a scanner. Plus all things equal, it’s probably a little simpler to just feed the sheet in and dial a number. Scanning and uploading can be a pain, especially if it’s a huge document.

      All of that said, I think eFax and services like that are great and if I personally ever need to send faxes from home that’s what I would do…although I don’t foresee very many faxes in my future 🙂

  4. Rob says:

    Adam, wow, thanks for the look inside your warehouse – it really looks like things have come along a lot. It can be difficult to see how much you’re progressing when you’re in the thick of it; even though you know all the graphs go the right way and turnover is up it’s great to see such a strong visual change.

    Couple of ideas – firstly, I think it’s probably better to move your shelving units and put them back to back sooner rather than later, so that you have fewer things to move. Another thing that might be worth considering is to move the heaviest items to the end of the picking run so that they don’t need to be carried so far – if you perhaps have the shelving for this separate from the rest of the shelving that will allow you to add stuff in-between when the time comes, rather than having to shift everything along a bay or heavily ‘defragment’ your shelving at a later date.

    I think the warehouse was a great choice – whether it was down to fate or luck it certainly sounds like you did well not signing on the other place!! The break clause in the lease also sounds ideal – I can’t think of a better situation.

    As for the 18-40 debate, I think some of the points are good; certainly here in the UK it feels very much like the lost generation – jobs are very hard to come by, taxes are up and education is more expensive and as you say, it sort of feels like we’ve missed the bandwagon. However, from our generation have also arisen things like facebook, iphone apps and free software allowing you to grow a business more cheaply. I think when you look at things like that, we’re in a great position to be productive and prosperous.

  5. Tim says:

    I agree with that last paragraph a lot Rob. I don’t think there will be a Bill Gates of our generation, there just have not been enough significant break-throughs to create a similar opportunity. That said, while I have nothing against Mr. Gates I would much rather see 530 entrepreneurs worth $100m then a single Bill Gates worth $53b(that is the current estimate) it’s REALLY staggering when you look at it that way. In other words, I am not saying our generation is destined to be a bunch of bottom feeders stuck at entry level positions. I think a lot of us will experience enormous success, simply not on the magnitude of certain wealth producers today.

  6. Dave says:

    The main thing about today’s business is that it’s much more global. As more and more people and countries get connected, there’s way more opportunity to generate revenue. I guess it goes hand-in-hand with inflation, but the customer base for a company can be so much larger than it was 10 years ago, and that means much more money. Think about just adding China alone to the mix of customers.

    Years ago it was unheard to get all these venture investments at huge valuations in the hundred millions, and even billions. Now we don’t even blink when a startup like Groupon gets an investment that valuates them at $1.3b.

    • Adam McFarland says:

      Great discussion guys. Rob’s last paragraph kind of says it all.

      The thing that really frustrates me is the student debt. Our parents generation had much more affordable education, and the next generation will have something different because it’s impossible to continue the education inflation without there being some sort of bust. Whether it’s an emphasis on web based schools or community colleges or state schools I don’t know, but my private education was ~$120k and according to the RPI website that’s up to $140k PLUS room and board (I lived at home). That’s almost impossible to pay back. I was lucky enough to have some scholarships and parents who chipped in a lot, so I’ve only got one small loan left, but I know a lot of people who are $50k+ in debt. Paying a few hundred dollars a month doesn’t wipe that away very quickly. Yes – it was our choice to go to an expensive school, but I feel like the general sentiment from our parents and advisers is “go to the best school you can and figure out how to pay for it later because you’ll get a great job right out of school”, which totally screwed our generation up. /end rant

      To answer Rob’s question: we’ve had the “heavy items” debate several times. For now we keep them grouped by product (so all 3 sizes of a product – 16oz, 32oz, gallon – are on the same shelf), but I’ve always sort of been on the side of moving them to the location where there’s the least work involved for the puller. When we do the re-design I’m sure we’ll have at it again 🙂 The advantage of keeping them in the same location is that it’s easier to unload the products when we get all of them in from the same brand, plus it’s easier for employees (and us) to remember one location for each product instead of multiple locations.

      • Joshua Holt says:

        Adam, I definitely agree that the conventional wisdom was to “go to the best school you can and figure out how to pay for it later.” Furthermore, the system can’t support the unlimited bubble of the increasing costs of academics. As a lawyer, I took on significant debt to finance my education. I would still make the same decision today, but it’s going to take a long time to overcome the student loan burden and it certainly does set your starting point back quite a bit.

        I’m curious to see how future generations will handle paying for an education.

      • Tim says:

        I know I’ve derailed this topic enough, but that is an interesting subject, the skyrocketing costs of education. Could you imagine being 20-22 right now, getting out of a 4-6 year program to face this job market? Seriously, what would you do? Very limited applicable experience 95% of the time, tons of competition, and your network is in the same shoes as you so there is little your network can do to help you land a job. Factor in rising costs and it creates a very unusual climate, how do young people justify the expense if they can’t apply it or capitalize on their investment?

        Who would have thought a blog post about a warehouse would take us in this direction!

        • Adam McFarland says:

          It’s scary to think about Tim. It really can set back your career. I believe your loans kick in 6 months after you graduate. Once that 6 months is up, you’re on the hook for hundreds of dollars a month (I know a few people with masters degrees that are paying almost $1k/mo!). If you can’t consolidate, you could be paying variable interest rates or paying like 15 different institutions. Finding a job in any industry is hard. Imagine not being able to take a low paying entry level job in another city because you can’t afford to live off of it and pay your loans! It definitely happens. You get tied to your parents house and have to get the best job you can locally, even if it’s not in your field. You stunt your growth because you end up working at the mall or bartending, and then one day you wake up and you’re 30 and you’ve still got 20 years left on your loans and no career. Or, even if you have a career, making $30k or $40k isn’t enough in a lot of areas, but if you add huge amounts of loans on top of that it’s impossible to live. We all have to be responsible for our actions, but I somehow feel in this scenario that a lot of 17 year old’s are being guided horribly wrong by a generation of parents who don’t understand our current economic climate and a bunch of greedy institutions who have inflated the value of a private school education for the average student. I think advanced institutions are great for engineers, scientists, lawyers, etc – but that’s not the majority of people. The business, economics, and liberal arts majors of the world need a better/cheaper alternative.

          And yea, it’s awesome that this conversation broke out on a post about our warehouse 🙂

  7. Rob says:

    Education’s a bitch eh? So many of my friends are suck jobless, or in low-paying dead end jobs. They’ve got great degrees from great universities but nobody’s hiring right now, so here they are, 1 or 2 years out of school and cold calling for credit card companies, or doing admin. We got screwed. Our parents don’t appreciate the problems our generation faces – they simply can’t comprehend it. My girlfriend is a financial adviser for students and their workload has increased tons. Usually it’s assumed that students will work during weekends/evenings to help fund themselves, but there simply isn’t the work going now, so they have to go for financial aid, contingency funds etc. I know someone that went for an entry level admin position with a salary of £15k ($23k). All it required was 5 GCSEs (tests taken age 15 – most people have 8-12). They got 1200 applicants for the post. I know someone who applied with 11 GCSEs, 4 A-Levels, a degree from a top university AND 3 years experience who didn’t get shortlisted. It’s staggering how far below your ability you have to go at the moment to find work.

    Adam – good point about keeping the similar items together. I suppose at the end of the day you need to do what’s most efficient, both for loading and unloading. What do your warehouse employees think?

    Tim, gotta agree about the Bill Gates comment, though it’s not as if he is the richest person in history either – his wealth pales in comparison to Kings, Queens and Tsars of times gone by, and Carnegie, Ford and Vanderbilt of more recent times. I think great wealth comes soon after a revolutionary change – whether that be oil, railroads, computers or something else. Everyone seems to think the next big money will be in Biotech, but I wonder if it’s still so easy for one man to amass so much wealth? Most changes now are more evolution than invention and take many great minds. No longer do we have the cliche of the lone inventor or mad scientist changing the world – yes we have occasional blips, like twitter, but progress is much more of a collaborative effort. Is this a bad thing? Not necessarily so. How useful is it to have a personal net worth of more than the GDP of many countries anyway?

    I’ve been thinking a lot over the past few days about success in business, what enables it and what prohibits it. I think someone’s comments about Zappos got me going on it…

    Firstly, I think you need to have a large enough addressable market. That’s obvious. Next, you need to execute really well and work your 20 years to become an “overnight success”. But, could one have more (financial) success in a smaller market with less competition? Adam – let’s say your addressable market is $X annually, and you get a 10% market share. What if someone else came along in a different industry which had a smaller market of $Y and got a 50% share, but their turnover matched yours; who would you deem more successful? Should this dissuade or persuade us to enter smaller/bigger markets? Is it worth spending your life carving out a 50% market share when you could work in a different industry with more room for growth? Could you realise that potential in the face of increased competition?

    Knowing that the companies with the highest turnover and individuals with the highest net worth generally work in the largest industries (oil, consumables, computers.. generally things that 100% of the worlds’ population would like AND that have repeat purchases) should we assume that it is from a similar market that the next ultrabillionaire will arise?

    • Adam McFarland says:

      Wow Rob really good points. I wonder what market is untapped enough to be comparable to oil or consumables or computers? Like Dave mentions below, if someone solves a big cleantech problem like clean electricity/fuels for cheap, it may become widely adopted and create great wealth. Even there though, there are so many people competing that it’s hard to imagine one solution that trumps the rest. It almost seems like that opportunity will have to come out of left field like the internet…which doesn’t happen too often.

  8. Dave says:

    I’m positive there is plenty of opportunity for a new round of ultra billionaires…I think part of the the mindset here is the internet start ups. I think the next round of ultra money will come from CleanTech and renewable energy. If for example the Bloom Box (or another similar technology) could go mainstream, it will be a monster opportunity for something that everybody would use everywhere in the world:

    http://www.cbsnews.com/video/watch/?id=6228923n

    • Adam McFarland says:

      Agreed totally on the cleantech stuff. I think I mentioned a while back that when I was listening to the entrepreneurial thought leaders podcasts that’s what every single entrepreneur and VC said was the future, even those with tech backgrounds. Moving forward, that’s where the biggest opportunity is. The hard part is getting involved. If you’re entering college now, you can focus your efforts there. If you’re rich now, you can invest in it. But compared to the web it’s way harder to start a venture up cheaply and have the potential to become ultra wealthy.

  9. totally agree luck plays a big part in everything not just buisness …no substitute for a good idea and hard graft though :>

  10. Rob says:

    See, it’s things like this that make me torn on what to do – I have a Nuclear Phys background, so will potentially become involved if I find a good opportunity. I’m frequently torn between what I’m doing now and heading that way, it crosses my mind at least once a week and usually enters serious consideration every couple of months. Not because I’m unhappy now, just because there’s a lot of exciting developments.

    However, I just don’t know what opportunities there are for small businesses to make great leaps with this – I think you probably need to be involved with a large corporation or research group to get anywhere, so I’m under no illusion that I’d be able to do anything other than try to join such an organisation. Maybe it’s this kind of closed thinking that allows dorm-room kids to take over the world though?

    On the web business is very knowledge-based and so the barriers to entry aren’t high in terms of finance and bureaucracy. Out there though….

  11. Scott says:

    Outliers is a lazy and tasteless book.

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