Manish Chowdhary at Pattern Accelerate

Thank you. Good afternoon everybody. How's everybody doing this afternoon? Good. Good job. We'll talk about the super exciting topic of logistics, which is going to rival the folks next door in marketing, which the room is flooding and people are bursting through the seams. But I know that the exciting stuff is happening here. We'll talk about a lot of things related to fulfillment logistics and Amazon Buy with Prime, which is a brand new program that was introduced by Amazon. Before that, I just want to give you a quick intro about myself. My name is Manish Chaudhary, founder and CEO of Kahoot. Kahoot is the world's first peer to peer order fulfillment network. By that, what we mean is our facilities belong to other brands and retailers that have warehouses of their own. And for the very first time, if they have excess space and capacity, they get to monetize that warehouse as a fulfillment partner on the Kahoot network. And what that gives Kahoot is a unique strategic competitive advantage in terms of cost. So similar to Airbnb, if you have a spare room and you get to put that on Airbnb and make some extra cash, you of course do not expect to get paid same as Hilton or Marriott, because Airbnb is doing a lot and this is an extra income. And so that is the fundamental tenet of our network that allows us to offer affordable fulfillment solution. And we'll break it down for you. So Amazon Buy with Prime, if you won't mind raising your hand if you're familiar or heard of this Amazon Buy with Prime. Okay, all the people in the room. Good. April 21st, very recent. Just less than two months ago, Amazon announced this program called Buy with Prime. It's essentially it extends the prime benefits to DTC site, your e commerce website, whether you know it's a custom website or what have you. You can now put the prime logo, the prime badge on your product page. You can put it on your shopping cart and then a Prime shopper, similar to a checkout, you know, you might have, might be familiar with checkout with PayPal. So it's a similar button would appear on your shopping cart page and instead of going through the native website checkout, you would actually log in with your Amazon account. And as soon as you log in you will, as a consumer, you will have access to all the items, book all the similar familiar Amazon checkout, experience all your personalization payments and so on. Amazon will load that up and you get all the benefits of Amazon prime, which is the most notable benefit for the consumer. For Amazon prime is the unlimited One day, two day free shipping, no questions asked returns and all the other cool stuff like your prime video and so on. But we're here to talk more from a merchant's perspective, not so much from the consumer. Because this, what I call this, is something that Amazon has been working towards for a very long time. So let's look at it. You know this initiative might come as a surprise to you, but Amazon has been building its warehouse and logistics network for over two decades. And this is the chart of the number of warehouses Amazon stood up over the years. And as you can see from the chart, there's a sharp spike in 2020 and 21. And Amazon's been gradually building these fulfillment centers, rotation facilities and all the back office capabilities in order to power a Prime like experience. And when Pandemic when Covid hit, Amazon went on overdrive and they went and overbuilt. And some of you might have read in the news that last quarter Q1 of 2022 was one of it was a quarter when Amazon had a loss that was reported and that loss hadn't been the case for many, many quarters before. And it was the slowest growing quarter for Amazon in the last decade. Granted, post Covid hangover, e commerce is slowing, the growth is slowing. But the net result of this was Amazon overbuilt. And that may have contributed to Amazon announcing this Buy with Prime sooner than expected. And in a typical Amazon fashion, it's half baked. We know nothing about it, so I will try to make up things. But overall the program is still in beta and it is by mutation only. So that's the backdrop. But Buy with Prime is the Trojan horse. It is not what you might think the first reaction would be, you know, if you will put the prime low on your website. It's a familiar brand, it creates trust with the consumer and therefore it will lift your conversion and so on. That is all true from a consumer perspective, but there's a lot more underneath because essentially Pilot prime is not just a logistics service. It's not just a one day, two day delivery, but it is essentially infiltrates your entire customer journey. And I'm going to show you what. And the notable pieces of that being Amazon advertising, which is of course the biggest cash cow for Amazon fba, which is the fulfillment centers which are readily available right now. And in fact the situation is so dire that Amazon announced that they were planning to sublease 30 million square feet of warehouse space because they overbid to that degree. So Amazon is hungry. They want to offer this service to anybody who wants to put this on their website, of course it's going to be a slow rollout and then Amazon Pay and why Amazon Pay is important, which we'll cover shortly. So we've all been gradually coming to terms with this one day, two day free delivery. And most DTC brands, they believe that this is a good idea, but they're really not committed. You know, we studied top 50 brands on Shopify and the results were absolutely shocking. That 60% of those top 50 brands, we commissioned a original study by Kahoot and we wanted to study the shopping experience and prices of those brands on their DTC site and compared the prices and shipping experience with the same identical item on marketplaces. And 60% of the time you could buy the product cheaper and you can have it delivered faster on a marketplace than on the DTC side. But this announcement, Bible prime is now going to create an even greater universal expectation. There are about 200 million prime shoppers in the worldwide, so that, you know, almost one in one in two adults in the US is pretty much a prime member. And now whether you have a DTC site or whichever platform, you name it, the two day delivery, which is actually the news from four or five years ago. And in fact Amazon is moving towards one day delivery. They were very aggressive in 2019, right before the pandemic. Amazon prime is shifting from two day to one day. And part of the warehouse build out was to support the one day initiative because from a competitive landscape standpoint, Amazon knew that Walmart is trying to catch up. And when Walmart builds their two day infrastructure next five years, Amazon would already be one day delivery network as of yesterday. So two day delivery is no longer optional. And if any brand thinks that their consumer does not want that, I would challenge you on that. And you need to do a deeper study because consumers don't tell you on your website, they just leave, they go somewhere else. And this has been. The delivery and fulfillment experience has been one of the hallmarks for marketplaces and, and that has led to marketplaces achieving a much higher growth rate than the DTC brands. So if you look at the combined growth of marketplaces that exceeds the DTC growth, they're both growing, it's kind of rising tide, let's all boats. And I think now that we are in a somewhat softer economic climate, we're going to see the effect of that even greater. So if, if I were to look at the same chart a year from now, I would argue that the marketplaces are going to surpass DTC sites even sharply. And from 2020 to 2021, the marketplaces grew 21% year over year. DTC brands grew up as well, 15%. So I'm going to take you through an example and on the right hand side, this Skull Candy one, that is a real example because that's if you go to their very popular brand, I love their products. But look at the checkout experience. You know you're going to see free shipping. It doesn't tell you how long it's going to take. And the standard shipping is going to be $8 in four to seven days. And then you see the if I want Amazon like delivery is going to be $23 and one to today. It doesn't quite tell me when I'm going to receive the item. There is no guarantee and if I want free, I can only hope when it will arrive. So on the right hand side, this is a real product. Razer since Amazon, there are very, very few examples of buy with prime in action. In fact, even on Amazon's promotion page, the brand that they are announcing or promoting we did not find try and check out on that website. So just want to give a contrast. So imagine Skullcandy and Razer. Tomorrow Razer puts up Vivid prime logo and Vivid prime button on the product page. So as a consumer, you decide, you know, how many of you will actually buy from Razer versus Silk Candy. Show of hands if you don't mind, you know, would you prefer still buy from Svelte Candy or if you did not have, let's just do a small preface that you don't have a strong affiliation or brand affinity towards Silk Candy and both brands are equally liked. You know, if are you going to buy from Razer, are you going to buy from Silk Candy? So my argument is it's people are going to go to the familiar, which is going to be Razer and it tells you exactly when the product will arrive. So as a brand, what are your options? What do you do? You know, you join them. However, Buy with Prime infiltrates the entire customer journey and I'm going to take you through that discovery, conversion, fulfillment or post purchase and loyalty, which is a repeat purchase. So let's look at the discovery part. So imagine if you start putting the Buy with Prime button on your website or the Familiar blue logo with the arrow. This is a website that you don't recognize as a consumer. Your first reaction might be, you know what this product looks like it's being sold by Amazon or through Amazon or something. So let me take a Peek at Amazon since I'm a Prime member and what else is out there? Because I don't know if this is the best price. So first and foremost you're going to, this is going to lead to potential defection of the traffic. That is a strong possibility. Now let's look further which is in the conversion process. DTC brands for a very long time have relied on this technique, the tactic of increasing the cart size by offering shipping a free shipping above a certain amount. And this is a real website Lockitane. And we know with prime member, right prime you get unlimited free shipping even if you order a toothpick, you know. So now if you were Noctane and you are considering offering prime now, what's going to happen to the basket size? You know, this is going to dramatically reduce your basket size and the traditional method of encouraging customers to buy more, add more items, that is going to be strong, that is going to be strongly compromised. And the counter argument is if you don't offer buy with prime and your competitors do and they lower the average free shipping threshold to say $25, that's going to also further compel you to do the same. So, so there is an argument to be made that this buy with prime is going to have a profound impact on every e commerce website. And there's a concept of gradually and then suddenly. And before I go to the next topic, which is let's say you abandoned the shopping cart. So this is in Skullcandy. Some of you who may be the fans of Skullcandy in spite of their insufficient guidance on shipping and when that product will arrive, you put it in your shopping cart and you take a break. Maybe you will come back to it or maybe you want. And imagine when you go on Amazon's homepage, you are going to be targeted by some other ad that is going to resemble very close to your purchase behavior or the browsing history. It is no different than you putting an item in your Amazon shopping cart because that technically Amazon has full knowledge if you install the buy with prime that someone has left the cart abandoned. And because it's, it's a double whammy. Because if you, if, if that is Amazon's cart now, you can't even potentially remarket to that customer. And that is a technique that DTC brands, the Shopify stores have long used is if somebody abandons a cart, I will remarket. But we know that they're not allowed to retarget Amazon shoppers and therefore most likely you can't remarket to them and when that visitor goes on Amazon Store Amazon website, they'll be targeted with complimentary offerings and Amazon will close the sale. Bioprime is not new. We've seen a version of Buy with Prime from a fulfillment and logistics perspective before. It's called multi channel fulfillment. Some of you may have used it. If you have, you can send Amazon orders that originate from other channels and Amazon will fulfill that for you. However, multi channel fulfillment is not the cheap, inexpensive, awesome Amazon fulfillment that we think it is. Because there is a significant cost difference between orders that FBA fulfills for orders that originate on Amazon versus the orders that do not originate on Amazon. And this is a real example with real prices. It was computed not too long ago. So if you, especially in apparel, this is very clearly evident when you have multiple SKUs. Amazon FBA was designed for small and light items, you know, one unit orders and you can just think it packet and ship it. The minute the basket complexity increases, the prices on Amazon get very different. So if you order two pairs of socks, two different kinds of socks, if you ordered from Amazon, you're going to pay 844. But if you, if you place that order from Shopify and ask Amazon to fulfill it, that will be 51% more expensive. There'll be plenty of room for Q and A guys. So I'm going to try to zip through this and hopefully we'll have some energetic discussion around Bioprime. And most merchants and brands and sellers, somehow they believe that if they were to fulfill themselves, themselves meaning not with Amazon, it's too expensive. Let me break this down for you. Amazon FBA is great for some kinds of items, primarily small and light, but it is not the cheapest. And in this example, if you were to try and do the shipping yourself is going to be 67% less expensive for one pair. And then it goes on. The minute the basket gets more complicated, your border size gets order gets more number of unique SKUs crime becomes or FBA becomes less and less attractive. So now finally, you know, we are at this XL8 conference and a lot of people have talked about storytelling, brand building and so on. And yes, FBA has promised that they will provide or they are experimenting with a pilot program for neutral brand, neutral boxes. But we know that the reason why Amazon brand is so strong is it's being reinforced to the consumer. Every single day, every single week you get a prime label box. And it is very intentional, it is very deliberate why that is and why Amazon does not want to give that up. So if you Decide to use Amazon buyer Prime most likely you're going to your consumer is going to get a prime branded box and then the little that they knew about your brand they're likely to forget. Because the first reaction for consumer is this item came from Amazon and not from you. And next time I should just go to Amazon rather than going to your website. And that's another problem. Now if they go to your go to Amazon and purchase the same identical item, if it's an apparel item, you're going to pay Amazon 15% commission on top of the FBA fees. And finally the repeat purchase. You know, this is where the hallmark the tenant of any DTC brand for it to be successful it has to focus on consumer lifetime value. And we've seen this time and time examples of companies like Casper that are. That are doing not not too great. They're doing terribly horribly because they figured out a great way to acquire the customer. But they cannot make a profitable customer lifetime customer. And that is the same problem. Even the best of DTC brands that are on stage whether it's Alex and Ani and all of that are suffering. And in reality there are very few successful. And by successful I mean profitable DTC brand is because customer lifetime value. If you can't figure out the formula for having a profitable customer lifetime value, you're not going to succeed in dtc. This is if you start installing buy with Prime. Essentially Amazon has all the data now. They have data from your DTC site in addition to your online sales. If you didn't trust Amazon before, I don't know if you can really trust now with additional data and you can be sure that that prime shopper and to be fair to Amazon, in order to do the right thing for the consumer, if I was a prime shopper I want relevant targeted promotions and not something that is junk. So it's going to be very. We can imagine. We can totally expect that Amazon will use that data to improve its algorithm on Amazon.com and Amazon owned properties. So this is a serious risk because you may not get the repeat customer. At this time it is still unknown how much data will Amazon share? When you install the Buy with Prime button and customer checks out using Amazon how much of that data is going to come back to you? And we talked about payment which is part of the checkout is also the Amazon pay. And just by contrast why Amazon is so interested in extending its footprints outside of Amazon is because payment is extremely lucrative. By simple example of Shopify, I don't know just a quick Pop quiz. You know Shopify makes more money processing payments than software. Subscription in fact makes two times more money processing payments. So now all that payment volume is going to shift to Amazon, which gives them even more, it improves their financial conditions even more. And 85% of prime members visit Amazon once per week. So you can imagine with the data that comes from your website now the prime member visits Amazon.com, they're going to be targeted with something else and they buy. A Prime member buys at least once a week or half of the prime members buy once a week from Amazon. We already talked about rich data which is knocking the brand's best interest. So, so the dilemma is what should the brands do, what should the retailer do? You're stuck between a rock and a hard place. You know, you do nothing, you lose out on price and the delivery experience because the consumer, especially the millennials, the Gen X and Gen Z, they don't have they want the item, they want it right away. And two day delivery is now the universal standard. You're going to lose that customer to marketplaces because marketplaces are a competitive environment. So unlike your website, you can promise anything and get away with it. If you want to compete on marketplaces. If you don't have competitive shipping speed and cost, you're not going to appear on searches, your sales are going to suffer. And as has been repeated throughout this conference, that you got to be multi channel, you got to be present on every channel where the customers are. And Amazon and Walmart combined make up 43% of E commerce GMB. There's really not an option for any brand not to be present on those marketplaces. Now let's look at. If you do install Violet prime, you know your margins are going to suffer lower basket size, unlimited free returns, no questions asked and Amazon is doing the customer service for you. So if you're, if the. Even if it was an expensive coffee machine that the user could not figure out how to turn on or use a certain feature, they just ask the customer to return it. And you know you can't sell it as brand new once it's returned. So it just needs to degrade a customer experience from a returns perspective. And Amazon has all your customer information and we know that Amazon is leading the way with E commerce searches and they are hungry for more data. So if Amazon wants to become the Google of E commerce searches, they have to find a way to extend Amazon outside of Amazon.com and the reminder of the blue button, the swoosh, the arrow is just reinforcement of Amazon brand, not your brand. And this tells the customer to keep going back to Amazon even if the customer was not previously a Prime subscriber. This is a great way to add to the prime subscriber list because now new customers will be exposed to the benefits of prime and they would gravitate because of the free shipping, free returns and will allow them to sign up even more numbers. So until now everybody thought that Amazon, of course, you know, undeniably Amazon has done a fantastic job of building this logistics network and providing that superior delivery experience. But you know, it is not rocket science. It is not as difficult as many of us think or believe. And I'll break it down for you, of course this is a very simplistic version. In order to achieve one day two day delivery nationwide, it is totally doable. So if you want to achieve two day delivery in the continental US you need to have four strategic warehouses, fulfillment centers. And by strategic I mean they have to be located at the right places which is closer to the centers of population. And if you want to target one day delivery guarantee, this is a using the economical ground shipping. Of course we're not talking about one day air or two day air expensive. This is the economical UPS ground USPS 8, 9 locations. You can achieve one day delivery. Just like Amazon prime and Kahoot, my company, we do this, we in fact support Amazon seller fulfilled prime program which is essentially prime like experience. And we do that very successfully using this model. So in order to achieve this kind of experience on your website, the first step is to smart inventory placement. You need to have your warehouses located in the right places and you need to make a smart inventory. You don't want to send everything in the same quarantine to all locations because that's not good inventory management practices. Then you need to promote this. Shipping and fulfillment is not a back office solution. It is a customer marketing tool. And this is what Amazon does. Shows that on the product page it makes a very strong promise right from the homepage to the category page, to everywhere in between, you are going to get as a Prime member two day, one day free shipping on almost everything. The DTC brands that I talk to, many of them they get too caught up into, oh, you know, I've got 5% of my products that I can offer free shipping. That dilutes the message, you cannot do that. You have to promote this so that the consumer has full confidence. They should have nowhere else to look. And that is what we call the free shipping badge or the fast shipping bag of dates. Open Shipping then you need the software to route the orders. As the orders come in, you need to route it to the right location. It has to pick the right carrier, right service and print the cheapest label so that you are managing your cost. And then finally you need to monitor the performance end to end to ensure that that customer was truly satisfied, not just that the label was printed and you gave it to ups. That's not good enough. You have to make sure that if the customer get the product during the time frame that you guaranteed or if or not. Because that's, that's what creates consumer confidence, that's what creates trust in your brand. That yes, your delivery and fulfillment experiences on par with Amazon. We don't believe that Kahoot or as a student of this topic of logistics and fulfillment and we heard the Walmart WFS woman jar talk about it channel temporary fulfillment. It simply does not scale. Just think about it. You want to sell on many, many different channels. So you want to sell on Amazon. Amazon wants to give you preferential treatment or give you the prime badge only when you put your products in fba. Walmart wants to also provide the prime, the Walmart two day tag if you send it to wfs. If you're on Shopify, they have just acquired this company called Deliver. So imagine now you're splitting your inventory across so many different different fulfillment centers and warehouse warehouses. You need to now keep track of safety stock at each one of them. You need to ensure abide by their unique limitations. Each one has unique limitations. For example, Walmart is going to send it in Walmart branded boxes. They do not ship orders internationally. So if you get an order from an international customer, you got to figure it out. Amazon has certain size restrictions and we already know, we saw that if you were to send a Shopify order to fba, it's going to cost you a lot more. In case of deliver, anything above 18 inches have to be pre packed. So if you've got, you know, it has to be literally pre packed in a way that the label can be affixed and they don't want to do any additional packaging, no temperature control. There are many, many limitations because each of these networks are doing it in my opinion in a self serving fashion. This is a revenue opportunity for them and therefore they want to exploit it and they want to give preferential treatment. But from a merchant's perspective, you cannot look at it singularly from the channel because it's not, it gets very expensive because now your inventory is sitting across multiple fulfillment centers, multiple networks. Amazon will impose limits Q4 charges. Storage charges for Amazon are 3 to 4x the normal charges. Now you're trying to play a cat and mouse game how much inventory to send. If it runs out of stock then you will be penalized from a sales rank perspective, your ranking will tank and so on. This is really not in the best interest of the merchant. And therefore we believe that successful multi channel fulfillment strategy prime like experience requires a holistic fulfillment fulfillment network. And there are three ways to do it in addition to these other networks. If you're only selling on Amazon, then FBA is a great option. If you're only selling on Walmart, yes, WFS is good, it's simple. But we all know that we have to be multi channel. And in order to be multi channel, how can we have multi channel sales with a channel centric fulfillment? They are just polar opposites. So there are three ways to do it. You can do it yourself, which is you can go rent and own four, five to nine warehouses of your own. We know that the data that just came out just a couple of weeks ago, industrial rent for warehouses at an all time high, vacancy is at an all time low. And labor is another problem that we all know. You can't find qualified labor and it is very expensive. And then if you sign a long term lease, even if you were lucky to find it now, you have no visibility into what your business will be honestly in three to five years. And those leases will be five years long. And it's going to suck up a lot of management and operations time. So we don't recommend, I mean wanting warehouses is no longer a competitive advantage for any retailer. I mean if that was Sears would be doing really, really well and so would JCPenney. So we believe that the other option is multiple three PR third party logistics companies. There are about 21,000 of them in the US but most of them, 2/3 of these companies are what we call mom and pop operators that have 1, 2, 3 facilities. So now you have to cobble together at least, you know, three, four different providers. Each one has its own sla, they have their own way of doing things. And you still need some intelligent software to route the orders. It's not just about routing the order, but also exception management. So imagine you send the order, they cannot fulfill it. You need to reverse that course and that's when things break down. It's easy to just send it one way in a simplistic fashion. But in reality, if you want to offer prime like experience, it has to be prime like experience, no exceptions, 99.5% on time, shipping every order. That is why Amazon is so successful. And they are fanatical about their customer experience. And if you're not going to be just as fanatical about delivery and holding your team and third party logistics company accountable, you're not going to change the consumer's mind, you're not going to win them over, that you can do it better than Amazon or at least on par. And finally you can join a water fulfillment network, something like a Kahoot that is channel agnostic. The future of fulfillment is completely channel agnostic. Same price for every order, doesn't matter where it comes from. That network should support whatever strategy you want. If you want to send some items to FBA because you want to take advantage of prime day special on July 12, you know what that network should support that Walmart is not going to send those orders to fba. That's not going to happen. So whether you have to now buy a separate warehouse or rent a separate warehouse, keep some inventory there, that rivalry may be good for the marketplace, it is not good for the merchant. And that's what we believe. So I'm going to end here and I'm sure we'll have plenty of room for questions. Perfect. Thank you so much. Fascinating. I know we always talk about this idea of the rates, right. If you look at more sophisticated areas, Japan, New York City, they're same day delivery, right. So just keep them building in the building. So anyway, I have some questions but I'm going to stop myself. I would love to see if the audience has any questions. Yes, right here.

Thank you for your presentation. Really, really informative and timely for, for me anyway and my company because we're kind of weighing the pros and cons of driving to Amazon from D2C sites and have seen more brands becoming open to it D2C Brands, which has been interesting. But the question I had is around the pros and cons of using the Amazon Buy with Prime button and the integration that they've just rolled out versus just driving directly to the pdp. Because as a lot of us probably know, Amazon has the brand referral bonus program right now with the 10% back if you drive to the, you know, PDP through the attribution link. So in my head I'm thinking, you know, there's more benefits still to just drive through an attribution link, even though you're creating one extra step of having to add to the card. And then also because it will help with ranking if you're going through the PDP versus, you know, I guess time will tell how the Buy with Prime Open actually impacts ranking, if at all. I'm thinking if it's just going straight to check out, it won't. So I'm thinking 10 referral bonus ranking improvement that outweighs, you know, the cost and the one click less approach that the Buy with Prime buttons. So just kind of curious on your thoughts on it. I also noticed the example that you provided the headphone company. They've actually, unless I missed the correct product, but they've actually removed that button and they're, they're doing the other example that I just mentioned through a service called Get Hatch, which looks interesting. So I'm just curious if, if you are privy to why they aren't using the Bible prime button now and are going through the pdp.

Great question. Thank you. I am not privy to the Razer brand. My team just use that as an example. I think what you're referring to with PDP would be similar to thinking about it as a dsp. How do you drive traffic back to your Amazon listing to really improve your Amazon sales? So it kind of contradicts the DTC portion because your DTC is simply acting as a gateway to improving your Amazon sales. So that's a strategy that is totally acceptable. And if that's what you're trying to do, if you're trying to sell the product and you don't particularly care which channel it originates from and you're trying to boost your Amazon sales, then that is a good strategy. However, if you're trying to build lifetime relationships with these customers and you want to capture the email address you want to market to them over a long period of time, then I think you need to figure out a way how to convert that shopper on your website and not take them away to some other third party, Amazon included. Because the real question is what is DTC today, right? I mean, we're getting, this is getting so fragmented, right? Every traffic source, you know, that's Instagram or Facebook or you know, they now have a checkout option right on, right next to the ad. So what used to be traffic sources are now becoming sales channels. And if you want to build a DTC brand, you need to go to traffic where the traffic is. It's very hard to imagine that you're going to inform the entire world through word of mouth if you don't have the cooperation of those sources of channel and traffic. So this is a quite a challenge for DTC in general. So that's an option. But if you want to convert more shoppers on your website, we'll need to find a way to convert them directly on site. Great, thank you. Any other questions, thoughts? Thank you for the presentation. So, tactical question for a brand like ours, where we have a large Amazon presence and we're trying to actively drive more through D2C and diversify away from Amazon. We already have two warehouses, one in the Midwest, one on the West Coast. So would a company like yours, would we leverage you to fill that gap from two warehouses to nine, for example, or like, how does that work? We would still fulfill out of two on our own and then supplement with your network. Great question, Kevin. We were talking earlier and the future of fulfillment ought to be flexible. And as for Kahoot, yes, our network is very flexible. We can augment those dark spots that you have. So if you have warehouse coverage already in certain geographies, then Kahoot can simply augment and supplement that because your existing investments should be leveraged to the maximum. And the beauty of our network is if you, if we vacate some inventory from your warehouse and put it in some other warehouses, you also have an option of joining Kahoot as a fulfillment partner and making money. Me as a fulfillment partner? Yeah. Great, thank you.

What other questions are there?

Oh, yeah.

Yeah. So just curious your thoughts on Seller Fulfilled Prime, Because I know, you know that's an option, right? That could work into what you're discussing for, for Amazon, having, you know, your own fulfillment, but also catering to the prime customer. And my experience has been it's very difficult to meet their eligibility requirements and any of the brands I've tried, their warehouses just aren't able to do it and they get kicked out.

So I think your observations are totally right. Seller Focal prime, for those of you not familiar, is a program from Amazon which has been shut down, or rather it's suspended right now. They're not taking any new applications that are approving any new applications is essentially, rather than sending your inventory to FBA Amazon warehouses, you can fulfill those products yourself or outside of FBA and still qualify for the prime shopper. So you can sell on Amazon under the prime badge. But the criteria for meeting prime standards, SFP sellable for prime is very, very high. 99.5% on time shipping six day fulfillment, which means you have to fulfill orders on Saturdays that can be delivered on Saturday and Sundays. And you need to offer one one day and two day delivery. You need to offer at least 20% of your page views, must offer one day delivery, which essentially boils down to 40% of the US population, should be covered within one day. So if you have say one warehouse, you won't be able to meet those criteria. You'll get shut down. And if you get shut down from that program, it's going to be very hard to get that back. So Kahoot does that. And that's one of the things that what we've instated with our peer to peer fulfillment network is similar to Airbnb. You know, if you want to live like a local, you can have a superior experience. And our fulfillment partners are top notch. They are at the top of their game and they help our clients achieve seller fulfilled prime. We do the seller fulfill prime orders without exception. So it is hard. But because we're building a prime like alternative outsport DDC grants, we need to have standards equal or higher than Amazon and that is how we're able to achieve that. Great, thank you. That's okay. I'm going to jump in with one last one. I'm sure you have just a minute left. But you know, whenever I hear about these solutions, my big curiosity is how far do you go down the pipeline here like inventory distribution? You know, a lot of times we work with partners, they got one, maybe two DCs in the country and now I need to get products to 9 or 10 and probably in smaller quantities because DDC is not that big. So I should make parcels to a bunch of places. What's your thought on that? And how, how do you thought about solving. Yeah, yeah. So we've simplified this whole experience for merchants. So the Kahoot network works very similar to an fba. You have an option to ship inventory to one of our facilities and then we will forward deploy the inventory to whatever targets you want to meet. So if you have a two day delivery SLA that you wish to meet, then we will forward deploy it. You can send inventory directly and from that point on you really don't have to worry because our software technology takes over. It always aims to find the cheapest cost and it's quite flexible. Our sellers also participate. They take advantage of our discounted freight, which is similar to Amazon's discounted rates for inventory in the fba. And the software gives them the same level of visibility into their inventory position when it's time to replenish and so on. So it works out to be typically lower cost because we also support the B2B. So if you are say selling to Nordstrom, you want to send them a pallet of inventory, you don't have to break that inventory into, you know, this is my dark store that is going to ship just to FBA and ship to Nordstrom or this is going to do my fulfillment one day today delivery. Great. Thank you. Thank you. All right, let's give it a round of applause. Thank you, Manish.