How Nick DiNatale Capitalized On a Gap In the Market

It’s always interesting to see how innovative companies came about. In the case of ShipPlug, Nick DiNatale recognized the need for the service based on his experience working in sales at FedEx. In this interview, Nick shares how the idea came to life and how ShipPlug has grown to seven figures in annual profit in just a few years.

How much revenue and profit does the business generate?

We’re on track to earn $25 million in revenue in 2024 with an expected profit of $2 million.

Tell us about yourself and your business.

I’m a Pittsburgh native, born and raised, and now reside in Miami, FL. Once I graduated college, I fled Pennsylvania winters. I’ve always had a passion for helping others and talking about business ideas. I kickstarted my career as an accountant but quickly realized that wasn’t for me.

I switched to my first sales job at FedEx and fell in love with it. During my time there, I discovered a huge need for both small and large businesses to understand their shipping costs and simplify the entire shipping process.

After 12 years at FedEx, I started ShipPlug, a data-driven insights and proprietary software company that saves businesses time and money on their parcel shipping efforts. To date, we’ve recovered $1 million in refunds for late shipments and generated a total of $12 million in savings for our customers in just two years.

How does your business make money?

We make a percentage of cost reductions we secure for our customers. There are no upfront costs and no costs at all unless we save customers money. Depending on a customer’s profile (volume, B2B/B2C, weights, zones), we see anywhere from a 10-35% savings opportunity; and, on some occasions, up to 50%.

What was your inspiration for starting the business?

While at FedEx, I identified a pain point among customers who didn’t understand the claims process or their pricing contracts, resulting in financial losses. Having seen firsthand companies go out of business due to a lack of understanding regarding their shipping costs, I became passionate about bringing a level of transparency and clarity to the space, providing customers with fair and appropriate price-saving solutions in the process.

How and when did you launch the business?

ShipPlug launched in 2021 after I met our current VP of Operations while at FedEx. We left the company within the same month, and at the same time, a friend of mine connected me to another individual – a developer who helped us create the initial version of our software.

For the first few months, it was just the three of us before a sales/business development rep I knew at FedEx got let go and contacted me about joining my company. This was a game-changer for us, as things really took off from that moment.

How much money did you invest to start the business?

I used all of my life savings, about $375,000, to travel almost every week, meeting people from my network around the country who could be potential customers.

How did you find your first few clients or customers?

I knew I had to hustle by using my network and traveling to win new business. Some of these individuals were friends who owned businesses that shipped thousands of packages per day. They became customers and, because they were happy with our services, made referrals, which helped grow the business.

Tell us about your first year in business.

Initially, the three of us worked very long hours, experiencing trial and error as we figured out our business model. Soon after, we hired another person but then had to fire them. This cost me financially and emotionally. It was someone I knew well and liked, but I ultimately had to make what I thought was the best decision for the company.

Fortunately, I learned lessons from that experience. Furthemore, in the first year, we got significantly undercharged by one of our customer’s finance team, which messed up our financials for months. We thought we were doing everything right, but realized there were still many lessons to be learned. More than six months later, things finally got sorted out – the ship was righted.

What strategies did you use to grow the business?

Networking and referrals. Almost 40% of our business is from referrals. We intentionally network with the right group of people (businesses and marketers in the e-commerce space, members of chambers of commerce, etc.)

We also attend and host happy hours and other types of events, including charity events, to help build our network. We’ve always put an emphasis on being strategic when it comes to forming partnerships, which has resulted in a great flow of business.

Tell us about your team.

My team is full of rockstars located all across the country. Our combined 60+ years of experience in the shipping logistics industry has enabled us to negotiate the best discounts among all shipping carriers.

What are your future plans for the business?

We want to continue growing our business by working with the right partners. We can work with any type of shipper except Amazon shippers. We can add value to any business that’s seeking to understand their shipping costs better. Internally, we’re always open to hiring the best of the best. If we can find that person, we do it. But we’re not necessarily looking. It’s a great spot to be in.

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What is the most important lesson you’ve learned growing the business?

Ideally, you don’t want to get too caught up in the highs or lows. The reality is you’re going to win and lose business, so it’s important to cultivate an ability to roll with the ups and downs. I do this by forming plans and doing what I can to stick to them. This helps me stay balanced and focused via routines and checklists.

Now, plans can change, so you have to be adaptable, but having a starting point allows you to put processes in place you can stick to and follow. Also, don’t forget to acknowledge day-to-day successes. These small reminders and an overall positive attitude can sustain you through challenges and setbacks.

What was the biggest challenge you had to overcome?

As I mentioned previously, I had to let go of an employee who I cared about greatly but was costing the company money. I tried making it work, but the situation became untenable so I had to make a tough decision. But these things happen.

There may be times when you hire someone you know for any number of reasons, and sometimes it works out; other times it doesn’t. I had another employee who got sick and was in the hospital, but I didn’t know about it until weeks later. I had no idea where the individual was and couldn’t reach them, so I was obviously concerned.

Thankfully, the employee ended up being OK, but if you’re a caring boss, you’re inevitably going to face hard times because your employees will face challenges in and out of the office that can impact the company in various ways.

What advice do you have for other entrepreneurs?

Really think about how you want to kickstart your business at the outset: via venture capital or bootstrapping? It can vary depending on the entrepreneur, as there are pros and cons to both.

If you bootstrap it, there’s a lot of pressure due to the constant money crunch. You have to pay people first and be able to survive on your own while also spending money on the business. So you have to make sure you don’t run out of money. That being said, you have the ultimate decision-making freedom, as no one is micromanaging your books, questioning your hires, etc.

When you take money from others, there’s less of a money crunch, but you have to constantly check in with investors and run most of your decisions by them. If you can handle certain pressures, I think bootstrapping is the way to go.

What is your favorite quote?

I have two. The first is from legendary basketball coach John Wooden: “Nobody cares how much you know until they know how much you care.” Essentially, once people know that you care about them and their well-being, everything can fall into place.

The second is from my high school basketball coach, Coach McConnell: “The harder we work, the luckier we get.” When I played for him, we only lost 10 games in four years. He inspired us daily to work hard, and it led to great fortune.

What are some of your favorite books, blogs, podcasts, or YouTube channels?

I highly recommend “The Hard Thing About Hard Things” by Ben Horowitz. It offers advice on many of the moments when things don’t go your way and, specifically, the best ways to handle each situation. The test of every founder/entrepreneur is how they react when things go wrong. This book gives a blueprint on how to handle those difficult moments.