Online Purveyor of Artisanal Goods Finds Uncommon Solution
Online retailer UncommonGoods needed a way to provide extraordinarily fast shipping times to sell and transport goods to the other side of the country.
Artisanal goods aren’t created in the same way as mass market goods. There’s no assembly line, no machine cranking out thousands of identical pieces to meet big box retail contract obligations. Instead, artisans spend countless hours crafting each individual item with care and love. The people who buy these goods have high standards—from the products themselves to the way they arrive on their doorstep. Every step of the customer experience can be crucial to driving repeat business.
UncommonGoods—an online retailer that sells products created by artisans and artists through a catalog and e-commerce site—struggled for several years with this dilemma because its distribution operation was on the East Coast.
The bulk of the company’s orders moved through a Brooklyn, New York-based storage and distribution facility. This was great news for customers doing online artisanal shopping in Manhattan, Boston, or Atlanta—but not so much for those ordering from Los Angeles or Seattle. Customers in the western United States faced long delivery times and higher transportation costs. Having only a single New York distribution center left customers on the other side of the country waiting impatiently for products to arrive, and paying significantly higher shipping costs than their East Coast counterparts.
"UncommonGoods is deeply committed to providing an excellent customer experience," says Thomas Epting, co-founder and COO of UncommonGoods. "And while our customers come to us for our creatively designed, unique products, we know that to remain competitive in retail, we must provide fast, low-cost fulfillment and shipping."
Today’s online shoppers demand fast shipping, but redesigning an existing distribution model is easier said than done—especially when the existing model is still basically getting the job done. The retailer’s staff was busy traveling to trade shows and meeting with small business owners to source new and interesting inventory. Figuring out how to move shipments more efficiently nationwide wasn’t originally a priority—but as business grew, so did the need for more efficient national distribution.
Handcrafting a Solution
Fortunately, UncommonGoods had a little uncommon luck that saved significant time and investment. In fall 2016, while shopping for real estate from which to operate a Nevada-based warehouse and distribution center, a real estate broker suggested using a third-party logistics (3PL) provider to speed things along. The agent connected UncommonGoods with ITS Logistics, a Nevada-based 3PL specializing in asset-based transportation, distribution, and warehousing services.
When designing a solution for a company like UncommonGoods, remembering the retailer’s target market turned out to be key. Buyers of carefully handcrafted artisanal goods have little patience for sloppy shipping practices. They expect their product to be transported and delivered with the same careful attention with which it was constructed.
"UncommonGoods is customer-centric and strives to provide a perfect ordering process for customers," says Epting.
This means not only that the right product ships, but that it ships immediately, and arrives in perfect condition. It also means customers are immediately notified when the order ships, and have full visibility to the order until final delivery.
"The biggest and most unique challenge we had were sharp holiday peaks, where volumes increased more than thirty-fold, which exponentially increased our space and labor requirements," says Epting. "The 3PL solution allowed for flexibility of resources, which became flexible operating expenses."
ITS already had distribution and storage operations up and running that could handle the retailer’s needs, peak season or otherwise.
"UncommonGoods visited our facilities and were sold on our people and capabilities," says Ryan Martin, president of warehousing and distribution for ITS Logistics. "ITS Logistics now provides custom fulfillment and distribution solutions for the company, and helps them support creativity and the artist community by offering unique artisanal products to their customers."
By teaming up with ITS, UncommonGoods saved itself a significant investment in real estate, as well as the time saved by not setting up its own facility. By moving some of UncommonGoods’ distribution operations across the country, ITS cut costs and made notable improvements to the retailer’s transportation and delivery efficiency. The operational changes driven by the partnership have paid dividends for the retailer.
ITS Logistics ships orders directly to many of UncommonGood’s customers on the West Coast and in neighboring states.
"Before our partnership with ITS Logistics, we shipped all our inventoried products from Brooklyn, while the other 20 percent of business shipped directly from the artists to customers," says Epting. "Our partnership allows us to have a much shorter transit time to customers in the west, which improves the customer experience and lowers transportation costs. We also take some holiday peak season pressure off our Brooklyn operation."
An Extraordinary Success
More than one year after entering the partnership, UncommonGoods continues to reap the benefits of its relationship with the 3PL.
"We have improved their supply chain and reduced time and transit of orders to customers, as well as from their vendors," says Martin.
The partnership with ITS Logistics has allowed UncommonGoods to provide faster shipping all across the United States, which is increasingly important to its customer base.
Beyond solving the original problem of reaching distant customers more efficiently, the ITS solution has grown and continues to deliver lasting improvement. Not only does inventory get stored closer to customers on the West Coast, but artisans based in the western United States that sell their wares through UncommonGoods can now consolidate shipments through the ITS facility in Nevada instead of shipping them all the way to Brooklyn.
This is easier for the artisans, who save money by shipping to a nearer destination. It’s also more efficient for the Brooklyn distribution operation, which no longer has to process numerous individual small shipments from the west.
"We continue to reduce transit time for many customer orders, lowering outbound transportation costs and improving the customer experience," Epting says. "Consolidating shipments from West Coast vendors via ITS Logistics also continues to lower our inbound transportation costs."
Beyond improving peak season efficiencies and reducing transit times, the ITS transportation and distribution solution also helps UncommonGoods achieve its sustainability goals—a core value for the retailer. The artisanal goods market tends to be hyperaware of environmental issues, and the UncommonGoods marketplace is no exception.
"UncommonGoods puts a major emphasis on sustainability to minimize its environmental impact with its artists and vendors. We support this initiative by using recycled packaging and a multi-faceted recycling program," Martin says.
Customers feel more confident in the end-to-end service they’ll receive as well. The efficiencies driven by the partnership have produced unexpected results in the form of increased sales and larger order volumes.
"UncommonGoods is planning to increase its business with ITS with a larger selection of SKUs and inventory," Epting says.
Designing a Future Plan
The partnership’s success has ITS preparing for the long term. The 3PL spends significant time and resources keeping processes and technologies up to date to better serve UncommonGoods, and its vendors and customers. "ITS Logistics continuously improves our pick-and-pack operations to expand alongside UncommonGoods’ needs," Martin adds.
The partnership shows no signs of stopping—nor does the success it generates. UncommonGoods solved a major shipping deficiency and can now meet the demands of customers nationwide quickly and efficiently. Meanwhile, ITS gets to put its distribution and transportation assets to good use serving a customer that knows all about quality and hard work.