When shopping online, we do we give thought to the logistics that occur between the time we hit “enter” and the time the item arrives.
The complex process involves a lot of moving parts, but a Shelton company has developed a product to make it more efficient for the supplier while remaining transparent for the customer.
Logic Technology’s Logicbroker application is designed to streamline the exchange of data along the supply chain, enabling smaller companies to seamlessly sell products through large retailers like Best Buy and Amazon, among others. Growing businesses can use the product for the full range of behind-the-scenes tracking processes without the expense of building a custom electronic data exchange system.
CEO Peyman Zamani founded Logic Technology as an e-commerce consultancy and he and his partners began developing Logicbroker about three years ago. They built custom systems for clients to learn what worked and what didn’t, and to provide a revenue stream while they refined the proprietary software that became Logicbroker.
Last year, the company switched to a subscription model, offering one- to three-year contracts to customers across the country and a few international ones. Logicbroker has been trademarked in the U.S., Canada and Europe, casting an eye to more overseas markets.
Logic Technology’s current client base is split about evenly between retailers and suppliers, and is comprised primarily of small- to mid-sized companies that are beyond the start-up phase.
“Huge companies like Amazon spend millions of dollars to build an infrastructure, but our clients are smaller companies that are growing fast,” Zamani said. “Maybe they’ve just put up a website and gone from five or 10 orders a day to a few hundred, and they don’t have a system to automate all of their processes.”
“They need us to make sure their website talks to their accounting system and their order management system, or if they’re sending orders electronically to suppliers, they need a system like ours to make it seem effortless and eliminate extra work,” he said. “Companies with revenues of $1 million to $50 million is our sweet spot, but we do have larger clients.”
One such client is Lenmar Enterprises Inc., a California maker-distributor of specialty batteries, battery chargers, and other power supplies or consumer electronics and industrial tools. Lenmar currently uses a hybrid of Logicbroker and a custom product Logic Technology developed to enable the company to connect with large retailers like Staples, Radio Shack and Best Buy, said Lenmar President and CEO Marty Goldberg.
“They ended up using a lot of the things they built for us in their standard platform,” he said. “They’ve been a good fit for us because they have a good understanding of both business and IT.”
Lenmar’s model is a vivid example of how Logicbroker operates, Zamani said.
“Customers think they’re buying a product directly from Amazon or Best Buy,” he said, “but behind the scenes we’re taking the order and sending it to them, but it comes to the customer as if Best Buy had shipped it themselves.”
With sales of about $1 million last year, Logic Technology has begun adding staff, including its first sales person.
The company now has about 15 employees and Zamani hopes to finish the year with 25 people and to double that number within 18 months.
“We have some lofty goals to add customers and we’re raising money now,” he said, adding that the company is close to landing some venture capital that will facilitate further expansion. “We deliberately started very slowly and didn’t try to raise a lot of money right away. We wanted to make sure our product was built correctly, finalize the market we’re going after, and fine tune our pricing, and now we’re going aggressively into the market.”
In addition to employing standard marketing techniques such as trade shows and the Web, the company exploits networking opportunities to attract new customers.
“We brought on board a furniture company based in New York and helped them integrate with 50-plus drop shippers, then we went after those guys,” Zamani said. “Two of them came to our platform and now we’re going after their retailers. One of them said they already had a solution, but they had 90 other suppliers that didn’t have one, so we signed one of those up. There’s a whole ripple effect.”
Potential investors are drawn to the company, Zamani says, because, unlike its competitors, Logic Technology provides a complete, end-to-end solution for supply chain optimization.
While some products integrate a website to a company’s internal system and others provide electronic data exchange products that facilitate communication between trading partners, Logicbroker does both, and the start-up process is fast and efficient, getting customers up and running in six to eight weeks.
“Our competitors take four to six months,” Zamani said, “so some customers have come to us specifically because of that.”
