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Mercado helps importers nail the first mile — supply chain’s longest mile

Final-mile transformation coupled with a ‘challenging’ international landscape make transforming the first mile imperative

Mercado digitizes the entire import supply chain, connecting the supply and demand sides of global supply chains. Image: Mercado Labs

A product that arrives on your doorstep in four days takes four months to get to the United States.

Bridging that gap between analog supply and digital demand will create the biggest competitive advantage in the supply chain. Customers have spent years adapting to the model pioneered by Amazon in the final mile.

Now the company to model is Zara. Zara turns over its entire store inventory on average every eight weeks. It has connected its store POS to the design team, and the designers are digitally connected to their offshore suppliers. 

The financial benefits are stunning and it is reflected in the market cap of Zara. Working capital is freed up due to the reductions in time to market, and it has no excess inventory and very few markdowns as the product is always “fresh.”

Robert Garrison, chief executive officer of Mercado Labs, notes that U.S. companies import around $2 trillion worth of international products annually, of which half comes from the Asia-Pacific region. 

“It’s probably the largest market in the world that hasn’t yet been disrupted by technology,” said Garrison. “I’ve seen this problem from every perspective as a carrier, an importer as well as a third-party logistics provider, and I’m humbled by the opportunity to play a role.

“It’s also one of the most complex inventory management problems out there, and technology needs to be part of the solution,” he said.

What adds to the complexity of international shipping, he states, is the number of parties required to complete each order. 

“There’s eight different companies that could be involved in the import process from the importer to the supplier, as well as a factory, customs broker or forwarder,” Garrison said. “There’s also about 30 people that touch an order from seven different departments. We connect all those people, entities and departments to ensure they’re on the same exact page throughout that four-month journey.”

The first mile is currently coordinated primarily through analog processes; disparities in technology make inventory management a huge challenge for all involved. 

So he went about creating an all-encompassing platform, connecting all parties within global supply chains.

Mercado is an import management system (IMS) on a mission to transform the first mile. The platform digitizes the entire import supply chain, connecting the supply and demand sides of global supply chains. 

With its focus on user experience, information can be easily consumed and shared by everyone involved in the international supply chain — from suppliers to partners to importers. Mercado’s solutions and features around transparency, collaboration and predictability ensure that all are on the same page.

“What we’ve built is a system that connects the importer to their suppliers, partners and products,” Garrison said. “Once we’ve connected them, Mercado then connects the products to demand.”

Buying wholesale international products takes a lot of time and coordination among multiple partners. Garrison steps through the first-mile purchasing process. Consider a major American arts-and-crafts retailer in need of red ribbons for Valentine’s Day, for example. 

Your first step is to communicate with the supplier that you’ll need the ribbons on shelves no later than Feb. 1. This means that shipments have to leave Thailand no later than Dec. 1 and be distributed among DCs by around Jan. 1. This entire process must be initiated sometime around early September. 

“Mercado connects retailers and suppliers with each other on the platform so that both parties have visibility throughout the entire purchasing process. You can go back and forth on price, specifications, production status — ‘Has it been inspected?’ ‘Can I get a sample before you make any more?’ ‘Can I get the product inspected before you put it into a container?’” Garrison said. “We follow the product through the entire first-mile journey of planning, purchasing and shipping to the buyer.” 

What makes Mercado truly universal is its affordability and ease of use. The platform provides native language translation, auto document creation and supplier training, in addition to requiring only minimal data entry and over 70 additional features. 

What’s more, when an importer joins the Mercado platform, its partners can access the platform for free. In fact, companies and their supplier partners can be connected through Mercado in as little as 72 hours.

Mercado’s off-the-shelf and custom integrations make the platform an IMS of choice for any size company through its built-in integrations with a number of leading transportation management systems (TMSs), electronic resource planning systems and customer relationship management systems. 

Mercado offers a suite of products designed to connect and organize supply: Mercado Buy and Move, with Plan coming soon.

Buy provides buyers and purchasing teams with complete control over the outcome of their imports, enabling greater collaboration among teams, suppliers and partners. Through the digitizing of the first mile, products are connected with consumer demand. Available soon, Plan enables sourcing and purchasing teams to automate and simplify the vetting process, ensuring that suppliers are compliant with internal standards.

Move helps logistics teams plan and manage shipments with greater control, offering complete visibility of order, supplier, product and shipper data — from origin to destination. According to Mercado, logistics teams for the first time can access product-specific information across shipments and communicate with the rest of the business through a single, easy-to-use platform.

Founded in 2018, the Dallas-based technology startup has seen tremendous growth in venture funding. Early last year, Mercado received $3.2 million in a funding round for software engineering and to expand its market reach. Backers included LiveOak Venture Partners, Story Ventures, Schematic Ventures and Berlin’s Amplifier. 

Then in July, Mercado close a $2.5 million funding round led by Ironspring Ventures and joined by new investor Supply Chain Ventures. Garrison told FreightWaves previously that Mercado services 20 customers but expects the list to grow in light of recent global events.

By far, the COVID-19 pandemic has been the biggest driver behind technology adoption across logistics. Garrison said that many importers were left in the dark when suppliers abroad abruptly went offline. Even when communications were restored, their demand remained an uncertainty. 

Among other events, container shortages at West Coast ports have led to capacity shortages and price hikes. This has led some companies affected by delays to take matters into their own hands. For instance, exercise equipment manufacturer Peloton announced that it plans to invest $100 million to fix its supply chain and speed up the delivery of its products.

“The events that are hitting these importers in wave after wave are so big that [importers] now are much more receptive to new technology because they recognize there’s no other way to contend with all these events other than putting technology in place to connect products to suppliers and partners and then to connect products to demand and your team,” Garrison said.

Even as they grapple with current events, Garrison urges companies to think of the long run when considering Mercado. Most importers already utilize warehouse management systems or TMS in place, so why not take care of your imports as well? Garrison also makes the case that if the current generation of importers dreads conducting purchase orders via spreadsheets, the up-and-coming workforce most certainly will expect better methods of communication.

“Simply put, the pain point is that the value and complexity of import inventory and the current lack of transparency in some ways makes an import management system a no-brainer for our customers,” Garrison said. “Describing it to our customers, ‘You’ve got tens of millions of dollars in import inventory which is hugely complex, and you don’t have any connectivity or transparency in place, wouldn’t it make more sense to put technology in place?’ When you present it like that, customers always agree.”

Jack Glenn

Jack Glenn is a sponsored content writer for FreightWaves and lives in Chattanooga, TN with his golden retriever, Beau. He is a graduate of the University of Georgia's Terry College of Business.