Shipping Efficiency Helps Ozbo Grow in Record Time
Growth is a wonderful thing, unless you’re unequipped to handle it. Ozbo, a fast-growing online retailer based in Hazleton, Pa., sells everything from pet supplies to groceries to educational supplies to baby items. In the last two-and-a-half years, the company rapidly won consumers over and now ranks as the 501st largest e-commerce business according to Internet Retailer. It’s quite an achievement, but one that meant the company needed to quickly streamline their shipping systems or risk losing customers.
A Store of One's Own
During the past decade, Joshua Wood built more than 100 online stores for other people. It gave him critical experience, but he knew he eventually wanted to start his own e-commerce site. In October 2008, he and his partners founded Ozbo, selling primarily pet products and lawn and garden supplies. They sold their wares on their own website and through several other online retailers, including Amazon and Buy.com.
"Our customers first buy from Ozbo through Amazon.com or some other website they already know. Then they shop directly from us because they have a great experience," says Wood.
The company quickly added other categories to their product inventory. They looked for items that would fit their model. "We're not into selling you a gas grill every five years. We would rather do business with you on smaller items much more often," says Wood. They paired their product and multiple-channel selling strategies with marketing techniques that attracted customers. Ozbo often conducts pet contests and offers a program for educators, students and parents that enables them to give back 5 percent of their purchase price to the school of their choice. The approach worked so well that sales quadrupled within the last year, prompting Ozbo to relocate in spring 2011.
Trying to scale an operation of this size into a small, converted 6,200-square-foot office space just wasn't working. The online retailer couldn't even house needed shipping supplies. In March 2011, Ozbo moved to a 65,000-square-foot warehouse.
Moving to the larger space allowed Ozbo to immediately improve business efficiencies in several key ways. "We are able to bring in our supplies such as tape and boxes. Now we can buy those items in much greater quantities and really lower our costs on them. That helps us increase our bottom line," says Wood.
Also, their old facility had one dock door. Now they have five. "We've consulted with FedEx at every step of our growth to ensure an even flow of product. FedEx Ground keeps a trailer at our facility at all times. We load it, and they pick it up and drop off an empty one. That's a huge advantage for us. We can put a package on the trailer and get it to our customers the next day because FedEx Ground and FedEx Home Delivery® ship faster to more locations. We are constantly under pressure to get our products to our customers faster. With the increased space and advice from FedEx about organizing our shipping processes, we've been able to add more people and smoother operations so we're more efficient," says Wood.
Experience Makes Perfect
Ozbo handles an average of 1,600 orders per day, and they expect that to increase to between 5,000 and 6,000 daily by the end of the holiday season. Shipping is one of the most critical pieces of their e-commerce business, and it has to be done right. "If all we do is take orders all day long but don't get the packages to the customers in a timely fashion, they'll never shop with us again. Our goal is to wow customers. We do that by giving great service and amazing prices. The great service is where FedEx comes in," says Wood.
Wood regularly calls on FedEx Account Executive Albert Miller and a team of FedEx shipping experts for advice. When Ozbo started growing, FedEx shipping engineers visited Wood and analyzed his whole shipping process. They immediately equipped him with better scales and high-speed label printers. By integrating FedEx automated shipping capabilities into his third-party software, he could quickly and easily create labels and track package status. He even received advice about how to organize the shipping lines in his warehouse and redesign and pack his boxes more efficiently. Most recently, Wood added a scanning system that enables his employees to move shipments faster than ever.
Miller and Wood work closely together to figure out the fastest shipping strategy and best pricing for Ozbo's business. Wood ships his products to customers via FedEx Ground®, FedEx Home Delivery and FedEx Express® services — using primarily FedEx Express Saver®. Most packages are shipped out within 24 hours after the order comes in, and most customers request FedEx Ground and FedEx Home Delivery. If a customer lives in California, however, Wood uses FedEx Express Saver, a cost-effective, three-day service with a money-back guarantee.* "We can get to Boston and New York in one day with FedEx Home Delivery, but we are five days away from L.A. We want to try to give those California customers the experience they deserve, so we switch to FedEx Express Saver."
What's in Store
Armed with a passion for providing excellent customer service, Wood aims at creating $1 billion in annual revenue within the next five years to rival other internet e-commerce giants. To accomplish this he connects with industry leaders to avoid the usual pitfalls. "Every e-commerce company experiences the same kinds of problems, the same growing pains," Wood says. "FedEx knows logistics and moves packages all over the world. They've helped other companies grow to our level and beyond." As far as Wood is concerned, growth is not a risk. With FedEx, he's ready.