iFulfill.com president Paul Purdue's weblog about innovation, growth, values, and fulfillment in running a multimillion dollar internet company and still having a family life.
In one of my early posts after the fall of iFulfill.com, I answered the question "What Happened" with the short answer:
In a nutshell: rapid growth and undercapitalization. In other words, not enough money to grow as fast as we did.
I've been doing alot of thinking about just what went wrong, and for those who are interested, here's the long answer.
Dr Krawitz said something in a comment that really hit home:
iFulfill would have succeeded if its computer system could have controlled robotic arms to pick, pack and ship. But its downfall was in managing the one thing that couldn't be plugged into the wall: people.
Yep, that's me. Looking back now I realize that. I'm not a manager, I'm a nerd. In the early days, it was easy. There was only me and it was a long time before we grew to be the size we ended up. But as we grew, I got pulled in all different directions and found myself micromanaging all areas - not a good way to manage. I tried to be a Jack of all trades, but the end of that saying is "master of none".
To be fair, I think the one area that I do excel in is "systems" or "infrastructure". It's too bad that we ran out of money before we got that part totally right. Perhaps if I had concentrated on infrastructure and let other people run various aspects of the business, we wouldn't be where we are now.
And my other key fault: finance. Again, I'm a nerd, not a businessman. I had an idea and went with it. I didn't study a business model and calculate the net return; I was a nerd with an idea.
Sure, there have been plenty of nerds with ideas who have made it. Some were also money smart, others realized their limitations sooner than I did, and brought in the right people to help manage that side of the business.
I'm not a complete dolt though (hold your comments, you'll get your chance) - I did realize we were in trouble, but too late. We tried desperately to get outside investment, but we ran out of time before we were able to find the right investor.
So, for those keeping score (and still reading), here's a rundown of the major problems that we had in our final year that ultimately led to our demise:
In November of 2004, I fired our warehouse manager (and assistant manager). In hindsight, I realize that this was the beginning of a downward spiral. She had wanted to move into another part of the company that interested her, but an area that she was not quite prepared for. I made mistake of letting her, and when I realized my error, we had already replaced her as warehouse manager.
Naturally, people want to lay the blame for the problems that followed on the new warehouse manager, but she was thrown into an impossible situation - it wasn't her fault, it was mine for making the switch in the first place.
A problematic Christmas followed, because of the managerial changes that were made, and because of the nature of the season in the fulfillment industry.
Shortly after Christmas, we began a move into a new facility that offered 5 times more pick space, 3 times more pallet space, but which increased costs by threefold. The move went badly, took longer than expected, and took more people than we thought it would.
A few months after that, we implemented a new paperless and wireless pick/pack system that we thought would run flawlessly. It didn't, and it took us a long time to get our arms around the problems.
For the first time in our history, we lost merchants. Sure we had lost merchants before, but never at a rate greater than we were gaining them.
The rest is history. We tried to find investors, failed, and closed.
I know that there are many people who are mad as hell, and who will stay that way for a long time. I would too. And I know that many have things to say about the way I did or didn't manage the situation. I would too. And rumors and rhetoric are freely sprinkled in with all that people are saying. I suppose I'd be sprinkling them in too.
But right now the most important thing for me to focus on is to continue to get things tied up; and the most important thing for the merchants to do is to focus on getting their operations back up and running.
There is continued concern that I am going to initiate more electronic funds transfers. That is NOT true.
The last EFT's we took were last Sunday (7/24) for the previous weeks activity. There will be no more EFT's processed. If you are concerned, you can log into the merchant zone and change your EFT info to bogus numbers. Remember, the ABA Routing number must be 9 digits, so I suggest 123456789. Doing so will replace your real EFT info with bogus info in our system.
As of right now, we have moved a majority of the stock out of our facility. That's more than half, but not all.
We continue to work frantically to try to move as much stock as we can each day. We are shooting to have everything out by the end of the week at the very latest.
I myself am trying to return as many emails and phone calls as I can, but the volume is staggering. I'm working with Blake Kennedy and Matt Wineland to see that shipments have been or are being handled as I get to each phone message or email.
Blake and Matt are each working with a team of people under them to try and get product moved as quickly as possible.
I am in contact with the landlord on a daily basis, and they are continuing to work with us to allow us access to the buildings to remove the stock. They do not plan to lock us out. I also do not envision any creditor being able to lock us out of the buildings before we are able to remove all stock. The rumors of the building being locked up are just that: rumors.
I will continue to blog to keep you abreast of our progress until every last item has been removed from the warehouse, and I will continue to allow all comments, good and bad.
I take full responsibility for the situation that you find yourself in, and will continue to work to make sure you are able to get your product out of our warehouse.
I'd like to take a moment to answer a few questions that are popping up frequently.
Will my Bank Account Information be Safe?
At this time, only I have access to that information, and it is perfectly safe.
How do I tell What Orders Did Ship?
When looking at an order, you can see the "Ship Date". If an order has a ship date that represents a real date, then it shipped on that date. If it has anything else in that field ("Shipping", "Ready to Ship", "Item Out of Stock"), then it did not ship.
Will Someone Padlock the Building, Keeping me from my Product?
We have been very up front with the Landlord. The last thing they want to do is lock us out, and then have to sort throught all the product that's in the facility. They are aware that the product is not owned by iFulfill.com, and they are working with us to allow us the access we need to get the product out.
Can Someone Else Padlock the Doors?
We have not filed for Bankruptcy, and have planned this "exit" carefully to avoid getting locked out of the building.
How do I Contact UPS about package delivery issues?
Call 1-800-PICKUPS and use the tracking number. The six charactors after the "1Z" that start every UPS tracking number represent our account number (A88R85). I don't think you need that number seperately, but there it is in case you do.
Will You Keep the Merchant Zone Up??
I am doing everything I can to keep the merchant zone up 24/7. I know that a few times it has gone down, and the server has needed to be reset. I'm trying to do that as quickly as I can every time it happens. Of course, the 3 IT staff that used to take care of these issues are no longer here. I'm working to get the alarms that they used to receive diverted to my cell phone.
How Long will the Merchant Zone be available?
I can't make any guarantees, but I will do all that I can to keep it available as long as possible. I don't mean to be vague, only to let you know what I know.
I'll post more answers to frequently asked questions as they arise.
A lady named Sandy Griffin showed up at our warehouse yesterday at the request of a merchant that I had referred. Sandy runs a company called Wrap n' Ship in Toledo. They offer fulfillment services which might work for some of our smaller merchants.
In spite of whether their fulfillment services will suit your needs, they may be able to assist you in getting your products out of our facility. Sandy and her staff know where we are, they understand our shelving layout, and we trust them to work in our facility.
They can get your product out of our facility and into theirs, where they can then do whatever you wish with it. The merchant that brought them into our facility yesterday wanted them to ship the 200 products they removed to customers that had placed orders. It is my understanding that half of those products went out in orders that shipped today, and the others will likely be shipped in the next few days.
Whether this merchant continues to use them for fulfillment is not an issue. If they do, I'm sure Sandy will be able to handle it, but if they don't that will be fine too. The point is, they'll get your stock out and then do whatever you want with it.
They were back today for three other merchants, and I'm sure we'll see them again tomorrow.
I want to be clear: we will also pack your products, let you know how many boxes or pallets and the weights, and then wait for you to arrange for a carrier to pickup your product, but please understand that there are tens of thousands of SKU's in our warehouse, and we can make no guarantees as to what order they will be packed.
Sandy Griffin runs Wrap n' Ship, Inc. in Toledo, OH. She can be reached at 419-531-8968 or by email at wrapnship@wrapnship.com. You can find more info on her company at http://www.wrapnship.com/.
I know that the number one issue of everyone's mind is "How will I get my stuff from iFulfill.com!!
We are working almost round the clock to prepare merchants' shipments to go out, and we're working at a pretty good clip, BUT, we are operating with limited resources, and there are over 350 active merchants with product in our facility.
There are two fulfillment companies that have stepped in, and are each taking on merchants and helping them out. Both have arranged to bring trucks to our facility, and both have temporarily re-hired members of our former staff to help assure that it is moved out as quickly as possible.
I can't begin to say how grateful I am that these companies are able to step in and help out our merchants, and especially that they are helping us to get their product packed up and on the truck as quickly as possible.
The companies are Dart Logistics and EFulfillment Service.
Dart Logistics is in Naperville, IL. The contact is Herb Duggan, and he can be reached at 630-643-5300 or by email at herbd@dart-logistics.com. You'll find more about them at http://www.dartentities.com.
EFulfillment Service is in Grawn, MI. The contact is John Lindberg, can be reached at 231-276-5057 x100 or by email at jal@efulfillmentservice.com. You'll find more about them at www.efulfillmentservice.com
Details to follow shortly on another alternative for merchants that need to get product out quickly and are not utilizing one of these services.
The question everyone wants an answer to: what happened?
In a nutshell: rapid growth and undercapitalization. In other words, not enough money to grow as fast as we did.
So why didn't I give 30 days notice? I've spent 6 years building this company. We've had many problems and many successes. The entrepreneurial spirit dictates that you solve whatever problems you are faced with. I've always tried to do that; sometimes more successfully than others, but you have to have faith and believe that you can solve whatever comes your way if you're actually going to tackle the problems you encounter.
But then a point arrives where you have to finally throw in the towel. Until that moment however, you maintain the same faith and continue to believe that you can work out problems.
As an entrepreneur, I have two main sides. There's the guy that shows up for work, is always smiling, has enthusiastic plans, loves what he does - you get the picture. Then there's the guy that lies awake at night worrying about money and infrastructure and other aspects of running a business. A big part of my job is to be the cheerleader; the guy that everyone turns to for inspiration and guidance.
Some have suggested in the comments on this blog that I'm out to screw everybody, that you'll never see your stuff again, and that somehow I'm profiting from this situation. That couldn't be further from the truth. I spent six long years building this company from nothing, working 14 hour days, and watching it grow. Now I've lost the company I built, and am starting over on a personal level.
But first, we've got to get everyone back together with their product!
I'll tie up a few more loose ends, and then make another post with more information on how that's going and what all the options are.
I am posting the email that I sent this morning at 5:00 AM. I will continue to use this blog to keep everyone posted on developments as they arise. Here's the email:
I'm writing to clarify some things, provide some additional information, and list contact information for those who are trying to get ahold of us (is there anyone out there who isn't??).
First, the answer to the number one question I have received to date - "Is the email you sent on Monday legitimate?". Yes, it is. I suspect that these initial inquiries came when there was still no indication on the website of the situation. Now that there is mention of it in my blog, those inquiries seem to have slowed down.
Next topic: communication. On Monday, our staff went from 28 to 4, and aside from myself and Matt Wineland, the other two are not email literate (they are in the warehouse). Matt and I are working diligently to get through the emails that arrived Monday, and, of course, that continue to arrive every minute. Please be patient, as sending multiple emails only slows down our ability to respond.
One of the first things I did on Monday morning was to change the phone system to eliminate the "queues" that line you up to speak with a customer service rep, since there are no more customer service reps. At that time, I also disabled the dial by name feature, intending to merely provide a quick solution to the fact that if you do know somebody's name, you could leave them voicemail even though they no longer work here. I did not intend to shut some people out of communicating with us via telephone, but if you didn't know my extension, that's effectively what I did.
My extension is 8059. If you call 888-883-8046 (or 419-897-2979) and key in extension 8059, you will either get me or my voicemail. Please be assured that I am checking my voicemail regularly.
We have also setup an email address at help4ifulfill@yahoo.com. Since we no longer have three IT people to solve server issues as they arise, I thought it was prudent to establish a web based email account in case something happens to our domain based email system before we get everything shut down. Please be aware that I am NOT monitoring sales@ifulfill.com or support@ifulfill.com anymore.
And finally: I will post this email to my blog and will then use that arena to keep you posted on developments as they arise. I will also allow comments, as many have already taken advantage of that feature to express your opinions, good and bad. Of course there are people who are upset, and no, I don't intend to keep those people from expressing themselves. There will be people who use this forum to say just what idiots we are or how we screwed something up for them. We have made our share of mistakes (just like everyone else), and these people deserve to be heard, just like the ones who never had a problem and think we're great ;>)
Remember, do not reply to this email, but instead use help4ifulfill@yahoo.com to communicate with us.
Paul Purdue
iFulfill.com
I will discuss the day's whirlwind developments here shortly. Thank you to everyone for the kindness we've been shown today.
Paul
In my last post, I introduced a new word (overinfrastructurization) and talked about how it can be the nemesis of a new company that's developing a new infrastructure.
But it's just as easy to overinrastructurize when adding to or enhancing existing infrastructure:
Getting out of bed is not exactly my favorite thing to do either, but even I -- incredibly enthusiastic proponent of infrastructure that I am -- don't need to develop an infrastructure for getting up in the morning. This cartoon is an over-exaggerated way to point out just how out of control you can get when developing infrastructure.
It happens to me all the time. Sometimes (just sometimes) I find I'm getting carried away in designing some new part of iFulfill.com's infrastructure for handling the product fulfillment our clients outsource to us.
So I look at each step as I develop it, and ask myself "is this as efficient as it can be", and "is this step going to save time or take time."
Save time or spend it?
I came up with a way to identify problem incoming packages that was a perfect example.
Once or twice a day, a package comes into our warehouse that is not properly identified on the label. We have to do research to find out what it is. They are usually identified within a day or two, so we have at most 8 to 10 packages in the problem area at any given time.
In a new receiving infrastructure that we're developing, the system assigns a number to allow us to track the package until we're able to identify it. I wanted to print that number as a barcode on a label. Printing a tracking label is definitely a prime example of overinfrastructurization.
KISS
And how did we ultimately solve the problem? A sharpie marker in employees' pocket. The hand scanner displays the ID number which the employee writes on the suspect package; problem solved - no extra printer, less programming time, and a more streamlined approach for the operator.
I've trained myself to be on the lookout for these bouts of overinfrastructurization.
You should too.
