Reality Check: The Life and Times of a Fulfillment Operation

Reality shows are all the rage on TV. We didn’t want to be left out! Starting this week, the Advisor brings you a unique look into how one start-up mail order business dealt with rapid growth—and the resulting fulfillment challenges. Written by Matias Zeledon, founder of Down to Earth, a coffee and gifts retailer based in Costa Rica, “Reality Check” examines the journey from order to delivery, the dozens of things that can go wrong in between, and what Zeledon’s doing to streamline his operation. Expect his column every other week or so. In the meantime, please feel free to send him your advice, suggestions, and feedback! Write to rramaswami@primediabusiness.com.

Reality is tough, especially when the success of your business depends on it.

Three years ago I founded Down to Earth, a mail order company based in Costa Rica and serving the U.S. market. Consumers in the U.S. could go online or call us toll-free, buy our fresh-roasted gourmet coffee, and we would deliver it to them a few days later.

Easy, right? Well, reality says no.

Operationally, the fulfillment of these orders quickly became very tricky. The process became taxing due to the cost of making a mistake. We had pre-set shipping dates to maximize our volume with the airlines and get a lower cargo rate. If an order was left behind or the wrong roast sent out, another order had to ship immediately. This compensation was four or five times more expensive because we had to use FedEx directly from Costa Rica.

Still, our customers loved us, and we were extremely successful. We grew exponentially—and so did our fulfillment headaches.

The problem was compounded by the fact that we opened stores in hot tourist spots and offered delivery of goods to the hotel the day before the buyer departed Costa Rica; if you have ever been on vacation, you know this is music to a tourist’s ears. But then, tourists did not want only coffee: How about T-shirts, coffee paper journals, handcrafted items? Soon, we were handling an inventory of hundreds of items from suppliers who sometimes did not even have a phone. Add to that the fact that our coffee is roasted upon order, and you are brewing chaos.

Three years of this was enough. We reached a point where we needed to take drastic action. We had been applying small solutions to parts of the problem and were tangled up in a maze of an operations system conceived by a marketer.

So, I made a decision: We would become a model operation to match the success of our products. We enlisted the help of Costa Rica’s Tech Institute to undergo a major revamping of all our systems. The main goal is to integrate four different proprietary software programs that address specific steps of what I now know is one process.

We will share this process with you with the idea of having our experience help you in your business but at the same time hoping to get valuable feedback. Keep checking back! Reality is setting in.