Steve Thomson, founder of Sweetwater Logistics, likens his business to that of an old-school neighborhood grocer, someone who knew your family and their needs. Sweetwater provides logistics and shipping services for start-ups, small businesses and entrepreneurs—their North Carolina-based warehouse lets them ship to 80% of the contiguous United States’ population within two days—but their underlying service, ultimately, is scalability. “If you have a great idea, you need someone on your operations side,” Thomson says. “I’d love to be known as the entrepreneurs’ secret to success to selling products on the Web.”
Which industries do Sweetwater Logistics primarily work with?
We provide services to really anything nonperishable that gets sold on the Internet. From an industry perspective, we’re open to everything. What I do—my niche, so to speak—would be start-ups, small-business owners and entrepreneurs. They recognize the value of outsourcing so they can focus on marketing. We focus on warehousing, setting up space, working with vendors, et cetera, so they don’t have to worry about it.
Our clients are start-ups and entrepreneurs. We’ve gotten into a really good niche; we’ve gotten well-known in subscription-based services. One of our clients has a subscription-based product for men, where every three months, you get a pack of new t-shirt, socks, and underwear. We’re a leader in setting up that type of service. We just had a client come to us, wanting to do that for pet food.
Before founding Sweetwater Logistics, you worked in international shipping. What did that teach you?
Logistics is a very simple thing: You move product from point A to point B. Many times, logistics providers try to make it as complicated as possible to prove their worth. But in reality, it’s pretty simple. It’s just a matter of knowing where you go to find the right answers. I don’t have to know everything about shipping. I just have to have the belief that something’s possible, and then find a provider to do that. That’s key to what I’ve learned in international shipping. It doesn’t matter what the language or the customs in the country are. The underlying principles are the same everywhere. It’s just identifying those processes and finding global nuances.
Honestly, I’ve gained a deep understanding and belief that there is an answer and solution for every problem out there. No matter where I’ve been in the world, you can find the answer. And it’s usually not as difficult as everybody wants to make it out to be.
Why would logistics companies make shipping appear more difficult than it is?
Transportation has turned into a commodity. Going way back, the original industry involved moving something from the farm to the marketplace. That’s the very first thing, as a society, that we’ve done, and every economy requires it.
What I learned in international transportation is that it’s the knowledge of moving that’s important. You have to convince [your clients] that you’re the go-to person to do it. Your competitor has the same-sized shipping vessel and containers, and it takes them about the same time. So there’s perceived value in creating this veil of insecurity around your customers’ knowledge. You’re able to create a differentiator. And that made me sick to my stomach, knowing that was out there. There are so many other ways to differentiate in the market without creating that deceptive veil.
How does Sweetwater Logistics scale its services to work with home-based businesses and more mature, larger companies?
All of our clients are fantastic at making products that are unique and creating demand for those products. We help them focus on that. It doesn’t matter their size.
I have a client—she has one pallet. In between Thanksgiving and today, she sold five items. That’s perfectly fine. It can sit there until an order comes in, and when it does, it just goes through the flow. And we notice; everybody cheers.
Then we have other clients, they’ll move a hundred pallets in a day. Because of automation, we can scale dramatically. We can scale to any size.
My growth strategy is, if I can take away one or two constraints that are hurting expansion of small business in the U.S., I should be able to grow on that. My strategy is helping these guys thrive. They’re able to focus on growth by letting us handle all the other little stuff.
How do you cross-promote your clients?
Here’s a good example: We have one client that does skin care and body care products for men. We also have another client—Manpacks.com. They have a similar demographic. We introduced Anna from Raw Materials for Men to Ken at Manpacks. Ken actually sells Raw Materials products in his subscriptions. Anna could put a note into her orders, saying “Thank you. As a token of my appreciation, here’s your first month free at Manpacks.” Ken can do the same thing. Or Ken has a blog going out twice a week, and he mentions her stuff in his blog.
That’s something we actively do, making those connections. My success comes down to my clients’ growth. I get paid when my clients’ products get out the door. Cross-branding and introductions is part of it. Everybody wins. Ken or Anna can thank their clients and give them value that they otherwise couldn’t, and they get eyeballs in a new segment of the market that they wouldn’t otherwise.
Have you found it challenging to build a clearly focused brand?
When we created our logo, we actually did this exercise. We went out to our client base and crowd-sourced our logo from artists around the world. We got 150 images, all different. We asked our clients, “Which one of these matches your image of Sweetwater, and why?” I got great feedback. The underlying message was, as somebody summed it up, “That sign looks like a sign for a neighborhood grocery store in the ’50s, where the owner knows what you need and knows your family.” That’s exactly the brand I want.
Doug, one of our clients—he’ll call on a Friday afternoon to chitchat, talk about his business, his challenges, his big wins. He sincerely wants to share. Another client, Anna—I love the fact that when something big happens, I’m one of the first three phone calls she makes. She wants to share. I love being in that position. I love knowing that we’re considered a partner. And all the guys here want to hear that. They see products every day, going out the door. We packaged that DVD, that underwear, those socks, these boots. The guys here are the last ones to touch it before the customer. So they take great pride in that.
What direction is Sweetwater Logistics headed?
I’d like to continue with the same focus. Five years from now, I’d like to have 20 of our clients hit it and and be huge.
The nitty-gritty of it? We’re really selling scalability. The ability of an entrepreneur to entrust us, if we’re working with them. Say, right now, they’re selling 2-3 items per week. If they get to more than 15 per hour, that’s great. That’s what I sell: The ability to expand dramatically.
It’s maybe a wish, but if there’s somebody taking an entrepreneur course in school, I want a professor to say, “That’s a great idea. You should talk to Sweetwater. They can help you.”
We’re not peddling get-rich-quick schemes. If you have a great idea, if it’s sound, you need someone on the operations side while you focus on growing this idea and getting it out. You’re always going to be your idea’s biggest advocate. I’d love to be known as the entrepreneurs’ secret to hitting success to selling products on the Web.
What do you love most about your job?
I love the energy of entrepreneurs. I love their optimism. If I can surround myself with that every day, that brings me pleasure.