【Business Digest】Transforming E-commerce Logistics: The DBEE Story

Editorial Department Creation Section Jul 31 2023

DBEE Cloud Warehouse Management Service Turnover of nearly $10 million in two years (edigest.hk)

As technology advances, the logistics industry has continually improved efficiency in recent years, with numerous participants in each sector. While the industry may seem saturated, it has yet to achieve a seamless experience. Three individuals from the post-90s generation identified the rapid development of e-commerce as an opportunity and founded DBEE, a one-stop e-commerce logistics service. With in-house developed cloud warehousing services, DBEE has achieved a turnover of nearly HKD 10 million in the past two years. DBEE disrupts the traditional fixed-fee model of the logistics industry, opting for on-demand and usage-based charging. This significantly reduces the entry barriers for e-commerce, creating a win-win situation for both DBEE and its customers.

Inspired by Amazon FBA Model

In contrast to traditional methods where e-commerce businesses would rent warehouses, manage staff, and coordinate with logistics providers after receiving orders online, the three co-founders of DBEE drew inspiration from Amazon’s online advertising. The platform provided a complete solution, including shipping, logistics arrangements, and settlement. Recognizing the pain points of current e-commerce, such as high entry barriers, lack of flexibility, and complex systems, they founded DBEE with the concept of shared warehousing. Leo, one of the co-founders, remarked, “Amazon inspired us; they serve businesses on their platform exclusively. We want to support different platforms, allowing businesses to focus solely on finding opportunities.” The trio began contemplating this business in late 2020, conducted market research, engaged in development, and launched their proprietary system and cloud warehousing services in mid-2021. DBEE offers a comprehensive service for merchants, from warehouse management to settlement, with charges based on the actual services provided, eliminating account opening fees and other charges.

When merchants receive goods, they can use DBEE’s warehouse address. The products are directly sent to DBEE’s warehouse, where employees receive and inspect them, checking for damage and suitability for sale. Each item is meticulously coded, and every step involves barcode scanning for accuracy and traceability. After DBEE completes the acceptance process, employees measure and weigh the products. Warehousing fees are charged based on the actual volume of goods, eliminating the need for merchants to rent fixed positions and sign contracts for a specified period.

Significantly Reducing Startup Thresholds

“How to utilize warehouse space is DBEE’s responsibility; it should not be borne by the customer. Therefore, we calculate fees based on the actual volume of goods, providing customers with more personalized services,” said Leo. When merchants receive orders, DBEE’s system retrieves the products from the warehouse and packages them based on the order content, charging a fixed fee per order. Finally, logistics and delivery services are arranged. DBEE has established partnerships with major logistics and delivery platforms, allowing for API integration with different platforms. Merchants can compare prices at any time and choose different platforms for delivery based on the needs of the end customers. Due to the cost-effectiveness of consolidating a large number of orders, DBEE can obtain better delivery prices for merchants. Through API integration, DBEE interfaces with major online shopping platforms, including HKTVmall. When merchants receive orders on these platforms, the order details automatically enter the DBEE system, which then processes the subsequent work automatically.

If merchants choose to handle delivery themselves, DBEE takes care of other tasks. If they choose the latter, merchants need to deliver the ordered goods to a designated transfer station before a specified time, and DBEE can also handle this on their behalf. In recent years, more and more people have opened online stores. However, in the early stages of entrepreneurship, the number of orders may not be significant. If logistics are handled independently, it can be a “loss-making endeavor” for each order.

“Our service can facilitate entrepreneurs. Even if they have only one business, they can still enjoy relevant services and benefit from our economies of scale,” added Leo.

DBEE’s fee structure is innovative, with no fixed costs for renting and hiring personnel, no minimum consumption, fixed contracts, or product registration fees. The only fixed cost is warehousing fees, paid only when doing business, effectively reducing the threshold for entrepreneurs and achieving over a 90% customer retention rate. DBEE began operating during the pandemic and initially rented an office and warehouse in Yuen Long. Recently, they moved to Tsuen Wan, upgrading to a 17,000-square-foot e-commerce warehouse. Over the past two years, DBEE has steadily increased warehouse space, the number of customers, the variety of products, and the volume of shipments. The team has grown from the initial three founders to over ten people.

Merchant Business Surges Tenfold

One of DBEE’s merchants specializes in pet products. Several founders of the business also work in banks and run the business in their spare time. They operate a physical store and an online store on HKTVmall. After some time in operation, they were receiving 10-20 orders per day online. The physical store also had a warehouse, but space was limited, and excess inventory couldn’t be accommodated. Additionally, as they all had full-time jobs, they could only handle online orders after work, often working until 1 or 2 in the morning, affecting their performance the next day. Over half a year ago, they began using DBEE’s services, gaining more flexibility in procurement due to the absence of space restrictions. As they no longer had to follow up on subsequent tasks related to orders, they could dedicate more time to operating the online store. The result was a significant increase in business, with daily order quantities exceeding 10 times.

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