Packform USA is the No. 1 company on the Business Journal's list of Fastest Growing Private Companies with a three-year growth of nearly 5,060 percent.
Preston Geeting, co-founder of Packform, attributes the growth of the e-commerce platform for packaging materials to three factors. First, the industry was ready for it: second, the timing was right; and third, the company had put together the right talent pool.
"We havea strong management team that we have frawrn from the industry that can guide this thing in a good way," said Geeting, a Valley resident who works from the Valencia offices of Packform.
Packform, based in Melbourne, Australia, with U.S. headquarters in Valencia, is a marketplace for packging and shipping material, such as bags, pouches, boxes and labels. It uses echnology to do the heavy lifting and so does not have a lot of overhead.
It grows by attracting established dealers, who are essentially salespeople who join the company and bring their customer base with them.
"That is how we make money," Geeting said. "We havea share of the profits with the dealers."
When a new dealer comes on board, they might have 10 clients or 100 clients or 500 clients, he said. "We are able to scale our business very quickly by growing the dealers rather than going directly to customers," he added.
But essentially what Packform does with its technology is to connect dealers with customers. Software takes all the data and information collected by the dealers about their customers and integrates the data into its system.
"It creates a marketplace where they can get all the products they received before," Geeting said. "Our system is driving a better cost. It's setting up very big supply chains for all the different items they need."
The company's U.S. division growth rate was 5,060 percent between 2018 when its revenues were $200,000 and 2020 when revenues reached $10.6 million.
As for the timing, the COVID-19 pandemic was probably the best thing to happen to the company, Geeting said.
It was already supplying personal protection equipment but then the business pivoted to it, he said.
"It was very easy to keep those lines of distribution going pretty seamlessly," Geeting added.
From an operations standpoint, most other companies were trying to figure out remote working for their employees and how to adjust their systems. All of that was not an issue for Packform and its 75 employees. For one, its online portal where buyers and sellers connect was accessible from anywhere in the world. And with a global workforce, all its employees were able to easily switch to working from home, Geeting continued.
"We found an increase (in business) especially during those first couple of months of COVID when everybody else was figuring out what to do," he said. "It gave us a real advantage."
Distributing packing materials, however, is an old-fashioned business. In the market only one company, Uline, a packing, shipping and industrial supplies distributor in Pleasant Prairie, Wisc. had developed a good website, Geeting said.
"Aside from that, nobody has done anything that's progressive," he added.
So from a competition stand-point Uline had a front-end portal but they also have massive overhead and infrastructure. The competing company has warehouses throughout the U.S. and in Canada and Mexico.
"What we built is the same front-end as Uline but hollowed out that infrastructure, so it is ultra-competitive," Geeting said. "We did what others are doing outside the industry. It worked very well, obviously. We put that same top technology into this company."
As for why the company is growing so fast now, Geeting said it was because it has scaled at a rapid pace.
The industry has seen what it is doing and Packform is seen as a disruptor in packing materials distribution, he said.
"It's a snowball effect," he added. "Packform are seeing this is the way of the future, and the traditional environment, where you had a building with inventory and trucks and stuff like that, is the way of the past. Now for us it is growing expotentially."
Original Source: Fastest Growing Private Companies - Special Report, Mark R. Madley, San Fernando Valley Business Journal, 8 November 2021.