Multichannel crafts merchant Paper Wishes in late 2007 thought it would be a good thing to bring its fulfillment closer to home by choosing a nearby outsourcer. But after a disastrous experience with a local third-party provider, the marketer last year decided to take charge its own fulfillment.
Canby, OR-based Paper Wishes, which had initially been outsourcing its fulfillment to a fellow crafts merchant in Wisconsin, signed on with a local provider in December 2007, says Paulette Jarvey, president of Paper Wishes and parent company Hot Off The Press. The move was made just in time for the first quarter, which Jarvey says is her company’s business season.
That’s when the problems began. The staff at fulfillment center was not trained well, and made costly mistakes, Jarvey says. Errors included shipped a full inner case pack of an item when one piece was ordered, orders shipped to the wrong customer, orders that contained the wrong products, and products that were just lost.
The warehouse wasn’t set up properly, Jarvey says, so pickers had to sort through palettes each containing dozens of items to fill orders. Even worse, Paper Wishes’ computers were not compatible with the fulfillment center’s systems.
“We kept trying to fix the problems,” Jarvey says. “We were like the proverbial little Dutch boy trying to keep the dyke from bursting, but things kept getting worse. And like any business relationship, you don’t want to walk away from it the first time there’s a problem.”
How bad was it? Jarvey says her catalog manager—who had prior experience as a warehouse manager—spent three to four days a week at the fulfillment center to try to get the place organized. And Jarvey and her management team worked several weekends doing location audits and inventory control.
Still, the situation got worse. Paper Wishes suddenly had more than 1,000 backorders, and managers were spending countless hours on the phone with customers to ease their concerns. Jarvey says she spent four months apologizing to customers and doing whatever she could to keep their business.
The final straw was in May, when the fulfillment provider told Jarvey it would have to raise its rates by 20%. “That made it easy for us to walk away,” Jarvey says. “We were already giving away free product and gift certificates to win our customers back—and then they were going to charge us more.”
That’s when Paper Wishes decided to bring fulfillment in-house. The company had storage space that was typically only used for its annual warehouse sales. It took six weeks and a capital investment of about $25,000 to set up a fulfillment center in that space.
“Because we already had the building, all we needed was really the racks, and getting them put up,” Jarvey says. “It was more about having the vision— how wide do we want the aisles, what kind of layout would we need, what will the pick process be.”
Jarvey put her catalog manager in charge of its new warehouse, which opened July 7—just six weeks after the decision to leave the other center. “Our team really pulled together,” Jarvey says. “We’ve been accurate and on time with our orders ever since. Most fortunate, our wonderful, kind customers forgave us.”
It seemed to help that matters Jarvey does a weekly Webisode on the Paper Wishes’ site. The Webisodes, in which Jarvey demonstrates how to do some of the crafts the company sells — helped build a trust.
Jarvey says when she was on the phone with irate customers, many said they felt as if they already knew who she was. “A couple of times I had customers tell me they couldn’t complain to me because I was in their living room every week.”
And it definitely helped that customers understood that Paper Wishes was truly sorry about all the fulfillment problems, Jarvey says. “We were authentic and sincere in our apologies—we were mortified.”