Logistics and Supply Chain in B2B Distribution
An interview with ChemDirect Co-Founder and CEO, Tyler Ellison
You are not seeing double!👀
We know you typically find us in your inbox once per week but this week we’ve split our coverage into two posts. Our first post this week looked at the rapid adoption of financing and payments solutions in B2B, one of two key value added services we see making a large impact on the industry. In this post, we look at the other side of the B2B competitive advantages coin: Logistics.
The logistics industry is one of the most critical parts of the B2B economy, and it has undergone significant changes over the past few years. The pandemic has accelerated digital transformation in many sectors, including logistics, as more companies turn to online services to streamline their operations. As B2B companies continue to grow, it's crucial to keep up with the latest logistics trends and services to stay competitive.
In this post, we talk with ChemDirect CEO and Founder, Tyler Ellison, about how ChemDirect’s logistics services streamline operations, increase efficiency, and drive growth. We also touch on ChemDirect’s Series A funding round led by strategic investor, Schneider National, an incumbent provider of transportation & logistics - not to be confused with Schneider Electric.
We’ve broken out key excerpts from our talk with Ellison as well linked to the full, unedited interview below.
Why Logistics is Key For Price Sensitive Chemical Buyers
Tyler talked to us about the challenges faced by different types of chemical buyers. Whether it's professional buyers purchasing large quantities or scientists searching for rare supplies, each group has its unique pain points that demand well-functioning logistics and supply chain operations to deliver a positive customer experience.
Tyler highlights the need for an efficient and transparent procurement process to get the right materials at an optimal price. For life science buyers, time is of the essence as the opportunity costs for not completing an experiment are high. They need access to supplies and quick fulfillment times. In contrast, bulk chemical buyers keep safety stock, and want to buy their materials in large quantities.
Taking on Strategic Investors
In June of 2022, ChemDirect announced the closing of a Series A funding round led by Schneider National, a leading incumbent transportation and logistics company. We asked Tyler to discuss the role of corporate VC investors in the supply chain space and how they can play a more prominent role in the future. He also shares insights on his experience working with strategic investors like Schneider and emphasizes the importance of setting clear expectations and having senior executive sponsors who understand the differences between a startup and a corporate environment.
“You really have to go in with the eyes wide open and have sponsors on both sides that understand that cultural dynamic and when it works, and it is working, it can be very powerful”
Does ChemDirect’s Supply Come From Manufacturers or Distributors?
We discussed if both distributors and manufacturers can participate on ChemDirect and detailed some of the points of resistance Ellison has had to overcome while building out a marketplace in the Chemical industry.
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