Founder's Update #8: Launching our KC Warehouse

Today, we’re excited to be sharing our eighth founder’s update letter where we provide a detailed overview of our recent progress in working to grow and improve Vaer.

In today’s update, we’re going to focus entirely on the launch of our new warehouse in Kansas City.

Just over two weeks ago, we were facing down one of the greatest challenges we’ve taken on as a business - to shut down all of our shipping, pack up all of our inventory and supplies, and truck it to an empty warehouse in a midwestern city, neither of us had ever visited.

It was a huge gamble. Especially, with a fall shopping season already underway.

We debated holding off until January, figuring it might be better to save such a high-risk logistical project until after the holidays.

But there were also plenty of reasons to move NOW. The warehouse we had found was the perfect space, our dream candidate for a warehouse manager was available, and if we were able to execute the plan, it would have a huge positive impact on customer experience over the coming weeks and months.

In the world of e-commerce, in-house fulfillment (i.e. shipping things yourself) is the gold standard, because it gives brands full control over the quality control, kitting, and shipping experience. The problem with in-house fulfillment is that it typically works best for brands that are either really small (under 200 orders per month) or really big (over 20,000 orders per month). For mid-size brands, the logistical and labor investment involved in running a warehouse rarely makes sense, especially since there are dozens of affordable 3rd party logistics providers, who will store, pack, and ship your goods on your behalf.

Here at Vaer, we’ve tried it all. In our first year, back in 2017, we shipped everything ourselves. Typically, packing orders in Reagan’s apartment twice a week, and running IKEA bags full of watches to USPS and FedEx. Once that became unsustainable, we tested out a variety of modern tech-oriented shipping solutions like ShipCalm and ShipBob, which both made a lot of big promises and failed to deliver on most of them.

It got so bad, that by the holiday season in 2019, we actually drove down to the ShipCalm warehouse in San Diego, grabbed all of our inventory, and manually fulfilled watches ourselves for a few months, renting out some space in a friend’s warehouse which was primarily used to store and ship surfboards.

While we immediately realized the positive impact of doing things ourselves (we shipped more watches that holiday than we ever had before) we also realized, that as founders, we didn't have the time to spend all day driving to and from a warehouse in Hawthorne, California, to package orders day-in and day-out.

In 2020, with e-commerce sales spiking amidst the pandemic, we knew that we needed to find a better solution, and we started to look out of state. While Southern California might be a good place to start a brand, it’s a tough place to operate a cost-effective warehouse. Ryan spent weeks researching dozens of independent warehouses across the country and interviewing them to assess their willingness to customize and cater their services to fit our unique shipping needs.

After a long search we eventually found a small, but eager fulfillment company based in North Kansas City, Missouri - and we decided to give them a shot.

Shipping for Vaer is tough because of the following reasons:

Customization: We offer customers the chance to customize 2x straps with purchase, which means everything needs to be kitted post-purchase (adding a huge amount of complexity on the day of shipping).

Similarity: Many of our watches look nearly identical, with the only difference being movement type, assembly origin, or case size.

Complexity: Watches are complicated in general - things like crown feel, bracelet fit, solar charge and bezel alignment are tough to integrate into warehouse level QC and inspection.

Despite these challenges, the fulfillment team we hired in Kansas City back in 2020 rose to the occasion, and generally speaking, did a good job of delivering our watches for the next three years. This was in large part, due to the incredible effort of one particular employee, named Denise, who acted and worked like she was a part of the Vaer team. Consistently going above and beyond our own expectations of customer support - going so far as to bring her family in to help ship orders for us during COVID quarantines in 2020 and 2021 when no one else in her company was allowed to go to work.

Unfortunately for us, Denise left the company partway through 2023, and we immediately felt the difference (and so did our customers). Mistakes became rampant, and the level of care and accountability we came to expect from our fulfillment team quickly evaporated. While sales and marketing continued to improve, mistakes from our warehouse and inaccurate inventory counts started to create massive strains on our customer support team (led by Justin in Texas, and Evan-Austin here in Los Angeles). Worst of all, fulfillment mistakes started to increase our rates of returns and cancellations.

As an e-commerce brand, this type of mistake is the equivalent of fumbling at the goal line.

We’ve worked hard and spent money to acquire a new customer, and that relationship disappears (often forever) because of a mistake on a shipping label or packaging of the wrong product. By late summer 2023, we were actively debating on how to proceed, and how to limit damage to the brand and business for the remainder of the year (while maintaining the sanity of our customer support team).

Everything came into focus with a single text message.

It was from our former warehouse worker, Denise, and it was in response to a message from Ryan about how to solve our problem with our current (underperforming) warehouse team. Ryan suggested, quite simply, that she was fully capable of running a warehouse for Vaer since she’d already done so for the past 3 years. Denise agreed.

For us, it was the perfect solution:

1. She cares about the brand
2. She knows the product
3. She knows how to run a warehouse
4. We trusted her 100%

We had found our dream warehouse manager - now we just needed to find an actual warehouse.

As we mentioned above, going in-house with fulfillment typically doesn’t make sense for midsized brands because midsized brands are very resource-constrained. It’s a chicken and egg problem: you can’t open a warehouse without a manager to run it, but you can’t hire a manager until you have a warehouse space.

Hiring is high-risk and expensive, but so is signing a contract on a multi-year commercial lease.

We were fortunate to have the perfect warehouse manager available, who was also willing to help us find the right commercial space.

Since Denise lived in Kansas City, and our inventory was already there, we pretty quickly decided to stay in the region. Fortunately, KC is also a great fulfillment location, since it’s in the center of the country, has one of the most affordable real estate markets in the nation, and has a well-organized and newly renovated international airport.

After a good deal of internet searching and planning, we settled on a few top candidates for our warehouse space. Denise and her husband Mike vetted the finalists with in-person visits, and after some negotiating, we signed a lease on our first-ever warehouse space.

Taking over the lease was a big step - but we were still far from having a warehouse.

At that point all we had was a building with high ceilings and two loading bays - it looked cool, but it was completely useless for delivering watches.

To make it work, we needed to fly out to Missouri - and build the whole operation from scratch. That meant packing and transporting our entire inventory, trucking it to the new location, loading it out, building out our shelving and storage system, connecting the warehouse with internet, security systems, and live camera feeds, and then counting and stocking everything to begin shipping out hundreds of outstanding orders.

It would have been a challenge for any team - but for us, with barely any warehouse or physical retail experience, it represented one of the most demanding management and logistics challenges in the 7-year history of the business.

Fortunately, we had incredible help.

Evan-Austin flew out with us from Los Angeles, Justin flew in from Austin, and Denise and her husband Mike quickly joined us once we arrived in Missouri.

In addition to the Vaer team, we benefitted from extremely helpful and diligent local Kansas City contractors and local businesses that lent us their expertise, advice, and, in one case, physical equipment. One of the biggest close-calls was forgetting to buy a loading dock plate, which is essential for running a pallet jack off of a truck.

This could have added countless hours to our unloading process, but fortunately, our next-door neighbor in the business park saw we were in a bind, and offered to lend us his dock plate for the day.

While we were working very long days to get the warehouse built out, we still carved out time for some local barbecue. After 12-hour days hauling boxes and building shelves in 90-degree heat (the warehouse has no A/C) it was a perfect way to celebrate with the team.

We didn’t have a chance to sample all the top local spots, but we can definitely say that based on what we did try, Kansas has extremely good BBQ, and really great sides (particularly amazing baked beans). Overall, the Vaer team came to the following conclusion:

Best brisket: Jack Stack’s
Best ribs: Joe’s KC

We’ll be heading back to Missouri soon, and we’re excited to put some other locations to the test, if you’re a local, and you have recommendations, let us know!

Yes, it is.

It took a lot of work, but after a week in Missouri, we were able to complete our mission and launch the initial framework of our warehouse. The space is still rough around the edges, with plenty of optimizations and improved organizations to be made, but critically, it has allowed us to ship and deliver orders in a timely and accurate manner.

As of today, we’re nearly all caught up on orders, and while we’re always prepared for unexpected challenges, we anticipate a consistently higher quality of fulfillment by our team moving forward.

Though it came with a fair share of stresses, the adventure of building our own custom fulfillment operation has, overall, been a very enriching personal experience. Most of us had never been to Kansas City or its surrounding regions, despite our business having roots in the area for years. The city charmed us with its blend of urban sophistication and down-to-earth authenticity. But what struck us most were the people—hardworking, friendly, and genuine—who made us feel at home and made a huge contribution to our successful launch.

Ultimately, we opened the warehouse as a functional necessity - we needed to do a better job shipping orders. However, by taking fulfillment in-house, it also sends a strong signal on our broader vision and message. Having our own warehouse and our own employees to run it encapsulates our commitment to doing things the right way for the long haul. It reinforces our dedication to manufacturing integrity, our obsession with quality control, and our mission to build a truly independent, and sustainable American enterprise.

What watch was everyone wearing?

Reagan: R1 Racing Chrono Cream 38mm on Jubilee Bracelet

Ryan: DS4 Meridian Black Solar Diver 38mm on Silicone Khaki

Justin: A5 Field White Automatic on Black Silicon Strap

Evan-Austin: C5 Tactical Field Solar on FKM Tropic Strap

Thanks for taking the time to read this update! As usual, feel free to respond with any thoughts or feedback, to team@vaerdesign.com we’ll try our best to respond in a timely manner.

All the best,
Reagan Cook & Ryan Torres

Note: While we love the idea of one day having a combined warehouse/retail/office space, our current warehouse location in Kansas City is not meant to be customer-facing/open to the public.