BY DAVID MALONEY, CHIEF EDITOR
CONVEYORS AND SORTATION
Material Handling
IN ORDER TO SUCCEED, AN E-COMmerce company must excel on two fronts:
delivering quality products and providing
superior customer service. That’s how it
can differentiate itself from its brick-and-mortar competitors.
Dollar Shave Club, a company specializing in grooming and personal care
products, was built on this principle.
Its founders saw a wide-open market
opportunity in giving consumers an
alternative to buying high-priced shaving
products in stores. In 2011, it launched a
direct-to-consumer subscription razor blades service, shipping high-quality products at low prices—
just a few bucks a month—right to the customer’s
door. Subscribers receive monthly deliveries of shaving supplies, including razors, creams, and lotions,
with the option of canceling at any time. In order
to retain these customers, the company must deliver
high-quality products on time and with 100-percent
order accuracy.
Like many e-commerce startups, Venice, Calif.-based Dollar Shave Club initially contracted with
a third party to handle its order fulfillment. That
worked well enough for a time. But as business took
off, the company grew increasingly dissatisfied with
the arrangement. Eventually, it became clear that the
retailer had outgrown its third-party provider, says
Lori Jackson, Dollar Shave’s director of operations
and fulfillment.
More importantly, the company felt the arrange-
ment did not guarantee the kind of service it felt it
needed to provide. (Dollar Shave Club’s objective is
to ship every order within 24 hours of receipt.) After
giving the matter due consideration, the company
decided that the best way to gain the flexibility—as
well as the level of inventory control, speed, and
accuracy—it sought was to cut the third party loose
and bring distribution in house.
ABOUT FACE
Today, Dollar Shave Club has full control of its
own distribution destiny, handling all of its order
fulfillment out of two company-run DCs. It opened
its first distribution center, a 110,000-square-foot
operation in nearby Torrance, Calif., in December
2015. That was quickly followed by the opening of
a second facility, a 280,000-square-foot building in
Grove City, Ohio, near Columbus, this past July.
As for what tipped the hand in favor of the
Columbus area for its second facility, Jackson says
Dollar Shave Club weighed a number of factors in
choosing the site. “We looked at our customer base,
distribution shipping costs, and the ability to service
our customers, as well as for an area with a good
labor pool,” she recalls.
In a reversal of the usual chain of events, e-tailer Dollar Shave Club cut ties with its
3PL and built two automated DCs so it could take charge of its own operations.
A razor-sharp strategy
for distribution
