The Ultra-Fast Fashion Supply Chain with Portless

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OLIVER CHEN: Ultra fast fashion direct from factory to customers, welcome to the Retail Visionary podcast series, a podcast about visionary ideas and people. The future of retail supply chain, it's more important than ever. My name is Oliver Chen. I'm TD Cowen's retail and luxury analyst.
In this episode, we'll explore Portless. What is Portless? A next-generation fulfillment platform for e-commerce brands. Today we're thrilled to feature Izzy Rosenzweig, founder and CEO of Portless. With Portless, Izzy is revolutionizing the retail industry by helping brands ship directly from China, helping them achieve better margins and cash flow. In the era of rapidly growing Shein and Temu, I wanted Izzy to join us today to better understand where retail and supply chain is heading.
Before Portless, Izzy founded Browze in 2012, a marketplace that curates unique, low-cost products directly sourced from factories. Izzy, it's great to have you here.
IZZY ROSENZWEIG: Oliver, thank you so much for having me. Very excited to be here.
OLIVER CHEN: My pleasure. So what is ultra fast fashion? Where do you see the supply chain moving, Izzy?
IZZY ROSENZWEIG: Absolutely. So I'd like to give a high-level example of some brands that people recognize. I think the first version of ultra high fashion-- ultra fast fashion came from Zara. So before Zara, the brands would manufacture overseas and have very long lead times, very long feedback loops.
So let's just say you're a very large retail business. You'd manufacture in India, Vietnam, China, wherever you're manufacturing. You'd put it on a boat, you'd wait on average 60 days, and only once you get it in your local market, then you're selling it. You're getting the feedback loop. And then what happens is you make decisions and changes for the next season. You're not really making fast decisions today.
Zara was one of the first companies that actually changed that. They started doing more small batch manufacturing. And they do, obviously, manufacturing all over the world. And Spain was their main hub.
And they started to take feedback from the customers and apply it to changes in a more agile manufacturing way for their business. So they would say, oh, a customer likes bigger zippers, smaller zippers, more buttons. And every time they'd get that feedback, they would try to immediately make those changes and bring them to stores around the world.
That even got more sophisticated over time with companies like Shein. So, again, just to phrase it, until companies like Shein, products would go on a boat. You would have to wait 60 days just until you could sell that product-- so bad cash flow, no feedback loops for a very long time. And only once you start selling it, you would get that data, you'd get the feedback loops, and finally get your cash out of your inventory.
Shein changed that totally, which is start shipping from near the factory's location. And that's what Portless does. So instead of putting it on a boat, you keep it locally near your factory. You're getting the orders on Shopify, wherever you get your orders from.
And now what Shein would do is they would be near the factory, so they'd make 100 units at a time. They'd get the order, they would ship it out, deliver it in roughly six days to the US. But most importantly, from post-production to that sale is now days. Days post-production, they're making that sale.
And with small batch manufacturing, you're making 100, 150 units at a time, but two days later, you're getting feedback. So you may have changed the design based on the feedback. You may have changed the material based on the feedback. And you're running a very agile business.
So ultra fast fashion is essentially, from the second it's done production to when it's being sold and the feedback loop happening is days-- not weeks, not months, days. And you're immediately capturing that data days post that data feedback loop, so within the season. Within the season, you're getting feedback. Within the season, you're producing the right product and the right colors and the right SKUs with the right feedback loop from the customers. And you're selling aggressively into those SKUs that make sense with those VI clips.
OLIVER CHEN: Izzy, Shein is really revolutionizing the industry, and the whole world is shopping at Shein, including myself. So how did they do it? What is their secret sauce, and what does it mean? Why did this happen now?
IZZY ROSENZWEIG: Great question. Let's go back a little bit in history. Prior to 1980s, everything was manufactured in the people's local markets. My grandfather had a manufacturing business in Toronto.
The difference was it was very expensive to buy a new piece of clothing. People did it once or twice a year because it cost hundreds of dollars, even back then, prior to 1980s. What happened in the 1980s is that shipping containers became commercialized.
When that happened, it took time. It took time for companies to build out ports and to build out big ships. But once that was done, all of a sudden, what you had is the ability to move product around the world efficiently for the most cost-effective possible. You're manufacturing product near the raw materials in the most cost-effective country.
So just like the 1980s, which I would argue was a once-in-a-generation shift of commerce-- but it took time, it took 15, 20 years, so, too, was Shein. Yes, you're hearing about it today. They started in the early 2000s. And the big pivot here was starting leveraging air cargo for a direct-to-consumer model. And, yes, there were planes for a long time, just like there were boats for a long time.
But to do that efficiently, where you are able to take a product, put it on a pallet, do a direct injection to all these different countries around the world, and have the local, last mile carrier do that final delivery within six days-- and Europe within five days-- it took some time. So sure, in the early days it wasn't as good or wasn't as efficient.
But people are hearing about it today because just like the 1980s took 15, 20 years to build out the industry, this is what's happened with this model as well. It took 10 to 15 years, but now it's at scale. Now it works. Customers have a six-day delivery cross-continental US, which is arguably faster than some local 3PLs in the States, and a fully localized experience.
With that localized experience, fast delivery, and the best efficient supply chain that ever existed for e-commerce, that's the magic potions. And now you're doing that across every country around the world.
OLIVER CHEN: Izzy, how can the prices be so low? And what is Portless? What made you want to launch the company? My take is that retail has a lot to learn from the business models of Shein and Temu.
IZZY ROSENZWEIG: 100%. So first of all, I'll answer what Portless is. And then I'll start answering where you can learn from Shein and Temu. And it's not always about price.
So first, with Portless, like you mentioned before, I've been doing this for a long time. I've been doing cross-border logistics for over 12 years.
The early days of this model wasn't great. It was slow. It was two-week delivery, three-week delivery. There'd be Mandarin on your packaging and on your tracking. It was confusing.
But like we mentioned, with time, with volume, with KEM efficiency, and now-- I ran that Browze business for many years. But in 2022, all of a sudden, money was no longer cheap. And brands actually had to make money, had to make better gross margin, and had to have better cash flow, because, usually, cash flow is what's killing businesses, not the gross margin.
And we start getting inbound of brands saying, hey, you guys are experts at it. You understand it's a complex business. Can you help us do the Shein model for our US brand?
And really, there is no difference. You don't need to be a Chinese business to leverage this model. As long as you manufacture in China or in Vietnam, you could use a Portless facility where you manufacture product, move it to us days post-production. We could ship it to your customer's front door within six days, local US experience or local UK experience for Royal Mail.
So that's what Portless does. We essentially give the Shein supply chain, fully localized to the customer, to any American or European brand that wants to leverage this. Now, how could US brands learn from Shein and Temu?
The first thing to realize is Shein and Temu are the two fastest-growing retail businesses in the history of commerce. Now, it's not because there's magic in their product. It's not because they have something unique that no other brand has. It's because they're using the most efficient supply chain that ever existed for e-commerce.
So a brand should look at this and say, hey, I manufacture in these places already. Why can I also not leverage this model? And when you do, not only do you go from way better cash flow from where it used to be months to get your money back, now days, less money in inventory, and you start producing product on the best-selling products, the ones that matter, reducing your excess inventory, and increasing your line items of products that are doing really well. US brands have to use it.
Now, Shein, being cheap, is not that this only works for cheap. It works for any brand. They're cheap because they manufacture in China. They reduce their OpEx. They reduce their excess inventory. They're selling to ship to 50 countries around the world. And their products are light.
So if you look at any American brand, their cost of goods is just like Shein. It's no different in the cost of goods. They just run an efficient model with no excess inventory, great supply chain, and they can ship it across the entire world to any customer that wants to buy it from them.
So who could use this model? Anyone that manufactures overseas-- for now, what we support is China and Vietnam-- and your products are on the lighter end. This business doesn't work with furniture. Putting a couch on a pallet on a plane is not cost-effective. But putting thousands of orders of fashion or cosmetics or jewelry or accessories and electronics, that does work in this model.
OLIVER CHEN: Izzy, why should companies use Portless versus doing it themselves? What are your core competencies in helping execute this?
IZZY ROSENZWEIG: Yeah, great question. To do something like in this model, there's multiple barriers of entry. First of all, from a legal aspect, it took us two years-- or let's say 18 months-- to set up Hong Kong corporations, a WOFE, a Wholly-Owned Foreign Entity, in China, so you can sign local contracts to local air cargo planes.
And so that's one aspect. Simply setting up operations overseas is complex. Many brands don't do it locally. To do it overseas is 50 times harder.
But then there's also the air cargo aspect. So, sure, we can hand it off to USPS or to another local provider. But the question is what product goes on what plane at what cadence, depending on the raw materials, depending on MSDS, depending on what country, and, most importantly, how do you make sure the entire experience is localized to the customer? That's an area that we are experts in.
We ran a US brand in this model for over 10 years. We'll make sure that your end customer always has a local US, UK, Australian experience, so for them, nothing changes when you transition to this model.
OLIVER CHEN: What would you say is stopping companies from doing this now? What's keeping some back when you speak to companies? And can these capabilities-- organizationally, how do you see this manifesting in terms of culture and roles of different departments, say?
IZZY ROSENZWEIG: Great question. I'll bucket that answer into two separate types of brands. There's brands doing, let's say, $10 to $150 million of revenue. For them, it's actually-- and they're digitally-- they're e-commerce focused.
If you're e-commerce focused and you're in that range, what you mainly care about is cash flow. And to transition your business to our model is actually quite easy. New production comes to us. Old production gets sold through. And within a few months, you're fully transitioned, depending how many SKUs you have.
So that is a-- for that bucket of customers, it is an easier transition. And we always say crawl, walk, run. Test out one SKU. Test a couple sample orders. You see it works. You do more SKUs, and you build up from there.
I think the brands that have a hard time wrapping their head of how do I use this is physical retail brands-- enterprise physical retail. So you might have 500 stores across the US. You're like, how do I tap into this, because then you still need product locally, right, because you have physical retail, you've got to restock product?
So what we say to that is the largest line item of lost revenue that you'll never see in a PNL is out of stock. We have brands that used us finally in their main season-- this past summer season. They increased their revenue by 60%, not because they sold outside of their core country. That increased it about 5% to 10%. It's because the main SKUs weren't out of stock.
They've never had a season prior to this-- private equity-backed firm that's been around for 12 years, this brand. They've never had a year where they run out of stock on their most important products. And what we tell the enterprise brands-- yes, it's hard to understand what that brings, because they got to have physical retail stores.
Well, at a minimum, look at this model to make sure you're not out of stock out of your most important items. That's lost revenue that you'll never see in a PNL but could be in 10% to 30% increased revenue on your most important SKUs.
Then we say, you're physical retail, but there's a big world out there. And in today's model, with almost no extra inventory risk, you can start testing all the different countries. So you could take your inventory, move it to one hub-- let's say for us in China. Now we're shipping to UK with Royal Mail and Australia in Australia Post or Japan.
And all of a sudden, you're saying, one second. This product may not-- we thought it worked well in UK. It didn't. But you're testing 49 other countries.
It's crushing in Australia. We should maybe open a store in Australia. So even to inform how you expand globally, you could do it very efficiently with our model.
And the last bucket I say is, for these enterprise businesses that have a hard time understanding, is new collections. New collections historically would take months for feedback loop. We encourage you to take one new collection, launch it with this model. You'll get feedback loop within days or weeks. And then you're going to say, one second. This is a great product. Let's bring more for our store. Let's bring more of this on the e-commerce side of the business.
So that's kind of-- to answer your story in a bit of a long way there. People at physical retail, they have a hard time understanding it. But there's so many-- three main channels where you could start testing and could fundamentally change the numbers of retail brands' business.
OLIVER CHEN: Izzy, how does this intersect with the magic and logic portion, meaning the design and development of better product relative to the speed model? And what can happen? Because small batch can unlock customer feedback, which will yield changing product quickly, if you should.
IZZY ROSENZWEIG: Yeah. So small batch, I actually argue, is a second phase of efficiency. The first phase of efficiency-- let's say you don't move in small batch manufacturing. You keep the MOQ of your current factory.
The difference is in today's world, you're not only buying MOQ. You're buying enough of buffer to hit certain revenue targets in your core season. That part goes away.
So you're not even a small batch. You just go back to factory MOQ and then reinvest in the best colors, the best products, very efficiently, within the MOQ world. So that is the core efficiency.
Small batch as the next step is when you start even testing smaller batches of SKUs and taking feedback loop and applying it right away. That world, yes, I would say is more in the fast fashion space, where you're testing a ton of new products very quickly, you're getting the feedback, and you're optimizing accordingly.
If you think about that in more towards-- I don't if I want to say luxury space or whatever area you want to look at, I would argue it's a different value prod. You're not looking for-- you're still taking your time with production. You're taking your time with design. You have your products.
The way we've seen luxury look at this model, it's more about, again, out of stock. Let's say you're based in France. Do you need all your inventory sitting in a warehouse in New Jersey? Maybe you could keep it in France or you could keep it in your main-- Italy, in your main hub, and start not having your inventory spread around the world, but doing direct injection in our model.
So more about inventory management, efficiency, more about out of stock-- but, yeah, I would say for a more luxury brand, it's a different way to look at this model. It's not necessarily about small batch manufacturing.
OLIVER CHEN: De minimis and the law and regulations is a hot topic. Could you explain that? What's happening there? And what if it's eliminated? What does that mean for your business, and Shein and Temu as well?
IZZY ROSENZWEIG: Great question. We answered that-- and kind of what we talked about until today, fundamentally, what changes in this model-- it's all about cash flow, all about inventory management. Now, there's been talk about doing this for a very long time.
And it's actually being talked about for a politician. There's been, I believe at this point, three bills. They haven't moved anywhere, but there have been three bills proposed.
The first thing to realize is this is not a loophole. It is literally the law. It's a law that existed since the 1930s.
People have been doing it out of Mexico to the States for many years, Canada to the States for the last 30, 40 years. Now, in this world, if they increase-- if they take away the de minimis--
OLIVER CHEN: Well, for people who don't know, Izzy, what is de minimis?
IZZY ROSENZWEIG: De minimis is a law that an item that's going directly to a consumer, it is import duty-free if the shipment is under $800 value into the States. Every country in the world has a de minimis. Australia, it's 1,000 Australian dollars. Europe is 150 euros.
So there's different thresholds. But it is a way for efficiently to move packages into a country for low-value goods, lower AOB goods. So Shein, Temu, but also the American brands that we represent and the many brands that are doing it out of Canada, and Mexico past 40 years, they've been leveraging this model. And what it allowed them to do is actually lower their prices to the consumer.
So, yes, it's not paying taxes, but also, the end consumer is benefiting it because if we take that away, you're basically raising the taxes on the end consumer. But that's not why customers use us. Customers paid import tax the day before they met us.
The reason why customers use us is, how much money do I need in inventory? Cash flow kills businesses more than another 5% of a gross margin. So a new way of running cash flow, a new way of not having money in inventory, but having money in the right inventory at the right time, in the season, that's why people use us.
So even if it went away 100%, OK, they paid import duties the day before they met us. Now they still run the most efficient supply chains, efficient inventory management and agile inventory that ever existed for e-commerce. And it's not going to affect Shein. It's not going to affect Temu the way we see it, because you could run this business at scale as long as you're efficient in your inventory, inventory management, and not have excess wastage in the wrong inventory. That's the way we see it.
OLIVER CHEN: Izzy, what about product categories? Apparel is obviously pretty lightweight and high value relative to the weight. What's best suited for this model? What are you catering to?
IZZY ROSENZWEIG: Yeah. For us it's all about lightweight. So it doesn't make a difference if you're selling jewelry or if you're selling cosmetics or if you're selling electronics. We have a customer in the electronics space.
If you think about it, as long as we could put many orders on a single pallet, this model could work. Our shipping rates start at $5, door to door, from end to end.
Now, I'll give an example. We always hand it over to USPS near where the customer lives. We hand it over in Chicago, New York, Arizona, Texas, Miami, Atlanta, which means we're always zone 1, zone 2. We're getting great shipping rates last mile.
The air cargo-- I'll give you an extreme example. For a pair of earrings, we get a lot of pair of earrings on a single pallet. That same idea works with clothing, and it works with electronics and accessories and cosmetics. As long it's not bulky, like a fluffy pillow, which takes up a lot of space, is not very heavy, or it's not very large, like furniture, this model, if you're manufacturing in Vietnam and in China, and it's on the lighter weight, there's a good chance that could be very effective for you.
OLIVER CHEN: Where are you in your journey, Izzy? What are the next hurdles for Portless and major milestones you see ahead?
IZZY ROSENZWEIG: So we've been doing this a long time. We've shipped millions and millions of packages to over 50 countries around the world. Our mission is to have a Portless in every single major manufacturing hub. We've been in China for a very long time. We actually just launched in Vietnam about two weeks ago with our first-- we've been there for about six months testing. But we just launched Vietnam with our first live customer a few weeks ago.
And our mission is to be in every major manufacturing hub-- India, Bangladesh, Thailand, Mexico. Wherever there's a major hub, because different raw materials very often brings specialty manufacturing to different countries, we plan to have a Portless in every major manufacturing hub, so no matter where you manufacture in the world-- could be multiple places in the world-- you can look for a Portless in your area, and we can service you.
OLIVER CHEN: Izzy, what do you think the harder problems for you will be?
IZZY ROSENZWEIG: Every country has its own curveball. Like, Vietnam, we had our own learnings. I'll give you an example.
Vietnam, people say-- people went to Vietnam a lot to take a percentage of their China business to Vietnam or wherever it may be. But a lot of the raw materials very often come from other countries. It could be China. It could be India. It could be Pakistan. And so if it's manufactured in-- if a product is manufactured in Vietnam, but the raw materials came from a different country, it has to be exported within a year and you have to have an export document.
So it's actually a very different law in Vietnam than it was in China. So understanding every single local market's unique export laws and unique export rules, we think that will be learning curves every time. We thought we'd launch fast in Vietnam. It took us longer.
So I think as we open in different countries, we're going to have to understand the local complexities for this model, which is still relatively new to the world of retail.
OLIVER CHEN: And, Izzy, what do you see happening in terms of nearshoring as well? That's happening, too, at the same time. I would love your thoughts there.
IZZY ROSENZWEIG: Yeah, I'll actually cover two-- nearshoring and onshoring. So first with-- I'll start with onshoring first. People say, like, oh, it's a trend to manufacture onshore. I would say, that's beautiful. That's capitalism, because you're going to have a segment of the population that want Made in America.
What you're going to do is you're going to charge them more because it costs more. And you're going to find an audience, you're going to market to them, and they're going to love it. Still, majority of customers want better pricing. And if you could manufacture that more cost-effectively in a different country, they will go to you.
So a huge-- I would say still majority of the country will want cost-effectiveness. Now, with that in mind, the question now is, where is the most cost-effective place to still manufacture? Sure, Mexico is starting, but they're not the most specialist manufacturers. They're still learning. They're still new-ish to the manufacturing world.
China has the expertise and the raw materials and the cost efficiencies way greater than the Mexico or Canada. But if there comes a day that Mexico gets better, then capitalism will drive more manufacturing there. But end of the day, it's going to live, where is the most cost-effective place to manufacture your product around the world and deliver great quality product to your end consumer?
We still see a huge portion made in China. There's a huge portion in Vietnam and India, Bangladesh for jeans. Every product is always going to be uniquely different. But the idea to say, we're going to bring onshoring as we want to-- and we think onshoring is a trend, well, the local countries might take 20 to 30 years to catch up to efficiency in manufacturing or have the raw materials to do it.
So we think it's more of a discussed trend. But factually on the ground, we talked to many different brands, they're still going to go to the most cost-efficient and the place that has the expertise to deliver great quality product. You could say you manufacture athletic apparel, but it doesn't mean you're good at it, because the factories that have been doing this for 20 years are experts. So that's the way we see it.
OLIVER CHEN: Mm. What about Portless and balancing your own growth and profitability? A lot of these platforms can be very unprofitable until you reach certain scale points. And how do you charge customers typically?
IZZY ROSENZWEIG: Yeah, we have three line items that we'll charge any customer. There is a warehousing charge, which is most likely cheaper than your local warehouse, a pick-and-pack rate, which is most likely cheaper than your local cost to pick and pack in your local market, and a shipping rate that starts at $5.
Now, it obviously starts. That's for a quarter-pound. As it gets larger, obviously, it's more expensive. But where we look at, we're very cost-effective to people's core markets. But to expand you globally, we'll still be cheaper than what you're paying today, and we have excellent margin as we expand globally.
So we're actually very profitable as a business. We might take growth capital because we have a big vision. But we're very cost effective-- always been a very cost-effective business and a healthy business.
OLIVER CHEN: What is your big vision? What are the key things that you see happening in the next 5 to 10 years?
IZZY ROSENZWEIG: Our vision is that Portless be one of the pillars for e-commerce. So you have, let's say, people use Shopify or whatever tech stack you're using for tech. You have distribution. That could be Google, Meta, TikTok, however you do distribution.
But supply chain is still extremely messy. It's either WeChat groups. It's Excel files. How do you look at inventory? You have buffer times.
Our mission is to be a supply chain company, integrate to factory RP systems, help customers figure out better inventory management, one-click reordering, auto-reordering for your best-selling SKUs, small batch manufacturing versus MOQs of factories.
Our vision of Portless is to be a supply chain business in all the major manufacturing hubs. And that's the area we want. It's extremely messy, but that's the area we want to be expertise on.
OLIVER CHEN: For the retail CEOs listening on the call, what's your message to them? Conversely, and related, what about retail investors, and what's your message to them as well?
IZZY ROSENZWEIG: Yeah, to me, it only started to get noisy when people heard of Shein going public. People see the fast growth of Temu. We've spoken to some of the top companies, top retail brands in the world.
You have to listen, but you have to start testing. This is like what would happen in the 1980s if factories didn't pivot? The ones that didn't went bankrupt, unless you were part of the very small percent that went very niche. You didn't pivot in the 1980s with shipping containers, you didn't survive as a brand.
This is the next evolution, not for physical retail-- you're always going to need boats for physical retail. But the e-commerce part of your business must use the most efficient supply chain model, or you will get squeezed out of e-commerce.
So we encourage you. You don't have to jump on it tomorrow. Start testing. Test with a new collection. Test with a new country. Test with a batch of out-of-stock products because this is the future. Just like the 1980s, we are 10 to 15 years into the new evolution of direct logistics.
So I'd very much encourage you to reach out, learn how you can start testing it, and once you test, you can learn and be like, hey, how do I apply this to my brand on a bigger vision? Start small, crawl, walk, run, but start crawling, as soon as possible.
OLIVER CHEN: A couple of other topics-- we're very focused on artificial intelligence. We've written books on it here. How do you see AI impacting what you do, the future of supply chain? And what about sustainability? Consumers may not pay for it, but they do care about it. And it will be a regulatory issue, too, in Europe as well.
IZZY ROSENZWEIG: Absolutely. So I'll start there. So first off, the way we-- I don't have any scientific documents yet. We haven't hired a consulting firm yet to put that into actual document. But we'll give you our understanding of it, which is in today's supply chain world, there is a ton of carbon footprint, and there's a ton of areas of the supply chain that simply don't need to exist.
And there's a massive portion of excess inventory. So right now, they say, I think, 30% to 34% of product in the fashion world is excess inventory-- landfills, wherever it goes. I've heard some brands burn their product.
There is so much wastage on either the wrong product existing when that raw materials should be put in the right product, and it simply goes to landfills. That goes away in this model, or it goes away by 90% or greater of efficiency.
Then there's an area of all these trucks driving across the States, all the warehouses across the world. These things don't need to exist, because you can be more efficient, less inventory, and whatever inventory you have is the right inventory, and then delivering products when it flies over, going to the customer's front door. It doesn't stop anywhere-- no other houses, no other footprint, trucks. It is on the way to the customer's front door.
So for us, it's taking a ton of wastage out of the supply chain. Again, I don't have-- we haven't hired a consulting firm to give us the mathematics. But, sure, when you look at a plane versus boat, apples to apples doesn't look equal. But when you take away a huge portion of the supply chain that don't need to exist and excess and wastage of inventory, we think our model is actually even more efficient.
OLIVER CHEN: And, Izzy, what about artificial intelligence and data? And what do you see as the future in your vision, specifically or broadly, in supply chain?
IZZY ROSENZWEIG: Yeah, two things we see as obvious next steps-- one is inventory projections and inventory management. It is very difficult to start making bets on products that have lead times and feedback loops of 60 days at a time-- every time we do a new product, how does it do, then go back and make a decision.
But if you could live in a world where you're closer to your factory, you can have fast feedback loops, and you're taking current data on current marketing metrics and current conversion rates and apply that through AI on what you should be betting on, how much you should be betting on, where's the raw materials coming from, we think AI is a huge opportunity in inventory management and in inventory predictions leveraging this model.
With the feedback loop, you're in this season. You have the marketing. You have the demand-side data. You're able to-- you have the supply-side data. How do you match that very effectively to put your money in the right inventory at the right time for the right season? We see that aspect.
I think there's another aspect of logistics on the last mile. So what we've seen something really interesting is these localized delivery companies. So I've heard of companies like UniUni, OnTrac, LSO. So right now what's happening is USPS does a lot of the deliveries.
We have these new carriers that focus on what they call the higher-margin side of the business-- high-density cities. They can do a ton of fast deliveries very quickly. Well, sometimes, the package should be going to USPS, because maybe you're in a lake town, and USPS already has the infrastructure. You don't have a UniUni. But sometimes a OnTrac, LSO, UniUni is the more cost-effective and faster delivery time.
Then, to go even further, there's other types of logistics carriers, which is they do, let's say, for Target, same-day delivery. So they have this huge fleet of delivery people to give three-hour delivery. But then there's tons of quiet periods.
In the quiet periods, these drivers are doing nothing. So to have AI to be able to fill in these carriers' quiet periods with packages that need a three-day window or five-day window delivery time, you can now start optimizing those companies, their drivers, to, sure, get the Target three-hour delivery. But in your quiet period, you're actually doing delivery times-- deliveries for packages across country.
And as that gets more sophisticated, we see an enormous opportunity for last mile optimization. We have maybe a ghost carrier that's making last-minute decisions on, what mid-mile truck is it going on? What last mile carrier? Is it USPS? Is it OnTrac, LSO, one of these Uber-style delivery? We think AI could be-- will make a difference in that area.
OLIVER CHEN: Another important topic for us is marketplace models. And Shein has a marketplace as well. How might those marketplace platforms intersect with Portless and US companies? It broadens the potential significance and reach by, like, an infinite amount.
IZZY ROSENZWEIG: We're huge fans of marketplaces. We service marketplaces for many of our customers. And what we're doing is customers think of, like, oh, I'm in the States. I want to sell in Target, Walmart, Amazon. Sure, those are the obvious ones.
And we can help those, as long it's not FBA. Obviously, we don't do FBA. You're going to have to bring that to their facilities.
But we deliver within the Walmart timelines, in the Target timelines. We do all of that. But the world is very big.
There is a marketplace in Australia called Catch.com, bigger than Amazon. In our model, you can now open to these marketplace channels. They're demand. They're sitting there. They just can't touch all the products that exist today.
But in our model, we could. We could open up 50 markets, 50 different marketplaces, different customers that have never had exposure, without any additional inventory risk or any different marketing budget. So we're big fans of marketplaces. We service them today. And we think, actually, helping brands go to many different global marketplaces is another increase of revenue that they don't even know exists.
OLIVER CHEN: And what about packages that customers receive and the customer experience? I'm the head of luxury goods, and that's really important. Packaging can be a really emotional part of the experience. How do you address that? And perhaps last question-- what are your most frequently asked questions?
IZZY ROSENZWEIG: 100%. So first off is, we will make sure the experience is no different than it was yesterday. If you have a beautiful packaging, you need wrapped paper, wrapped around it, as long as it's scalable solution and we don't have to handwrite notes, we will work with you on your current packaging.
We can help you find factories that can maybe do it for better quality or cheaper. But we will make sure that you live in the world of your packaging. As long as it's scalable and we don't need people writing notes, we will do it for you. The mission is the consumer should have no different experience the day before using us and the day after using us.
And we ran a brand. We understand brand experience is everything. The way it's delivered, the way you open it, the way the package experience, that is everything. And we double down with brands to making sure that it works for that brand.
And what was the last one? The frequently asked questions. What does the tracking experience look like? What does the package look like? And that's why we say, like, hey, we'll send you some sample packages from our facility. You get it, you open it, you're like, holy crap, that's not local.
And then you send us a SKU. We'll do maybe 1,000 orders over a period of three weeks for you, or 100 orders, whatever you're comfortable with. People have a hard time understanding how this works. How does it exist?
And the truth is, it didn't exist forever. Like the shipping containers, it took years to get efficient. I ran the business, my business, when it wasn't efficient and it wasn't pretty. But the last three to five years, it is extremely efficient.
And just showing that this actually works is what brands need to understand. And we do that with crawl, walk, run. We send you samples. You send some SKUs. You get some orders out. You see there's no difference.
Very often it will beat your current 3PL because you're maybe East Coast and West Coast, and US is a big country. It's just really understanding and getting exposure, and we encourage it-- crawl, walk, run. But once you taste it, it is a whole new way of doing business.
OLIVER CHEN: Tasting the future, skip the ship, ultra-fast fashion. The name of the game in retail is about speed and matching supply and demand as well as creating the best, most innovative products.
So, Izzy, it was a real pleasure to get briefed by you on the future of supply chain and also learn about your capabilities and advice for the future of the industry at large. Thanks for your time, Izzy.
IZZY ROSENZWEIG: Thank you so much for having me, Oliver. This was awesome. I had a great time.
ANNOUNCER: Thanks for joining us. Stay tuned for the next episode of TD Cowen Insights.

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