How a B2B operator responds to the 'Amazon effect' on fulfillment
February 23, 2015 02:49 PM
The expectations set by Amazon.com Inc. and sustained growth have led business-to-business e-commerce operator Slate Rock Safety LLC to change the way it handles fulfillment.
Based in Ohio, Slate Rock Safety sells and distributes safety clothing that is flame-resistant. Launched eight years ago, the company—whose web sales increased 35% year over year in 2014, and which will be included in the upcoming Second 500 Guide—has enjoyed double-digit annual sales growth for seven straight years, the company says. Last year it earned about 65%, or $4.23 million, of its $6.5 million in total revenue from business-to-business accounts. It doesn’t break out total online or B2B online sales.
When it launched, Slate Rock initially relied on the dozen or so manufacturers from which it buys products to drop ship those products to customers. Those customers can include utility linemen buying with their own money prior to reimbursement and oil rig employees purchasing through their employers’ accounts. But because many manufacturers have been slow to embrace e-commerce, keeping up with customer complaints about slow deliveries became a “full-time gig,” says Chad Wilson, the retailer’s chief operating officer.
As a small company with fewer than 20 employees and not a lot of capital, Slate Rock Safety in the last year or so decided upon a home-grown “half-and-half” fulfillment model to handle its growth, he says. Drop shipping still accounts for half of deliveries, with the rest of the fulfillment operation handled at the company’s offices in northeastern Ohio, using software Slate Rock Safety developed itself.
Starting in April, the company will lease an additional 9,000 square feet of fulfillment space in an adjoining building, giving Slate Rock Safety 15,000 square feet in total. By directly taking over half of its fulfillment, the company can now deliver products in seven days while being less at the mercy of slow-moving manufacturers, Wilson says. That has helped it deal with the “Amazon effect” of customers demanding ever-quicker deliveries, he says.
He adds that the company anticipates $8 million of revenue in 2015.
For much more about how fast-growing online retailers upgrade or tweak their fulfillment operations, check out the upcoming March issue of Internet Retailer magazine.
Sign up for a free subscription to B2BecNews, a weekly newsletter that covers technology and business trends in the growing B2B e-commerce industry. B2BecNews is published by Vertical Web Media LLC, which also publishes the monthly trade magazine Internet Retailer.