Order Fulfillment

Many metrics are used to run a profitable catalog business. For example, an apparel company may set a goal for its overall return rate of 22 percent, while a gift mailer may strive for less than 6 percent. But one thing is universal among catalogers: The ideal metrics or ratios are those that lead to profitable income statements. After all, if you manage by the ratios, the dollars will take care of themselves. Remember, dollars go into the bank, not percentages. Key metrics to calculate and watch include service levels (e.g., how long customers wait in your contact center’s queue), response levels (e.g.,

With world conditions and the economy in upheaval, business has been tough for most catalogers lately. This month I’ll focus on several ideas to improve your bottom line. Although it’s always important to stay focused on long-term growth and strategic development of your business, some of you obviously will have to take action now to ensure short-term profitability. The following suggestions may produce only a temporary increase in your profitability, however, so be cautious about any potential impact down the road. Cut Cautiously 1. Improve your margins. The No. 1 expense line on your profit-and-loss statement (P&L) most likely is cost of goods.

Sweater snags, off-spec measurements, unglued sock liners in sneakers, moldy wooden toys, and incorrect care, content or country-of-origin labels — poor-quality merchandise can make a cataloger reluctant to buy again from a particular manufacturer or vendor. The quality issue has long plagued merchants, says Doug Easly, national sales and marketing director at Quality Corrections and Inspections (QCI; www.qualitycorrections.com), a Duncansville, PA-based firm that salvages and refurbishes goods for some of the largest catalog companies. What can you do when your goods arrive in less-than-top-quality condition, and how can you ensure that the problem never surfaces again? Easly offers the following

Crystal-ball gazing is not a widely practiced art in the world of fulfillment. Being very much a tactical discipline, fulfillment is more focused on the here and now. With calls having to be answered in 20 seconds and orders to be shipped in 24 hours, fulfillment is a near real-time, decision-making process — one that historically owes as much to operational flexibility as it does to operational planning. In the catalog industry, marketing innovation has spawned major developments in fulfillment operations. Marketers have been the dogs that wag an operation’s tail, and in the end it’s the marketers who determine the direction fulfillment

As margins continue to be squeezed, reducing expenses has become a major topic of discussion among catalogers. In fact, many have put into place specific edicts to reduce operational expenses. That said, the purpose of this article is to offer ideas that can help you attack one major aspect of your company’s cost structure — vendor inbound freight (VIF). By properly managing your company’s VIF, you could make the difference between a marginally good and a very good year for your catalog. Current State VIF usually is included on the profit-and-loss statement as part of overall inventory costs. This low visibility line item normally

The following is a checklist to help you develop cost-effective and customer service-oriented shipping plans. The direct-to-consumer in-dustry finds itself at a crossroads in terms of shipping and handling (S&H) policies and charges. Specifically, some studies show consumers are refusing to place orders if the S&H charges are perceived to be out of line with those charged by competitors. But S&H is a necessity for most catalogers. It often represents 8 percent to 10 percent of a catalog’s average order and net sales, and it offsets some of the pick-and-pack labor, outbound freight charges, and packing materials needed to ship consumers their orders.

Niche cataloger Shari’s Berries International guarantees that its chocolate-covered strawberries reach recipients a mere day after they’re dipped—a business plan that puts a heavy emphasis on reliable address data. Indeed, according to Lowell Feil, vice president of operations, until May 2002 his department experienced delivery address problems with about 10 percent of its orders. Though the company’s FedEx shipping system caught nearly all of these during the package-scanning process, catalog call center reps then had to call and re-verify the addresses. This not only strained call center resources, it often resulted in delayed product shipments and ruined customer surprises. Company executives

Since its inception in 1985, Venus Swimwear has had a long history of growth, with annual sales increases averaging 15 percent to 25 percent. Today, the Jacksonville, FL-based company that was started by a college student and weightlifting enthusiast is the world’s largest marketer of junior swimwear. But as Venus grew, founder Daryle Scott realized he had one problem. “We had this business that was doing really well, but it’s basically a February-through-June operation and is dead in the winter.” Venus Swimwear has always handled its own order-taking and fulfillment, and the seasonality was putting a dent in the company’s back-end productivity. Scott’s solution:

Long after the Internet bubble burst, e-commerce is alive and well for direct marketers and is the fastest-growing direct commerce sales channel. Catalog companies have three options for managing the dynamic online marketing environment. An Independent Adjunct At one extreme, a catalog’s e-commerce operation can stand alone as a totally independent adjunct to the traditional enterprise. Although it may share some of the same merchandise, it also may feature items that are not in the catalog. When it does offer catalog items, they may be only a subset of the full catalog line. In this extreme scenario, no effort is needed to

When Glen Pirie came to Swanson Health Products four years ago with a background in retail operations he was used to serving big customers like Wal-Mart and Home Depot. But he soon realized that for a consumer catalog, “A lot of the same business principles apply—like giving customers what they want.” The difference in the catalog field, he says is that there are “a lot more customers when you’re dealing with catalog orders. At Swanson, we have about 750,000.” Today, Pirie overseas purchasing, receiving, manufacturing and logistics at Swanson, which markets about 6,000 vitamin and health supplement products, including national and proprietary