When you’re outsourcing a business process as critical as home shopping fulfilment, choosing the right partners is essential. The specialist service provider Clientbase Fulfilment’s co-founder and current Sales & Marketing Director Rob Smeddle was involved in outsourcing fulfilment long before it became the buzzword it is today. He was founding director of a highly successful company that specialised in home shopping and mail order services, and was one of the first companies to take card payments over the phone with Amex. Later, in the dotcom boom in the 1990s, they got heavily involved in fulfilment for the first wave of online retailers.
After selling the previous company to a multi-national in 1999, Rob in conjunction with David and Angus, formed Clientbase as a new venture with full agreement from the buyers. David Fanous came in as a founding director, and went on to become Managing Director. Rob and David spoke to Warehouse & Logistics News.
Focussed on fulfilment
Clientbase Fulfilment has had the same fixed objective since its formation in the early days of internet shopping – to provide specialist outsourced fulfilment services for multi-channel home shopping operations as a one-stop solution. Clientbase’s initial clients included Oka Direct, a rattan furniture company founded by Samantha Cameron’s mother, Amex, Day-Timers, and Pro-Ideé, the German gift catalogue shopping company.
Clientbase Fulfilment’s home shopping fulfilment services include contact centre and warehouse services with integrated software for e-commerce, cataloguers, off the page and direct response TV companies, covering business-to-business and business to consumer. Working with two combined warehouses and call centres in Newton Abbott, Devon, near the M5 and Exeter airport, Clientbase offer clients the option of using their ‘Elucid’ Best of Breed integrated Home Shopping system or are equally happy to work on a client’s in-house system.
As the case study on the opposite page explains, one of Clientbase Fulfilment’s key clients is Day-Timers, a greatly respected and long-standing US company who sell a range of time management products for lawyers and other professionals, which have become a generic term in the US and are catching on here. Clientbase Fulfilment offer Day-Timer a total fulfilment solution in the UK covering order systems, call centre services, email management and warehouse management. CF also offer Day-Timers the same solution in Australia through their recently established joint venture there, Clientbase Fulfilment Pty, with all the systems managed from here.
Importantly, Clientbase Fulfilment do not carry out any home shopping marketing themselves, and only provide fulfilment for clients in this area, but in an interesting recent development, Chinese companies are showing substantial interest in marketing to the UK from the Far East using Clientbase Fulfilment as a conduit for the goods. Finally, Clientbase Fulfilment are in the process of teaming up with a German fulfilment specialist to be the UK partner in a co-operative European marketing venture for outsourced fulfilment, which promises to speed the growth of Clientbase’s operations.
The smell of team spirit
Rob Smeddle and David Fanous use the phrase ‘teaming up’ frequently in our conversation. David and Rob have been very hands on since the early days, when they started out picking, packing and doing it all with 12 employees in a shed in Modbury, South Hams.
These days Clientbase Fulfilment have a core team of expert account managers providing day-to-day customer service backed by daily reports, but Rob and David are still both involved in servicing clients. David runs the company’s call centres, and the billing and general systems, while Rob manages the warehouse and stock centre side and looks after logistics. The third member of the management team is Angus Dick, who looks after the accounts and financial side, and is also a director of the company.
“David and I still work closely together on client solutions,” says Rob. “We both come from account management backgrounds, so we’re totally service oriented. When you outsource with us it’s a partnership built on trust and openness, and we live or die by that.”
Clientbase Fulfilment has no truck fleet of its own, but sends shipments to Europe and the rest of the world via the carrier networks, says David. ”We can tailor our system and find the most efficient carrier for that product. When a client buys our services,” he explains, “they can tap into our buying power and benefit from our extremely good commercial terms with the top networks. “
Clientbase Fulfilment provides turnkey fulfilment solutions in which they handle all calls, stock and despatch, typically processing 10,000 orders a day, with up to five items per order. “We’re planning to expand our capacity by fifty percent in 2012,” David reveals, “by opening another warehouse.”
The case for outsourcing
Some of the big players in home shopping like Littlewoods, M&S and John Lewis outsource some of their fulfilment, says Rob, but the proportion fluctuates. At the next level down, he reckons companies sending out 30,000-300,000 orders per year – the typical clients Clientbase Fulfilment serves – probably outsource half their orders. Outsourcing part of your business is increasingly a common practice, and Clientbase often get asked to handle overflow warehousing and call centre work.
“Owner-entrepreneur clients often find they get snowed under by day to day hassle,” says Rob. “Outsourcing enables them to hand over all that hassle to an outsourced partner with best of breed systems and expertise, and concentrate on growing their brand, and their marketing and merchandising.”
These services come with a price tag, David acknowledges. “In terms of our own cost management, we can deliver price per order with great clarity, and prevent overspend and handle seasonality, delivering true, qualified SLA’s.
“Because we’re entrepreneurs ourselves, we have a very straightforward approach to prices. Our pricing for orders is much more straightforward than many other people’s, and we strike the right balance between price and quality and speed.
How much of a sticking point is price, when negotiating with customers? “It’s an interesting point,” David replies. “ When we founded this business, we talked to various major retailers about their e-fulfilment. The senior people understood the need for partnership but the middle management often didn’t, and wanted to take out price.”
David has some reassuring words for those outsourced fulfilment virgins who may be feeling anxious about what lies ahead: “We appreciate clients may have some initial sensitivities about handing over their calls. The move to outsourcing usually starts with overflow warehousing, then overflow calls and then order calls – starting with one element and then as trust grows they gradually hand over more to us, leaving them to get on with the marketing.”
The range of products Clientbase handles is broad, including fashion gifts, motorcycle accessories, cosmetics, medical dressings, gardening products, small white goods, computer peripherals and exercise equipment. A key service is bundling products for multiple orders, wherever possible combining orders so the customer receives the complete list in one package, and ensuring product is suitably packaged for despatch, re-packing items if needed.
“Our Elucid system has the functionality to manage Drop Shipped, otherwise known as Direct Despatch, which enables suppliers to despatch their own ‘ugly’ goods direct to the consumer. We manage the performance of these Direct Despatch suppliers and report on their performance as one of the elements of our comprehensive reporting suite. Rob explains. “The heaviest item we send is a two-man lift or 30 kgs. There’s no maximum value.“
When it comes to turnkey solutions – anything from 20,000-300,000 orders per year – Clientbase is strong in gifts and upmarket products. Our largest client of three years standing, called M&G own four established brands called Presents for Men, Gifts for Girls, Travel Paraphernalia and Essentials, they excel is finding practical and brilliantly innovative products covering kitchen, garden, home, cycling, hiking, camping, fun gifts, stocking-fillers, equipment and storage. In another area, fashion, Clientbase provides complete end-to-end services for Eric Hill. A niche business David runs is fulfilment for a stable of five leading German catalogue businesses, acting as the UK contact centre covering order calls, customer services and e-mail management as well as managing returns on clients’ host systems through remote user links. These clients include Madeleine, Peter Hahn, Westphalia, Pro Idee, the practical gift company, and sailing boat accessory supplier Compass. Attention to detail is vital, and Clientbase employs an ex-Dartmouth Harbour employee as a specialist product adviser for Compass.
Crafting is another important sector, a significant client being US fabrics and home improvement company F&W.
Lastly, Clientbase are experts in direct response TV fulfilment, and usually have two or three clients on air at any one time, needing specialist services to handle stocks, telesales and managing products. Incidentally, if you call between midnight and 8am, you call will be handled through their Australian Contact Centre just 45 minutes north of Sydney!
Inevitably some home shopping purchases have to be returned, and Clientbase Fulfilment are also experts in reverse logistics. Fashion has a 30% returns rate, gifts nearer 2%. “We excel at reworking returned goods into good enough condition to be sold again. We even employ an excellent seamstress who delivers professional fashion alterations in house.”
Elucid – the powerbase behind Clientbase Fulfilment
At the heart of Clientbase’s operations here and in Australia is the Elucid best of breed integrated home shopping system, to which clients both inside and outside the UK have controlled access. In Rob’s words, “this is the engine room driving our aircraft carrier. It’s a fully integrated, multi-channel home shopping software package, with the functionality to handle every nuance of service requirement.”
Elucid is a specialist fully integrated home shopping software solution owned, supported and developed by Sanderson, who invest in regular enhancement to keep the Elucid brand as best-of-breed, who Rob says have been in the market for a long time and are now supporting it to a very high standard. As well as interacting with clients on their orders, stock holdings and despatches, the system enables Clientbase to receive orders from third party sales channels on behalf of our clients’ such as Amazon, QVC and Ideal Home Shopping. We interface with Amazon and ebay on orders and despatches for clients for which Clientbase hold stock. Elucid also allows clients to track orders, and stay on top of stock positions and crucially, returns.
Rob says. “We can see orders as they pass through the various stages of production on the system from the moment the purchase order is placed to the moment the completed parcel is placed on our carrier’s truck ready for final delivery. Then we can track the parcel through to the customer’s home. Returns processing has similar visibility.’
One of Elucid’s other benefits is that it ensures PCI compliance for both Clientbase Fulfilment and their clients, a key factor in making home shopping secure. “And as we go forward,” Rob continues, “Elucid will also help Clientbase Fulfilment and our clients to benefit from the very interesting developments currently taking place in home shopping among the social media community.”
Picking the right partners
“As entrepreneurs ourselves we evaluate the people who come to us,” says David. “We get a lot of enquiries and turn away several every week. Companies can grow quickly, and we respect that, but we won’t handle a client with less than £60,000 in annual revenue or 1,000 orders per month unless it’s a substantial start up and we’re excited about being involved. We’ve been chosen for a start up next year, which will be very innovative in the online shopping world.”
As clients grow, Clientbase can on rare occasions suggest they could run their fulfilment inhouse. “There’s a B2B haircare company we advised to set up their own warehouse, and we’re assisting them do it. We’re helping them design the new place and we’ve put them in touch with the best sources for personnel, forklifts, racking and so on.”
Getting the right balance between high quality and speed during the spike in demand prior to Christmas, Rob admits, “is a real skill, but because we’ve got a reputation as a pleasant place to work, we have a bank of skilled people with goods-in and warehouse experience who we can call on in the busy season from September to Christmas, and who we welcome back as friends. Another successful strategy is to use Gap Year students: “We respect the younger generation as articulate, dedicated and able to fit in with our core staff. They are particularly successful in our Contact Centre but we have also employed real stars in our warehouse too. At peak times we run 24 hours in the warehouse using three eight-hour shifts.”
David has some sound advice for Internet marketers and other home shopping operations wanting to improve their fulfilment: “Experience fulfilment as a consumer, by ordering goods yourself. If you have an opportunity to visit other fulfilment operations, take it. And join trade associations and talk to other people. You can always learn something from your peers. Or, you can call Clientbase!“
Getting started as a Clientbase Fulfilment client is straightforward: “We have an initial conversation and produce a brief. From there we provide a quote, and then we discuss price ensuring that the client is aware what is included in the price. Once we agree on the contract price, if the client has an existing merchant number and inhouse internet guys, and has payment handling systems in place, we can take on their business in a month, but if we have to put all that in place for them it generally takes nearer to three months.
“That said, we recently took on an account where the client’s previous service provider had gone bust. We stepped in because we would have wanted to work for the client anyway, in a normal situation. We took stock out of their warehouse and were acting on their behalf within ten days.”
Looking ahead, looking good
A major growth area for Clientbase, Rob Smeddle says, is UK order fulfilment for Chinese companies. “One Chinese company sells computer spares in the UK and is growing rapidly, and we’re regularly quoting for other companies in that part of the world, mostly in electronics, who want to sell their products direct to the UK consumer through sophisticated web sites.
“We’re also in the early stages of an international co-operative marketing venture, passing referrals to and fro. We’re looking at pan European partnerships with partners in various countries and also linking in with a large US company. If you add in our existing activities in Australia and New Zealand, we’re covering a large part of the consumer globe!”
David Fanous has the last word: “From here we want to keep growing and doing more of the same, bringing in new clients and keeping existing ones happy. We have a healthy order book, pointing to 20% growth this year with expectations for at least the same the following year despite the present world turmoil. Next year we’re looking at partnering with existing large-scale logistics companies who don’t have our home shopping fulfilment expertise but want to broaden their service. And as we extend our reach and become more involved in the Far East, the world is definitely opening up further for Clientbase Fulfilment.”
Clientbase Fulfilment Ltd
Tel: 01626 831 111