by Alex Vuocolo Special to Delaware Business Times
Darius Banasik founded Simple Global, headquartered in New Castle, because he wanted to make it easier for consumers around the globe to buy U.S. products. He knew that meant navigating different regulations, different languages, and the complicated world of global shipping. But how exactly the new company would fit into that patchwork was an open question.
"This is 2012. We have zero dollars in revenue, and we're trying to figure out what to do," said Banasik. "All we know is that if you're living outside the U.S. it really sucks because you can't get what you want."
Four years later, Simple Global has adopted a business model that combines logistics, customer service and proprietary software in effort to make e-commerce - online commercial transactions - easier for both buyer and seller.
A 2016 report from the research group eMarketer found that e-commerce made up nearly 9 percent of global retail sales. The report estimated that number would rise to 14 percent by 2020, totaling over $4 trillion in sales.
"E-commerce has sort of been a big thing, and it's a growing thing, and obviously companies like Amazon are taking advantage of it," Banasik said. "The problem comes in when you're not Amazon, and when you're not Nike and you can't open an office in every portion of the world."
Small and medium-sized companies, Banasik explained, don't have the economies of scale or infrastructure to easily sell their wares across national borders. Those that take advantage of the digital marketplace, he added, have their own set of barriers.
One barrier is that limited sales volume, however the customer happens to buy the product, raises the costs of shipping. What Simple Global does is consolidate products from multiple companies and then ship them together. A company can also send their products to Simple Global for storage, fulfillment and inventory, creating a one-stop-shop for logistical needs.
Simple Global has warehouses in Delaware, Michigan, Los Angeles and South Korea. The goal, Banasik said, is to set up strategic locations around the world that will allow the greatest access to consumers. The company plans to build locations in the Hong Kong area and in the Netherlands by the end of 2017, opening up large portions of Europe and Asia for direct shipping. In the meantime, the company works closely with DHL and UPS where it doesn't have warehouses.
The other key piece of Simple Global's model is its proprietary software, which provides a visible inventory and shipping information to business clients.
"When we initially started we used a lot of out-of-the-box software solutions," Banasik said. "And this stuff didn't do anything that we wanted to do."
As a result, the company took a bold step: co-founder Justin Kim opened a development office in South Korea and assembled a team to build software that met the specific needs of their clients, which are often mid-sized companies or small companies with ambitions for growth.
"We can't just target any kind of e-commerce customer. We kind have to do a little bit of sifting ourselves," said Paul Banasik, brother of Darius and a marketing associate at Simple Global. An ideal customer, he added, would be a company that wants to focus their time and energy on launching a new product line, rather than handling shipping and fulfillment themselves.
The larger goal, Darius Banasik said, is to help make the global market more open to all types of businesses.
"From the business-to-business perspective, we want a U.S. e-commerce company to sell to India and have it be just as easy as it would be to sell to Indiana," he said.