Know Your Numbers Before You Cut Costs: Keyan Bazargan on Smarter Logistics

Keyan Bazargan is the founder of Iron Margin, a consultancy he started earlier this year to help seven- and eight-figure direct-to-consumer brands simplify logistics and find real savings. Before that, he ran operations at Freak Athlete, a gym equipment company, where he says he saved six figures in freight and fulfillment costs, and served as VP of Operations at Greener Printer, a commercial print company. I talked with Keyan about the full arc, from inbound freight to fulfillment to last-mile delivery, and the numbers that tie it all together. Here are the takeaways.

Get smooth first, then cut costs

Keyan’s first piece of advice will sound backward to anyone hunting savings: do not start with cost cuts. Smaller brands can shave a nice-looking percentage off freight or fulfillment, he says, but at small scale the nominal dollars barely matter. What matters is the foundation. Lock in the product. Lock in the marketing. Make the customer experience, in his words, “smooth as butter.” If that means paying a little more for faster shipping or the most reliable carriers, do it. Get the software in place, stop the customer service complaints about fulfillment issues, and ship on time. Only when those systems are solid should a brand start pulling cost levers on freight, fulfillment, and last-mile. It is working on the business instead of in the business. The savings land harder once the operation can actually scale.

Most brands do not know their true contribution margin

When Keyan starts with a brand, one of the first things he asks for is how they calculated their gross profit and contribution margin. Then he audits it. Pretty much every time, he says, he finds differences. The reason is variation. Margin changes by SKU, by channel, and by geography. Shipping to the UK is often cheaper than shipping within the US, and last-mile pricing from any provider is rarely black and white. Keyan told me he regularly has to engage the brand’s providers directly, asking follow-up questions until both sides uncover costs neither of them knew were there. His advice: do not try to be perfect. Get a reliable read on your hero SKUs in your main sales regions and channels first. That is the 80/20 version, and it becomes the baseline everything else improves from. One thing I liked: he does not keep this as a black box. He keeps the brand looped in so the team learns the playbook, because cost discipline is a forever job. Saving money in month one means nothing if the brand cannot keep doing it in month twelve.

Stop giving one carrier all your volume

On last-mile delivery, Keyan sees one mistake more than any other: brands locked into a single carrier agreement. If you have no alternatives, he says, you are at their mercy. When the carrier raises prices, you take it. His prescription is simple. Have multiple carriers and rate-shop every single order. At enough scale, go directly to the carriers and negotiate. If you are smaller, use an aggregator that pools volume across brands to get you better rates. The national carriers keep raising prices while regional alternatives keep driving them down in their own footprints, and you do not want all your eggs in the rising-price basket. One caution: ease in. Do not dive in headfirst with a new carrier on day one. Many aggregators let you start with rates that only use FedEx, UPS, and maybe DHL, then slowly introduce alternative carriers into the mix while you test delivery performance the entire way through. Repeat customers are what make a brand real money, and delivery is an extension of the brand, so confirm the experience holds before you chase the full savings.

The LCL trap

Freight looks like a category with fixed market rates, but Keyan says volume thresholds change the math. FCL, full container load, means your goods fill the entire container, typically around 20 full pallets. LCL, less-than-container-load, means you share the container with other brands, and when it arrives, people have to physically separate everyone’s goods. That extra work is why LCL runs two to three times more expensive than FCL. The fix is not always “sell more.” Sometimes it is shipping less often. If the product line is stable and sales are trustworthy, consolidate, say, monthly shipments into bi-monthly ones to fill a full container. The freight savings, he says, will far outweigh the cost of carrying extra inventory. He ran the math for one brand and called it life-changing money, savings that drop straight to net income.

Visit the warehouse before you sign

For fulfillment, Keyan’s advice is blunt: go see the building. He has personally visited more than 20 warehouses in the past year, and he says the differences are night and day. The impression you get from the team, how clean the operation is, the things you notice walking the floor, none of that comes through on a video call. A 3PL is one of the most important partnerships a brand will sign. Firsthand experience, he says, cannot be replaced.

In-house or 3PL is a founder decision

His last company, Freak Athlete, used 3PLs. Separately, he works with a seven-figure soap brand that manufactures in-house and makes that manufacturing part of its marketing, something the founding team cares about deeply. His framing: be honest about what you are building. If you want to scale fast and spend your time on product and marketing, go the 3PL route. They bring the expertise, equipment, technology, and the rent, and they specialize in pick, pack, and sort with full accuracy so you do not have to. If you are thinking in decades and care more about the journey than the speed, keeping it in-house can be the right call, headaches and all.

Referrals beat cold outreach when picking a 3PL

Somewhere out there is another founder in a similar product category, with similar weights or kitting needs, who has been doing this for a couple of years. If that person gives you a diehard recommendation for their 3PL, Keyan says, it means a lot. Then bring volume to the search. Do not talk to two or three providers. Talk to ten or twenty. Some will tell you that you are not a fit, some will price wrong, some will be in the wrong location. Within a few weeks, he says, you will have three genuinely solid options.

Compare 3PLs on full landed cost, not line items

When brands get serious about adding a second node, Keyan pushes one strong preference: use one 3PL with two locations rather than two separate 3PLs. You keep the same WMS, the same points of contact, and you avoid the management overhead most brands underestimate. Two nodes usually cut last-mile costs, but he warns it is context-dependent. Storage costs shift between urban and rural markets, and if you import through the Port of Los Angeles, a 3PL in LA saves real transportation versus one in Utah. The only honest comparison is full landed cost, every factor side by side. To help with that, Iron Margin publishes a free landed-cost template on its website. It is intentionally bare bones, covering everything from manufacturing to last mile, laid out so a brand can compare ten or more options without scrolling sideways.

Your 30-day move: question every number

I asked Keyan for the single most effective action a brand can take in the next 30 days. His answer: take an hour and figure out whether you actually know your numbers. Pull up each cost category and ask whether the number is real or an assumption. Then ask your 3PLs and your manufacturers questions, relentlessly. He says the truth is hard to find in logistics, not because anyone is hiding it, but because partners do not want to overwhelm brands with detail they assume is irrelevant. Ask the right questions and you can team up with those partners to find savings together. His closing point is worth repeating: logistics costs are not immutable. They are variable, partners are making good margin, and a lot of savings surface just from having the conversation. Brands that want to follow along can find Keyan posting supply chain insights on LinkedIn and on X at @OpsWithKeyan. The landed-cost template is a free download at ironmargin.com.

---

This post is based on the Logistics Remix episode “Unlocking Margin and Growth Through Smarter Logistics” with Keyan Bazargan, Founder of Iron Margin. The views are the guest’s and the host’s own.