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Outsourcing is the Name of the Game at French Toast

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Posted July 11, 2005 By James Maguire     Feedback

Outsourcing your fulfillment facility and call center can be a great benefit to an online merchant - if done properly

As a leading supplier of school uniforms, French Toast sells to a nearly innumerable array of customers. The New Jersey-based company ships to parents and schools across the country, as well as to both small and large clothing retailers.

But when one of its many customers places an order at the French Toast site, that order does not ship out from New Jersey. Instead, the site routes all of its orders to New Roads, which is an outsourced fulfillment and call center in Martinsville, Virginia.

"We outsource everything," says French Toast president Michael Arking. "New Roads is our call center, our fulfillment center and where all our inventory resides."

French Toast used to handle its own fulfillment, but about four years ago began using New Roads. Arking made the switch to save money, and just as important, because it allows him to better focus on his business.

"There's enough to concentrate on just in marketing and managing your Web site," he says. "Concentrating on a warehouse and inventory is a whole other piece of the business that's going to require that many more people."

Another key reason to use an outsourcer: French Toast does about 75 percent of its business in the late summer.

"The biggest benefit is that if you're a very seasonal business, you don't have to manage temp help," Arking says. "When you have an outsourced provider, they're able to swing in people from other accounts."

Choosing a (Reputable) Outsourcer
Using an outsourcer is a good idea only if that third party provider is responsive to your needs, Arking notes. "If they're not responsive, you're in trouble." In fact, "If you move to the wrong facility you can sink your business."

For merchants who are looking for outsource providers, Arking recommends a careful vetting process.

First, get several references from them, he says. Then call those references and ask them numerous questions: What were the problems with this outsourcer, and how did they respond? How long have you been with them? Would you consider renewing?

"Also, try and get some references outside of who [the outsourcer] tells you — try to ask around to find out who uses this service," adds Arking.

French Toast outsources its entire order and fulfillment process, saving money and enabling its owner to spend more time on marketing.

Call Centers vs. Fulfillment Centers
Deciding to outsource a fulfillment center is a completely different issue from deciding to outsource a call center, Arking notes, and many businesses chose to outsource one while keeping the other task in-house.

As for call centers, many merchants don't outsource this service because they feel that third party phone reps can't properly address product issues. Arking says he's able to outsource his call center because the items he's selling are not that complex.

"If you were selling consumer electronics, you'd get more calls from people who really want to know more about features, as opposed to school uniform, which is a lot more basic," he says.

As for merchants hesitant to outsource fulfillment, Arking points out that headaches can be solved — with the right provider. In 2003, French Toast received customer complaints based on problems with orders that New Roads had shipped out. "We found after working closely with New Roads that we were not empowering the operators to handle the customers as well they needed to," he says.

The problem was resolved after quality control was increased, and phone reps were given the authority to offer discounts and free shipping in problem cases.

"Once we put those new rules in place, we had a substantial drop in customer service issues, and satisfaction levels rose," says Arking.

Vital Statistics
Content management/storefront system:Database backend
Database backend:Various/Custom
Visitor analytics system:Hitbox
Affiliate technology provider:Linkshare
Ad server:N/A
Payment solutions provider:N/A
Hosting provider:N/A
Number of tech staff:N/A
Number of employees:N/A
Key strategies: • Outsourcing all fulfillment duties.
• Empowering outsourcing employees to boost customer satisfaction.

James Maguire is a contributor to His column appears every Monday.

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