In an otherwise bleak world, today’s guest is a success story who just keeps going from strength to strength.
Martin Bysh is CEO of Huboo Technologies Ltd, a fulfilment company that takes stock, stores it, picks, packs and delivers it on behalf of e-commerce sellers, automatically.
But Martin hasn’t always been in this industry. In fact, this is his first company that has physical things, like people and space. He’s always had companies with no people in them. This 180 degree business model is completely down to Paul Dodd, his business partner.
“[We figured] we’d do something together in e-commerce. We ran a few shops online to get a sense of where the pain points might be, and immediately stumbled on fulfilment. It’s a massive problem for lots of e commerce companies. And so we started to explore it and just gradually found ourselves in this business, which I love, but it is very much a people business. I think we’ve got about 70 staff now. And it’s all about the people, but it’s a lot of fun as a consequence.”
But scaling a business that consists of so many people with so many moving parts is a challenge. How do you scale small without breaking small?
“This isn’t about massive sheds and treating people as robots. This is about building a distribution system for e-commerce businesses, based on human beings. How do we take the best of human beings and build a business on that, which drives high margin rather than trying to treat human beings like robots to drive margin into the business.”
This is a fascinating conversation, we hope you enjoy it as much as we did.
On today’s podcast:
- The little known world of fulfilment
- Building the company
- The micro-warehouse/hub fulfilment model
- Staying open during the pandemic
- His plan to turn the business into a billion dollar company
- Integrating last mile as a way to save costs
How to run a warehouse with no churn with Martin Bysh
Employee churn is one of the biggest expenses when running a business. Finding, hiring, onboarding and training all take time and cost money. So what can you do, when your business requires staff, but it’s not exactly traditionally ‘fulfilling’ work, in fact, it’s minimum wage, repetitive work?
How do you get your employees to feel emotionally engaged in the work that they do? How do you get them to stay with you?
Martin Bysh, CEO of Huboo Technologies Ltd, a fulfilment company, believes he’s got the answer.
In Martin’s warehouse, right now, they have about 70,000 SKUs. And there’s no hardware or software in the world, no automation tech that can deal with what is required to get those products to the end customers. To pick, pack, wrap, and post this stuff requires people.
They created technology to automate the processes that can be automated, but it’s too expensive to develop the tech to automate everything, so right now, they need actual humans to fulfil the orders.
“For reasons of economy, and because it’s just not really out there, you’ve got to use people. When tech becomes commoditized for a particular piece of what the warehouse does, we can plug it in then. So we can make the warehouse increasingly inexpensive, more automated as time passes. But right now it has to be people.”
But the challenge with people is that they tend to be treated really badly in warehouses. Which is why most people don’t want to work in one. It’s very difficult to make people happy in a warehouse. You can’t pay them over the odds to motivate them, because the margins just aren’t there. So they end up getting treated like robots.
“When we started, we realised we had to have people but we decided we would never treat people like machines, we were not going to build sweatshops. So Paul came up with the idea of reducing the warehouse space into what we call a ‘micro-warehouse’ or a hub.”
They’ve got a warehouse that is about 30,000 square feet, and another 20,000 square feet next door. They divide these warehouses into spaces of between 300-500 square feet, and these small, individual spaces become micro-warehouses or hubs.
In each micro-warehouse or hub, they allocate a single hub manager to run that space.
“There may be one client in that hub, there may be 20 clients in that hub. The hub manager will do the inbound, the outbound, the picking, the packing, the posting, and crucially, the support. So when the client wants something done or wants to engage with us about how they want their micro warehouse to function, they go to the hub manager to do that.”
The advantages of having multiple hub managers?
Firstly they don’t need to walk miles, they only walk around their hub. Secondly, they speak to their clients. They know why they’re doing what they’re doing. They know who they’re doing it for. They understand their clients and the significance of what they are doing. And as a result they like their work.
“Where the average warehouse has between five and 20% churn rate of staff per month, we have no churn. We just don’t lose staff. Obviously the occasional person might get the job they love and they leave to do that. But broadly speaking, it’s exactly the same as in the office. So people just don’t leave, they love the job they do.”
By reshaping the job, they’ve turned monotonous, hard work into a pleasurable job.
Investing in your staff
Unlike other warehouses, they have chosen to invest in training their staff, because the staff do so much work for the company. How can they afford to pay for training warehouse staff? Because the staff stay with them.
“You end up with this virtuous circle where you can bring in great people, you can treat them like they’re great people and invest in them, and you get to keep the great people. I don’t know why anyone wouldn’t want to run a business like that.”
So why doesn’t every fulfilment company work like this and invest in their people?
“Traditional fulfilment is just very lazy. What they do works and when eventually they can’t get enough people in because of the 20% churn, they’ll just plug in an agency and that agency will just push temporary staff there, you know, endlessly.”
Creating meaningful work
But how do you turn warehouse work into meaningful work? It all starts and ends, according to Martin, by treating your staff like humans.
“If someone comes to work only to get paid, I mean, I think of that almost as a crime. What am I doing to somebody? Eight hours of their day I’m consuming, and only because they have to be there. That’s kind of like slave ownership or something, it’s awful.”
You might be able to get them to hit an SLA, to deliver a minimum standard, but you will never get amazing customer experience.
In Martin’s warehouse, people don’t come to work to pack boxes, their jobs are far more varied than that. They come to work because other people need them to come, they rely on them to do a fantastic job and as such, Martin rewards them when they do.