My Best Promotion: Dennis Funk
What happens when a company’s inventory outnumbers its sales, or vice versa? Dennis Funk from Proforma Signature Solutions, Brooklyn Heights, Ohio, shared how he efficiently streamlined a nonprofit’s e-commerce platform, while decreasing its liability.
Dennis Funk: We had a really nice success story with the American Diabetes Association. … They had their own e-commerce platform, and what they were doing was selling the product online. They probably had 50,000, 60,000 in inventory, but about 100,000 in sales, so they kind of outgrew their own system. They didn’t want to do it anymore. They outsourced it to one of our competitors four years previously, and this competitor, who is a pretty big player, said ‘OK, we’ll do it, but you have to get on our system and you’re going to have to use our products.’
When they started that store up, the very first couple months [were] a pretty big success because it was fresh, and people were just buying stuff. But the last year of the contract they only sold 10,000 that year, and they had about 120,000 in inventory, so it was pretty ugly. So when we were in the meeting, we were talking about how we can integrate their system with ours. We can do the picking, the packing and the fulfillment, and in addition to that, we (Rich and I, my partner) we developed a program. We called it a hybrid program, which is on-demand embroidery mixed with inventory.
What they would do is, they would choose the top 15 to 20 items that are popular, that they sell a lot of and really aren’t conducive to on-demand, and we put those in the inventory. We reduced their inventory from 70 down to about 40. Last year they generated $458,000 in sales off the site. So the way it works now is, when a customer goes online and places an order at ShopDiabetes.org, they’ll order a mug, a silicone wristband or maybe a jacket with the Stop Diabetes logo, and at the end of the day we’ll place an order [with the supplier for the item], it’ll ship to our warehouse the next morning, and we’ll decorate it, marry it up with the stock item and ship it out the next day.