A successful entrepreneur in the field of e-commerce, Lee Hnetinka founded the on-demand delivery service WunWun. After selling the company, Lee Hnetinka went on to collaborate with Wilson Lee to form Darkstore, which also provides on-demand delivery services.
Since its introduction through companies, such as Uber, on-demand delivery services have become a revolutionary player in the e-commerce marketplace. The technology allows customers to receive what they want in a much shorter time frame than what is available via traditional shipping options.
For example, customers can walk into the mattress store Tuft & Needle in San Francisco, California, and decide to buy a mattress. As long as they make their purchase before 4pm, they will receive their mattress at their home the very same day because Tuft & Needle employs on-demand delivery services. Previously it would have taken as long as three days to receive the product.
Smaller businesses across the nation have begun to take advantage of the efficiency of on-demand delivery services in their local area. These businesses offer a diverse range of products from package delivery to childcare services.
Founded in 2016 by Lee Hnetinka, Darkstore provides on-demand fulfillment for companies that ship products to customers. Lee Hnetinka’s company enables brands without local inventory to store their products in fulfillment centers nationwide and facilitates product shipment via its own API and intelligent routing service. Recently, Darkstore partnered with T-Force Final Mile, a last-mile delivery service, to expand its market reach.
The partnership with T-Force Final Mile allows Darkstore to expand to 33 additional locations across the United States, bringing its total number of fulfillment centers to 40. Brands are not charged to store their inventory in a Darkstore fulfillment center, but Darkstore collects a 3 percent fee for each item that leaves one of its storage locations. Products are shipped to consumers from Darkstore facilities through independent service operators such as local courier companies.
Darkstore offers a hosted shopping cart, making it straightforward for e-commerce brands to provide on-demand delivery service to customers by using only one line of code. Darkstore’s e-commerce software and partnership with T-Force Final Mile supports Darkstore’s goal of becoming an invisible retailer.
Based in New York, Darkstore CEO Lee Hnetinka focuses on the same-day delivery needs of e-commerce brand retailers. An April, 2017, article in TechCrunch brought focus to Lee Hnetinka’s success in completing a $1.4 million PivotNorth-led seed round designed to enable the firm to expand from three markets to a total of seven, with new markets including Seattle, Chicago, and Los Angeles.
The seed funding round was noteworthy in being led by PivotNorth CEO Tim Connors, who also guided delivery startup Deliv’s successful seed round. Mr. Connors is now integrally involved in the operations of Darkstore as a board member. In tandem with the funding round, Darkstore expanded its brand partners beyond mattress startup Tuft & Needle and the clothing maker Wildfang, and added Master & Dynamic, a high-end headphone manufacturer, to its lineup.
The seed round capped a period of significant growth, with the startup generating 120 percent month-on-month order growth in its first year of operations. The firm shipped goods valued at nearly $1 million in November and December of 2016. The company has an innovative business model of not charging for inventory storage and instead charging three percent (with an upper limit of $20) on every item shipped out.
New York entrepreneur Lee Hnetinka is the co-founder and CEO of Darkstore, a startup company that provides ultra-fast shipping services for e-commerce brands. In his leadership role at Darkstore, Lee Hnetinka offers clients same-day and one-hour shipping via local inventory in major cities such as New York and San Francisco.
The nature of service offered by same-day delivery companies necessitates the constant availability and accessibility of products. Since retailers tend to cluster their inventories in regions with elevated consumer densities, same-day delivery services currently remain restricted to highly urbanized areas (although this may change soon). But wherever they operate, retailers should prioritize updating their inventories in order to accurately determine which products are available for same-day shipping.
From an operations perspective, ultra-fast shipping is only possible with an extremely efficient warehouse retrieval and packing process. This often requires significant investment in warehouse infrastructure, which prices most small retailers out of the market. Startups such as Darkstore, however, are changing the game by allowing e-commerce retailers to benefit from external infrastructure on a per-shipment basis, without the need for a major investment.