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Case Study: Supreme Vinegar Selects ASD for Inventory Management & Fulfillment

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Vinegar lover Reggie Smith founded his company, Supreme Vinegar to bring nearly-lost, old world vinegar flavors back to the marketplace. Each batch of uniquely-flavored vinegars - including date, pineapple, raspberry, and even watermelon - is created using a combination of traditional cooking methods and modern chemistry, which results in a superior quality product.

For years, Reggie created these vinegars in his own kitchen, and stored them in his home. As the popularity of his product grew, so did his inventory. He needed a bigger space to store the vinegars, and assistance in fulfilling the orders he received. He turned to Fulfillment by Amazon (FBA) to prepare, pick, pack, and ship his product.

Seller Struggles with Fulfillment by Amazon

Amazon’s expansive customer reach can’t be beat, which means great exposure for sellers. And FBA is a dependable service, in part because inflexible policies make it an extremely efficient operation. However, this rigidity makes it a less-than-user-friendly option for vendors - especially smaller retailers and/or those who sell less costly items.

As a smaller-volume FBA retailer, Reggie faces some real challenges:

  • During the holidays, FBA dramatically increases its storage fees for all vendors, and imposes additional guidelines that favor higher-volume sellers who can afford the hiked-up costs to manage their larger inventories. For a smaller seller like Reggie, these costs become operationally prohibitive.
  • Speaking of prohibitive costs, Amazon constantly increases its fees, and places a lot of pressure on retailers to offer low prices and free shipping to entice customers to buy. For vendors of less expensive merchandise, like Reggie, these deeply-discounted prices and free shipping don’t make financial sense. Supreme Vinegar sells for $9.95 per bottle; shipping is about $6, and Amazon takes a portion of each sale (10%-15%). Reggie can’t afford to discount his product or offer free shipping. This erodes his profits; his goal is to make money in this transaction, not to lose it.
  • If Reggie receives an order outside of Amazon (from eBay or his website), he can’t use FBA to fulfill it. He has to fill it himself, which takes time, and money, that could be better used in the business.
  • Sometimes, FBA’s facilities are filled to capacity, so sellers needs to find alternative storage arrangements until FBA opens up. That’s simply not a reasonable or convenient way to manage inventory or fulfillment.
  • The Advantages of ASD Recently, Reggie asked ASD for pricing on inventory preparation for FBA. Knowing ASD could do better than just product prep, ASD’s General Manager, Phil Lanctot, Jr., provided Reggie with a strategy for his entire preparation and fulfillment operation, completely replacing FBA’s services, and adding additional services and benefits - at a lower cost to Reggie.

“There’s a personal touch and alignment of interests that our clients experience when they partner with ASD. Our goal is to help them grow,” says Phil. In getting to know and understand customers’ businesses, ASD promotes their products and services as part of its own marketing strategy.*

ASD is now providing Reggie with a more flexible program at a 25% cost savings, without the additional hassles and stress he experienced as an FBA retailer. “ASD's solution provides me with the best of both worlds,” says Reggie. “I can get FBA-style service through any sales channel: my website, EBay, Etsy, and others.” ASD is proud to be part of the Supreme Vinegar team
Services ASD Fulfillment by Amazon (FBA)
Inventory Preparation - Apply barcodes to individual packages - master cartons and individual units. $0.56 per item $0.75 per item
Storage, Pick, Pack & Ship Fee $3.15 per item $4.20 per item
Restock Return $1.65 per item $4.25 per item
Order Management/Processing - for a variety of channels. Includes the purchasing of shipping and online order status updates. Yes No
Collaborative Opportunity - Easy access to customer support team to provide direction and ensure they manage orders exactly as desired. Yes No
Accept Orders from Multiple Channels - Amazon, eBay, website, others Yes - Same cost for orders from any channel Yes but 40-50% more costly.
Executive Guidance & Insight - Input on how to creatively and cost-effectively enhance profit margins. Yes No
*Supreme Vinegar is the official vinegar of ASD
04 Jun, 2019
ASD’s President and General Manager, Phil Lanctot , talks about the convenience and benefits of choosing ASD to assist your business with asset recovery, re-deployment, recycling, and lease returns. Q: Phil, which types of companies use ASD’s asset management services, such as Virtual Warehouse & Distribution, Service Bench, and Service Anywhere? A: Large organizations have Asset Management systems. Typically, it’s the physical resources - knowledgeable staff and facilities - that they’re lacking. Assets tend to pile up because these companies don’t generally hire full-time staff to handle the logistics of physically handling used IT equipment. This is equipment should be re-deployed, or returned to a leasing company. Other assets must have the data cleared and disposed of. So they’re also paying to store equipment not in use, which is costly and puts their data at risk. Every office - every business - has a pile of IT assets they’re reluctant to throw away. And the staff is too busy to figure out what to do with it. That’s where ASD comes in. Q. How does it work when a client is ready for ASD to handle an equipment return? A. Our team can be onsite with the client to pack the equipment securely for transport. Then we ship the units to the ASD depot. Of course, we provide tracking reports to our clients, so they have a record of the equipment that was recovered and shipped to our storage facility. Q. Once equipment is received by ASD, what happens? A. Once we receive the units at ASD, it’s triaged in one of three ways. If the equipment has reached the end of its lease, the ASD team expertly wipes the data from the machine and returns the equipment to the lessor. In this industry, previously used equipment is sometimes redeployed to new users, while it still contains sensitive information that can be accessed with relative ease. In fact, this scenario was a catalyst for a major healthcare provider to call upon ASD to handle disposals, re-deployments, and lease returns of its multi-function printers (MFPs), as health information privacy is of utmost importance. If the equipment is still under lease, and requires storage until it’s re-deployed, ASD’s staff once again wipes the data for security reasons. They refurbish it to client specifications, making it plug-and-play ready for the next user. The item is then placed in the client’s online “storefront,” where managers can review equipment inventory and select the item for re-deployment when they need it. In the meantime, it’s safely stored at ASD’s facilities. Finally, older, unusable equipment requires disposal. It needs to be recycled properly, in an environmentally-friendly manner. ASD’s team disposes of electronics in accordance with R2 Guidelines, which is the gold standard for recycling this type of equipment. ASD recovers, re-deploys, recycles, or returns equipment like (but not limited to): computers multi-function printers phones tablets computer carts medical devices (such as scales or blood pressure equipment)
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ASD Business Center
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In the 2016 State of Small Business Report,* small business owners cite five top operational challenges. If even one of these challenges applies to you, you’re probably seeking solutions right now to help you effectively, efficiently, and affordably continue to operate your business.
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