Stein World improves drop-ship capabilities

Heath E. Combs, July 30, 2013

For drop shippers these days, you're either good or you get dropped.

That's a lesson Stein World has been taking to heart. It began drop shipping items to e-tailers five years ago, but about 18 months ago began a major effort to improve drop-ship process capabilities and packaging components, according to Bob Kelley, vice president of operations.

The moves should help the company rival the best drop-ship programs in the industry, Kelley said. The accent, lighting and occasional source's whole Asian accent line under 150 lbs. is now drop shippable through the UPS and FedEx delivery systems. Items that are heavier go LTL.

The line's drop-ship ability makes it easier to offer dealers the same access to online goods for home delivery.

Most of the company's Asian sourced accent and lamp lines are now ISTA 3 compliant, and the occasional table line is ISTA 2 compliant with the standards set by the International Safe Transit Assn.

Through the testing, each accent SKU undergoes a series of specific drops and vibration tests before it will pass. Stein World offers a written certification for each package tested from laboratories in Asia.

Drop-shipping involves three modes of transportation, small parcel, LTL, and white glove. All of the company's SKUs are classified by mode of transportation.

"We have found that properly packaged and prepared, we can avoid using the white glove mode, which is the most expensive, by shipping normal LTL," Kelley said.

Formerly, the company distributed items nationally with furniture carriers, and cross docking between facilities resulting in an unacceptable slow delivery to customers, high damage rate, overages and shortages, Kelley said.

He said Stein World greatly reduced its damage rates to dealers by developing a national LTL delivery network where all shipments are palletized and stretch wrapped.

"For larger items we have customized pallet sizes and strap the product to the pallet for ease of cross-docking," Kelley said.

The shipping network is not allowed to stack on top of palletized product, he said, adding that the method has yielded significant reduction in the damage rate on outbound shipments from its Memphis central distribution center. Stein World uses the process on its LTL mode of its drop-ship business.

"The major e-tailer trade is realizing that common carriers are not adequate enough to make home deliveries and are thinking of new innovative ways to offer the consumer a faster delivery system," Kelley said.

Kelley added that speed to customers is paramount. Stein World is also now 99.3% compliant on case fill - the number of orders entered and shipped by the supplier complete within a mutually agreed upon number of hours of being given an order by a retailer.

Case fill is one of the two main metrics by which drop-ship orders are judged by internet retailers - the other being incident rate, Kelley said.

He added that few suppliers are providing all the critical elements needed for a drop-ship program.

"It's a lot of work. Because not only do you have to be good on the damage and defect rate - what is called an incident rate - but you have to be good on the case fill side. You have to be good on both sides to be successful, to retain customer loyalty," Kelley said.

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