Lessons from the Fast Track 100: Fulfilling the American Dream

It’s been a whirlwind few years for this self-funded Fast Track 100 British company. As they take their business model to the US, things are set to speed up even further…

“It’s been a steep learning curve for us to repackage what we do in a way that works in America,” says 34-year-old James Hyde, co-founder and CEO of Northampton-based James and James Fulfilment.

The fact he’s talking about the US market tells its own story. Especially when you consider that he and co-founder James Strachan launched their order-fulfilment company just nine years ago in the dusty corner of a Cambridgeshire warehouse. They hired some space, built their own office, created some bespoke order-fulfilment software (easier said than done, that part) and set to work. In early 2015, they opened a warehouse in America and, later that year, launched another fulfilment centre in New Zealand. In 2018, they broke into The Sunday Times Fast Track 100. These guys are rapid. To succeed at e-commerce order fulfilment, you have to be.

Fast, yes. Scattergun, no. James and James are growing quickly because they have painstakingly built an order-fulfilment service from the ground up, using their own rigorous methodology and technology. In line with this thorough, carefully engineered approach, they have resisted diving headfirst into the American market. For two years they’ve run their Ohio fulfilment centre for existing clients only. Only now are they seeking new American customers, having looked long and hard at the local market and culture.

“The way Americans buy things is different,” observes James Hyde. “In the UK there’s greater consideration up front, a bit more going through all the details. In America, it’s more: ‘This is going to be amazing, let’s start today!’ There’s an exciting, can-do approach and a ‘let’s go for it’ culture. So, we’re tweaking the way we package our services to appeal to new US clients.”

That’s a useful lesson for any British business thinking of launching over The Pond. And if such a move is on your agenda, James and James advise strict adherence to the old adage: measure twice, cut once. It’s a saying that has served them well.

It was while doing a part-time job together that the seed was sown. The pair graduated in manufacturing engineering from Cambridge University and were taking part in a project run by serial entrepreneur Peter Dawe. The project was seasonal and in their downtime they took jobs with an e-commerce website. The duo soon noticed that the third-party company responsible for mailing out their orders was not doing a great job. “The fulfilment warehouse did not work in some fairly spectacular ways,” says James Strachan. “At one point, we ran a successful sales campaign. The next day the company shipped out all the orders. And then they shipped them all out again! Customers got 100% extra free because someone had printed out the orders twice. It was all so hit and miss. They still used faxes and sometimes they packed orders in the morning, sometimes later, and you never knew whether Friday’s stock report included orders from Thursday.”

The friends drove to the fulfilment warehouse to count stock and to see the operation up close. They were amazed. Having visited many gleaming just-in-time factories during their manufacturing engineering degree, this place was just a big shed crammed with stuff. So they started asking for quotes from other providers.

Other fulfilment centres they visited were smarter but, to their trained eyes, also lacked effective systems. That’s when they decided they could do a better job themselves. The order-fulfilment market was clearly ripe for disruption. They would be the disruptors.

“We noticed that the industry was full of people who’d been in it for a long time,” says James Hyde. “When the internet came along, companies that had done logistics in the 1980s and 1990s were asked by their clients: ‘Can you deal with our online orders?’ They’d agreed and started to fulfil online orders using old logistics-industry techniques they were familiar with. But actually, when it comes to packing small orders, what you’re doing is operating a parcel factory. You are creating thousands of parcels every day through repetitive processes – it’s more akin to a manufacturing plant than a logistics warehouse. So, if you start applying manufacturing-process design to your operations, you can run a much better fulfilment centre.”

Armed with this mindset and James Strachan’s technical nous, they created their own fulfilment technology. Next, they hired space in a courier company’s warehouse in Cambridgeshire and in 2010, they built an office in the corner, using doors and windows donated by friends and family. James and James Fulfilment was born. In the early days they spent mornings working for the e-commerce website that had first sparked their interest in the industry, and afternoons hitting the phones to win new customers. “We self-funded from day one,” says James Hyde.

Their originalplan was to perfect their technology and then sell it as a platform that customers could operate themselves. But their business model soon changed. Offering a complete fulfilment service was more profitable. James Hyde explains why, using a clever analogy: “We discovered that if someone wants to drill a hole in their wall, they’ll pay 10p for the drill bit. But they’ll pay £10 for someone to come and drill the hole for them. So we could sit there selling drill bits all day for 10p each or sell a complete service for £10. It made sense for us to run a bigger and bigger warehouse. That’s where we are now.”

James and James Fulfilment experienced 300% growth in their first two years and moved to a bigger Cambridgeshire warehouse in 2012. But theywere careful not to overstretch themselves with capital expenditure. “We negotiated another deal to only pay for the warehouse space we used,” explains James Strachan.

In March 2016, with fast growth still coming, they decided to make their first big jump in the UK, moving their HQ and fulfilment centre from Cambridge to a much larger site in Northampton – this time one they owned. “It was a massive jump,” says James Hyde, and for a while we had two warehouses running in parallel. When you are fulfilling thousands of orders each day, moving your base is challenging.”

It might have been a giant leap and a logistical nightmare, but it didn’t stop them from opening new warehouses in Ohio and Auckland later that year too, using their proven ‘rent space in someone else’s warehouse’ model. And following 300% year-on-year growth in US, order volumes (exactly the same growth figure achieved in their first two years in the UK), they expanded their US operation in September 2018, moving to a new 38,000sq-ft warehouse.

So, what’s next for James and James? More growth and a higher Fast Track 100 ranking seem inevitable. “We’re looking at investment opportunities later this year with a view to growing further in the US and then Europe – so watch this space,” says James Hyde. James Strachan agrees: “We’ve got the network now. So, we can now do exactly what we’ve done in the UK in other countries. Scaling this out is the next step.”

The sky’s the limit, but you can be sure that James and James won’t rush in and risk building the next phase of their growth on shaky foundations. The US beckons, but these manufacturing experts know they’ve got to get their systems and processes absolutely right for the native market before they press the turbo-boost button. Only when they’ve created the perfect platform will they then set about weaving their own American dream. One thing’s for sure: it’s a dream that will be seamlessly engineered and fulfilled to perfection!