Scaling a high-growth business through wholesale: Caraway's journey

Caraway has emerged as a shining example of successfully scaling through wholesale channels. In our recent webinar, Mark Riskowitz, VP of Operations at Caraway, shared valuable insights into the company's journey, challenges, strategies, and key learnings. 

In this article, we dive into Caraway's approach and share the valuable lessons other businesses can learn from their experience.

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Caraway’s ambition

Caraway, known for its high-quality, non-toxic cookware, launched in October 2019 with a clear vision: to be present in multiple sales channels, both online and offline. From the outset, the company aimed to diversify its sales avenues, recognizing the importance of omnichannel strategies in today’s market. This foundational approach set the stage for Caraway’s ambitious growth plans.

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Caraway’s approach to building a high-growth 9-figure business through wholesale

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1. Proving viability with manual processes

Like many new brands, Caraway faced significant challenges in its early days, particularly in managing manual processes. When the company began partnering with various sales channels, many tasks—such as listing products, processing orders, and fulfilling them—were handled manually. This manual approach was necessary to validate the potential of these channels without overcommitting resources.

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This cautious approach allowed Caraway to understand the viability of different channels before making substantial investments in technology and processes.

2. Gradual investment and scalability: Data-driven decisions

Caraway’s strategy of careful measurement and validation paid off. The company gathered a few months of consistent data from multiple channels, which validated the trends and volumes. Only then did they invest in more permanent solutions to scale operations efficiently.

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This data-driven approach ensured that Caraway’s investments were well-timed and backed by concrete evidence of channel potential.

3. Balancing segmentation and allocation

One of the critical challenges Caraway faced was managing inventory across multiple sales channels. Mark discussed the pros and cons of segmenting inventory for specific channels versus maintaining a unified inventory pool.

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While segmenting inventory can offer better control, it also carries risks such as overstocking in underperforming channels. Caraway leverages Fulfil's advanced listing management capabilities to overcome these challenges. 

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By utilizing Fulfil's platform, Caraway can share inventory across multiple channels without the risk of overselling. This feature allows them to maintain a unified inventory pool while still catering to the specific needs of different sales channels, ensuring optimal inventory distribution and minimizing the risks associated with channel-specific segmentation.

4. Navigating EDI and chargebacks

Electronic Data Interchange (EDI) is a crucial component for managing wholesale relationships despite its complexity. Mark emphasized the importance of understanding compliance requirements from trading partners to minimize chargebacks and ensure smooth operations.

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EDI might seem daunting, but Mark suggests simplifying it by focusing on its core purpose. "I think going back to the roots of understanding what the point of EDI is, it makes it easier to comprehend when you're just putting it in that same context of an order being placed, an inventory feed being sent, and a shipment confirmation and detail being traded," he explained.

Caraway leverages Fulfil's native EDI capabilities to streamline their order management processes. This integration has allowed them to automate many workflows, especially for dropship orders. Mark emphasized their goal of achieving a "fully hands-off approach" for most orders, letting the system run automatically.

Fulfil's EDI solution supports a range of essential documents for streamlined communication and transactions, including Purchase Orders, Purchase Order Acknowledgments, Advance Ship Notices (ASN), Inventory Inquiry/Advice, Invoices, Functional Acknowledgments, Return Merchandise Authorizations, and Payment Order/Remittance Advice.

This comprehensive suite of EDI transactions enables efficient communication with trading partners without the need to troubleshoot issues with third-party platforms.

"You could have an EDI provider, you could use in-house tools, you could use tools that existing systems provide such as Fulfil," Mark noted, highlighting the various options available to businesses looking to implement EDI. For Caraway, choosing Fulfil's native EDI solution has been instrumental in their ability to scale their wholesale and omnichannel operations efficiently.

While you might not need to dive as deep as Mark did by reading EDI documentation on weekends with a glass of wine, understanding the basics of EDI transactions and ensuring compliance with partner requirements through a robust system like Fulfil's has enabled Caraway to navigate the complexities of wholesale relationships successfully.

5. Leveraging technology with automation and efficiency

Caraway utilizes automation to streamline operations and reduce manual touchpoints. This includes setting up automation rules, scripts, and predefined workflows for different partners.

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Automation not only enhances efficiency but also minimizes errors, allowing Caraway to scale operations without significantly increasing workload.

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6. Proactive planning and experimentation through iterative testing

Caraway’s proactive approach to planning and experimentation has been a cornerstone of its success. The company continually tests new features and processes to find better operating methods. Collaborating with partners and utilizing software that enables experimentation was essential for improving their processes.

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This iterative approach ensures that Caraway remains agile and adaptable to changing market conditions and opportunities.

7. Intentional investments: Timing and validation

Mark advised other merchants to carefully consider the timing of their investments in technology and processes. Understanding when to scale and when to hold back based on data and market validation is critical to sustainable growth.

 "It's a collective decision where we were experimenting with those channels while preparing behind the scenes to make those operations a bit more scalable and permanent." Mark Riskowitz, VP Operations - Caraway.

Caraway’s intentional investment strategy, based on careful validation, has been key to its successful scaling.

Caraway’s journey underscores the importance of strategic planning, data-driven decisions, and leveraging technology for efficiency. By following these principles, other brands can successfully navigate the challenges of scaling through wholesale channels and achieve sustainable growth.

Whether you’re just starting to explore wholesale opportunities or looking to optimize existing channels, Caraway’s story is a testament to the power of careful planning, innovation, and a relentless focus on operational excellence.

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Key learnings from Caraway’s journey

Mark’s insights from Caraway’s journey offer valuable lessons for other businesses looking to scale through wholesale:

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Caraway’s journey underscores the importance of strategic planning, data-driven decisions, and leveraging technology for efficiency. By following these principles, other brands can successfully navigate the challenges of scaling through wholesale channels and achieve sustainable growth.

Whether you’re just starting to explore wholesale opportunities or looking to optimize existing channels, Caraway’s story is a testament to the power of careful planning, innovation, and a relentless focus on operational excellence.

Ready for wholesale success? Reach out to our team of experts to get a personalized demo.

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