Ohi has raised over $20 million to help direct-to-consumer brands deliver fast delivery

  • Ohi delivers branded orders directly to customers within two hours.
  • The service is an alternative to Amazon and fulfills orders that arrive through the brand’s own website.
  • Ohi CEO Ben Jones says the company plans to take its same-day shipment to the suburbs next.

William Hicks has no plans to sell coffee substitute drinks from his Magic Mind brand on Amazon anytime soon.

But many of their customers receive their orders within two hours of placing them directly on Magic Mind’s website through the delivery service, Ohi.

Shoppers can get two-hour delivery of Magic Mind drinks in New York, Los Angeles, Chicago and San Francisco. They can also opt for next-day delivery, Hicks said.

“Expectations are moving towards same-day and next-day deliveries because of Amazon,” Hicks said. But he added that his direct-to-consumer brand is better off serving customers directly and outsourcing last-mile delivery as it gets better data about their shopping habits and can communicate directly with them rather than relying on a market.

Retailers have been offering fast delivery for DTC products for years. Amazon started offering two-hour delivery on specialty brands through Whole Foods a few years after acquiring the supermarket chain in 2017. Fast delivery startups like Gorillas, Jokr and Gopuff also work with many DTC food and beverage brands, offering your products to consumers in less than 15 minutes.

But some startups like Ohi are cutting out the middleman. Ohi delivers orders placed through the brand’s own website, rather than through a marketplace like Amazon. In addition to Magic Mind, its client list includes Health-Ade, Untuckit and Olipop.

Other startups are taking a similar approach. FastAF, for example, bundles orders for DTC products, including those from many brands that sell on Shopify, and delivers them within two hours.

According to Ben Jones, CEO of Ohi, many DTC brands develop eye-catching pastel 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 buyers are equally satisfied with what happens after they place an order.

“That high-quality pre-purchase experience doesn’t translate to a high-quality post-purchase experience,” he said. Once an order is placed, it is usually shipped to a third-party warehouse and a shipping partner chosen for its low cost, not speed.

Ohi’s goal, Jones said, is to offer Amazon-like shipping speeds for DTC brands.

Brands ship their inventory to an Ohi warehouse, each with a delivery radius of several kilometers. This is in contrast to 15-minute delivery startups like Gorillas or Jokr, which deliver within a mile of their warehouses to deliver on their promise of faster delivery.

When an order arrives, Ohi relies on a mix of its own fleet of deliveries and third-party services like DoorDash, Uber and Roadie to get the orders where they need to go.

Ohi manages its own delivery service providers with a system similar to Amazon Flex: drivers use their own vehicles to deliver Ohi packages. “We see it as pretty much the most effective way to do it,” Jones said.

The model makes the Ohi “software heavy and hardware light,” he said.

While big cities make up much of Ohi’s delivery area now, Jones said Ohi has his sights set on the suburbs of cities like Los Angeles. The company is in eight metro area 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 on the same day,” he said.

Magic Mind’s Hicks said he thinks fast delivery helps keep many customers shopping, as they can order more when they run out.

He added that the fast delivery impresses many new customers when they order Magic Mind products through an ad on Instagram or a website.

“There’s a push to click that buy button,” he said, adding that getting the product to customers the same day they order means Magic Mind is “able to capitalize on the interest that exists on the day of purchase.” .

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