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Thought Leaders in E-Commerce: Rafael Zakinov, CEO of Ruby Has (Part 2)

Posted on Tuesday, Nov 6th 2018

Sramana Mitra: If an e-commerce vendor is trying to choose between you and another third-party logistics vendor versus Amazon, what is the case for choosing you? What is Amazon lacking?

Rafael Zakinov: First of all, Amazon does not provide any customization to the process. They don’t allow you to brand the packaging. Everything must ship in an Amazon box. In 2017, they did away with the option of paying an extra dollar for the use of a brown box. Amazon no longer gives you that ability. They’re really trying to do away with that whole third-party fulfillment. They want you to sell on their platform. Other marketplaces like Walmart don’t want you to ship in an Amazon-branded box.

Sramana Mitra: It’s the branding that is the key to choose another logistics provider.

Rafael Zakinov: That’s a huge proponent and they’re also quite costly with respect to their fees for marketplaces outside of Amazon.

Sramana Mitra: If you look at the industry outside of Amazon, to what extent are your customers able to provide same-day delivery or to what extent outside of Amazon does the industry provide for same-day delivery today? Is it really not quite there yet?

Rafael Zakinov: Our most successful customers don’t even sell on Amazon for a multitude of reasons. All of our customers achieve, on average, two to three-day delivery for all of their customers.

Sramana Mitra: The question I’m asking is, to what extent, from a logistics point of view, is the market outside of Amazon able to deliver same day?

Rafael Zakinov: There’s very little market outside.

Sramana Mitra: That’s what you and your peers are working towards to create the coverage so that you can all provide same-day delivery. You’re trying to create an alternative to Amazon vis-à-vis same-day delivery as a third-party logistics provider segment that will compete with Amazon.

Rafael Zakinov: Exactly.

Sramana Mitra: There, Amazon is two to three years ahead? What are we talking here? At what point does this reach parity?

Rafael Zakinov: I don’t think they’re two or three years ahead. I think they’re six months to a year out. Between the technology that  is emerging with respect to DoorDash, Uber, Lyft and the like, they have bridged that gap. Amazon, three years ago, didn’t have these carriers at their disposal. I think we’re very close to achieving that. We achieved that for New York. We’re going to achieve that for LA, Las Vegas, and San Francisco in the first quarter of next year. We’re very much excited about that.

Sramana Mitra: To achieve that, you need the warehouse in that geography and then you need the last mile delivery. You’re achieving the last mile delivery using Uber, DoorDash, and all these other players?

Rafael Zakinov: A multitude of players. Amazon did not have that available to them two or three years ago, but now it has become available to them as well. They’re also coming out with their own Amazon Prime-like subscription that they’ve started utilizing this year. That whole stronghold that Amazon had, with service providers like Ruby Has, that’s no longer true.

Our customers are able to control the branding, control the messaging, own the customer, and yet deliver that same level of shipping out of receiving an order and getting it to the consumer depending on how our customer wants to place their inventor whether that’s same-day or two to three-day delivery time. Amazon lost that advantage where five to six years ago, marketplaces would force sellers to ship. They would reward sellers that ship within one day or two days. That’s no longer acceptable.

If you go online and you place an order at 12 PM or even 1 PM, you expect that order to ship. You’ve come to expect that from Amazon but not other players. Now that is made possible.

This segment is part 2 in the series : Thought Leaders in E-Commerce: Rafael Zakinov, CEO of Ruby Has
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