Online toy store ToySpot.com.au recently discovered that virtual retailing cannot entirely escape the confines of the bricks-and-mortar world when it experienced difficulties finding a suitable warehousing partner.
Justin Punch, co-founder and co-CEO of ToySpot's parent company, TheSpot.com.au, solved the issue by creating his own warehousing business called E-commerce Distribution Centres (EDC).
`I spent a lot of time researching warehousing options and discovered that the infrastructure to provide a high-quality, low-cost service is just not there. Much of the system design and techno-logy we saw has moved little in the past 30 years.'
Punch cited contract warehousing's high cost, poor technical services, bad turnaround times and `woeful service guarantees' as the motivation for establishing his own warehousing com-pany. EDC's solution is based around a mixture of proprietary software and pre-developed solutions which according to Punch integrates fully with an online store.
Wasted resources will also be eliminated with the inclusion of an array of high-density storage equipment, which is linked via a warehouse network, he added.
In EDC's half a million dollar, 540sqm Western Sydney complex Punch said `stock goes to the store man, not the store man to the stock'.
`In traditional warehousing pick-and-pack models, 70 per cent of the time is spent travelling to and from a product. About 15 per cent of the time is spent checking the product and only 15 per cent picking and packing it,' said a disgusted Punch.
Punch gave as an example of EDC's space efficiency the ability to store 16,000 CDs in the same space as the footprint of a small car.
Punch, aided by EDC co-founders Chris Harvey and Kent Rogers (both warehousing and manufacturing veterans), intends to offer the e-retailing solution to other online ventures.
Punch estimated business can save between 40 and 50 per cent on warehousing costs using EDC's system.
EDC's first role will be working with ToySpot when it is launched later this month.
`We need to build a whole new distribution channel to the consumer,' said Punch, who was confident EDC could also shape up the IT industry's warehousing and distribution system.
`We can provide a better service to companies who are either managing their warehouses themselves or outsourcing them.'
Punch added that the lack of warehouse expertise in Australia is a consequence of its relatively immature direct mail and catalogue industries.
However, with e-commerce set to explode, warehousing will become `a very important piece of the whole structure, it needs to be focused on'.