In an explosive year of growth for online sales, Whitebox has been riding the wave.
The Baltimore-based Whitebox, with its unusual business model providing a range of logistics and e-commerce services to brands, in September closed on an $18 million Series B financing round, following its Series A round of $5 million in 2019, and a $2.6 million seed round in 2017.
Last August, Whitebox moved into a new 365,000-square-foot headquarters in Baltimore, on the site of a former Under Armour distribution center. It’s more than eight times the size of Whitebox’s former headquarters, and houses corporate functions and fulfillment operations.
And just last week, the company opened a 350,528-square-foot distribution center in north Las Vegas, replacing an 81,000-square-foot facility in Nevada. There is also a distribution center in Memphis.
“We are shipping hundreds of thousands of orders on a monthly basis. We are still a small company, with 150 employees, but growing very fast,” said Marcus Startzel, chief executive officer of Whitebox.
For its brand clients, the seven-year-old Whitebox will ship both direct-to-consumer and business-to-business; handle customer service issues, and provide data and demographic insights on how their brand clients’ products are performing — where and what items are selling best, by stockkeeping unit, by marketplace and by geography. Direct-to-consumer shipments grew 300 percent in the first half of this year, the company said.
Whitebox also analyzes customer acquisition costs, the effects of couponing, and what other products customers are purchasing. “A lot of that information is actually surfaced in our dashboard in real time, where clients log in,” Startzel said.
In addition, Whitebox helps brands establish web sites, or sites on marketplaces like costco.com, Amazon, eBay or walmart.com, with such issues as pricing, packaging and promotions, and advises on what marketplace might be best suited for a particular brand. Each marketplace has its own shipping requirements, fee structures, procedures and charges for failing to meet certain requirements.
“There are a lot of decisions along the way, on the marketing and sales side. You’ve got to think about product selection first. Then you have to think about pricing,” Startzel explained. “You have to compete with resellers. A lot of distributors sell on Amazon as well. Then you just have the continuing optimizing of ads and content. Amazon advertising can be extraordinary profitable, and doing it well can drive a lot of great sales.
“To be able to have a seller account on Amazon, there are a ton of different policies and requirements, and depending on category, there could be more stringent oversight, such as with health and beauty ingredients and claims. There are a number of product-related hoops you have to go through, stringent requirements to fulfill orders, and meeting delivery promises.
“Walmart.com is a completely different marketplace with completely different dynamics,” Startzel added. “The way they present the listing to customers is much different. It’s a different discovery challenge on Walmart. Amazon is quicker at turnaround on listing changes and items. Walmart takes a little longer to correct or update things.
“There are a lot of rules and a lot of nuances that can trip you up with working with the marketplaces, but once you are good at it and understand the right process and have the tools and tech to update and maintain, you can have a robust business.”
Considering its wide range of services, the Whitebox business model seems unusual. But Startzel puts it plain and simple: “We’re an end-to-end e-commerce technology partner to take products from factory floor to front door.”
He said the company has more than 100 “active” clients, ranging from Starbucks and Super Coffee to French’s Mustard, Chicobag for environmentally friendly reusable bags and face masks, and Skinny Girl low-calorie cocktails. No fashion apparel brands were cited.
Clients attained this year include Wldkat skin care, which is advertised as clean, vegan and cruelty free, and Pangea organic skin care.
“When we work with a brand very commonly we are fulfilling orders taken through Amazon (and other marketplaces) for them and also fulfilling orders from their own web sites,” noted Startzel. Even as a small company, Whitebox would help relieve some of the backup of order fulfillment and delivery delays due to the perpetually rising volume of online orders as consumer behavior shifts to web sites and away from physical stores.
Whitebox was founded in 2013 by Rob Wray. The idea for the company came to Wray when he was running Mp3Car, an e-commerce site for niche electronic parts. The name Whitebox is a play on the term “white glove service” and receiving e-commerce orders in a box. Startzel, a former submarine officer who once worked for Ross Perot, AppNexus, Millennial Media and at Advertising.com, acknowledged there are a lot of companies that help brands manage their business on Amazon, though he said few expand out to multiple marketplaces. He also acknowledged there are many companies handling fulfillment for brands, but he said Whitebox is different in that it’s involved in getting products to consumers as well as to wholesale accounts.
“The most powerful part of our platform is that decision-making capability to guide a brand,” Startzel said. “Managing their offerings on marketplaces, direct-to-consumer and wholesale fulfillment, and staying in stock regardless of the marketplace, is all very challenging.”