Founders of 6-month-old Ready for retail salerecent graduates of the YC 2024 winter cohort have discovered an neglected area of the warehousing/shipping industry that costs retail brands roughly $40 billion annually, they say.
They are creating an application for tablets that will replace paper warehouse instructions documenting packing instructions. Co-founders Elle Smyth and Sarah Hamer got here up with the idea while working together at unicorn supply chain startup Stord.
“We met and bonded over our love of the supply chain industry,” Smyth told TechCrunch. “We call it the engineer’s playground. There is no shortage of problems to solve there.”
Smyth and Hamer left Stord and, after being accepted into Y Combinator, began working on their startup idea in earnest. “One thing Sarah and I are really confident about is extreme founder-market fit.”
RetailReady is designed for $40 billion compliance market to help reduce the variety of retail compliance losses that shippers incur each yr due to incorrectly shipped packages, Smyth said. The company uses dual AI technology to reduce incorrectly shipped products: large language models to process shipping requirements manuals and computer vision to check for compliance.
The supply chain and logistics industry is a huge market, and there is no shortage of legacy and startup firms looking to get a piece of it, especially as shipment volumes have increased thanks to online shopping. A giant a part of this is third-party logistics, corresponding to Hopstack, Techtaka, Ranpack, and ShipBob, to name a few.
Smyth said RetailReady is more area of interest. Warehouse employees must refer to phone book-sized manuals that describe how to ship goods to retailers like Target and Walmart. The instructions contain information, among others: how to pack orders in accordance with regulations, e.g. fold clothes in a specific way, where to place the RFID tag and where to place the label depending on the product category.
If shipping/warehouse staff do not package these things appropriately, retailers will collect brand-related fees, called chargebacks. “Brands will receive an average 3% discount on their invoice just because these requirements are not met,” she said.
RetailReady replaces these instructions with a digital version that provides employees with a focused workflow for properly packing an order. As a part of a feature currently under development, the app will then use computer vision to inspect packaged orders for compliance.
“We’re really excited about continuing on the product side, including our computer vision module, where we’re going to start capturing the workflow of employees so we can actually check that they’ve done it correctly,” Smyth said.
While Smyth remained tight-lipped about discussing growth numbers, she said that six months after launch, Smyth and Hamer are now onboarding six customers. The company cooperates with brands, wholesalers and retailers.
The founders have raised $3.3 million in seed funding, which they are going to use to hire additional employees and focus on product and technology development.
Wischoff Ventures was the lead investor in this round and was joined by Y Combinator, 640 Oxford, Lombardstreet Ventures, Duke Capital Partners and a group of angel investors including Cargado co-founder and CEO Matt Silver, Stord co-founder and chief technology officer Jacob Boudreau and the Scale Angels Fund.