Your Warehouse Bottleneck Ends With This Fix (Shopify Brands Swear By It) — Thomas Kircheis | What Brands Get Wrong About Warehouse Scaling, Why Warehouse Chaos Impact Sales, Why A Warehouse Management System Is Essential (#420)

In this episode, we dive into fixing warehouse chaos for e-commerce success. 

Thomas Kircheis, CEO of PULPO WMS, shares how poor warehouse management hurts profits and customers. Learn why 50% of warehouses still use pen and paper, how a WMS cuts costs and boosts efficiency, and why accurate stock is key for scaling. 

From optimizing routes to reducing staff, discover practical tips to streamline your warehouse and keep customers happy. 

Topics discussed in this episode:  

• Why 50% of warehouses still use pen and paper — and how it hurts your business. 
• How warehouse chaos leads to lost sales and unhappy customers. 
• Why stock accuracy is key to scaling your Shopify store. 
• What makes picking the most expensive part of your warehouse. 
• Why warehouse staff walk 10 miles a day — and how to fix it. 
• How one company cut their warehouse team from 50 to 20. 
• What slows down your fulfillment — and kills your profit. 
• Why better warehouse routes beat hiring more people. 
• What most brands get wrong about warehouse growth. 
• Why setting up a WMS only takes 1–2 weeks, not months. 
  
  

Links & Resources 

Website: https://www.pulpowms.com/
Shopify App Store: https://apps.shopify.com/pulpo-wms
LinkedIn: https://www.linkedin.com/in/thomaskircheis/

Get access to more free resources by visiting the show notes at
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Transcript

Speaker 1 (00:00.128)
A block warehouse about 500,000 square feet and not exactly sure where every product is. Majority of warehouses even today is run with pen and paper. But as soon as you have a rack here, a rack there, then you can cross between the racks where you have the snake game going on in your warehouse, right?

What's the biggest warehouse nightmare that you have seen that made you think this has to change?

And Welcome to to the Ecomerce  Coffee Breaker Podcast.

When your online store grows, the warehouse can quickly become your biggest bottleneck. Missed items like shipments and endless spreadsheets create chaos behind the scenes, hurting profits and frustrating customers. But it doesn't have to be that way. Today we're looking at a smarter way to manage your warehouse. Joining me today is Thomas Kircheis. He's the founder and CEO of PULPO WMS, a warehouse management system built just for e-commerce. Since 2017, Thomas and his team have helped merchants in over 20 countries.

Speaker 2 (00:56.28)
turn warehouse headaches into smooth scalable operations. So we want to find out more about this. We have a lot to cover. Let's get started. Thomas, welcome to the show.

Thank you Claus, thanks for having me.

Thomas, what's the biggest warehouse nightmare that you have seen that made you think this has to change?

It's tough to say where to start. Well, definitely one of our favorites was a warehouse at one of the largest barbecue sales companies in Europe. And it had a block warehouse and about 500,000 square feet and not exactly sure where every product is. So going into that warehouse and looking at it, seeing it in front of my eyes was quite impressive. Definitely this one's my top.

A lot of merchants, lot of companies, they start with their own warehouse. So they have some back room where they get started and then they are working with either papers or spreadsheets. What's wrong about that start?

Speaker 1 (01:56.142)
Yeah, absolutely. And I think that is a typical way to start, right? Especially as a founder, you have an idea, you want to sell a product, you want to create a market and necessarily probably you're already packed the first packages of the products that you actually sell. And then it grows. then of course, as a founder, while selling is the most important part, so you try to give that to other people. It's also, I mean, not very tough working inside the warehouse, picking, packing.

for eight hours. So you either find a way, find a solution and looking into how can I do this or you maybe keep it as a black box. And surprisingly, is state of the art is that majority of warehouses even today is run with pen and paper, be it in United States, be it in Europe. So it's a plus 50 % definitely. That still does so. And yeah, that's also kind of where we came from on why we did it because we had that own pain.

I don't think in some way my co-founder running a business in the healthcare industry. So with a certain amount of products, also a certain complexity, because of course the motivations can be plentiful on why you might want to implement the warehouse management system. And it's with so many system in their case, an ERP solution, the out of the box, let's say inventory management system does not really help you optimize all the workflows. Right. So.

I mean, as a warehouse management system, we do is really help everyone inside the warehouse to take care of receiving products, putting them in an optimal position. And then, well, as soon as the sales orders come in with the minimum amount and minimum effort possible shipping them out, mean, that's, that's our goal. And that's also where we came from. So, and the impact was one of the biggest, that's the feel that my co-founder had when implementing it in their own company where

Well, in their case, they went from 50 to 20 people. So it was quite significant, the impact of a warehouse management system. today, mean, e-commerce merchants and all shapes and sizes use Puyipu really from one of my favorites is sending out orchids in the States, Up to, of course, then those very large warehouses that I mentioned.

Speaker 2 (04:13.102)
I want to take a step back and really talk about the risks and the issues that you have if you don't have a proper back-end system like your system. How does bad warehouse management hurt your business and what kind of steps can completely go?

from. Yeah, sure. So I think one of the important things is, and if you order online, you really want to have your product. So of course, stock accuracy is a key, right? In your Shopify store, you want to make sure that if it says 429 available, there should be 429 inside your warehouse. So straight from the inbound of the the products where you receive them, having an accurate count, having an assisting process where also maybe if there's a faulty product coming in, if there's no

If it comes across the big ocean, chances are something might have gotten a little bit damaged. So you might want to put this into quarantine and not simply say, well, I bought one 500, please add 500 to the inventory. If 20 of those are damaged, you don't want to inbound them. So starting off the accuracy of the inventory, I think it's one of the most important things. then of course, as soon as we get into the processes of, well, now we've received the product.

I mean, there already might be certain difficulties if you have products with lots and expiration dates. Well, you you need to make sure that you can track those, which natively, for example, in Shopify is rather difficult to do. you have serial numbers, the same thing, but just from a quotation perspective. how often do you sell a product? A warehouse management system can already help you. Hey, look, this goes out a lot more often with this more into the front, which then subsequently, of course, in the picking process, if you don't have to.

walk such long distances will save you a lot of time. So on average, of course, it's always ballpark numbers, right? Where regarding your, let's say, operational expenditures as an e-commerce merchant, you might have 30, 35 % of your up-packs is just in the warehouse if you run your own warehouse. And then 70 % of that is the picking process. So then once you have hopefully warehoused them in an optimal way, really

Speaker 1 (06:21.854)
knowing what is, what is the best route also, how do I go through my warehouse? And, and that was one of those points where we, come from IT, I'm a consultant that did very large enterprise companies. And so I saw a lot of enterprise software and well, we went into this warehouse area and we looked at solutions. wanted to buy a solution instead of, instead of building one. And then we looked and there was software that was built a long time ago, to put it mildly.

And one of the key points and that still I really do not find lots of systems. The setup of the warehouse. I mean, if you have a small warehouse, maybe a U-shaped warehouse, fair enough. know what? Print it out, your first hundred orders a day, good enough. But as soon as you have a little bit of a rag here, a rag there, then you can cross between the racks where you have this sort of like snake game or potentially a snake game going on in your warehouse, right?

just adding, okay, this is my rack, this is my number and having a straight, always repetitive way for your warehouse is far from optimal. Right. And so we I think we had 14 solutions pitched to us at that point before we went into, you know what, think there's a, there's a market for this. If you don't want to spend a million on the info system, then let's go for it. So on average, like those picking,

Of course, it depends on the types of products and so on, but, know, batching together orders, picking them at the same time. And there you can say, if you make them, you know, twice as fast, sometimes three times as fast. And so, and in the bottom line, of course, all increasing the profit for the, for the warehouse merchant. That's really, and that's what we liked about it. We went into this because we said, you know what, like for every dollar that the WMS might cost you're getting out 1.5, two, sometimes three.

And that's really neat, really.

Speaker 2 (08:21.55)
I never thought about this. It's a very interesting thought that basically having a direct way or an optimized way through your warehouse saves you time. It's not a fitness exercise that you're doing. You're running a business. And that really saves your time at the end of the day. And obviously the fault rate will be probably very small because you know exactly where to go and what to pick. Can you give me an example of a company that have implemented your system and what kind of results they saw?

Yeah, it's quite, it varies quite a lot. So the typical is that maybe if you start off with 10 people, you implement PooL PooL and then it might be six. In the US, so popular companies for happy dad. I don't know if you drink their seltzer or buy their cool hat. A very popular brand. But also we have for example, 4-H Council also in the States where they send out books, right? Educational books. And so it varies really. And that also the motivation varies a lot on why.

or how much a WMS might be able to assist you. You have smaller orders, you do lots of drops, for example, right? Lots in the fashion industry where then you need to hire 10 more people and they don't know what they're doing. So the better the system, more fault resistant you really are in fulfilling it. Because really, I mean, the warehouse is like the last connect to customer happiness, right? I mean, they order something and if they get the right product as quickly as possible.

You know, they just have a really nice experience. And, um, nonetheless, as sometimes seen as the black box that needs to do its job, but, um, you know, then there's maybe not, not on the priority list of things to, of things to arrange or to improve inside, inside my company. And I mean that together. for example, in general, warehouse staff is not easy to find. And over, over Corona, I was speaking to, um, uh, Kevin with the warehouse, that warehousing podcast.

And the over Corona, the salaries have almost doubled. So first of all, you don't want to have extra staff, but also if the staff changes because at the beginning, and that's a nice thing, if you have your own warehouse, you can track it, right? So the team was, was walking round about 10 miles a day, which is a lot. And all of a sudden you have an optimized router and it's two. So also the, just.

Speaker 1 (10:46.414)
the happiness of your team goes up because they're no longer searching anything. The rate of sickness goes down also, right? So you can more rely on your team. And well, on top of that, also you have some KPIs where you can motivate those that might have a bad day. Or if you're a fulfillment company, right? mean, we also help lots of fulfillment companies that serve merchants, serve Shopify merchants.

And they can also really find out how much, let's say, manpower did I need to serve this customer to look at, how's it going, how's the profitability there? And does it make sense where I need to do that?

I really think what you highlighted that warehouse management is an important pillar of your business. Not the favorite thing for most of specifically founders, startups growing quickly. Marketing is so much more fun. The other things are so much more fun. But as I said, it's crucial to get the product to your client and client happiness at the end of the day is what drives your business. talk me through the different features of a warehouse management system. How does it look in day to day life? How do I use it?

Yeah, so in our case, it consists of three parts. One is what we call our warehouse wizard, where we can really create this, let's say, digital twin of your warehouse with graphical interface, a few clicks. We're very self-service driven, so you can do that yourself. You can do it with our team, however you want. then we know, Brutbo knows, where is every position? Where are they relative to each other? Work and network, that's one part. And then there's a web front-end, where you can organize with the head of the warehouse, where you create your users, where you create

any rules that you want on how you want your team to work. You already mentioned that, you know, sometimes some teams want, yes, scan everything. And I want additional double, triple scan control in the outbound. Some say, you know, maybe I have very few SKUs. I don't need so much control. So there's lots of, let's say ways on how you can, how you can define how you want your team to operate. And then we have a native Android app.

Speaker 1 (12:51.842)
that runs on any Android device that we recommend using with these. For those who see the video with the finger scanner connected to it so that also you have your both hands free. You have your phone connected on your arm with a little holder. You don't have to take out the pistol. so for that day to day, all the movements inside the warehouse, that's really the setup. And well, for Shopify, know, the native integration, you do two clicks and all of a sudden everything is integrated. The products come over and...

the sales orders come over and so on and so forth.

Very interesting with this finger scanner. I've seen it before. I never used one, but I think that's a huge benefit. I've worked with these pistols back in the time when I had my own store. It's a bit of a pain in the neck. You always have to pick it up and put it down again.

And that's all small things. Every picking, every position, you've lost again three seconds. You've lost again five seconds. You get what we call a tennis arm, right? Because you have to bring out this picker instead of if you have it on your arm, you just natively, well, you can drive your forklift with it. So there's this, you know, small things where we also took a long time to do, you know, took a very long time on actually how to get it right. there's very things that are motivational for the people, but also they save you time and it's money and...

potential errors.

Speaker 2 (14:10.978)
When is the right moment in your growth process as a startup to implement a management system?

So typically companies start when they have like two, three people inside the warehouse, right? So when your orders get to, I don't know, two, three, four hundreds a day. But then again, there might be other motivations. There might be, you want to take care of lots and expiration dates, right? So you cannot make a mistake if you send out, I don't know, if you're in the fashion industry, right? If you have food, obviously the most obvious thing were.

You need to be compliant and knowing which lot, which production that you send out to customers should there have been an issue in the production process. So those can also be motivators. But yeah, really the idea also how to look at it is this is not an ERP implementation. I think, know, Sebastian from Genie, when I was listening to his podcast about his inventory tool, was like, oh, you know, he wants to implement this ERP and it took half a year or something.

In Pulpo with the typical merchant, it's a week or two, right? And it's not full time. The only downtime that you might have is we kindly ask you to do a full inventory count because well, just to make sure that the quality you put inside a Pulpo is actually what it is supposed to be. that's it, right? And you can go on and then, well, looking forward really is if you start at this, you know, let's say younger stage or two, three people with those, then

and the warehouse management system, you can ship out a lot more than what you would be able to. If you would continue doing it manually, you would have to add staff and with the same team, can just all of a sudden, you know, send out twice as much as you might have been able to doing it manually.

Speaker 2 (15:58.456)
What happens with companies that have more than one warehouse? Do you support this?

Absolutely. Yeah, of course we have very large merchants also that have multiple warehouses where you have depending on what product is sent out, you ship it from this one or you consolidate shipping it from the other one. Multiple warehouses also sometimes the setup that there might be the Shopify merchant that sends that uses Puyipu but his full filler is using something else for whatever reason. then it is split up there. Yeah, absolutely.

Do you have other interfaces, APIs that slot into your system besides Shopify?

Yeah, so we have many ERPs integrated and of course, customers with SAP also, customers with Microsoft Business Dynamics or the typical ERPs that also do not come with a true warehouse management system, only inventory management system where really putting a warehouse management system on top can help you a lot. But it's very interesting also to see, let's say, the regional differences. You mentioned we're in 20-something countries.

Sometimes and also certain regional, let's say laws allow you to become quite big, just using your online store, just using your Shopify. then maybe the Amazon is also plugged into Shopify. So everything goes to Shopify. You send it out and you sell an a hundred million, but you don't feel the need to create an ERP. it's quite different. And of course we have an open API, we have an open rest API. So there's also many companies who simply just integrated themselves with their specialized system. You that might be the biggest ERP.

Speaker 1 (17:32.108)
in Argentina or in Chile, which we just don't know. So they just integrate themselves.

Okay, that all makes perfect sense. Though you gave already a couple of examples with industries and verticals you work with, but who's your perfect customer?

The perfect customer is a bit tech savvy, does not have the oldest ERP running, but really just has physical products, ready-made products, does not have a complex production facility. And then we really sound at everything. There's two, three people using Boolbo, there's 60, 70 people also in the warehouse using Boolbo. There's basic fashion products, basic because they only have a barcode. There are products that are.

I've caused lots in expiration dates. have companies that, especially in the healthcare sector, sometimes certain customers need at least six months of expiration dates. So there might be additional complexities on top of what are you allowed to send out actually. So, it's really, it's really a very big spread and that, that's also how we build people. Fortunately, we let's say from, from our own need, we came from a highly complex requirement and then we boiled it down and that's a, that's.

I think the only way to go instead of the other way around. So sometimes we see inventory management systems now branding themselves like warehouse management system. Yeah, but how do you do lots? How you do serial numbers? How do you actually optimize your route?

Speaker 2 (18:57.504)
Okay, walk me through a typical onboarding process for a new user. What kind of steps are involved? How long does it

Yeah, so it is this setup you can like if you're a bit if you're a bit savvy, you can absolutely do it yourself. We have a PooPoo Academy, which is a learning management tool for the entire team. So everybody gets their own user and gets his own videos. So typically, like in one week, they take the last 15-20 minutes of the day, they learn how to inbound a product, they learn how to work on the product, they learn how to pick a product and so on. And then, you know, you want our team, it's a very streamlined, we have a little

project board in Trevo. It's 35 steps where basically a few things you do, a few things we do, depending on how much you want us to help. And then we just run through it, making sure that, of course, you know, there's a couple of thousand Puyipu users every day using it. So we have some, have had some experience and also depending on the customer, of course, like our help can, can really like even more optimize the user Puyipu, right? Because by now, of course we have lots of functionality. You can use it really easy.

or you can really optimize the last little bit out of it. with the team then, senior people who can help you out, maybe you should put this setting, maybe you should put that setting. And then, I mean, the inventory count is already mentioned, is typically like the last step before the go live. The typical integrations are of course pre-built, so there's really just a plug and play solution. we have Shopify customers or Merge or...

logistics companies, fulfillers with Shopify merchants, for example, we have taken life over the weekend. Okay. Yeah. And that's also this mindset, right? Of like a warehouse management system. Should I really go for it? There's nothing to lose really is, you know, that is just a very, very high upside. It's not an ERP implementation. is everything that happens inside the warehouse. And that is it. And it'll help you with all this. But, of course, also depending on the area that you're in,

Speaker 1 (20:58.542)
You know, the returns management, if you can just scan the product, you have it back in inventory right away. You can resell it. It's also a big game changer if you're in a, in a sector that has high returns rate, like probably in fashion.

Yeah, absolutely. And I think the benefits are very, very clear, but I think it's also a bit of a shift in mindset of a merchant doing themself and then going into a system and you don't know what you don't know. So you're going into a new system. I think it helps a lot. Just say you have an academy and somebody's helping you and optimizing over time. That helps a lot to make really a informed decision to go over to a professional system to manage your wear.

And also for quite a while already we give our customers a happiness guarantee. Quite frankly, if you don't like it, you give it back and you get your money back. We're very certain that when we do, we make a first call, we learn about your company, we show you Puyipo, we say, you know what, this should work really well. Let's go for this. And if you really don't like it, and so far all that. Knock on wood.

Yeah, just give it

Okay, there's no risk involved. Tell me about your pricing structure. How does that work?

Speaker 1 (22:13.762)
Yeah, so it's typically per warehouse employee, per full-time warehouse employee per month. then the, of course there's flexibility. There's lots of companies that have, you know, seasonal workers. You just add a seasonal worker per month. Some that have temporary workers. Well, then of course that is not a full license that is charged there, but it's really on the seats that we do there. Anything else, typically also the e-commerce EAPs where you say, well, you go for order volume and a certain percentage or a certain percent per pick.

We found that a bit unfair. You kind of get penalized for being successful or having lots of revenue, which I don't understand that concept quite well.

Yeah, I'm a big fan of simple, straightforward pricing that you actually know what you pay at the end of a month and do not wake up with a huge bill that you did not expect. So I think that's very fair.

Yeah, and in the States, for example, the typical the TPC is $225 per user per month, right? So that might be, I don't know, five, 6 % on top of the salary, 7%. But you know, you should make them all of a sudden he has 30, 40%, 50 % more power that you get out of that employee. So it's, that's quite straightforward.

Yeah, no, total no brainer. Thomas, before our coffee break comes to an end today, is anything you want to share with our listeners that we haven't covered yet?

Speaker 1 (23:38.016)
No, I think it's, it's really, the, this, this warehouse has become after, after you found her, after your founder, after you, you you sell more, you create your team. this warehouse is looked at as sort of an, I don't want to say necessary evil, but it is right. It's a, it's, it's, it's tough work. it's, it's, know, there's hardworking people in there. It's not easy. It's not also not easy to, motivate them. And, but looking at it really as a.

as an advantage of if you do this well, you know, your bottom line, I mean, if you, if you improve those, you know, 30 % of your optics by 30%, there you go 10 % more margin or 9 % more margin in your overall company. So that combined with just as client, clients, um, happen in this part. Right. So, mean, if you send out a thousand orders and a thousand orders are correct, it's just a multiplicator. Um, you know, every, every one star.

evaluation might cost you X customers. that's really apart from, say, the proof with this other solutions, I think really looking at it as something that can create a lot of value for both the company, but also the, but also the customers that that's why we went into it. And that's why we're very keen on keen on helping out there on or bringing this to attention and getting rid of these, you know, hopefully we speak in two or three years and we can say,

Now it's only 30 % that don't have a warehouse management.

I think you're really creating like a win-win-win situation. A win for the customer, a win for the business owner, and then most importantly, well, also importantly, a win for the warehouse worker, which I never thought about.

Speaker 1 (25:20.994)
Yes, yes, yes.

Where can people go and find out more about you guys?

Well, you can help you to visit us on our website, PooL Poo WNS dot com, of course, with me also on LinkedIn, more or less frequently, also posting some stuff there and subscribe or also just reach out to us. Also, very openly, sometimes just book a meeting, people can book a meeting straight from our warehouse, from our website. Also, just to find out, maybe you're not there yet and just to have an idea.

how much you can improve without implementing a WMS. A half hour conversation is always worth having, just taking a look at it, because quite frankly, that's how we started. We looked at it and we ran out backwards by the solutions that we saw. So sometimes we get to a conversation, yeah, I've looked into warehouse management systems maybe five years back and I just ran out because I wasn't going to pay 100,000 for an implementation, but now it looks a little bit different. So maybe it's also time to revisit that thought.

on looking and optimizing the warehouse really.

Speaker 2 (26:28.066)
Cool. So for our listeners, if you have the feeling you need to look into your warehouse management, get in touch with Thomas and find out if a warehouse management system is the right for your solution and to grow your business faster and bigger. Thomas, thanks so much for your time today. I will put the links in the show notes as always, and then you just one click away. Thanks.