Archive for April, 2010
Supply Chain & Control
Posted by Brett in Start-Up Tips on April 28, 2010
Scrubadoo.com is a drop-ship operation, you can read about our supply chain and how we got our start as a drop-shipment company here. We are trying to differentiate from our competitors based on our service, not an easy thing to do. It becomes even more difficult when you have a limited amount of control over the fulfillment of your orders.
In case anyone is thinking of starting a company with a similar model I thought I would throw a few of the issues you may run into.
-All of your suppliers have different fulfillment periods.
- If someone orders products from two different suppliers it is very likely that the products will arrive at different times. This tends to make the client think we forgot a portion of the order.
- We can’t actively advertise that your product ships out in “x” days since they all ship out in different amounts of time.
-Suppliers have different return periods.
- While we accept returns for 100 days, they only accept returns for 30 days typically, thus anything that is returned to us becomes inventory.
-They all have unique order entry systems.
- This makes it impossible for us to have a standard order entry process, resulting in more time spent on this task.
-We do not always receive tracking numbers.
- If a client calls to see the status of our package sometimes we do not know it.
-You are managing several relationships.
- Just like anything else the relationship is important, especially for the smaller companies. The better you treat your account reps the more they will take care of you.
- If you need some rush work done, you can’t do it yourself, you are depending on another person to come through for you.
-We don’t have the ability to put anything in the box
- All that is shipped with the item is a packing slip, it is not unique and pretty obviously does not come from us.
- We can’t use the shipment to market our products further
There are a lot of issues that arise from a drop-ship model. Unfortunately, it is our only option right now. Inventory costs money, and right now, we have very little.
Dealing with a Major Industry Change
Posted by Brett in General Entrepreneurship, Lessons Learned on April 12, 2010
There was recently a major shake-up in the Medical Uniform industry which has become the cause of slow delivery, shipping mis-haps, and upset customers. The result; a back-order log of more than 200,000 Dickies Scrub products that need to be shipped, a number that won’t shrink quickly.
To keep the details brief: For the last eight years Selecta Corporation has had the rights to manufacture and wholesale Dickies Medical apparel to your favorite retail uniform stores, like scrubadoo.com. As of just a few weeks ago this is no more. Selecta lost the rights to produce anything under the “Dickies Medical” brand. Dickies Scrubs won’t be going away, the rights for these products has been awarded to Strategic Partners Inc., who also produce scrubs under the Cherokee, Baby Phat, Sketchers, and other well known brand names. Strategic Partners will take over full time on the Dickies Medical brand June 1st. Unfortunately Selecta has already had to lay off over 100 employees due to the change, with more to come.
These layoffs, which amount to more than 75% of the account service reps and 50% of the warehouse people, have caused customer service to slow to a crawl (our rep was laid off) making it very difficult to get orders processed and once you do get an order through, shipping times have become extremely slow due to lack of staff.
On top of this there are issues on what inventory Selecta can ship right now as they are trying to lock down a price with SPI for the purchase of everything. This has made matters worse. SO the question became, what do we do, if anything? We have really only taken 2 major steps.
- Turn off all active advertising for Dickies Products
- When a client does purchase product let them know about the issues immediately and give them the opportunity to exchange their order or even get a refund if they can not wait the extra week or two fullfillment will take.
So far that is all we have done. Hopefully we do not need to stop selling the products all together.
Until next time,
-Brett