A Study in Innovative Leadership: Rafael Zakinov, Ruby Has CEO and Founder
Rafael Zakinov – lifelong entrepreneur, experienced CEO, and founder of Ruby Has Fulfillment – is not just changing the 3PL game, but innovating its offerings so brands of all sizes can play and WIN.
About the CEO
From day one Rafael Zakinov “Rafi” has focused on doing whatever it takes to help ecommerce businesses grow. Prior to founding Ruby Has he ran his own hugely successful ecommerce company and in doing so developed firsthand knowledge of the pain points that businesses encounter in the fulfillment and logistics worlds. Not only that . . . he realized his talent for navigating and finding solutions to those problems. So why not help other entrepreneurs with that earned skill? Enter the inception and creation of Ruby Has Fulfillment.
Just out of college and already running the #1 seller in various luxury categories on eBay for several years, people thought Rafi was crazy to change careers and try to break into a capital intensive industry full of uncertainty and tenured 3PL giants. It was unheard of for a 3PL of Ruby Has’s size to try and make a name for itself, but Rafi knew instinctively that the more automation you could incorporate, the faster his small-package fulfillment business could scale and the faster his clients could grow. And he was unafraid of the challenge. As a result of his experience, drive, and passion for the industry, against all odds Rafi has now grown Ruby Has into a “friendly giant” in the ecommerce 3PL space – a huge and formidable force that genuinely cares about brands/businesses of all sizes that are also looking to grow into giants in their own spaces.
Ruby Has Fulfillment at a Glance
In the last couple of years, Ruby Has invested millions of dollars in automation, robotics, and software. Our newest fulfillment center in Las Vegas has state-of-the-art robotics, which wasn’t easy to procure because Amazon and companies with huge distribution centers have priority with suppliers. However, Rafi made his pitch for the little guy and got what his company needed.
Today, Ruby Has is one of the fastest growing ecommerce fulfillment companies in the U.S. with 700+ employees, 8 strategically-located fulfillment centers internationally, and management of over 1,000,000 sq. ft. of warehouse space. The company’s geographic locations can reach 94% of the U.S. with 2-day delivery.
Additionally, the logistics leader has been ranked as a leading ecommerce company by Crain’s Fast 50 since 2018, and Inc. 5000 for 6 consecutive years. It leads the 3PL industry with cutting-edge technology, seamless integration, and an uncompromising commitment to quality that empowers ecommerce brands to scale with efficiency and speed.
Through it all – the success, the struggle, the experimentation, the innovation, every decision Rafi has made since then has been held to the standard of “Will it help our clients grow?” His company’s constant growth is fueled by innovative and creative thinking that is unafraid to go where other 3PLs have not gone before, especially in terms of technology and integration. (Breaking from the norm, he began putting overhead conveyor belts in his first tiny fulfillment warehouse back in 2013.) And he has embedded a moral thread into the Ruby Has mission and operation that runs through the company like a plumb line, all starting with his commitment to doing things the right way.
3PL Creativity and Innovation
Ruby Has is a business built by ecommerce for ecommerce. The 3PL didn’t start out as a Silicon Valley thought experiment in search of a problem; it started out as a real-world, high-touch business for addressing existing problems of storing, packing, and moving goods. Rafi had experienced all these problems firsthand, and knew he could do a better job at solving them for ecommerce businesses that rely on their fulfillment providers for brand sustainability and growth.
The technology came later. Rafi’s decision to go big into automation and robotics is highly unusual in the fulfillment industry. Outside of Amazon, 3PLs simply aren’t creatively utilizing those areas to the best of their ability. For Ruby Has clients, this type of innovation is a huge differentiator. By using various system integrations, tech. partners, etc. Rafi believes Ruby Has can find a solution for any problem a DTC brand has. Ruby Has has the experience and willingness to go the distance for clients by employing resources that enhance the 3PL process.
Part of being a leader in the brave new world is being brave yourself. Rafi has always exhibited the greatest asset of entrepreneurship: courage, that willingness to take risks in the face of uncertainty because you believe in what you’re doing and what you’re building. However, this quality shined especially when the antagonist of Covid was introduced to the narrative. In the middle of the pandemic, while other warehouses were locking their doors, Ruby Has acquired a fulfillment facility in Kentucky, launched a brand new distribution center in Nevada (tripling the company’s space there), and doubled its footprint in Canada.
Nobody knew how Covid was going to play out. Rafi only knew that his clients needed somewhere to put their inventory. Retailers were cancelling purchase orders. Shipping was at a standstill. Inventory was being sent back, and his clients needed a place to put it. It was a huge risk to double, even triple-down on efforts and capacity, but it needed to be done and so it was. As a result, Ruby Has clients and partners continued to grow and consumer needs were met during the Covid surge just as effectively as before 2020.
Overcoming Significant Industry Obstacles
Fulfillment is an industry of very large, very tenured players. It is also capital intensive, making it extremely expensive for small players to break in because of the technology, automation, etc. required. Unfortunately, that bar to entry works against the very nature of the business, which is that you have to build it first so clients can come. In sum, fulfillment is an industry where uncertainty is the name of the game. You can do great forecasting, but at the end of the day you’re building then filling.
When Rafi entered this industry to begin Ruby Has, the three huge obstacles he had to face were:
- Differentiating his business in an increasingly crowded and fragmented field
- Developing a methodology to become profitable under incredible constraints
- Doing all this despite being bootstrapped when his competitors were well funded
Rafi got past these challenges with nothing more than persistence and personality. The key way he accomplished success through the struggle was by forming relationships with vendors and suppliers – getting them to buy into his vision, and because of this give him better terms. Those vendors and suppliers are still working with Ruby Has today because Rafi came through, and has continued to come through, on his entrepreneurial promises.
In the Face of Adversity
Covid presented a huge challenge for everyone in the fulfillment industry. Demand ramped up immediately once consumers were all staying home. Yet, this huge influx of ecommerce was challenged by difficulty staffing essential workers, inventory shortages, disrupted supply chains, and shipping backlogs. As with all obstacles though, the question became fight or flight – grow or die.
Rafi chose to grow, and to get through this incomparable time in an uncompromising way. The company never has “stood still,” and the Covid pandemic was no exception. Under Rafi’s leadership the Ruby Has team took on the extremely steep Covid growth curve with determination, innovation, and efficiency.
Additionally, while continuing to deliver for customers and grow the business as fast as possible to keep up with demand, Rafi made sure employees were protected and well taken care of. For example, Ruby Has distributed PPE to employees before Amazon did, and gave employees lunches and flexible hours.
On the Subject of Risk
Founding a business is a leap of faith backed by brilliance, planning, and perseverance. Rafi bootstrapped his business for the first five years and has taken very little money from external sources since then. What’s more, to start Ruby Has he stepped away from an already-successful ecommerce business. It was a huge bet, both in terms of the number of years it would take to build this company (putting his reputation and career on the line) and in terms of financial risk. After all, there was no guarantee this was going to work, but beginning a business requires you to be all in.
Furthermore, the fulfillment business is not like a normal business where, say, if you run out of paper, people can buy it elsewhere. There’s a tremendous amount of pressure involved when hundreds of other businesses rely on your company every day for their livelihoods. If you fail, they fail. Rafi does not take that lightly, completely understanding that running Ruby Has is not just taking on the responsibility of his own business and employees, but also the responsibility of his clients’ businesses and their employees.
High Standards, Always
Clients and partners that work with Rafi agree that he is different from many CEOs out there, demonstrating a rare combination of moral character and professional efficiency. They say “rare” because often as a business grows these qualities become tradeoffs and you lose one or the other. Rafi has increased revenue 439% over the last three years without compromising his standards. He consistently, unrelentingly values honesty and transparency with his employees, his partners, and his clients. And he has always embodied what he aims to be and the kind of company he wants to run, not compromising either for the sake of saving a dollar.
“Ruby Has is not the cheapest fulfillment company out there, and we tell our clients that. With us, however, you will always get more than you pay for, because we care about your business.” – Rafael Zakinov
Rafi compares Ruby Has to a well-run, high-quality goods store where everything is organized, there’s a strong selection, and prices are clearly marked. There are no 90% off stickers to entice customers to come through the door because they’re not needed. The store and the value it brings to customers speak for themselves and are worth the price.
It is important to live with a giving mindset, whether you’re an employee, employer, and so on. At Ruby Has, the belief is that charitable behavior is not something that should be limited to specific days, or seasons of the year. For bigger companies like Ruby Has, “giving” is part of the operational DNA and folded into the everyday. For example, RH supports:
- Childfund International
- Broadway Halloween Bash
- UMO Kindness
- Food deliveries for entities serving communities with food insecurities
- The Pathway School
During the onset of Covid, the Ruby Has Nanoleaf partnership expedited delivery of PPE to first responders. Together in 2020, Ruby Has and Nanoleaf paid for, donated, and shipped 52,000 masks to areas most in need. With the addition of donations from friends and clients, Ruby Has and Nanoleaf eventually shipped over 90,000 masks.
Growth for Team members, Not Just Brands
In addition to having excellent client retention and long-lasting partnerships with vendors, Ruby Has is known for having exceptional employee retention. This all stems from Rafi and the culture he’s created at the 3PL.
Ruby Has is honored every day to have such amazing, hard working people on the team. Rafi’s aim as an employer is to always provide a safe, enjoyable, and rewarding place to work for people across all of Ruby Has’ 3PL locations and beyond. The company loves giving credit and shoutouts to employees through internal kudos and Ruby Has programming. RH values doing extra things to enhance its work environments, like providing food to team members who worked tirelessly through Thanksgiving week and Black Friday weekend to get customers their goods in a timely manner. And Ruby Has cares about providing career opportunities for growth within the company as well. There is a strong history of promoting from within at Ruby Has.
In terms of maintaining a well-rounded workforce, Ruby Has hosts tremendous diversity at every level. Rafi didn’t have to undergo diversity training or sensitivity training on the job to understand that having a diverse company culture is important. Diversity is baked into the culture because of who he is. Rafi is an immigrant himself, and his grandmother was an entrepreneur. His mother, father, and brother have all run their own businesses.
The Key Takeaway
Aside from Jeff Bezos, Rafi is the only founder of an ecommerce fulfillment company that actually started in ecommerce. Most other companies in the industry either started in transportation/distribution, or started in Silicon Valley as a thought experiment that they built a fulfillment company around. Rafi did the opposite. He built the company first, experienced all the real-world problems that come with physically moving goods around, and then began building the technology to solve those problems. This kind of experience is what has let Ruby Has Fulfillment continue to grow and thrive, even amidst the massive challenges of the Covid pandemic when other companies fell apart. Rafi has always used his experience to find a better way forward and Ruby Has is in a better place now because of it.
Both Rafi and Ruby Has are just getting started. Under Rafi’s leadership, Ruby Has is bringing in big business solutions with robotics and integrated technologies to hyper-growth DTC businesses around the world so they can quickly scale to meet fluctuating demand. The plan is to keep moving forward, always.
With clear vision, high moral and business standards, and creative, determined thinking, Ruby Has will continue to increase its presence globally, expand the company’s capabilities for international fulfillment, and invest in technology that enhances the 3PL’s efficiency and results.
To get started with Ruby Has Fulfillment and work with a team member to discuss your goals, fill out our quote request form now.
If you’d like to learn more about Rafi and his entrepreneurial approach, check out the following resources: