- Ohi delivers direct-to-consumer brand orders to customers within two hours.
- The service is an alternative to Amazon and fulfills orders that arrive through the brand’s website.
- Ohi CEO Ben Jones says the company plans to bring its same-day shipment to the suburbs below.
William Hicks has no plans to sell his Magic Mind brand coffee replacement drinks on Amazon any time soon.
But many of their customers receive their orders within two hours of placing them directly on Magic Mind’s website via delivery service, Ohi.
Shoppers can get two-hour delivery on Magic Mind drinks in New York, Los Angeles, Chicago and San Francisco. They can also opt for overnight delivery, Hicks said.
“Expectations are moving toward same-day and next-day delivery thanks to Amazon,” Hicks said. But he added that its direct-to-consumer brand is better served by serving customers directly and outsourcing last-mile delivery, as it gets better data on their buying habits and can communicate with them directly rather than relying on a marketplace.
Retailers have been offering fast deliveries of DTC products for years. Amazon started offering two-hour delivery on specialty brands through Whole Foods a couple of years after it acquired the grocery chain in 2017. Fast-delivery startups like Gorillas, Jokr and Gopuff also work with many food brands. and DTC drinks and offer their products. to consumers in as little as 15 minutes.
But some startups like Ohi are cutting out the middlemen. Ohi delivers orders placed through a brand’s website rather than through a marketplace like Amazon. In addition to Magic Mind, his client list includes Health-Ade, Untuckit, and Olipop.
Other startups are taking a similar approach. FastAF, for example, bundles orders for DTC products, including from many brands that sell on Shopify, and delivers them within two hours.
According to Ben Jones, CEO of Ohi, many DTC brands develop attractive pastel-colored websites and spend money on social media ads to get customers to buy their products. Ohi has raised just under $22 million to date to ensure shoppers are just as satisfied with what happens after they place an order.
“That high-quality pre-purchase experience is not translating into a high-quality post-purchase experience,” he said. Once an order is placed, it is often shipped to a third-party warehouse and shipping partner chosen for low cost, not speed.
Ohi’s goal, Jones said, is to offer Amazon-like shipping speed to DTC brands.
Brands ship their stock to an Ohi warehouse, each of which has a delivery radius of several miles. That’s in contrast to 15-minute delivery startups like Gorillas or Jokr, which deliver within a mile of their warehouses to fulfill their promise of faster delivery.
Once an order arrives, Ohi relies on a combination of its own delivery fleet and third-party services like DoorDash, Uber and Roadie to get the orders where they need to go.
Ohi runs its own delivery service providers with a system similar to Amazon Flex: Drivers use their own vehicles to deliver Ohi packages. “We see that it’s pretty much the most effective way to do it,” Jones said.
The model makes Ohi “heavy software and light hardware,” he said.
While big cities make up much of Ohi’s delivery area now, Jones said Ohi has its eyes on the sprawling suburbs of cities like Los Angeles. The company is in eight metro markets and plans to be in 13 by the end of the second quarter.
“Over time, we will fill the suburbs with micro-warehouses to allow those areas to be same day,” he said.
Magic Mind’s Hicks said he thinks fast delivery helps keep many customers buying, as they can order more when they run out.
He added that fast delivery surprises many new customers when they order Magic Mind products through an Instagram ad or website.
“There’s a push when you click the buy button,” he said, adding that getting the product to customers the same day they order means Magic Mind “can capitalize on the interest that exists the day they buy.”