MyFBAPrep, one of several companies brokering warehouse space and fulfillment services between shippers and 3PLs, has expanded its network from 15 million to 85 million square feet in the past four years to meet demand, increasing coverage in the UK, Germany, Canada and Mexico as well as the U.S.
CEO Tom Wicky, who founded MyFBAPrep in 2018 with partners Bart Boughton (COO) and Taylor Smits (CSCO), said the model is simple: stay asset light, purchase service and space commitments at volume from 3PLS at a wholesale rate, then charge shippers below retail.
Others operating in this corner of ecommerce fulfillment and logistics include Flexe, Stord, UPS unit Ware2Go, Flowspace and Deliverr – recently sold by Shopify to Flexport – although some of them have begun to abandon the pure asset light model and taken on their own fulfillment facilities.
Wicky said the majority of its customers are Amazon aggregators, top Amazon sellers and established DTC brands. The business is split among retail, B2B and co-packing (20%), DTC sellers (30%) and its legacy marketplace prep, including value-added services like kitting and order breakdown (50%).
MyFBAPrep has a network of 100 nodes – half of them in the U.S. – through partnerships with 40 3PLs, ranging from “mom and pops” to multinational operators, in a variety of specialties. A logical next step at some point is expanding the business to Australia, Wicky said.
The company started out when Wicky found it difficult to have orders prepped for Amazon’s FBA program for his own ecommerce businesses selling groceries and t-shirts.
“That taught me to move up the supply chain and play a different part in ecommerce, moving off the dependency on Amazon,” he said. “It’s an incredible space. Supply chain was always a barrier, there was no national network of FBA prep, where orders were broken down and moved into their facilities.”
Wicky said it made much more sense to him and his partners pursue an asset light, broker model vs. the massive capital required to stand up a physical 3PL business, including facility development or long-term leases, equipment and personnel. A proprietary SaaS system acts as middleware between an ERP or OMS and a 3PL’s WMS, matching shipper requirements to service offerings.
“We’re feeding 3PLs a steady diet of business,” he said. “On rare occasions we buy dedicated square footage if the client wants. But for the most part, we bring client, the 3PL does the work and we do the rest. Being asset light offers a lot of flexibility.”
Asked about a decrease in DTC demand, as startups like Allbirds and Warby Parker have struggled while Nike and Adidas have pivoted to omnichannel, Wicky said he has seen that recently due to the challenged macro picture, but things are starting to turn.
“There’s certainly been a cooling as companies hunkered down, taking a wait-and-see approach with interest rates rising and the war going on,” he said. “It’s come out in the last two quarters or so, some paralysis for sure.”