Leading US retail expert and Gently co-founder Elian Pres-Gurwits has warned that existing logistics infrastructure is seriously harming small businesses and needs urgent reform.
The former Glossybox President’s intervention follows recent findings, revealing that the past two years saw the greatest number of US small business applications on record, according to Census Bureau data. This was largely fueled by the boom in e-commerce companies during the pandemic.
Pres-Gurwits says: “The recent rise in new small businesses is exciting, but we can’t expect these businesses to realize serious growth while they’re being held back by our outdated, monopolised logistics system. If we want these new businesses to survive and grow, we need to change how logistics works.”
He cautions that small businesses rarely have the means to deliver their products to a large customer base themselves. From his experience, they rely on major e-commerce platforms to expand their customer base and deliver their products, believing that this will help their business grow further.
Large e-commerce companies collect data from small businesses which can be used against them, as revealed by the House Antitrust Subcommittee hearing in 2019. During proceedings, Amazon admitted to using aggregated data from sellers to create its own competing products, pushing small businesses out of the market, despite claims by the company that their platform helps small businesses.
Pres-Gurwits continues: “Our current logistics system forces small businesses to rely on huge corporations to deliver their products swiftly and cost-effectively. 99.9% of businesses across the US are small businesses, and Amazon accounts for 37.8% of all e-commerce sales globally. This is damaging their individuality, handing over their data, and removing them from their local communities.
“E-commerce giants have a monopoly on next-day and short delivery times in the US due to the outdated, patch-work system created by rapid expansion. There have been some attempts to improve the last mile of delivery, such as the gig economy, but it has failed to live up to expectations.”
In response to the lack of options in logistics, Pres-Gurwits and co-founder Anas Aljumaily have established a decentralised logistics company called Gently. The company plans to level the playing field and allow businesses of all sizes to compete with e-commerce giants while maintaining their identities, data, and connection to their local communities.
Pres-Gurwits adds: “By decentralizing the supply chain, we want to unlock opportunities for local communities to drive a more efficient supply chain directly through operating nano-fulfillment centers. They can add value to and generate income from the supply chain, which is currently extremely capital-intensive and difficult to penetrate.
“For retailers, a decentralized system allows them to capitalize on the shift to remote shopping without surrendering their sales and consumer data to large e-commerce companies. This is essential if we want to keep small businesses – which make up over 99% of the US economy – afloat through the coming years of uncertainty.”
