Supply Chain Therapy with Flexport and MANSCAPED®

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Art Morales
Sometimes you can grow a lot faster than what you're really prepared for. I believe that summer of covid, we had more sales that summer than in Christmas. So it was really interesting that impact not just on the fulfillment side, but going… out of stock in things in August because there's so much demand.

Ryan Petersen
great. Welcome. So I'm Ryan Peterson, CEO of flexport. And today we have, I'm going to be interviewing art morales, the senior director of supply chain for manscaped. So welcome art. Thanks for taking a little time to get to know each other here.

Art Morales
Thanks for inviting me out. Ryan. This is great. And I'm looking forward to this conversation, yeah, for.

Ryan Petersen
Sure. Maybe actually you can introduce yourself and I think most people know manscaped but maybe at a high level, what is manscaped today? What's it become? It's probably a little bit different than when we first launched.

Art Morales
Yeah, absolutely. So my name's art morales, senior supply chain director for manscaped. Just recently made five years at manscaped this past July. I've been involved in logistics warehousing, transportation, three PL management for I'm going to date myself now, but like 35 years. Wow, I live in oceanside, California, married two kids, oceanside.

Ryan Petersen
Is like San Diego.

Art Morales
San Diego area, right? Yeah. North county, San Diego. Okay. Cool. Yeah. So married, two kids, two dogs, a cat, born and raised in New York. I always got to represent New York. So I got to throw that out there a little bit about manscaped. So, manscaped was launched in 2016 by Paul Tran. The founder and CEO of the company, Paul identified an opportunity in men's personal care, personal grooming, and that was in creating an efficient electronic tool that would address below the waist grooming. There really weren't any companies at that time that were really focused in on that. So in 2016, Paul launched the original lawnmower. And if you fast forward to today, manscaped is considered the leading men's lifestyle consumer brand with at least 12,000,000 loyal customers globally. We have a diverse portfolio of products including premium tools, formulations, accessories. You could find our product in 40 countries via DTC, over 100 countries via Amazon. And our retail presence includes walmart, target, CVS, best buy, costco, military exchanges, and even more retailers internationally. So it's been quite the story.

Ryan Petersen
Yeah. What a journey. And so obviously this has a huge impact on supply chain even just hearing you say it, it's like you've gone wholesale multi country, many countries and Amazon, and then on your own, what does that look like talk? Maybe a little bit about the evolution from a pure DTC supply chain in the early days into maybe into last year. Then we can talk about all the changes that have had to happen in the last year.

Art Morales
Absolutely. So I think we can go back to the pandemic really to talk about manscaped and manscaped's growth. Like a lot of E com companies, manscaped really experienced tremendous growth during the covid, pandemic. If you turn the clock back to when manscaped first started fulfilling DTC orders, pretty sure Paul and his wife were fulfilling orders out of a small warehouse in San Diego pre.

Ryan Petersen
Covid, pre, covid.

Art Morales
Way back in the day, then you fast forward to today. Manscaped fulfills Omni channel in eight locations in over seven countries globally. We also have contract manufacturers that create formulations and what products for us in the U. S, Europe and Asia. Going back to those humble beginnings, we've really evolved into a pretty complex supply chain, a global supply chain, but always from day one with the explicit goal to create the best customer experience possible.

Ryan Petersen
You joined five years ago. So that would have been right at the start of covid as you were coming in. Huh? That was crazy.

Art Morales
I never worked in a manscaped office. My interview was totally remote. My first day working at manscaped was I was a remote employee and we are totally a remote company, but it's been fantastic. It's been really interesting to see the company.

Ryan Petersen
This runaway growth during covid. What were some of the, I don't know, you can rewind what do you think? Like what are the lessons from that period that you had to take into account?

Art Morales
Yeah. So, I mean, I guess sometimes you can grow a lot faster than what you're really prepared for. I believe that summer of covid, we had more sales that summer than in Christmas. So it was really interesting that impact not just on the fulfillment side, but going… out of stock in things in August because there's so much demand. It was, really interesting to see the company get through that and get through that period. Yeah.

Ryan Petersen
It's so interesting. I almost want to do a whole podcast series of just people just talking through what lessons they learned and what they could do if they could do it all over again. What would they do differently?

Art Morales
Absolutely, absolutely.

Ryan Petersen
For all of us. And so, you know, you've got this pretty traditional category. Can you talk a little bit about you've? Got E comm fulfillment? And now wholesale distribution is that very, it must be a very different set of requirements for.
Art Morales
Oh, yeah, absolutely. Again, all of our, three PL locations are Omni channel. So, you know, we fulfill orders to DTC customers, fulfill orders to, marketplace such as Amazon, and obviously, we have, retail customers as well. I think when you think about, a three PL and what's important to a customer like us, I think scalability is like tremendously important. Like most traditional E, comm companies were really super heavy with D to C, you know, in the beginning, of manscaped's journey. But then as the company matures and grows, you know, then the retail channel becomes like a big component of how you generate sales. So, when we were looking, at a potential three PL partner, we needed to keep in mind not just what's happening today, but, you know, what do we see? Two, three, five years down the road? And can a potential three PL partner help us? You know, if we go, let's say from predominantly D to C to predominantly retail. Because as, you know, retail is just a whole different kettle of Fish that's probably an old fashioned term. I don't know. But, you know, all of the things that you have to worry about with, you know, fulfilling retail sales that three PL has to be well versed and really be able to handle all of the different sales channels and all of those challenges that each sales channel presents. So, super important for us.

Ryan Petersen
Really proud to have been part of this and gotten to earn your business. But maybe you can talk a little bit about what that was like onboarding to flexport. What have you found? So far? What are your lessons that you could give us back?

Art Morales
So our transition to flexport has been, I have to honestly say it's been super positive as our supply chain has matured over the years, especially over these last five years. Our distribution strategy has had to change as well. So we've gotten really good at vetting potentially new three PL partners. So we go through a pretty rigorous process. Flexport in particular, it's pretty interesting because we started talking to you guys like two years ago, we ran into members of your team at a trade show two years ago, really enjoyed the vibe, really enjoyed the conversations that we were having kept in communication. And then about a year ago, we had to come to the decision that our existing partnership with our existing domestic three PL, we really had to sort of walk away from that. There were various reasons but there were just a lot of service failures and challenges that we were going through. So once we realized we needed to make that break, obviously, we started asking for proposals from, I think we dealt with, we vetted four three PLS. Obviously, flexport being one of them, one of the things that differentiated flexport from the other companies that we were talking to was really, I think the ease of communication with your team. You should be really proud of those folks that we were dealing with and also how approachable they were and continue to be, one of the great things that we observed during this process is that while flexport was getting to know manscaped and manscaped was getting to know flexport, the team that we worked with for that entire year, you know, going through negotiations back and forth, the companies getting to know each other. That same team has remained in place while we went up to and through golive this past September second and this hypercare period going forward, those same people are there. And that's a great comfort for us because, you know, obviously there's going to be obstacles that we go through during this transition, but it's great knowing that the team that we've built a great relationship with great communication with is still in place helping us through this transition. And as I promised you before Ryan, I have not sent you any angry texts yet. So I think things are going OK so far you?

Ryan Petersen
Can send me. I don't have to be angry just.

Art Morales
Text me and let me know.

Ryan Petersen
Give me feedback. I think we're lucky to get, we've built. We've built, I agree. I mean, the people is the best part of our company. Everything starts with the people and the culture and everything else is downstream of that. But, getting, the opportunity to meet customers and learn because what we've built as a company, when I started flexport, 12, 13 years ago, I couldn't have imagined most of these things is basically from talking to customers and being like, tell us the problem that you see and then, okay, let's earn permission to solve that with you and for you and stuff like that. So, it's, it's that constant dialogue and that's why we really want to make sure we have great people who build the trust and because we're not perfect by any means.

Art Morales
Oh, no, absolutely. And, I think the culture and the vibe was very similar with the team that we were dealing with. I think you could tell just seeing manscaped in the way we market our product and, you know, we have a certain culture. We, we like to have fun. We obviously all work hard and have that one common goal, but we like to have fun doing it. And so far, everyone that I've dealt with at flexport, I think we share, that common vibe, of having fun but working hard and it's really cool, to link up with people.

Ryan Petersen
So, without, you know, throwing the old three PL under the bus, but I would be curious to hear like, what makes the checklist? Let's say, what are the, you don't need to say all the problems they had before. But what are the things that you were really looking for as you're going to explore a new ddc partner? What was on that kind of it's a checklist or your process that you're building on. You already mentioned the people and that part of things, but.
Art Morales
We have a checklist but I really do want to highlight one of the really great things that we experienced when I think about our previous three PL partner and what we've experienced with flexport. So again, this year has, you know, it's been sort of crazy for manscaped transitioning to a new three PL and all of the things, that go with that. And at the same time, you know, the global supply chain landscape just totally blew up. You know, de minimis went away. Tariffs are just, you know, seemingly monthly, seemingly daily. Sometimes it feels like every minute the tariffs, you know, are changing. And one thing that was great about flexport was that you made your subject matter experts totally available to manscaped. You had customs experts, you had tariff experts, you had compliance experts that, you know, we were able to just reach out to at the drop of a hat and, you know, to be honest, these were uncharted waters for manscaped. You know, we weren't used to a world without de minimis. We weren't used to tariffs going from 25 percent to 145 percent. And flexport gave us the ability to talk to folks that really had real world knowledge with these situations and help us make some pretty critical decisions that, you know, in some aspects helped sort of mitigate the tariff exposure and in some aspects, helping us put together a plan, a plan B and a plan C regarding de minimis. And, yeah, I'm never gonna forget that. And this was before we signed on the dotted line with you. This is while we were still putting this relationship together and we were very fortunate and very appreciative.

Ryan Petersen
Customs piece, especially obviously, we started as a customs brokerage all those years ago and it's this has been the year for that team to really shine for us and we want to put them in front of everybody. But it also speaks to like what I think we can do over the coming years that we haven't reached our potential at all. But is really how do you connect that inbound international piece with the domestic fulfillment piece? And, you know, he's even talking to customers earlier today about how can do better planning of what POS are coming in and how should we route those POS into different nodes in our us network and help optimize on a true end to end basis. And where we want to get to is where you're never out of stock because you've got your inventory if the inventory has been ordered anywhere in the world and you can see that and see it on the ocean and then inform the customer. Okay, I might be out of stock of this unit but still order it. It'll just get there in three weeks and right? For some customers that's good enough, you don't want to lose the sale. So, I love hearing that about our customs team because we're already starting to come together a little bit. This vision of the domestic and international, both sides, making each other better.

Art Morales
Absolutely. And, you know, speed and visibility, right? That's that's all we can ask for out of our three PL partner. And you guys have really provided that for us whether?

Ryan Petersen
It's your own checklist or you're giving advice to others that you're thinking through like what are the big high level buckets that you say, hey, I gotta check this box as I think about a three PL, right?

Art Morales
So again talking about, you know, how well versed we are with vetting three PLS because we've changed our domestic distribution footprint. We've changed our international distribution. You've done.

Ryan Petersen
This before you joined manscape too. So, yeah.

Art Morales
Absolutely. And, you know, learning to ask, what are the pertinent questions of a potential three PL partner? So, if I were to give like any advice to any company like manscape, and if you're looking to vet a new three PL, some of the things I would ask about is the WMS, for that new three PL, does it provide reporting that, you know, really suits your needs? Is there like a sort of a self service reporting feature, that WMS provides? Is there customizable reporting? You may, you may have some specific needs or your accounting and finance teams might need a specific view of something. Can that WMS help support that? What kind of view do you have into inventory is your view into inventory sort of real time? And how important is that to you? So one of the things I would suggest is really become intimately knowledgeable of the WMS of that three PL that you're going to do business with. Another thing I would really ask about is inventory control and inventory management… find out how cycle counts are handled, what's the process for picking, for packing, for receiving, for put away. You really have to understand all of those processes to feel comfortable that, yeah, they're not going to lose my stuff. Yeah, you know, did we have?

Ryan Petersen
You go through and run it yourself a little bit. I.

Art Morales
Love picking orders. I love picking orders. So, you know, those are some of the questions you need to ask, what is the tolerance for discrepancies regarding inventory on the three PL side? And does that match your expectations from a customer? You know, maybe that three PL is, you know, promoting, hey, we're 95 percent effective with inventory accuracy? Maybe you need 99 percent effect.

Ryan Petersen
95 doesn't sound.

Art Morales
Great. Maybe there's a happy medium, but these are some of the questions that you have to ask before you get into like a formal agreement with any kind of three PL. I think setting expectations on communication, every three PL in the world is going to assign an account manager to you and that's all well and good. But I've seen that what's even more effective is as a customer having access to like dev leads or operations leads like those folks like the boots on the ground folks, can you get access to those folks? Because those are the folks that are going to have the intimate knowledge of what is going on with your product in that warehouse. And those are the folks that can really affect fast and quick changes. So, I would really find out what are the expectations for communication? And do they suit what you're looking for… slas, make sure your slas are dialed in? You know, if that… three PL is saying that, you know, you give us an order by three o'clock and we're going to ship it out that same day. Well, you better vet that and make sure that actually happens because those slas are your lifeline to that customer experience. So dial into the slas, make sure you're getting what you want out of this relationship. And I think the last thing I'll mention is billing and invoicing that can become such a rabbit hole and such a dark and scary place for companies like manscaped, when you're going through the process of vetting a three PL, ask for samples of billing, ask for samples of invoicing. Put those samples in front of your three PL team because they're the ones who are going to go through those invoices and those bills and reconcile those against the orders that you shipped out, put those samples in front of your accounting team and make sure that it's digestible for them. And that they understand what they're looking at because it's going to have that domino effect of if it impacts accounting, it's going to impact finance and impact the PL. So nip it in the bud, make sure that everything you're getting from this potential PL as far as billing and invoicing is something that is acceptable for you. And in a format that works for you and your team understand all the charges. The worst thing in the world is to get an invoice. And suddenly there's a charge on there that you weren't expecting when you're vetting that PL, make sure you understand every single charge that you're going to be. Liable for paying. And the last thing is understand the process to dispute an invoice that you might think is incorrect. There is a lot of fine print with these agreements between three PLS and customers like ours. A three PL might say, hey, you've got 15 days to dispute an incorrect invoice. Is that enough for you? You're familiar with your own internal process? It might take you 10 days to reconcile. Is then that enough time to try to address something that you feel is incorrect? So make sure you take a deep look at that as well. And I mention those things because those are real life examples of challenges that we've worked through working with three PLS.

Ryan Petersen
Great. Well, we're thrilled to bring you on and keep learning from you and keep growing. This morning. We did our big tech launch and tech release, yes.

Art Morales
Exciting. I know.

Ryan Petersen
You're here, I'm curious to see what anything stood out to you there, things that you're excited about. And maybe also where would you like to see technology keep getting better for your business and help us improve our roadmap? Well.

Art Morales
That was super exciting. That was great to be a part of. I almost felt like I was in one of those apple unveiling events.

Ryan Petersen
Definitely trying to channel my interesting jobs. We.

Art Morales
all are as entrepreneurs exactly. Yeah, that's what it felt like. But we actually have already been using one of your newish tools and that's the tariff simulator that's been incredibly important for us because the tariff landscape has changed so much throughout this year. So that's helped us make some really key decisions regarding when to cross product, when to not cross product and also just tying into our HTS codes. I think one of the things that you mentioned today was the insights builder. And I think that's driven by AI. That sounds amazing. So.

Ryan Petersen
We hooked it up to all the fulfillment data now, so you can just ask questions, natural language questions and don't need a data scientist and start generating charts and stuff. Don't need to be intimidated. Just start playing with it. It'll set you up.

Art Morales
My business intelligence manager is going to be all nervous now, no.

Ryan Petersen
Probably like it the most actually. So it should be good.

Art Morales
No, but we're a data driven company and anything, you know, we really have to look into this insights builder because anything that's going to help us make better decisions that obviously are data driven. That sounds, really amazing. So we're definitely going to have to, yeah.

Ryan Petersen
I think we're just scratching the surface on AI too. I think you see more and more use cases like this and planning that I was mentioning and load balancing, figuring out how much inventory you want to have in stock and which sites, and doing… some experiments around what does fast shipping do for conversion rate versus slow shipping? And how should you price these things? We really just want to be a partner for growth and conversion rate, optimization. Customer experience are big parts of that, of course. And then going global is the other thing maybe you could talk about that a tiny bit here coming to a close with your global footprint and how you guys have managed that… today. Our fulfillment is only in the United States but I have ambitions to go global. So tell me what you've seen.

Art Morales
Well, let's see. We've got two third party warehouse locations in Mexico. Obviously, we're really taking advantage of de minimis and three two one. So that was really the driver to have those locations there. We have a location in Canada as well, which is just purely Canada. But Omni channel against supporting all three sales channels. We have a three PL location in the UK and also one in Rotterdam that fulfills all of Europe for us. We also have a location in Dubai that supports Mena, and we also have a really thriving three PL in Sydney, Australia, and we get man, the aussies love manscaped product. We do like really well there. Yeah. And that warehouse supports Australia and New Zealand. So, yeah, I mean, you know, as we continue to grow and we continue to grow globally, you know, who knows what? An?

Ryan Petersen
Amazing story to be able to build a business over the last decade and just have it go global like that and be kind of global sensation.

Art Morales
Isn't it, I mean, isn't it incredible? Yeah. Can I say balls? A ball trimmer is now like this global mover and shaker of commerce and industry. It's incredible when you think about it.

Ryan Petersen
Amazing. Well, thank you so much for taking time today, art. It's been great to get to know you over this last year and building this together. So I want to keep that dialogue going. You can send me angry texts or nice ones, whatever you want. But I definitely want to hear from you and hear your ideas of where we need to get better. That's how we built. This whole company was trying to listen. I love what you said about talking to our engineers because we want flexport to feel like. Oh, I've got my own custom software engineering team even though we try not to build custom tools, but almost everything in our roadmap is like some customer told us. Oh, I need that and you're like, OK, cool. Build it for you because other people probably need the same thing. So I need to keep that feedback. It's.

Art Morales
been awesome. We're super excited with this partnership. Everyone that we've worked with has been tremendous. I mean, I'm not just saying that because I'm on this podcast, but everyone we work with has just been incredible and we're excited to go forward with flexport and who knows what the future holds?

Ryan Petersen
Awesome, man. Well, thank you so much.

Art Morales
All right. Thank you.