A Baltimore company wants to help small manufacturers expand by taking over their warehousing, shipping and customer service operations.
Whitebox, officially launching this week, automates those and other aspects of online sales so manufacturers don’t have to pay the overhead costs or worry about the extra hassle.
“Our goal is to be the fully outsourced e-commerce department,” said CEO Rob Wray in an interview. “We take care of everything.”
Usually, there are numerous steps needed for a company to get an order out the door perfectly, which create a tremendous amount of work — quality control, packaging, managing inventory, processing credit-card information, negotiating with vendors, and providing customer service, to name a few — for small and large companies alike, Wray said.
But with Whitebox, manufacturers will only need to worry about shipping their product to Whitebox itself — the company takes care of the rest, he said.
In return, Whitebox takes 10 percent of gross sales, and passes along any fees — such as for credit cards or shipping — to the manufacturer, Wray said.
The company’s target clients are small manufacturers ready to start filling thousands of orders or companies that want to expand into international sales, he said.
Whitebox has licensed warehouse space in about 60 locations in five countries, including a portion of Amazon’s Baltimore distribution center; the automated software platform communicates with vendors such as Amazon to manage shipping, inventory, customer service and other aspects of sales, he said.
Whitebox can make sure each product is sold through multiple channels, such as Amazon.com and Ebay; will professionally photograph each product; and will give manufacturers timely notifications when inventory is running low as well as analytical reports on sales figures and customer feedback.
Whitebox grew out of another business run by Wray that sells electronic equipment for cars. The company, Mp3Car, used to run its online sales operation out of its office, but without a good system to manage inventory the company found itself alternately understocked and overstocked. To streamline the operation, Wray and his team developed the automated system that became Whitebox, according to the company.
After two years of using the system, Mp3Car’s overhead costs dropped and profits grew by more than 600 percent, according to Wray.
The team founded Whitebox in 2013, and has spent the past two years testing its service. It’s worked with about 30 sellers to fill about 400 orders per day, Wray said.
One client, the Rhode Island-based Glee Gum, previously ran its own e-commerce operation and sold its products on Amazon. But CEO Deborah Schimberg said in a statement that the company has found Whitebox much easier to use and credits it with a dramatic increase in profit margins and sales volume.
Glee Gum has seen a 58 percent markup increase and a 29 percent increase in sales volume since use Whitebox, Wray said.
“Generally, we find that the growth from these companies more than makes up for the fees,” he said.