Never Run Out Of Toilet Paper: An Ecommerce Fulfillment Case Study Featuring Alice.com
Abstract
In direct to consumer distribution, each order is vital to the growth of the business. After listening to the needs of consumer packaged goods customer, Alice.com, OHL developed a system that would allow Alice the needed flexibility to grow their business the right way. OHL takes a holistic approach to meeting the demands of both their consumers and manufactures. With OHL as their partner in logistics, Alice doesn't need to worry about spending money on space they won't use when they add more products because OHL provides a flexible and scalable warehouse model.
Overview
Alice.com provides ecommerce and interactive marketing services exclusively to the Consumer Packaged Goods (CPG) industry. Hundreds of the world’s leading CPG manufacturers currently use the Alice.com platform to sell their products direct to consumer, leveraging a unique online service that provides consumers always free shipping, automatic coupons, and a reorder queue that makes it easy to plan ahead and avoid store shopping for household essentials. To successfully grow their business, Alice.com needed an experienced logistics partner to provide ecommerce fulfillment and warehousing – their search would bring them to OHL.
Business Model
Operating as an e-marketplace for consumer packaged goods, Alice.com launched in late June 2009 and have since added more than 160 manufacturers selling direct to consumers via the Alice.com marketplace. Today, Alice.com carries over 6,700 items and expects its manufacturers to offer more than 25,000 to 30,000 SKU’s over the next three years. The Alice.com marketplace carries items in almost every consumer goods category, making the company a major player in the CPG market. Alice also develops branded storefronts for its manufacturer customers that enable them to sell direct at their own websites with all the benefits of the Alice.com marketplace, including always free shipping. Since launching its storefront platform in January of this year, the company has already developed more than 30 storefronts for customers, with the expectation of adding another 70 or so before the end of the year.
Instead of acting as a traditional retailer - buying products, marking them up, and making a profit on their sale - Alice.com charges fixed percentage fees to its manufacturers for the costs of fulfillment via the marketplace and it also earns revenue by delivering targeted, value-added advertising opportunities that enable manufacturers to transform their traditional advertising dollars into added value for consumers (things like digital coupons, product samples and loyalty programs).
Challenge
Since Alice does not buy inventory from the manufacturers, but covers the cost of warehousing and fulfillment, partnering with an experienced and seasoned 3PL is essential to the success of their business. Alice.com needed a flexible and scalable 3PL who could meet the growing demands of their manufacturing base. Each new manufacturer offers unique challenges in sanitation, packing, shipping, delivery and storage requirements. Alice needed a 3PL who could meet the diverse requirements of their manufacturers and consumers, a partner who understood how ecommerce fulfillment works and how it impacts their overall business model.