R500 billion, online transactions, however account for less than 2% of that; in the US, online retail makes up 15-20% of overall sales. South Africa’s poor logistics are often blamed for making it harder for retailers to take full advantage of their e-commerce platforms.
Enter ParcelNinja – a storage and distribution company for e-commerce stores. ParcelNinja stores stock for online retailers and delivers them on behalf of that store.
Co-founders of ParcelNinja Justin Drennan (pictured above), Ryan Drennan and Terence Murphy explain how they developed a system for online stores with the goal of alleviating the logistics hassles that online retailers face.
ParcelNinja was formed when our online shopping website, Wantitall, took charge of its logistics infrastructure to improve its own service and delivery times. We realised that there were very few distribution businesses focusing on e-commerce. We had some specific requirements which we couldn’t seem to find a supplier for, so eventually we decided to build our own distribution business.
“We need a robust set of players which can facilitate the entire life cycle of a startup”
This forced us to develop a supply chain methodology to deliver products from the US to South African customers. There is also no one really focusing on helping small and medium businesses to get products to customers and we wanted to build a warehouse in the cloud, that anyone can make use of.
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ParcelNinja is different in that it allows e-commerce sites to perform real-time stock checking. They can combine orders and reserve stock, as well as optimise the delivery route if needed. These are things you won’t be able to do as a normal e-commerce provider. We can do same-day deliveries in Johannesburg if an order is placed before 11.30am. We are working to expand this to other cities as demand increases, but this is still a while off.
The ParcelNinja Warehouse.
Small companies that don’t know much about technology or that don’t receive many orders can handle the ParcelNinja systems on their own. They log into the backend when they receive an order, complete the relevant order details, and ParcelNinja will handle fulfilment.
The warehouse is completely paperless, it uses iPod touch devices linked to Bluetooth scanners to record, track and ship packages.
The biggest hurdle we’ve faced is educating the industry and making them aware that there is a business like ParcelNinja out there, which can assist e-commerce players in fulfilment and distribution of goods. Although, we are lucky in that all of us come from an IT background, so from a development cost perspective, we were able to fund ParcelNinja ourselves and keep costs low.
“Try focus on building a monopoly in your niche and stay away from competitors”
The South African startup industry is quite underdeveloped, however in the last two to three years we’ve seen a definite movement towards startups and the funding of startups. I still think the entire ecosystem needs to be built up, as we need a robust set of players which can facilitate the entire life cycle of a startup – all the way from seed and angel funding, through to the final exit. This does not yet exist.
ParcelNinja is not just targeting small to medium e-commerce businesses. It’s also hoping to attract large e-commerce players and traditional bricks and mortar stores. We just want to keep growing the business and focusing on acquiring new customers, allowing us to scale the business, while building world class systems. We’re also now looking for developers to build third-party applications on top of the warehouse to enhance the capabilities of the platform further.
Aspiring entrepreneurs should try focus on building a monopoly in their niche and stay away from competitors. It’s not just hard work, but staying focused. Saying ‘no’ to things is far more important than saying ‘yes’.