In an episode of the popular ABC show “Shark Tank” that aired last week, founders of the web-only fashion retailer ranked in the Second ...
Getting a better handle on inventory helps cross-channel fulfillment.
For Terry Bicycles, the ability to manage online orders for both consumers and business customers is key to revenue and cash flow, CEO Elisabeth Robert says. But it wasn’t until the manufacturer of women’s biking accessories migrated to a new Internet-hosted retail technology platform that it was able to more efficiently match orders across both selling channels with available inventory.
The company was founded in 1985 by cycling enthusiast Georgena Terry as a designer and manufacturer of bikes designed for women and sold through client retail bike shops. Over the years it patented a design for women’s bike seats—the first saddle with a now popular center hole for extra comfort—and introduced women’s cycling apparel. After its first decade it began to complement its wholesale business with sales direct to consumers through mailed catalogs followed by e-commerce sites. It does about $5 million in total annual sales, though doesn’t break out e-commerce sales.
Operating in both business-to-business and consumer channels, however, has made it difficult over the years to ensure it can satisfy both types of orders with sufficient stock, Robert says. “It gets complicated, particularly in our industry,” she says.
The peak season overlap between the two sides of the business is what makes it complicated. Because its wholesale customers need to plan their merchandise months ahead of sales, Terry typically books pre-season orders for about 65% of its B2B business. It processes orders from business customers between July 1 and Oct. 15 for shipments that don’t go out until the following January through May. (The company now sells bicycle seats and cycling apparel and accessories, but no longer sells bicycles, which are now made and sold under license by a separate business operated by founder Georgena Terry, who has retired from Terry Bicycles.)
But its consumer business also picks up in the first quarter, as consumers plan for warm weather recreation and respond with online as well as telephone sales after Terry starts to mail catalogs in January. That leaves the company with the challenge of keeping the right amount of inventory in stock to satisfy both its B2B and consumer markets, without over-stocking products that might outlast the peak selling season.
If it over-commits products to one channel, it risks alienating customers in the other, Robert says. In the past, Terry struggled to maintain order volumes in spreadsheets for each selling channel, but found it difficult and time-consuming to update its inventory and order management systems, which it had configured in-house and integrated with its initial e-commerce platform built on the open-source Linux technology platform. As orders came in from either channel, it was difficult to know how much inventory was still available for additional orders or to present inventory availability on its web site. Open-source technology allows a user to modify the software code.
That all changed in 2011, when it switched to an Internet-hosted technology platform from NetSuite Inc. Although Terry still uses spreadsheets to help manage order records, it can now more easily export that data into the NetSuite platform to keep inventory records updated and properly allocated to each selling channel Robert says. NetSuite maintains both the B2B and consumer inventory records in a single database, which gets updated as orders come in from either channel. Terry can then log into the NetSuite system to more easily reallocate inventory stocks to its B2B contract customers, or to orders placed through its e-commerce site and call center.
NetSuite also provides a single technology platform for Terry’s two e-commerce sites—TerryBicycles.com for consumers, and Dealers.TerryBicycles.com for its B2B customers—both of which are tied into the same back-end inventory database.
“We can adjust and reallocate inventory, and move what we need to one channel or the other,” Robert says. “I can’t tell you how critical that is; it has allowed us to be much more cash-flow optimized.”
The system’s capabilities are also important, she adds, for keeping customers happy in both the B2B and consumer channels. “If we over-commit inventory to the B2B channel, we could lose out by not selling products at higher margins to consumers,” Robert says. “But if we over-commit to the consumer channel, we could disappoint and lose a regular high-volume B2B customer.”
Terry uses the NetSuite technology platform to handle “end-to-end” commerce, including customer-facing e-commerce sites, order management and applications for managing inventory and financial records. It also includes software modules provided by NetSuite-certified technology providers. From one such provider, Oz Development Inc., Terry uses the OzLink shipping application, which assists in fulfillment pick-and-pack operations. For example, OzLink integrates with Endicia software for downloading accurate shipping labels for services like UPS WorldShip.
The cost to retailers to deploy NetSuite SuiteCommerce software starts at $1,999 per month for the Mid-market version and $3,999 per month for the Enterprise version, which can handle more product catalogs, NetSuite says