Huboo is a popular U.K. startup that provides fulfillment services for different e-commerce businesses. The company has now raised $1.2 million in seed funding. The main backer of the round is London venture capital firm Episode 1. However, many unnamed investors have also participated in the round. Martin Bysh and Paul Dodd originally launched the company in 2017. The duo came up with the idea of the company after many e-commerce experiments. Huboo mainly aims to solve the fulfillment point, which many companies face. The service stores your stock and then promises “to pack and deliver” it to the customers when they place orders.
The main idea that the startup Huboo follows is outsourcing fulfillment. The startup wants businesses to focus on the aspect of the business where there is more value, like choosing the products to sell and customer service.
According to Huboo’s founders, there is great potential in this market. Most fulfillment providers are either too expensive or uninterested in low-level businesses. Their only option remains to go for Amazon’s “Fulfillment by Amazon.” However, it is beneficial only for products sold through Amazon because of the discount the company offers. Amazon is in hot waters these days because FedEx decided not to renew its contract with Amazon.
“The most horrible side effect of our implementation was packing the boxes and arranging them in a post office. We needed to come up with a solution to this problem because we didn’t want to waste hours on this each day. The only other option for us to end the whole project,” Bysh says, “We called some fulfillment companies to solve our problem. However, they had no interest in our business. They thought that our items were quite cheap with low volume. They also weren’t tech-friendly and based their businesses on third-party software and limited market interrogations.”
The duo decided to change their tactics. Instead of finding the next e-commerce opportunity, they decided to find out ways to break the economics of fulfillment. The prize of this was a huge chunk of the untapped multi-billion market. “We did some research and found out that there is a $1.2 billion of untapped market opportunity.
The main idea was to build a flexible system so that Huboo can work with sellers. It didn’t matter what the products were, whether they were sold new or second-hand. Bysh further explains, “We have clients which ship just two or three items per day and others that ship thousands. The price range of items ranges from a few pounds to hundreds.”
The major products, which Huboo fulfills, include CBD oils, vitamins, bingo tickets, headphones, coffee, electronics, clothes, beauty products, and antiques. Popular clients include startups, business subscription or individuals selling products.
According to Bysh, a combination of algorithms or bespoke technology serve the fulfillment market. This leads to “massive process optimization” and reduces the overall client management costs through sign-ups and support.
However, the startup’s success doesn’t lie in just tech-driven processes. Huboo also achieves its proposition by a modular approach to organize its warehouses. This involves having a designated space for every client within a hub and a manager who understands the business well.
Huboo is constantly looking for new ways to improve itself. The startup looks to align its interests with the sellers. The startup gives two months of free storage to each client with the new inventory shipment. Therefore, if the sellers maintain the turnover, they won’t need to pay for the storage again. Bysh states, “We fulfill when a seller sells. In layman terms, it means that the seller pays us only when he is earning. 80% of our revenue comes through this method.”
Huboo also generates revenue from small administrative subscription and other services, such as packaging. The packaging business will grow when “Hubstore” launches at the end of this year, which offers upgrades with a single click. This will also include services to increase overall sales.
