EP 564: Mastering Omnichannel Logistics with Caraway Home
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A new episode every Monday morning brings you the latest from industry experts and thought leaders. And now, here's Kevin.

Hey, it's Kevin with the New Warehouse Podcast bringing you a new episode today. On today's episode, I am going to be joined by Mark Ryskiewicz and he is the VP of Operations at Caraway Home, which is bringing some very nice cookware into your house and from an e-commerce perspective has been quite explosive over the last five years and they're also in retail outlets as well. So we're

his experience there from an operations perspective and you know being employee number one actually at the company and and what that looked like and how he kind of navigated that growth over the last few years and really dive into what does the distribution strategy look like what are some of the the challenges with some of the the heavier items larger items that they're they're shipping and also talk a little bit about returns too that uh that nasty r word right that

that people in operations don't necessarily like too much. So we'll dive into a little bit of that and how they kind of handle some of that stuff. So Mark, welcome to the show. How are you? Thank you for having me, Kevin. I really appreciate joining and happy to

discuss and just have a good time chatting through the world of kitchenware and e-commerce. So doing pretty well today. How about yourself? Doing well, doing well. Definitely happy to get you on here and talk to you about this too as well. I think it's a very interesting perspective, you know, to see how you've kind of navigated some of this stuff. So looking forward to

to diving in for sure. So why don't you kind of start off here, kick us off a little bit and tell us about your background. And also I saw you were employee number one at Caraway too as well. So tell us a little bit about your background and how you kind of came to get that opportunity and what that looked like. Yeah, of course. Technically employee number two, if you call the founder and CEO an employee, but who's counting, right?

Yeah. So prior to Carraway, the founder and CEO Jordan Nathan and I used to work at the same company called the Mohawk Group. They're since rebranded to a Terrian publicly listed company, the company that earned a handful of different brands and use contracted factories overseas, imported the product into the US and then sold predominantly on Amazon, mostly FBA in the beginning and then Sala Fulfil Prime after a while.

with probably about 10% non-Amazon revenue at that time. It's changed a lot since then. But during that time, I ran the logistics of the company. So everything from production operations, freight forwarding, inbounding, 3P fulfillment outbound components, as well as the custom experience. As soon as that grew to a certain point, I sort of gave the CX piece away and sort of let go of those Legos and moved into...

strictly logistics. Fast forward a little bit, Jordan had the idea for Carraway, wanted someone to come join and help sort of build the backbone of the company from an ops perspective and wasn't too keen on getting stuck into logistics. So dropped me a message and invited me for a coffee. And then from there, the rest was history. So that's

Kind of how things got started. Nice. Interesting. Interesting. And yeah, from coffee to five years later now, here you are. Right. So very interesting there. And I guess tell us, too, I mean, what because you worked, you said that a company before handling logistics and, you know, that was primarily focused on selling through Amazon, different brands. What kind of got you interested in this this world, whether it's the logistics operation side or the e-commerce side in general? I mean, what really sparked your interest there?

Yeah, it really kind of came to fruition where I was excited to be a part of something from the ground up where I just had more of a say in terms of how things were constructed and built and especially in supply chain entering that kind of a journey into

in a sort of proactive stance as opposed to a reactive one, which is, you know, I would say 90, 95% of the case with most professionals is a lot of putting out fires, reacting, band-aiding, you know, doing a lot of those cleanup-based activities and projects as opposed to proactively building out a supply chain, the sort of tech behind that as well. So that whole idea was pretty attractive to me. And I

thought that it allowed for a lot of experimentation, a lot of optimization when you didn't have a lot of baggage to inherit. And so I think that was a really attractive idea. And then of course, Carraway itself in terms of

where the company was being positioned as a premium kitchen brand. I thought it was super exciting, very aesthetically pleasing products that made a lot of sense and products that I would love to own as an individual. So that sort of combination was super attractive to me at the time. I did happen to be looking for something else and for my next move. So that always, you know, helps as a bit of a catalyst. And so just the idea of getting started at the ground up was really

really exciting and something that I wanted to challenge myself with as well. So it was kind of a no-brainer. I just had to figure out what the risks were, obviously getting involved in a super early stage company, about six months pre-revenue. But everything sort of made sense. Jordan pitched a sort of fantastic business case and opportunity in front. And I had to say yes and see where this thing

had turned up. Definitely. Yeah. Yeah. That's great too. And, and, and obviously you made a good choice, I think, you know, seeing how Carraway has kind of exploded over the last five years. So, so tell us a little bit about that because, you know, you were, let's see, technically employee number three, right? You corrected me there, but yeah, I mean, tell us a little bit about, you know, going from that initially, like just, you know, a couple of months into them starting this business and now to, you know,

five years, obviously, you know, being successful and having a lot of explosive growth, not only in e-commerce, but also on the retail side too, as well. You know, tell us a little bit about how you've kind of handled that. And, you know, did you, did you expect it to happen that, that fast? And, you know, how, how did you kind of navigate all that, that explosive growth from, from an operations perspective?

Yeah, I think a big part of it is the foresight in knowing what the objective and goals were as a business and as a brand. And what I mean by that is the idea of omnichannel is obviously one of the most complicated aspects of a brand, especially in modern day. A lot of the time when brands are generally DTC or Amazon owned and they're trying to now be omnichannel or they are more traditional where they're wholesale and retail and are not trying to be more online.

I think because it was part of the business plan from the beginning that Omnichannel working with different types of retailers, dropship partners, marketplaces, wedding registry websites, with a long-term understanding that we did want to be accessible as a brand in as many places as possible was probably the

the most helpful transparent goal that was set in the beginning. So it allowed a lot of the different building blocks to be planned and constructed according to that final outcome. So I think that was just helpful to

understanding what kind of 3PL partner we wanted to work with, what kind of CX team we wanted to assemble, what kind of order management systems, imagery management systems we wanted to establish and what the needs of those should be today, but also in two years time, three years time and so on. At the same time, there's a lot of things and gaps and mistakes made that were difficult to cover at the pace that we were operating at. And I think going back to your question on that, COVID was definitely a

crazy magnifier of growth in the kind of best way possible for a lot of brands in the kitchen and home space if they could keep up. And for us, it almost took the company from year zero, one, two, and three and sort of

threw it right into year four, five and six, even out of best case scenario. So 2020 compared to 2019 was just completely wild. And that growth just continued to exceed regular business practices and pace and what have you, which was very fortunate to be on the right side of that wave when COVID came along. So a lot of agility was required, a lot of reacting to the powers that

we're flowing into the business and the demands from customers and channels and what have you. And luckily we're able to pull it off with a fantastic team that we assemble and continue to assemble today. So, you know, really exciting times. Yeah. Yeah. That's great. And I mean, you guys were, you know, right on the cusp of COVID, right? I mean, launched in, you know, Q4 of 2019, right? And then COVID really kind of kicks off in

know, March, April timeframe of 2020. So, you know, it was a good time, a good time, I guess, in a sense to, to launch and be there for all those people that were at home and, you know, wanting to do more in the kitchen and, you know, bake their breads and all those things that people were doing during COVID. Right. And, uh,

You know, very interesting to hear that. And obviously fantastic that you're able to fight through that increase in demand. And obviously, you know, COVID, I think for everybody, it was unexpected, right? I mean, but at what point, I'm curious, did you, you know, look and maybe as, you know, you see and look at your order volume and the sales you're getting, you guys just kind of looked at each other and like,

Wow. Like we had no idea like that we would be, you know, facing this kind of volume like this, this soon. I mean, what was kind of like that, that tipping point where you're like, oh, we need to really like, you know, strategize and make sure we can meet this. We'll be back after a quick break.

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Yeah, it's a great question because there was really just so much going on in 2020, 2021, even that I really don't think there was a single moment of time where I

A handful of us, the leadership team or anything like that just took a step back and said, look at how far we've come. There was just so much happening and so much to do. You know, we have done that and reflected quite a lot over the past couple of months and the past year or two. But I think in the ramp up of that sort of hockey stick type of growth, the company was seeing growth.

there wasn't really any time to sort of assess and appreciate, which was not a bad situation to be in. And as a young company, you know, it's, we're talking second, third year, it's like, keep the pedal to the floor and let's keep on feeling this thing, see where it goes. But I think a big part of it was,

The desire and appetite that our customers had for our brand and our products in the space in general was pretty impressive to see when we started running into supply chain challenges like every other company in terms of stock availability, estimated shipping timelines and dates where the conviction for purchase didn't change. If you

if you had stock or if you could project some kind of restock date that customers could still commit to. And so...

you know, seeing that conversion sort of maintain its pace and its growth was really just fascinating. So definitely, you know, I think it's great that, you know, I think that's kind of very telling too, like, you know, what we do in operations, right? We just, we just, you know, put our head down and just get it done basically. Right. And, and, but I mean, I'm happy to hear that you guys are able to, to reflect back and see like, you know, wow,

Wow. Like we, we have come a long way. It's been, it's been successful in that sense. So tell us a little bit too about your, you know, this is the new warehouse podcast. So obviously we want to hear about the warehousing side of things and, and distribution. So tell us a little bit about your, your distribution strategy. You guys utilize 3PLs. You do any self-fulfillment. What, what does that look like?

Yeah, so we use 3PLs exclusively and I say 3PLs with an S, but it's multiple locations with one partner today. We do consider Amazon FBA and that network as kind of a third 3PL location or a second 3PL partner, if you like. Of course, there's a lot of debate in terms of how one should treat Amazon FBA and the pros and cons to it. However, yeah, just a single partner, we don't do any self-fulfillment right now.

That same partner, it's ironic that it wasn't timed at all, but I sent an appreciation post to one on LinkedIn a couple of days ago just to appreciate our 3PL and how they've been this holiday season, but also over the five years that we've been with them. So we opened up an account with them when we just had a couple of hundred products being shipped out the door. Even one of the craziest stories is we had some packaging difficulties with our first couple of inbounds where we

Basically, through the small parcel fulfillment networks, a cookware set wouldn't be able to sustain the journey from warehouse to customer, which required a big value add, sort of repack and rework project that was right about when we were launching the brand to begin with. So typical startup challenges and issues, and it's great to see that the same partner that sort of held our hand through that process is the same one that we operate with today, where we're

We've grown, I don't even know the percentages, you know, percentages, numbers, you know, since then it's, it's probably something that doesn't really make sense to list out because of starting from zero all the way through to now. Yeah. But yeah, they've been a great partner with us and I think we'll, we'll mostly stay 3PL focused. There's not really a strong business case for us to move to solar fulfillment because we don't have a lot of high touch products or water flows. Yeah.

We don't do co-packing or any types of kitting with the exception of a few projects. So self-fulfillment is an idea that we're always exploring in the long term, but it's probably not practical for...

the foreseeable future for now. Gotcha. Interesting. And, and when you started out, was that kind of the, the strategy to begin with, or did you kind of weigh out, you know, should we start out with 3PL? I mean, I know you mentioned that you, you've been with them for five years and guys have been in business for about five years. So, I mean, was that ever, was that like the strategy initially was, you know, especially around, I guess, like designing the product and thinking about the product too, you mentioned, you know, you don't do any like

kidding or anything like that. So was it intentional to do that, to stick with 3PL from the beginning? Or was there some thought of self-fulfillment in the beginning too as well? Tell us a little bit about that thought process. Yeah, absolutely. It's pretty straightforward. I mean, self-fulfillment was too difficult to plan and commit to, given the fact that in summer of 2019, we were this newcomer brand to the kitchen space that had

six or seven SKUs and they were just variants of the same products that we were launching. And so self-fulfillment was rather, I'd say difficult to buy into when the certainty and sort of general business concern was something that still needed to be proven out. And so the good news and the best part about leveraging a 3PL and some of the different software that's out there, especially today with small sellers and brands that are just looking to get that operation done

sort of outsourced and off the ground. We took advantage of that approach and wanted to do so with a partner that should things take off and explode, that they could sustain that growth with us and really partner along the way to get to the different milestones and checkpoints that we want to hit. So part of that included whether we were strictly doing e-comm or omni-channel with the idea of

much earlier on being omni-channel and sort of focused with multiple different sales streams. That's something that we wanted to ensure that we were selecting the right partner from the beginning that when the time comes to expand into those different options, we could do so. So it was really the only consideration at the time and self-fulfillment is something that never really was on the cards. And I personally don't have experience running my own warehouses and

overseeing a full team like that. So it didn't really make sense to explore much further. Gotcha. Gotcha. Yeah. Yeah. That makes sense. Definitely. And you're kind of like, ah, I don't want to deal with that a little bit. I know 3PLs, but I, I don't know. I can, you know, pick, pack and ship myself. I've done that many times and mostly for the photo ops, but yeah, in terms of running a small warehouse and

all the particulars in that, that's something I'd love to explore, but, you know, as a slow, passive and discovery type project rather than a, let's get going right now. Yeah, definitely. Definitely. Yeah. Yeah. A lot to do there and a lot to figure out and get both out from infrastructure perspective and all those different things. So totally understandable to go with the 3PL. So you mentioned that, you know, you've been with the same 3PL for the life of the company, basically five years, which means that,

you must have a pretty good 3PL there, right? So tell us a little bit about, you know, what are your, some of your thoughts and recommendations on, you know, for those that have a 3PL? I mean, what makes a good 3PL? Like what's a difference maker to you as a brand? Absolutely. I think to call them out and specifically, I don't know if I have ITS logistics, like I say on LinkedIn, you know, we do have a lot of exchanges back and forth on

giving each other credit. And I think the way that I view a 3PL and even on the topic of self-fulfillment is I don't really distinguish between the people per se. And I encourage our team and our team does the same where we really view the partners we work with, especially on that side of the house as an extension of the business rather than an outsource contractor that's performing a task. And so I think just having that degree of

familiarity and partnership collaboration it really just fuels the possibilities the likability between both clients and 3pl and it allows you to align on the same types of goals where both sides can win ultimately and i think a lot of brands basically view the idea of a 3pl fulfillment as a

unnecessary service and evil and don't recognize that behind a 3PL or behind any sort of component of supply chain are people and people are what make it and people are what are required to make it a success and to run it in a way that is efficient, scalable and enjoyable. I mean, you know, supply chain can be enjoyable if you just let it be. Obviously, it's been a tricky and rough, you know, five, I'd say five years, it's more like seven or eight, depending on

when you start some of the chaos and how your supply chain globally has been. But I think finding the wins, partnering, being lighthearted about it, and just recognizing patterns and enjoyment in some of the partnerships that you strike up, I think is a recipe for incredible success and growth that you both can lean off each other. So yeah,

Short version of that is treat the 3PL like people and find a fit for what's needed from both sides, not just from client to 3PL. Yeah, absolutely. And I think that's a great thing to think about there because it is like an extension, right? And there still is that human element to it. It's not just necessarily, I mean, it's transactional in a sense, but it's not necessarily just transactional, right? There's intricacies there that

you know, a great relationship and partnership can help you either overcome or, you know, be able to navigate a little easier than, you know, maybe not such a great relationship. Right. So tell us a little bit about kind of, you know, over the last few years, certainly returns has become such a hot topic, right. Especially around e-commerce. A lot of people, um,

things, sending it back because they didn't like it or, you know, sometimes people using it, then sending it back, trying to get returned to as well, or even like returns fraud from that perspective. I mean, I saw you guys have a,

30-day guarantee and that you do accept some stuff that's used as well and kind of what happens to that. So tell us a little bit about how you navigate kind of that whole mess of returns in a sense there. Absolutely. It's a huge topic and especially now that, you know, recording this in the sort of

getting towards the quieter time of holiday season, depending on who you are and what kind of business you run. But returns and the onslaught of incoming returns, especially post-December, is going to be pretty intense, as we all know. So you hit the nail on the head in terms of the difficulty and challenges, especially when it comes to the size of our products. I mean, so we...

We have a pretty high average package volume. We ship kitchenware of all different shapes and sizes, and the average consumer is not coming to buy a single fry pan. They're looking to buy a couple of different pieces or sets or collections, bundles, what have you, for their kitchen. So per order, a lot goes out the door. And so from a return standpoint,

I think the most important thing is it is an area of a business that is often neglected and left behind because it's a pure cost center in most cases. And it tends to be that, especially when your restock rates are pretty minimal. We were at that point at one point where our restock rates, you can imagine high-end kitchenware customers were

pull it out of their boxes, they start using it, it becomes a little bit either, you know, potentially stained or maybe they're careless with it because they're trying it out and, you know, it gets a slight, you know, hard to see little scratch on the underside that, you know, unless you were inspecting it, you wouldn't sort of notice it.

customers that are shutting out a couple hundred bucks for new kitchen sets are probably going to notice a marking or something like that. So our restock rates for new products was pretty low. So at the time, and even today, we do have a couple of different outlets where we sell secondhand goods through some of our partners. Comeback Goods is one of them. We also do some bulk distribution to a few partners that take sort of lightly used goods as well.

We've actually pretty heavily leveled up the returns process due to a few unlocks and efficiencies that we found where we've been able to boost our restock rates as well as the speed of return handling through really just leveraging smart technology and more robust SOP site visits, everything like that to understand how

the viability of restocking your product and what that looks like. So some examples, we've started leveraging the platform, two boxes. My friend Carl runs the company over there and seems like everyone under the sun is starting to leverage two boxes now, which is great for them. So we're happy customers of that. So it was our 3PL and we're looking to really just

gather all the data and insights and patterns from everything returns to understand how we can fill those gaps and how we can optimize the whole process and find those efficiencies. So it starts with that data, the data collection, the aggregation, the efficiency that you need for return handling as a part of collecting that data as well.

From there, you'll have a lot of different indicators to start exploring and identifying patterns and opportunities to elevate the whole process, improve customer education, modify return policies or processes based on product type or reason codes or things like that. So really, you need that sort of data house to begin developing.

feeding those ideas. So yeah, definitely a big topic and a big challenge, but something that we're excited to continue getting better at every single year.

Yeah, interesting. And it's interesting, too, to hear kind of the evolution, I guess, in a sense of how you've been able to handle those returns and, you know, what you've been able to see. And yeah, I do remember seeing you guys on Comeback Goods there. Shout out to Liesl over there as well. Not Liesl, yeah. What a group she is. Definitely.

And yeah, I mean, I think it's great to hear that you're able to, you know, figure that out a little bit. And I think it is very interesting too, because you're, as you mentioned, like your customer, right?

you know, if there is like a slight ding or something, it's a premium product in a sense, right? So, you know, they're going to be a little more attentive to that and they're going to be looking, you know, it's not like, you know, $5 egg pan off Amazon or something that they're, well, you know, I'm just going to cook eggs, so whatever, right? But they're buying it for, you know, because of the quality of it and,

aesthetic of it too as well. So all those things are very important to them as the consumer. So it's interesting to hear how you're navigating that and able to save some of it through different channels as well and bring that in, which I think is really important too. And yeah, very, very interesting to hear. And that data collection certainly goes a long way and to be able to optimize that process a little more.

So it's very interesting to hear about that and how you, how you navigate that. Now, as we look to the future from your kind of, from a brand perspective, right? How do you kind of view the future of fulfillment, whether it's from a consumer behavior perspective or an operations perspective, what's exciting to you or what do you think we should be on the lookout for in the future here? Yeah.

It's a great question. And I think I could go on many different tangents depending on the topic, the brand, the industry. But I think something that

Hopefully now all the data points to the idea that it's been disproven is that instant gratification really is only applicable to a handful of industries and categories. And what I mean by that is we have years and years of data on everything from long-term back orders through to five, six, seven day free shipping thresholds versus paying up

you know, one, 2% extra on top of an order to get a two day delivery or something as fast as that. All the different indicators that really point to this idea that at least in the home goods space, kitchenware, bakeware, kettles, food storage, it's very unusual and unlikely that those products are going to be required instantaneously or next day or same day or anything like that. So I think, yeah,

to really focus on everything from an environmental, economic, and just general sustainability standpoint. Lower the urgency, I think, is key, especially in industries where it doesn't matter as much. And I think I don't want to downplay the idea of speedy fulfillment is, of course, something that you can do, but overnighting something or two-day express versus balancing inventory where ground will get you there in three days for...

A fraction of the cost, especially in bulky items like we sell, is a much more constructive and sustainable way of approaching the challenge of fulfillment than just buying into the narrative that everybody wants everything instantaneously. Of course, I don't work in food and beverage. I don't work in baby products. And as a father of a three-month-old myself, I know that if I need diapers, I

immediately i need them immediately but i'll also probably jump in my car and you know head out somewhere yeah um probably strapping the baby up as fast as i can in the backseat in the car so yeah i think it really just depends on that and i think it's the responsibility of operations professionals to repeat that narrative as much as possible that it really is only applicable and it's really just gonna make the car center a lot more bloated than it should be

And you can still find efficiencies and provide a quality shipping and fulfillment experience without breaking the bank. Yeah. Yeah. I think that's a great point too, because I think it is, you know, interesting. I was just talking to somebody earlier today about, do you have micro fulfillment centers and, you know, this whole thing where everybody is trying to deliver everything in like 15 minutes or two hours. And, you know, is there really a need for that? Right. And it depends

it depends on the use case and then the product. But like to your point, I mean, the majority of stuff people, you know, they don't need it like that, that quickly in a sense. Right. So how do you create that balance? And I think that's a great thing there to see. And, you know, I'd be curious to see like how that continues to evolve as well. And, you know, how that,

narrative will shift a little bit and maybe you know change change the tone a little bit from you know the consumer saying that they want everything right now when in reality you know they probably don't necessarily right so so i think that's a great perspective there mark and really appreciate you coming on the show sharing um

a little bit of your journey with us and also Caraway's journey too, and how you guys navigate some things, especially the returns. I think that's super interesting and certainly a challenge for a lot of people. So really appreciate you coming on and sharing your time with us today. If people are interested in getting in touch with you or maybe they're interested in buying some stuff from Caraway too, what's the best way to do that?

Absolutely. Well, thank you so much for having me, Kevin. It was great to chat and always happy to talk about everything. 3PL, fulfillment, operations, and I can go on for days as I'm sure many of my colleagues and counterparts would say. In terms of Carraway, depending on when this is, you might still be in time for the

The holiday special that we're running our best promotions for the year. So you got to go to carawayhome.com to unlock all kinds of different bundles and deals and really a fantastic just experience to, you know, revamp your kitchen. So I'd encourage that ASAP for anyone listening. For myself, you can connect with me on LinkedIn, pretty simple, LinkedIn slash Mark Ryskiewicz. It could be Mark dash Ryskiewicz. I actually am unsure of the exact name.

But the good news is there's only one or two Mark Ryskowitz's on LinkedIn apparently. So it shouldn't be too hard to find. All right, great. And we'll definitely put that at thenewwherehouse.com and also in the show notes. We'll link to the right Mark Ryskowitz, the best Mark Ryskowitz we'll say here there in the show notes so people can easily connect with you and find out.

and find that. Not the fake one, if there is. Yeah. Speaking of fake depends, fake profiles, you know, it's probably the next, the next thing coming. Yeah. Yeah. The, what are the deep, deep fake of Mark Krisco? Yeah.

It's going to get to the point where the deepfakes are so real that I'll start doubting if I actually said that or not. You know, I'm like, I can't remember 10 years ago if that was really what I said. Definitely, definitely. That's a good topic for the next podcast there. We'll have you back on to discuss that deepfakes in the e-commerce world. So definitely appreciate you coming on and your time today, Mark. And thank you once again for joining me.

You've been listening to the New Warehouse Podcast with Kevin Lawton. Subscribe and check us out online at thenewwarehouse.com. Enjoyed this episode? Make sure you are subscribed to the podcast and for more content from The New Warehouse, find us on LinkedIn and YouTube. Links to subscribe can be found in the show notes and for everything The New Warehouse, head to thenewwarehouse.com.