A Long Beach startup aims to help Long Island businesses compete with Amazon and other major retailers when their customers want packages delivered fast.
Trellus started serving local businesses in January, promising same-day deliveries for a few clients in Nassau County. Now it has raised $2 million from about 20 investors to grow its business.
The company is making 500 to 1,000 deliveries a week and its service area stretches into parts of Queens and Suffolk County. It plans to make more regular deliveries to the Hamptons by the spring, said Adam Haber, 56, the company’s CEO and co-founder.
With the new funding, it plans to hire more workers to support customer service and software development and to spend on social media, print and local TV advertising. The company has 12 employees and a delivery network of about 50 drivers, who are mostly contractors using their own cars.
. In addition to its deliveries, the company has an online marketplace for local sellers. So far, 130 businesses have signed on to use Trellus including toy stores, florists, liquor stores and pharmacies. Trellus’s focus is on specialty vendors, not chains or takeout restaurants, Haber said.
"We only do small, independently-owned businesses and franchisees to give them a way to compete against Amazon and e-commerce," he said. "It’s a huge void in the market for the downtown Main Street businesses that are getting crushed by Amazon."
Haber’s career has included roles in business and government. He has invested in commercial real estate and acted as an angel investor to other businesses. He recently spent two years as deputy chief of staff for economic development and government efficiency in the Town of Hempstead.
Haber, who lives in East Hills, also mounted two unsuccessful runs for state Senate in 2014 and 2016 and one for Nassau County executive in 2013. He spent the first 20 years of his career as a commodity trader and served as a member of the Nassau Interim Finance Authority and nine years on the Roslyn school board.
Haber cofounded Trellus with chief operating officer Brian Berkery, who owns an advertising agency, and chief technology officer JR Jensen, an entrepreneur and designer.
"We did this because we love it here, and we get tired of seeing small businesses go out of business," Haber said. "We want people to shop local. Long Island has got so much wealth, and there’s no reason to give it to Amazon or other big box stores when you can get everything you need quicker through us."
Trellus charges businesses a monthly subscription fee ranging from $9.99 to $99. The stores that pay for a pricier subscription pay less per mile traveled by Trellus’s drivers. Businesses paying $99 a month pay $6.99 for deliveries within five miles, and $1.50 per additional mile. Trellus batches orders to lower mileage fees.
It's then up to stores to decide how much they want to charge customers for the luxury of same-day delivery.
Same-day delivery has been a priority for the country’s largest retailers, such as Walmart and Target, which offer membership plans to give consumers access to same-day delivery as well as one-off fast deliveries for an additional fee on top of shipping charges.
In New York City, a bevy of startups, such as Gopuff and Gorillas, are promising deliveries in less than an hour. Businesses can also use DoorDash to connect to delivery drivers. With significant financial backing, these companies can afford to offer low fees to attract as many merchants to their platforms as possible.
Haber said he believes Trellus can succeed in this competitive market by focusing on local deliveries for businesses that haven’t traditionally fit into other delivery models — and that could benefit from a marketplace designed for shoppers who want to buy from Long Island businesses.
"The thing we beat Amazon on and we’ll always beat them on … is time from your local vendor of specialty goods," Haber said.
Marc Lazar, owner of Lazar’s Chocolate in Great Neck, said he started using Trellus for deliveries after Haber walked into his store to pitch the service earlier this year. Lazar said Trellus has been faster than other courier services and he’s appreciated the way Trellus’s technology works with his business’s website and allows him to track orders.
"We have a lot of gifts that people want and expect to get delivered somewhat quickly and this really takes all the guesswork out of it," he said. "There’s always been solutions to these [delivery] problems, but they have always been more complicated than they needed to be and they’ve just really simplified everything."
Consumers are interested in supporting local businesses, and if Trellus can share that message and prove it is paying local workers a fair wage, it could capture shoppers’ interest, said Sucharita Kodali, a retail analyst who follows e-commerce trends at Forrester, a technology research firm. But Kodali said she is skeptical about whether rapid delivery should be a focus of small businesses.
"A lot of these small businesses are throwing things against the wall to try to keep their businesses alive and experiment with faster shipping. I think that they will find it’s not a silver bullet and it just eats into their margin," Kodali said. If Trellus doesn't succeed at winning merchants new customers with its nascent marketplace, "then all they are is like a courier service and those things have been around for decades," she said.