Fulfillment company isklad enables worldwide growth for e-shops thanks to its comprehensive coverage of the operational aspects of their business. The company provides a fully-developed software product automating logistics and warehouse processes for e-commerce vendors, supplemented with the effective outsourcing of a wide range of physical processes. This significantly simplifies the solution of logistics and a considerable part of the operations of any e-shop (warehouses processes, software, workforce, warehouse rental, logistics, cash on delivery, returns, online payments). In comparison with regular fulfillment providers, the e-shop (isklad client) is able to concentrate almost exclusively on sales and marketing. Over four years, isklad has helped more than 100 e-shops handle over 1.3 million orders and in 2019 reached a turnover of 2.6 million euros, making a total of 6.6 million euros over 3 years (2017-2019). The value of the company, however, is driven primarily by its proprietary software product and its readiness for further growth. The company intends to use the investment for expanding into a new, state-of-the-art warehouse and the automation of the physical components of its service. This helps the company to extend its lead on competitors and scale internationally through partnerships with leading e-commerce platforms.
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Investment goal (3,000,000 euros)
The investment of 3 million euros will be used for expansion into larger warehouse spaces and for obtaining specialized hardware for the automation of item picking as well as “verticalization” of the warehouse. With this, isklad will supplement the already automated and fully-developed software, increase its technological lead and lower its variable expenses by an estimated 50–70%.
The problem that isklad is addressing
Building a reliable, scalable and customer-friendly logistics infrastructure is an essential goal for every e-shop. It is also an important element in terms of cost, time, processes, personnel and technologies.
If an e-shop wants to be self-reliant in the issue of the entire logistics process (receipt of goods, stock and inventory management, storage, processing orders, delivery and returns processes), it must have at its disposal sufficient investments, know-how, data and experts in IT, logistics, processes and technologies. Often only the largest e-shops can afford this when taking into consideration the investments of time and money required for the development of such systems and the alignment of their capacities with the dynamics of turnover and growth of the e-shop’s product portfolio.
Expenses, physical storage of inventory and the transportation of parcels are important elements and integral to the e-commerce competitive landscape, where costs drop significantly with increases in volume and customer experience is increasingly scrutinized.
Though there are companies that provide the outsourcing of logistics processes in e-commerce, most of them use labour-intensive, manual solutions for these warehouse processes with the need to utilize a high degree of manpower. isklad looks at each process separately with the goal of its greatest possible optimization, with an emphasis on tracking data and maintaining modularity of the entire system. Unlike its competitors, isklad is able to provide its product to small and starting e-shops thanks to its proprietary EGON software, in which the e-shop operates under its own administration and therefore essentially manages the warehouse remotely.
The solution: they helped themselves and developed isklad
isklad enables e-shops to grow thanks to its coverage of the operationally-demanding area of order fulfillment on their behalf. isklad provides the e-commerce fulfillment sector with advanced process automation and a highly accessible service.
The company began providing fulfillment services in 2016 and since then it has handled more than 1.3 million orders and charged 6.6 million euros for its services over three years. Prior to this, the team spent 7 years developing its proprietary software. Martin Mitošinka and his team began working on it when they were resolving the logistics needs of their own e-shop. Now, the fully-developed software product automates more than 30 essential processes and its functionality is capable of satisfying the requirements of any e-commerce vendor. If the e-shop uses the software’s full set of features, then one worker is able to manage all logistics processes, while even this can be outsourced to isklad.
Today, the company serves 90 clients and handles 31,000 orders per month. The company operates a warehouse with an area of 2,500 m2 in the Golden City complex in Bratislava and due to its full capacity can no longer take on new customers that use both the software and physical part of the service (storing and processing goods). There are over 100 interested clients on a waiting list from all over Europe and even Asia, and each day isklad receives approx. 2 inbound leads despite minimum marketing spend.
The physical part of the service is also already optimised to a great extent. For example, warehouse labour is fully variable thanks to the company’s “UBER” system, which automatically manages the supply and demand for warehouse workers for each day.
The next step is the technological innovation of physical warehouse processes and increased capacity per square meter through the integration of vertical warehouse systems and modern item sorting technology.
Why should you invest in isklad?
E-commerce is a segment that has seen rapid growth worldwide over the long term. The number of shipped packages worldwide increases each year by 12.3% (CAGR) with e-commerce volume in Europe expected at 374 million euros in 2020 at an estimated growth of 6.7% (CAGR 2020 – 2024). The current situation has dramatically accelerated this trend. At the same time, building your own reliable logistics infrastructure and scaling it with the growth of sales is operationally demanding and capital intensive. Thus, the outsourcing of logistics processes to a specialized provider is a logical trend that resolves these problems. With isklad, the e-shop very easily integrates already developed software (usually their existing e-commerce platform handling the front-end) and starts to use isklad’s logistics infrastructure, which flexibly and variably adapts to development in sales volume.
isklad does not have extensive competition thanks to the typically low margins present in the fulfillment sector (absence of automation). They include global as well as Czech and Slovak providers. isklad is ahead of the competition thanks to its automated software and the high-quality technical solution of its services. At the same time, isklad is more focused on providing a modular product allowing them to serve a diverse client base and achieve maximum possible automation of physical movement in the warehouse.
The company’s goal is to scale the customer base and become a regional (CEE) leader in the fulfillment sector. It is currently not able to satisfy the aforementioned 100+ potential clients in its pipeline as a result of its presently full storage capacity.
isklad’s business model is very flexible and rapidly scalable. The client chooses tailored services, from the use of various software functions to the use of physical fulfillment services (e.g. which transportation company, countries, speed of delivery, packaging method). The connection of the e-shop to the isklad system is technically streamlined, through plugins for well-known e-commerce platforms (Shopify, Woocommerce, Prestashop, Magento, Shoptet) or via API, and configuration on the side of the e-shop is done through simple (step-by-step) instructions. The customer can manage the onboarding process by themselves in less than 30 minutes as a result of effective automation. The founder, for example, was able to run 2 million euros in annual revenues in the first years of operation with just one employee in the management structure.
isklad is fully prepared for further growth. As soon as the company secures greater capacity through further automation and an expanded warehouse, it plans on growing its client base via pre-negotiated partnerships with e-commerce platforms Shoptet (20,000 e-shops in the Czech Republic, ca. 50% of the market), Prestashop (Europe, 300,000 e-shops) and potentially Shopify.
Today, isklad’s clients also include major e-shops such as SHOOOS.sk (sneakers – 2.9 million euros of sales in 2019, up 168% from 2018) and Maxsport (fitness nutrition – 8.9 million euros of sales in 2019).