DSTLD Sees Benefits of Outsourcing Its Fulfillment Operations

As a growing ecommerce company selling luxury denim and casual apparel, DSTLD found itself challenged to keep up with its fulfillment operations, including meeting rising customer expectations. Predecessor firm 20Jeans had charged customers for shipping and returns but as it went upscale in its new incarnation, free was the way to go in both directions to drive more sales of its premium product.

“20Jeans had its own distribution facility in Commerce, CA, with one manager and five or six employees in a 10,000-square-foot space,” said Kevin Morris, DSTLD’s CFO and COO. “Back then we had thousands of SKUs, it was hard to find things and there was no transparency. So when we launched DSTLD in April 2014, we wanted to put more of our effort behind growing the brand, the product and the marketing, and spend less of it worrying about operations.”

In order to shift its priorities and address operational demands, DSTLD partnered with Newgistics in the fall of 2014, moving its inventory to the company’s nearby 128,000-square-foot facility, also in Commerce, CA.

“From an overhead perspective, we didn’t have the manpower to manage our own warehouse, so that was quite refreshing in and of itself,” Morris said. “Dealing with Newgistics is much easier than handling our own operations staff. We also see a lot of upside in terms of flexibility as we grow.”

He said DSTLD has also benefited from Newgistics’ scale in terms of overall shipping volume, giving it the ability to land more competitive rates with UPS and the U.S. Postal Service than it could on its own. It has also gained real-time access to inventory levels as well as historical data, giving it greater transparency into things like product shrinkage.

Returns are another area where DSTLD has benefited from the relationship, Morris said. With apparel sales in ecommerce, customers have gotten used to buying multiple items to try on at home then returning everything they don’t want – and luxury jeans are no exception.

“Newgistics includes a prepaid label in each outbound shipment, so a customer just has to attach it and drop it at any post office,” he said. “The system tracks it from scan to when it arrives, typically within two business days. Having that returns tracking has been a great perk for our customers, who get issued a credit when the item goes back into stock. Most companies our size can’t offer an experience like that.”

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