4Driving Operational Optimization and Efficiency

Wednesday, August 8, 2012

@caseycarey #ysummit

WAREHOUSE

RETAIL INVENTORY

MARKETPLACES

RETAIL STORES

IN-BOUND CALLS

WEB STORES

DROP-SHIPPERS

FULFILLMENT BY AMAZON

operational costs

customer satisfaction

• procurement and sourcing

• carrying and warehousing

• fulfillment and shipping costs

• customer service

• product availability

• landed price

• order-to-delivery duration

• order accuracy

• communications

Every channel is different, avoid selling everything, everywhere Manage it like a portfolio – determine the optimal mix of channels

and products Key factors to consider

› Predominate audience available in the channel › Competitive landscape › Prices points and basis of competition › Overall product economics › Product affinities (does it “make sense”) › Control over brand, messaging, and service › Impact on current operations

Continually test new products and categories Leverage technology to reduce complexities of product

information and inventory across channels

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65% of mid-sized merchants use drop-shipping with an average of 26% of inventory source fulfilled

Expand product selection without the risk › Test new products and categories › Improve economics of marginal products › Good alternative for long-tail products (low-volume)

Improve margins › Reduce distribution and fulfillment costs › Consider hidden costs such as splitting orders

Increase customer satisfaction › Fulfill back-orders › Multi-source top sellers › Improve services levels › Maintain control over customer service and communications

Ensure each vendor can perform to your expectations

2

For inventory listed on Amazon, a no-brainer › Increased sales by FREE Super-Saver Shipping and Prime eligibility › Preferred listing positions and higher price points › Lower landed costs, improved margins › Leverage Amazon’s best-in-class fulfillment (picking, packing, and

shipping) and customer service

For multichannel inventory (eBay, ecommerce stores, etc.), it may reduce costs for some or all of your products › Not all products are candidates

• Product categories and types • Sufficient turn rates and margins

› Evaluate supplier shipping direct to Amazon to reduce costs further › Use the calculator on sellercentral.amazon.com to determine economic

viability

3

Integrate and process orders from all channels in one place Automate processing flows – manage by exception Create “one view of the truth”

› Order states › Inventory and products › Customers › Channel performance

Integrate everything so you can focus on selling rather than using technology › Product and inventory information › Orders from all channels (changes, cancels, back orders, etc.) › Shipping and warehousing › ERP/financial systems

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ccarey@monsooncommerce.com caseykcarey caseycarey