Adam McFarland

Back when we moved into our warehouse we were shocked to find out that there was no high speed internet available in our building.  When we contacted local high speed providers, we quickly realized that adding a line to the building would cost a ton (like either $4,000 down plus $140/mo, or $300/mo with a 5 year commitment).  So our somewhat risky solution was to get a Sprint Mobile Broadband card and use it in conjunction with the Linksys WRT54G3G router below.

We didn’t know how good of cell phone reception we’d get.  We didn’t know if the router would cover the entire warehouse.  We didn’t know if the speeds would be adequate.  We could have totally fallen flat on our face with this risk…but we didn’t.   I wanted to make sure I wrote a follow-up post so that everyone knew how well this has worked for us. This solution for internet service has absolutely been one of the better decisions we’ve made.  In fact, I plan on using this same setup at home (being able to “take your connection with you” by just pulling the card out of the router and putting it in your lapper is sooo cool).

Before I get into specifics, keep in mind that we are about 30 minutes outside of Albany in an area that resembles farm land more than the inner city…meaning we don’t get the worlds best cell phone coverage.  Also keep in mind that the warehouse is a steel framed building, which certainly isn’t helping reception either.  After almost five months of use, here are my thoughts:

• Connection speeds are fast - generally within the range that the broadband card states (600 kbps - 1.4 Mbps download and average upload speeds of 350 - 500 kbps).  Now if you’re uploading movies you aren’t going to like an upload speed of 350 kbps, but for our daily activities these speeds are more than enough.  The router certainly doesn’t prohibit you from getting the maximum available connection speed.
• Connection is strong.  Everywhere in the 5,300 sq-ft warehouse you get a full five-bar connection.  It’s nice to know you can move around and not lose a signal.  Again, being in a steel framed building you just never know what you’re getting.
• Downtime is minimal.  In five months, I’d say we’ve only had one day where we lost connection for a significant amount of time.  It was about 2 hours one morning.  Otherwise, just clicking a button on the router to disconnect / reconnect always solves the problem in less than a minute.  My home internet service is down more often than this is.
• There’s no slowdown when all four of use are connected at once.  These broadband cards aren’t necessarily made for this, so I was worried that the connection would lag or we’d get kicked off if there was too much combined uploading or downloading going on.  I’ve never noticed a difference whether there were five computers using it (our lappers + the shipping desktop) or just one.

In sum:  if you have a Sprint Mobile Broadband card you’d be nuts not to pick one of these up.  For us, trimming a $300/month expense down to a $60/month expense was huge.  Every penny adds up, and that $240 is money we can use to market our sites, pay other warehouse expenses, or pay our salaries.

If this first story sounds familiar, it is - I touched upon it in my Productive Output post.  A few weeks ago the owner of a local large online retailer (approx 10x bigger than us) visited the warehouse.  George worked for him prior to starting DI, and he based much of early DI off of this particular website.  After seeing our shipping process on the back-end of our shopping cart, the owner turned George and his co-owner and said “I could fire two employees if I had that technology”.  I unfortunately was not there to hear this, but upon getting the story from my partners it made me feel about as good as a developer slash business owner can feel.

Thus far, features like the shopping cart are how we’ve gotten our competitive advantage, how we’ve gotten as far as we have as guys just out of college with no outside funding.  Anytime something takes up a lot of time we’ve either automated it or eliminated it.  However, we’re rapidly approaching the time when four people just can’t handle it all.   Today Mike, George, and I spent from 9 AM - 3PM packing our orders from the weekend.  That’s 18 man hours doing warehouse work!  Don’t get me wrong, we shipped close to 60 orders - many of which were very large - but no owner in their right mind thinks that 3/4 of their resources should be poured into $10/hr work while the high level stuff (mostly marketing) gets ignored and pushed back.

So why not just hire right now?  A couple of things add to the difficulties:

• 18 man hours is not the norm.  The norm is probably 4/day, but it’s not uncommon to have a few slow days a week that only take 2 man hours.  Mondays are always larger because you have an extra 2 days of orders being shipped.   In short, the pure warehouse work is sporadic.
• We don’t really have a lot of other work for “warehouse workers”.  Shelves need to be stocked for maybe 30 minutes to an hour a day.  Inventory needs to be updated (15 minutes a day maybe).  That’s about it unless we want to cross train them in other areas, which I personally do not think is a good business move.
• We recently instituted a new check/balance system where one person pulls orders and another packs.  Both check the invoice against the products before passing it on (either to the packer or to the outgoing packages area).  This prevents errors due to pulling the wrong item, and highly reduces errors from missing an item all together.   We’re pretty serious about it:  if you take the product off the shelves, you are absolutely not allowed to pack and ship it.  If this is the case, do we hire 2 employees?  Or do we still have an owner paired with the full-timer?
• Our salaries aren’t as high as we want them to be right now.  We are all getting by, but still underpaying ourselves.  Everyone is living tight and that is stressful.  An employee will increase revenue long-term, but we’d like to get one more raise in there for us before hiring someone.

My gut tells me that in a few months we won’t have a choice:  we’ll need to hire.  IF our threshold is where I think it is (fingers crossed), we’ll already have our raises and it’ll be a question of:  do we hire one full timer or two part timers?  I’m leaning towards two part time college age students with flexible schedules.  This eliminates the need for us to provide benefits, meets our check/balance requirement (if one isn’t working that day, one of us will chip in), and enables us to have them only come in 3-6 hrs a day.  I realize that there are downsides to these types of employees, but I think the pros outweigh the cons.  Who knows, maybe we’ll have 3 or 4 at some pt to ensure that we get 2/day.

The good news in all of this is we’re growing.  Nonetheless, every “hump” is stressful.  The “getting into a warehouse without going under” hump is passed and this is the next logical part of our growth.  The warehouse stuff was only February, so things are happening fast, even though a lot of days it feels like growth is happening at the speed of molasses.

On a somewhat related topic:  we’re considering getting an intern or hiring a virtual assistant (usually based in India) to do a lot of the more monotonous marketing and customer service tasks.  One example would be to create a list of sites for us to contact to participate in our wholesale or affiliate programs.  There are many many more, but those illustrate the point that there are long tedious tasks that us, as owners, shouldn’t be spending our time on.

On a completely unrelated topic:  this heatwave is ridiculous.   I was sweating balls all day long doing manual labor in the warehouse.  Average high temps this year:  ~70 degrees.  Beautiful weather right?  This week:  close to freaking 100 degrees with humidity that makes it feel like you’re in a steam bath all day long.  Our boxes - despite being “dry” - felt mushy when we were trying to pack orders.  The packing slips and invoices were curled up like you took them in the bathroom with you while showering.  Last time I checked I lived in Upstate NY…not the swamps of Florida.

The long hours and constant stress of running a business are offset by the fact that after working a 12 hour day George and I can go back to the warehouse and play a fierce game of warehouse hockey at 10 PM…using our shipping dock as a goal.

Our heating adventure continues. When we moved we knew we had ~1,000 gallon oil tank, but when the oil company came and told us it was just short of full, we were happy to only put in 27 gallons. Then our heat went out after a few days in the warehouse.

Four days later, the oil company came and essentially said “our bad, the tank was really empty last time we came” and put in 850 gallons. The bill for that fill up ran us just over $3k, but we figured it would last a while.

Apparently not. We checked the tank today - which consists of sticking a large stick down a pipe - and roughly 1/5th of the 850 gallons was gone. Ummm ~$2,500/month on heat during the winter is not going to fly.

So we lowered the thermostat on the warehouse floor from 60 degrees to 50 degrees. We have a little 200 sq-ft office that Mike and Greg spent a weekend renovating (pics on Mike’s site) and we keep that at 70 degrees and right now are pretty much doing all computer work in there.

We’ll check the stick again a week from now and see how it goes. If not, I think we’ll need to get an energy expert to come in and analyze the situation and recommend things we can do beyond the obvious ones like energy efficient thermostats and adding a bit of insulation.

I bet you think I just haven’t been posting much this week because we’ve been busy getting acclimated to the warehouse. Right? Right? Nope - I caught a wicked cold and have spent most of the week home sick getting very little accomplished. This was supposed to be the week where I started my ‘new’ routine, but that’ll have to wait until next week.

Speaking of next week, we could end up spending the majority of the week working with the oil company trying to figure out why our heater mysteriously stopped working today. That should be fun.

With the move and everything that it has involved, combined with George and I being sick the past few weeks, and George losing his laptop to repair for 2 weeks, I would have expected sales to have struggled. Nope. Detailed Image exceeded expectations by about $15k of additional revenue for February. We’ve spent so much time on total BS this month that sales weren’t doing so great I think I’d be in full-out panic mode.

Is there a point to all of this rambling? Yup. All of this has put us behind the 8 ball a bit with Tastefully Driven. A month ago we were way ahead of schedule, and now we’re cutting it really, really close. The site will launch 4/1 regardless (I’ll make sure of that), but I want it to launch 4/1 with 100% of our pre-marketing plan executed (haven’t started yet…eh) and 100% of the rest of our marketing - like our PPC - prepared.

I’ve also learned that vendors move slow as shit. Every vendor I’ve contacted for Tastefully Driven has been extremely receptive to Pure Adapt and has bought in to the Tastefully Driven concept…which is great. Once they’re sold however, I basically say “we need to place an order ASAP, how fast can I pay you?”. The majority have taken weeks to place the first order, and then weeks to ship the first order. Wtf.

In most cases we’re working direct with product manufacturers, which is an archaic world where fax machines still get more use than computers. One company even told Greg that they charge extra to “ship to companies south of the Mason-Dixon Line”. The Mason-Dixon Line??? Is this 1820 or 2008? Thanfully we are NORTH of the Mason-Dixon line. Whew.

To take product photos, take initial inventory, stock shelves, etc, we really need to have everything in our hands by the middle of March….which I’m confident won’t happen for all of our products at this point. There’s a chance that 75% of it will be here by the end of next week, but the other 25% are going to be pushing it. We could literally be receiving products the last few days of March and photoing them on 3/30 or 3/31. Lesson learned: contact new vendors 3-6 months before you plan to begin selling their products.

Does TD have to launch on 4/1? Of course not. Nothing has to be done. But I won’t let us screw this launch up, even if it means working every waking second the next month to get it right. A few unforeseen road blocks only motivate the shit out of me. In a way, the more daunting the task, the more focused and driven I am to get it done. The easy thing to do would be to postpone the launch to 5/1 - but that’s just not how I work.

As soon as I wrote my last post about our moving time chaos, Murphy went into hiding an everything started going right for us.  Friday we packed everything.  Saturday we spent the entire day moving, but we were able to do it in two truckloads and the weather turned out to not be all that bad.  Sunday George and Greg loaded all of the products on to shelving units while Mike and I set up the computers and the network (our Sprint Mobile Broadband Card + Linksys router is working great thus far - download speeds are well over 1 mbps with three computers running at once, and the Skype VOIP phones all work well).

Here are some pics that Mike took throughout the weekend:

Loading the truck…

The Industrial Park entrance as we pulled in…

Empty warehouse with just our shelving units…

Products off of the truck…

The way we left it last night (good enough for now)…

I’ll admit, it does feel pretty cool to all be working together in our warehouse today

Today we finally start the move to our warehouse.  All week long Murphy’s Law  - whatever can go wrong will go wrong, and at the worst possible time, in the worst possible way - has been in full effect.  Among my favorites:

• The hard drive on George’s brand new laptop died yesterday, and his most recent backup was the end of January.  He has been the main point of contact for everything move-related, so this was a big hit.  Remember to back up your files kids!
• I’ve been jumping through hoops trying to get my identity theft situation cleaned up.  I’m one step away from getting my lawyer involved.
• The National Weather Service has issued a snow advisory for the next two days while we’ll be moving.  Because loading stuff on and off a huge truck and driving several 30 mile round-trips isn’t hard enough, we now have the element of snow to deal with.  There are just enough hills on the way there to make it a challenging drive.

Despite the general stress of moving, taking no salary, and all of the obstacles getting in our way, it’s a really exciting time for us.  The silver lining in this week is Detailed Image sales are just going bonkers, which bodes well for the busy spring time just around the corner.  I’ve also had good luck contacting vendors and placing initial orders for Tastefully Drive, which is a good sign.  Overall I think we all are a bit over-stressed and are working with the mentality “if we can just get through the weekend, everything will be OK”.

Today we’ll be packing up, with tomorrow being the big move day.  I’m going to try to remember my camera to take some pics.

One thing we learned quickly when we started adding up the costs of a warehouse was that everything is more expensive when you’re a business. It’s as if every service provider hears “business” and immediately jacks up the price 50%.

As of Monday we had everything squared away except our internet access, which has always been a bitch every time I’ve ever moved. That’s why we got out in front of it and about two weeks ago George put a call in to Time Warner Cable to inquire about getting Road Runner in our warehouse. They told him they needed to send out a technician to see if the building was already wired, and that they would get back to us in a few days. Well, after harassing them several times they finally called George on Monday afternoon:

They wanted $4,000 to run cat5 cable into our warehouse! To be fair, they either wanted $4k OR a contract of any combination of phone, internet, and TV exceeding $300/month for the next five years. Never mind we don’t want phone or TV from them. Oh, and I failed to mention that the same Road Runner that we all have in our houses and pay $50/month for costs ~$200/month for “business class” at comparable upload/download speeds.

Suffice to say, our answer was a resounding NO. Unfortunately we looked at other local internet providers and they were all in the $200-$300/month range, which is still freaking ridiculous for a biz of our size.

So we started to get creative. I’ve always been fascinated with mobile broadband cards so we started looking into the alternative of purchasing an unlimited data transfer card for each of us for $60/month. Then we got the idea: what if we could buy one card and somehow get it to work with our router? I took a quick look on Sprint.com, and in 3G areas like our warehouse the connection speeds were comparable to Road Runner.

Then Mike found this Linksys Router that actually has a PCMCIA slot in it and is designed to work with Sprint Mobile Broadband Cards!

Freaking awesome right! We’re all pretty in tune with the tech world and none of us knew anything like this existed (at least legally anyway).

George and I went to the Sprint Store in the mall on Monday night and got a 3G mobile broadband card for free with a rebate. Then we took our unopened router to Best Buy and returned it for this one, which was actually cheaper than the original router we purchased. Let’s sum up: we’re getting similar service for $0 down and $60/month when Time Warner wanted $4,000 down and $200/month. Ha - take that bitches.

Last night George and I went to the post office and mailed in the final copy of our signed lease. Wow does that feel great! We’ve been looking for a place since back in August, and after having a few places fall through we finally found the perfect location for us.

First things first - in our struggles to find the right place we learned that there are a lot of grimey people in this business that are difficult to work with and try to rip you off. This location is managed by the Galesi Group and I wanted to make sure that I gave them the credit they deserve for being a pleasure to work with. Not once have they not returned a phone call, or not given us a completely honest answer. Even more amazing: our location is by far the smallest that they manage. You know you’re working with good people when they treat their least important client like gold.

On to the warehouse. It’s located in the Guilderland Industrial Park, about a 15 minute drive from Albany. I really love the Guilderland area (and so does everyone else) so I anticipate that we’ll all move closer to the warehouse within the next year or so. The warehouse itself is exactly what we needed: essentially a big freaking empty room that’s in good condition.

The park used to be a military depot (and is still zoned as such) so we get cool little perks like 24-7 security and no sales tax on anything shipped to our warehouse. I’m not sure if this has to do with the zoning or not, but it’s my understanding that the park charges a flat yearly rate per square foot to everyone. This worked to our advantage immensely because we got prices that a 200,000 sq-ft place would get, which is why we were able to afford a 5,300 sq-ft place for the price of a 1,500 sq-ft one. The lease is a 3 year lease, but we built in a renewal provision to renew at only an increase of 20 cents/sq-ft/year, which means we’ll probably be in there for 6 years unless we explode and need a larger place. We’ll only be using about 1,000 sq-ft to start off, so we’d have to grow a lot for that to be the case.

Here’s how Google Maps shows the massive industrial park - we’re just a tiny corner of that building…about the size of a football field:

We’ll be moving next weekend (2/22 - 2/24) so I’ll be sure to post before and after photos.

In moving back and forth for several internships during college and then my job after college, I’ve lived in quite a few different places from anywhere from three months to a year. In doing so, I’ve looked at a lot of apartments and become accustomed to the relatively pain-free process of leasing an apartment. I always figured leasing business space would be the same. I was wrong.

Following our debacle a few months ago, we were pretty certain we found a great place for us a few weeks ago. It’s a short commute, it’s a brand new facility (meaning we have control over the layout), and it had a decent amount of space to grow in to. Then slowly but surely it began to fall apart. They would only sign a 5-year lease (five years is A LONG TIME for a young and ever-changing company like ours….we could have 30 employees in 5 years or it could still be just the four of us), and then the lease they sent over seemed to be a bit over the top. We forwarded it over to our lawyer who specializes in real estate, and hoped he’d tell us it was a good lease. If that was the case, we probably would have attempted to work them down to a 3-year lease and try to get a few other small concessions and if all things went well we could have moved in on 2/1.

Not so much. He came back with NINETEEN points of contention on top of the few that we came up with. And they weren’t just minor things. I’m quoting from his email here:

• “This is burdensome and unnecessary”
• “This particular section of the lease sucks for you and there are a lot of hidden costs here”
• “This is not reasonable and is too suggestive”
• “I think paragraph 5 under Section Nineteen is bull shit and definitely not standard”
• “DEFINITELY NOT. The last paragraph under Section Twenty is OUT. I have never seen it done this way.”

That was enough for us to bail. We’re not going to sign a lease without those concessions, and there’s about a 0% chance they’ll concede on over 20 points in a 10 page lease. It’s not worth wasting our time.

Maybe I’m reaching here, but when you get a lease that sucks THAT MUCH, you have to wonder if they were trying to take advantage of us. This is an established property company in Albany that we were dealing with. They own a lot of commercial real estate in this area, and you’d think their other tenants would have a lawyer review a lease. They’ve been around for a long time and I wonder if they’d try to slip a lease like that by a large corporation. Do they see four 25 year old guys and think “these guys have no clue what they’re doing”? Regardless of whether they are ageist scumbags or just equal-opportunity scumbags, we’re out and we’re happy we took a hard stance.

We’re now looking at cheaper, shorter-term alternatives. After getting together for a few hours last night and calling some of our friends/family/business contacts, we already have a handful of opportunities. If we can trim our rent costs from ~$3k/month to ~$1k/month we can put that extra money away to build our own facility in 1-2 years when we learn a little more about how our company is going to shake out.

Even though stuff like this pisses me off, it always seems to work out for the best.