By Anna Lardinois, Startup Storyteller
If you think Amazon is the only third-party shipper with a warehouse in the Milwaukee area, think again.
Founded in 2020, Atomix is a third-party logistics (3PL) business operating on a unique ecommerce platform. Led by CEO Austin Kreinz, the rising company is housed in a 20,000 square foot warehouse in Milwaukee. Kreinz has found early success by catering to clients like new brands and those with high-touch shipping requirements, whose needs are best met by a 3PL with a boutique approach.
Founder Kreinz was an elite college athlete who was the captain of his D-1 lacrosse team at the University of Pennsylvania. He began his career on the East Coast but returned to the region to disrupt the 3PL industry.
“I love the Midwest,” he said. “I love Milwaukee. I grew up here and want to make the city and the state successful. From a startup standpoint, we’re an overlooked area so, you know, that puts a bit of a chip on our shoulder. There’s been a recent shift and rise in technology and startups in Milwaukee and we want Atomix to play a bigger role in that growth.”
The city also made financial sense.
Kreinz said Milwaukee was ideal because of “our access to Chicago, which is one of the most important transportation hubs in the U.S.” When he compared startup costs on the East Coast, where he started his career, he said, “our costs are roughly half. From just a real estate cost perspective, our rent per square foot (cost) is half.”
Labor costs are also lower in the region. Despite the labor crunch, the company reports they have not had difficulty filling their warehouse positions. Kreinz openly acknowledges he cannot match the Amazon warehouse pay rate, but states he offers a more flexible working environment where employees are part of the decision-making process and “can meaningfully shape the trajectory of the company.” The culture-building seems to be working, as Atomix has a number of former Amazon warehouse employees on staff.
Atomix has become a favorite of emerging companies by offering services without minimum usage requirements and creating scaffolded support that scales as the needs of the new brand grows.
The company also excels in serving high-touch clients, in part because of what Kreinz describes as his “micro-pod” approach to warehouse design. “Conceptually, think about it as a mini-warehouse within our facility,” he said.
Kreinz observed that most companies working with a 3PL have concerns about how their orders are being processed. He said users wonder, “is the point of contact that is managing our brand really putting effort into the brand? Who’s picking and packing your product?”
The CEO addresses this common concern with logistics.
“The ultimate goal for logistics is being as efficient as possible – that is understanding and improving your units per hour” he said. “But what most 3PLs don’t understand is the human element to partnering with brands. The reality is errors are bound to happen, so to have an element that really goes above and beyond with a personalized touch to it, is something that we’ve noticed that has really clicked with our customers and led to our rapid growth.”
The micro-pod concept has proven to be just as cost-effective as it is customer focused.
“The most inefficient element to a warehouse is picking times, meaning how long it takes you to go walk and pick an item then ship it out,” he said.” What we’ve done is limited the steps that our team is walking, which significantly increases our efficiency. From a brand’s perspective, they know that all their products are organized into these geographic locations within our warehouse.”
Creating micro-pods staffed by designated team members allows Atomix to handle clients with a variety of different needs. An example is their partnership with Loyal for Dogs, a startup working in the biotech healthcare industry that requires a 15-step kitting process with a reverse logistics component.
Because of the success Atomix Logistics has had with high-touch clients, the company is working to add the subscription box industry to their list of targeted markets.
The strategy for scaling the company includes opening additional warehouse locations. The CEO said, “our plan is to have three nodes throughout the U.S. to be able to hit the Midwest, West Coast and East Coast with two-day shipping, affordably. After that, we will open micro-fulfilment centers.”
In population-dense areas it “will make sense to open a few 1000 square foot warehouses across the country. But it’s really important to follow our demand, which is our clients, so when they want to open a facility, we know we’ll be profitable (from) day one and not overextend (ourselves),” he said.” The company is also looking at ways to market their unique ecommerce software system to companies that handle order fulfillment internally
The boot-strapped company has chosen to avoid fundraising until they “prove out our concept, prove out our model,” Kreinz said. His goal is to get to $5-10 million in revenue in under two years, he said, “and then see where our next steps are. We are getting close to that point. We just hit our $3 million in run rate revenue.”
To learn more about this rapidly growing 3PL startup, connect with them here.