CEO of Continents Apart Interviewed by Internet Retailer's Wholesaler Directory
27-May-2010- GetThatWholesale.com offers a monthly Expert Opinion Interview. Here is their interview with Continents Apart CEO Steven J. Husak
- GetThatWholesale: Could you give a brief sketch of your background and industry experience?
Steven Husak: I have been in the furniture and accessories business for just over 30 years. After working overseas for several years I returned to the US in 1999 and started an online business drop shipping office furniture, smartofficefurniture.com. I have been around eCommerce and drop shipping ever since. I have been involved in launching eCommerce ventures at SmartOfficeFurniture.com, Brighton Commercial Furnishings, CADsecret.com, Midwest/CBK (NYSE symbol BTH) and most recently Continents Apart, LLC.
- GTW: While it may seem a silly question, could you define drop shipping for us?
SH: This is really funny. The Wictionary gets it correct. "To deliver goods for a business directly to its customers, as though the business owned a relevant inventory, but the manufacturer or wholesaler is the real source of that delivery."
The US Census Bureau gets it wrong - surprise, surprise the government doesn't understand business. They say, "When a manufacturer drops a shipment off at a customer's site, although a wholesaler makes the sale." Huh? Most of these manufacturers are overseas and more often than not it's a retailer, not a wholesaler, making the sale, so maybe somebody at the Census Bureau can explain what this means?
The advantages are from the perspective of the seller, if you drop ship the orders, then you don't need to own the products. No getting stuck with "dogs" that don't sell, overstocks, paying for warehouse space and staffing. The retailer also has another huge but often overlooked advantage. Rather than being a local store, they are a national retailer, even international. So if they sell clothes they can sell swim suits in Key West, ski equipment in Colorado and overcoats in Boston.
From the manufacturer or importer's point of view, this opens a new channel of distribution without requiring new products to be developed or inventoried.
This is a just in time (JIT) model that can be used by conventional retailers (catalog stores), eCommerce, television and catalog retailers. But, there is also wholesale drop shipping such as Dollar Days and retailers such as Stein Mart that have operated without large warehouses and have products palletized and shipped direct to the retail stores from their suppliers.
So the simplest explanation is that the goods are shipped directly from the manufacturer or importer without the need of warehousing in-between. It isn't always direct to consumer, sometimes its direct to bricks and mortar retailer. Either way, inventories and handling expenses are dramatically reduced.
- GTW: Many wholesale suppliers offer drop shipping to their customers, what should a retailer look for in a quality shipper?
SH: Beware of the rip-offs. If you have to buy a membership, pay a fee for access to a list, pay monthly fees, or are not dealing directly with the manufacturer, stay away from it. There are "distributors" with warehouses full of goods that they can drop ship to your customers. They buy the goods from the manufacturers or importers and take on the warehouse expense. Why not go directly to the manufacturers or importers?
You can be sure that if you are buying a list of "certified" drop shippers, paying membership dues or upfront fees the folks making the real money are the ones standing between you and the real source of the goods. If you are buying into a relationship with a "distributor" that carries products from hundreds of manufacturers, even if they don't charge you a fee up front, they are just a middleman and after they make their margin, there just isn't much left for you.
Now, you may ask "How do I find the real sources of the goods?": Well, some folks will walk the halls at trade shows to speak to manufacturers or manufacturer's multi-line reps. "Hi, do you drop ship?" If the answer is yes, great! But often you discover they only do it for one or two large customers and are learning along the way. They don't have their products packaged correctly, ship too slow, etc.
My suggestion is to find a drop ship rep firm. Just Google or Bing or Yahoo "drop ship reps" or just search for manufacturers in your product category. Then beware of the folks calling themselves drop ship reps that are really distributors or list sellers. A true drop ship rep is like any other factory rep. They either work for the factory as an employee or they are an independent sales rep/rep group that gets paid by the factory.
- GTW: Are there retail niches that are particularly suited to make use of drop shippers? Could you give an example and explain why?
SH: Really any product that can be handled by UPS or FedEx and can be packaged to be shipped without damage is great. But we are also seeing great success with furniture products that require LTL shipping. We focus on home and garden decor, furniture (indoor and outdoor), licensed sports products. We have gone in this direction because these are products that are in our areas of expertise.
- GTW: On your site you mention that you "fight for the needs of your clients". I love the sound of this, could you give us an idea of what this fight involves?
SH: First and foremost, we are very selective about the companies we represent. Many of them have never drop shipped or have done very little and weren't very successful. We offer them free consulting in exchange for exclusive national rep contracts. We teach them the way to drop ship RIGHT so they don't have to reinvent the wheel.
So we rarely have to fight.
But if they (manufacturers) are not providing inventory updates, order tracking or responding to requests for information, we are there to make sure they get it right. When an order is supposed to ship in two business days, it isn't just that manufacturer's reputation that depends upon it happening correctly, it's ours as well. We may have a site carrying thousands of our SKUs, we cannot have them being let down by even one of these suppliers, it could cost us and the other manufacturers that we represent a lot of business!
- GTW: It is obvious that your company takes your relationship with your clients very seriously, what unusual services does Continents Apart offer that makes them different from the competition?
SH: I really don't think any other organizations offer the free consulting component to make sure that everything gets done right in the first place. This allows a lot of organizations that realize how important the industry is to their distribution channels but are balking because they think it requires huge investments of time and money.
We have a relationship with WebSimplify. They can build a website and load all of our products for a very reasonable cost, but it is not a dedicated site so other lines can also be added. If you can use MS word, you can operate these sites.
When we start with a retail customer they complete one customer profile, it covers all of the vendors that we represent. All of the hi-resolution photography is available by ftp or CD, all of the pricing is done on universal excel spreadsheets and we can convert them to whatever formats they need to easily download to their site. The excel spreadsheets have everything, jpg match the products numbers, short, medium and long product descriptions already written for SEO, bullet points about the product, weight and package dimensions, you name it. We also provide them with information sheets about the product line, where to send the orders, how to send them, such as email, fax, EDI, CommerceHub, etc. And these information sheets also tell the retailer how to get up to date inventory whenever they want it.
Our solutions are as turnkey as the retailer wants or as simple as they want.
- GTW: What new technologies or services do you foresee developing over the next few years that will affect the way drop shipping is done?
SH: Websites are becoming more and more intuitive, and so are the tools for the suppliers and retailers. The biggest thing I see coming is the marketing aspect. Social networking is still in its infancy. The ability to give the consumer information based upon their buying and shopping habits is becoming a true science. There will be a convergence of the two.
From something as simple as "people that bought this, also bought that" to advertising on social sites that is focused on that consumer's interests. For example, the advertising on the side of the FaceBook page-if your profile says you are a Yankees fan, Yankees products show up. If your spouse is listed on your profile and he or she is also on FaceBook and she collects cat figurines, sending ads with gifts (those cat figurines) that match their interests listed in their profile. Not just a birthday reminder, but "here are things that match the person's interests". This saves consumers time and has a great deal of value added.
An eCommerce or television retailer can change as fast as the paradigms change these days and can surgically market new technologies and trends as they come along.
This is the future - and the future is now. The better mousetrap is here and getting better every day.
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