Industry Insights From Renewal Logistics:
Value Added Services
Projects at Scale
Renewal Logistics handles warehousing and distribution as most 3PLs do, but where we are very different is that we are the ONLY 3PL that I know of in the US that also does Value Added Services projects at scale. And when I say Only, I mean Only. I was at an International Warehousing and Logistics Association function a few weeks ago, and we were the ONLY company out of about 150 in the room that did Value Added Services as a primary function of our business.
What are Value Added Services?
Any projects or programs that are needed to prepare a product to ship.
Why are Value Added Services important to brands choosing a 3PL?
I had a client recently who came to us and said that they had a product that was at a particular 3PL warehouse that had a promo insert that was in violation of Amazon’s policies, and so they needed to remove these promo inserts from all of their products that were intended for Amazon FBA.
They could never get the warehouse where these goods were stored, to get them to agree to handle this project, and they ultimately never were able to get the project complete at the warehouse. After months of trying, they ended up having to open a temporary space, have all the product shipped to them, they had to manually remove the inserts, and then had to ship the product back to the warehouse.
What a hassle and what an expense!! Not only the shipping and transfer expense of moving the product, but the lost time of the managers who had to stop working on things to grow the business, who had to divert their time to managing this project, and then also think about the lost sales.
On the flip side, what we offer to companies is the ability to harness the potential of each and every product.
The most successful brands in the world are watching their inventory and making adjustments in a very fluid way. And they capture a lot of extra sales because they have this flexibility.
How, You Ask?
As an Example: One client had 800,000 units of single packed women’s undergarments that didn’t sell through to Walmart. We accepted the return, bundled the returned units into 5 packs, created PDQs which we loaded with these 5 packs, and then our client resold ALL of that product to Walmart again. And then the product did sell through.
Another client had a 1.7MM unit order canceled by one major big box retailer. We accepted that return, and rebranded all of those items so that the product could be sold to another large retailer within a few weeks, allowing this client to still capitalize on the seasonality of the product.
There are tons of examples like this. For instance, today at our facility we are doing the following:
Wholesale Prep: Today we’re taking 30,000 units of undergarments that came in from the factory in universal packaging, and customizing it for our clients’ wholesale customers’ vendor requirements.
For instance, some companies like bag tags on the bottom right of a polybag, some like bag tags in the middle, some like bag tags on the bottom left corner. Some want sports bras folded in half in the polybag, some want them unfolded in polybags. Today, we are prepping product for Urban Outfitters, Macys, Kohls.com, Bealls, and many many more. Every Retailer has a different set of requirements and on a given day we may be prepping product scheduled to go to 40-50 different retailers. We manage vendor guides for about 145 retailer clients.
This means, our client can be dynamic, selling as much product as they want to any of these 145 retailers, and within a few days have that product prepped and shipped.
Amazon FBA Prep: We are the largest FBA prep facility in the country that we know of, and we do some days tens of thousands of units of FBA prep. Getting product packed in the right quantities, and with the right labels, creating shipping plans, etc for these goods to go to an Amazon Distribution Center. Amazon has exacting standards on how products are to arrive, and if items do not conform, there are high fees for fixing those issues. Today we’re prepping about 15,000 units for an athleisure brand to be sent in to Amazon FBA.
Kitting:We have a client right now that is asking us to print user manuals for one of their mechanical desks, and create kits consisting of those user manuals, the desk, and a riser. Our system is able to account for what quantities of stock are consumed by the kits so that the inventory stays clean in our WMS, and our employees physically create these kits, including labeling the bundle with a new SKU or UPC code.
E-commerce Fulfillment Prep – Auditing: Today we are handling all of the audits for a client’s product that is ultimately going to Kohls.com for fulfillment. Kohls has very strict policies and chargebacks. The major challenge is that the chargebacks are based on a percentage of goods audited. But, if a problem is located, Kohls will increase the percentage of goods that must be audited from 2% to 5% to 10%. For each level of audit, the fees for nonconforming units goes up. I saw a recent chargeback for $800 for 1 case that had a wrinkled case label. By taking over this auditing process for this client, they’ve been able to go from a “D” to a “B” level vendor, in less than 6 months. In another 6 months, they’ll be an “A” level vendor!
Subscription Box Assembly: We have a client that sells baby clothes that we’re creating gift boxes that include onesie sets, as well as bathing products, and a washcloth and towel. They are all put into a box in a certain order so that there is a beautiful unboxing experience.
These are going out as a subscription box, but this client is also able to offer this gift as a stand alone product through their holiday sales channels.
We also perform gift wrapping for this client, so they’re able to increase their average revenue per order – without having to do this in house, which would slow down their own facility and distract their own workforce.
End Cap Display Assembly: We are finalizing the shipments for 3,800 end cap displays that are going to Walmart to be on display through the holiday season. They came to us in as flat corrugated pieces that we had to shape into an end cap display PDQ, and then fill with product, then create the outer shipper case and palletize. There were 50 different products on each display, in quantities of 5-20 units per sku, to total around 450 different units on each display. At the end of the project, the 3,800 displays were filled with over 1,710,000 units of product. We do these with 100% accuracy. We’ve never failed an audit.
This client was able to offer the creation of this end cap display program to Walmart to differentiate their products from their competition. It got their foot in the door for a much larger sales program than they were originally considered for.
Cleaning and Remediation Services: We’re doing a project right now of belts that came over from the factory for an accessories company, that had a musty smell and had some mildew. Apparently the container had a moisture issue- which isn’t surprising since it sat on the water for an extra 90 days due the port delays. We’re decontaminating this product so that it can be sold as first quality. We lab test goods to be sure that there is no contamination remaining. We’re cleaning about 30,000 belts in our facility this week.
We also from time to time work with brands who have product that does not conform to the compliance guidelines for their retailers, and we will remediate nonconforming product so that it can be properly sold.
Returns: We manage the returns programs for some of the largest apparel retailers in the world. Today we’re doing a 45,000 unit return project of goods that were sold to Nike that didn’t sell through. We’re crediting and repackaging the goods so that they can be sold as new to the next retailer.
On top of this, we’re handling our normal distribution and fulfillment for our B2B and B2C e-commerce clients. And trust me when I tell you, picking and packing is the easy part!
Our clients love about our specific ability to handle Value Added Services at Scale, is the flexibility it provides our clients in their wholesale sales programs.
Looking For More?
If you ever want to chat with our existing clients, many of them we have NDAs with, so I can’t share their names on the website or in our newsletter, but I assure you, you’ve purchased product from them, and if you want to verify our consistency, accuracy, and ability to handle complexity with ease, they’ll be happy to talk to you.