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Open orders dropped 32% and back orders 50% when web and catalog retailer Trilegiant, a spin-off from Cendant, implemented a web-based ordering system for its drop-shipping vendors.
Norwalk, CT-based Trilegiant Corp., which operates the NetMarket.com web site as well as branded shopping clubs for such high-profile clients as Citigroup Inc. and American Express Co. Inc., has reduced its proportion of sales not shipped by 32% since implementing a totally electronic, web-based, drop-shipment ordering system with suppliers earlier this year, the company tells Internet Retailer. As a result, Trilegiant, which operates totally on a virtual inventory basis, has been able to reduce its staffers whose only job was to follow up on orders not shipped from 15 to 12, Evan Guttman, director of logistics for Trilegiant Retail Services Division, says.
Using a system developed by St. Paul, MN-based SPS Commerce Inc., Trilegiant communicates electronically with 400 drop-shipping vendors representing 80,000 SKUs. The company also has reduced back orders by 50%, resulting in reduced costs of having to notify consumers that products are on back order and providing them with a $10-off coupon in compensation for the back order, Guttman says.
As Trilegiant implemented the web-based ordering system with all vendors, 250 of 610 vendors decided not to participate and stopped selling to Trilegiant. Since that time, Trilegiant has attracted 50 new vendors. “A lot of people said it’s not worth it,” Guttman says. “But they were the vendors who were only getting one order a month from us. The number of products that we offered didn’t go down because we were able to replace them pretty quickly.”
Trilegiant is the former Cendant Membership Services Inc. and Cendant Incentives Inc. divisions of Cendant Corp. Cendant spun Trilegiant off to a management group on July 2.