Fast & Furious
"Speed To Market Is Critical These Days"
Clients are demanding even quicker turnaround on apparel orders today. Here’s how suppliers and distributors are responding.
Order fulfillment at Edwards Garment Co. (asi/51752) these days reads like a FedEx service brochure. Say a distributor wants an order shipped the same day he places it – not a problem. Need it in two days? You got it. Want to place a last-minute order at three in the morning? Easy.
Simply put: “Speed to market is critical these days,” says Taraynn Lloyd, Edwards’ director of marketing.
More and more distributors – and their clients – are demanding that apparel orders be placed, produced, packaged and shipped immediately, with turnarounds sometimes as quick as 24 hours. Like many in the industry, Edwards is obliging. In the past few years, the Kalamazoo, MI-based Top 40 supplier has drastically changed its processes and service offerings to meet a more demanding marketplace that wants apparel items rushed to their offices.
Edwards now offers same-day shipment on orders for blanks placed before 5 p.m. Eastern. Drop-ship services are available on virtually all orders, which can be placed online 24 hours a day. They’ve boosted their inventory so that popular items are always in stock, constantly changing up where inventory sits and rotates within their warehouse, so that the most popular items are the easiest to access and can be pulled at a faster rate. And the company has added a later shift to make it possible to send orders out as late as 9 p.m.
Edwards is far from alone. In the past several years, many more suppliers and distributors have scrambled to meet a market request that, these days, seems more like a mandate from customers who want orders and want them now. “Before, rush might have been two weeks,” says Terie Vickers-Craig, director of vendor relations for Vaughan, Ontario-based BrandAlliance Inc., (asi/145177). “Now it’s more like 24 hours.”
The demand has been so great that some suppliers have simply set up satellite distribution centers to make sure they can meet today’s timelines. Top 40 supplier SanMar (asi/84863), for example, has opened eight warehouses, including its newest one in Phoenix in November, so that orders can be sent to customers nationwide at a faster rate. That means next-day delivery is an option for 83% of the country, the company says, with 99% of orders available in a two-day window.
That kind of distribution model is crucial to remain even remotely competitive in today’s ad specialty marketplace, insist industry insiders, particularly when it comes to apparel orders. “The infrastructure on the supply side has aided in the ability for distributors to offer quick turnaround times, and that’s not the case for hard goods,” says Tom Goos, president of Seattle-based Image Source, a Microsoft preferred provider. That reliance upon suppliers is becoming more and more critical.
But suppliers aren’t the only ones gearing up. Six months ago Custom Logos (asi/173183), a distributor in San Diego, added a second shift five days a week so that it could fulfill more apparel orders at a faster rate. Doing so has doubled the company’s capacity for screen printing, doubling sales, says Jeff Golumbuk, the company’s CEO, who adds that Custom Logos’ rush orders now account for 35% of its jobs.
Many in the industry point to the “Amazon effect” as the reason for a push to get apparel orders out the door faster – consumers see orders being fulfilled by Amazon.com on an overnight basis and they’re beginning to expect the same from their business-to-business orders, as well. “Over the last seven to eight years, we’ve morphed into the McDonald’s of the embroidery business,” says Mike Little, president of Team Mates Inc., (asi/90674), a supplier based in Eagan, MN.
Part of the issue, say industry experts, is that today’s consumer marketplace is driven by next day or even same day delivery from the likes of Amazon and other behemoth online retailers. Those consumer expectations are spilling over into the ad specialty market.
Changing Buying Habits
There are other factors at play, as well, that are forcing suppliers and distributors to provide faster turnaround on apparel orders.
Little also points to the ripple effect of the economic downturn from 2009. After distributors and their customers experienced huge cash crunches, they became very cautious buyers, he says. In order to be sure their dollars were being spent wisely, they often waited until the last minute to place orders – either because they waited themselves for permission to purchase items or because they wanted to make sure that what they planned on buying was really needed.
That caused a greater need for last-minute order placement and delivery. When a company is handling upwards of 2,000 purchase orders a month, as Team Mates is, last-minute orders can put a tremendous amount of stress on a supplier. In fact, Little says, most of their rush-order management comes in streamlining upfront processing to make order fulfillment faster. “Our efficiency is based on the fact that we can organize our POs and make them easier to read and process,” Little says.
For their part, distributors say they’re working with suppliers to alleviate some of the burden of rush apparel orders that are, these days, becoming the norm rather than the exception. For some that means establishing preferred vendor relationships with a few key suppliers. For others it’s less about the number of suppliers they’re working with and more about the level of business they’re doing with each one.
“It’s about establishing the sales levels needed by supplier partners to command the greatest amount of support,” says Brad Akers, president of Tip-Top Branding Inc., (asi/344851), based in Sterling, IL. “Bottom line, if you’re doing $25,000 each with suppliers in the same product category, it might be worth considering doing $50,000 with two suppliers.”
Despite the increase of preferred-vendor programs, suppliers still say they’re feeling more and more pressure to ship orders faster – whether those orders are going to distributors or directly to their clients. For many there is an increasingly justified need to add additional warehouses, distribution centers or offices nationwide. S&S Activewear (asi/84358), based in Bolingbrook, IL, purchased a company on the East Coast (Eva Tees) and a company on the West Coast (Americana) so that “together with our Midwest location we are able to reach 46 states in one or two days,” says Margaret Crow, the company’s director of marketing. Having just one office, even if it’s centrally located within the country simply isn’t competitive enough these days to meet the speed of demand, say experts.
But are today’s consumer expectations, spurred by giants like Amazon and others, really appropriate for the promotional products industry – one that’s historically been more collaborative in nature with a lot of back and forth between suppliers, distributors and end-users?
For some suppliers the prospect of a permanent market shift where rush orders become the norm is reason to redirect their business model. “During the downturn, I kind of took a step back and said, ‘I’m really never going to be better than Amazon in this marketplace’ in terms of apparel and trying to be all things to everybody,” says Aaron Tucker, principal and founder of Scottsdale, AZ-based Carefree Casuals (asi/43851).
In fact, Tucker was so fed up with the push for fast orders that he turned to government business instead, focusing the majority of his supplier business these days on direct sales with government vendors. Doing so has allowed his company to resume a less rushed pace of business where he and his team can forgo much of the panic of rush orders they used to endure.
For others, though, quicker turnaround is an opportunity to add more value to their apparel business. For Midwest Single Source (asi/327845), for example, rush orders offer an opportunity to meet customer demands more quickly, says Sarah Strydom, marketing director for the Wichita, KS-based company. They’ve been able to do this in part by contracting exclusively with an area decorator who only does business with Midwest Single Source, working late nights and weekends to complete last-minute orders, Strydom says.
Strydom and others say part of the problem is the misconception clients have about apparel items. “I think with apparel the customer’s perception coming into the order is that 75% of it is already done,” Strydom says. “You’ve already made the shirt, so in the customer’s mind it’s a faster, easier, quicker product” to produce because it doesn’t have to be made from scratch.
These educational gaps among clientele about apparel production and decorating are frustrating for distributors and suppliers alike. And for clients who refuse to learn more, fulfilling last-minute orders time and again can be exceedingly frustrating. For those distributors and suppliers struggling to keep up with a faster corporate client, some are managing by ranking clients, even if unofficially, and are even leveraging rush orders as a client management strategy.
For his part, Little says, Team Mates doesn’t charge rush fees – or at least not for clients who are helpful in the ordering process. “What really slows us down more than anything are orders from distributors that are poorly written with incorrect quantities, colors they forgot to identify or changes they forgot to send,” says Little. “The better a distributor is educated, the faster we can get orders out.”
In fact, collaboration between distributors and suppliers is so key in today’s rush-prone world of orders that Little’s company often weeds out problematic customers by raising prices for those who “don’t get the message after the first few times and don’t look like they’re trying” to help streamline the purchase order and ordering process.
That may sound harsh, but Little and others say working together, including education back and forth between both suppliers and distributors is vital in maintaining less stressful rush order fulfillment. Akers says his company is prone to order from suppliers who are helping improve process fulfillment as well. That includes “online ordering, accurate shipping estimators, real-time stock checkers, automated proof approvals, easy-to-access product imagery, and anything else that streamlines our business process,” Akers says.
For other distributors it’s also about educating clients. After all, rush orders are emanating from them in the first place. For those who are used to placing orders last minute or accustomed to a world in which everything is delivered overnight, it’s important to reset expectations, says Tim O’Neill, president and CEO of Image Masters (asi/230071), a distributor based in Merced, CA, whose rush orders comprise about 15% of its overall business.
“We trained our sales staff to never ask, ‘When do you need it?’ in reference to any order,” O’Neill says. That way they remain in control of the ordering timeline, rather than the customer, who O’Neill and others say, isn’t always the best judge of when an order is needed.
In addition, they try to set reminders for upcoming customer events in an effort to preempt a client’s ordering needs. “If I have a customer who mentions they have a golf tournament next March, I put a tickler in my calendar for early February to say to the client, ‘You have a golf tournament coming up. Do you want to talk about ideas for that?’” O’Neill says.
Even with the best education and client prep, though, it’s not always possible to stave off fast orders and those that need a 24 to 48 hour turnaround, mostly because it’s hard to reverse today’s client expectations. “The Amazons of the world are delivering within 24 to 48 hours, and now even same day delivery,” says Thomas Rector, CEO of Rector Communications (asi/305623), an Indianapolis-based distributor that ranked number one on Counselor’s Fastest-Growing Distributors list last year. “The culture of what customers are expecting is much different than it used to be.”
In a move that signals both acceptance of a market shift as well as an attempt to turn that shift into an advantage, Rector’s company invested in equipment to better manage and fulfill rush orders. Last November the company purchased a Brother direct garment printer to boost small-run production. The $28,000 machine has already paid for itself, Rector says, and helps the company sustain a market advantage of last-minute, print-on-demand order capability for its 78 online stores.
Rector and his team are so accepting of the industry’s shift to last-minute apparel orders that they actually laugh now when they get an order with a completion date of more than a few weeks. “I think within the near future,” Rector says, “rush orders will be the standard in the industry.”