Global Beauty Brands* is a Northern European based company that manufactures upscale hair care and skin care products. These products are sold through a distributor network who in turn sells them to prestigious professional beauty salons. GBB has been formulating hair care and skin care products for over 40 years, creating a very popular and loyal customer base in Europe and South America. In recent years they made the decision to enter the North American market, initially utilizing one small distribution center in South Florida.
As GBB’s North American business began to grow, they soon realized that their distribution center was too small to accommodate the volume of products they were moving and located too far away from most of their distributors. As a result, GBB began to experience a decline in their ability to service their growing North American customer base effectively and efficiently.
This being the case, GBB began a site selection process for a new North American distribution center and ultimately decided that the Dallas, TX area was the best overall location for optimizing their service levels to their distributors. Quality Logistics Systems (QLS) was one of multiple 3PL service providers GBB contacted with a request for proposal (RFP) for a Dallas distribution center. QLS carefully reviewed the RFP and presented GBB with an initial rate proposal. The rate proposal resulted in a series of face-to-face visits and business review meetings between GBB and QLS.
During these meetings, GBB shared information about some of their future service needs as well as plans for growing their business beyond the traditional pallet in, pallet or case pick out, distribution model. This information allowed the team at Quality Logistics Systems to identify several areas in which they could help and improve GBB’s processes.
Area 1: Upon every new product launch, GBB’s marketing group was having an outside agency create multiple introductory kits featuring several of the latest products combined in each kit. While this worked initially, there soon became logistical and financial hurdles. Pulling products out of their warehouse, then shipping those products to the agency for kit assembly, and then, shipping the same products with new packaging back to the original warehouse became overly time consuming and simply not cost effective.
Area 2: Wanting to expand their distribution channels and potential coverage, GBB collaborated with an on-line seller to offer some of their products via the digital marketplace in addition to their traditional distribution channel. The on-line seller, however, requested shipping cartons that contained smaller quantities of individual packages than GBB’s normal shipping cartons were designed for. GBB had to find a low-cost solution for re-packaging these orders to fully utilize this new digital sales channel.
Area 3: As Covid shutdowns became the norm, many of GBB’s distributors were forced to close for extended periods of time. In response, GBB began exploring a new direct-to-consumer channel for their products allowing them to bypass the shuttered distributors. GBB decided they wanted to market and sell their products directly to the end user, hair care professionals. They needed a distribution partner that could manage this function for them in a speedy and cost-effective manner.
Ultimately, GBB partnered with QLS for multiple reasons. GBB’s need for a more geographically strategic warehousing location was a natural fit with QLS. Partnering with QLS gave GBB access to a major North American transportation hub only minutes away from Dallas/Fort Worth International airport. This proximity to the airport and QLS’ centralized location, both in terms of the Dallas area and of the United States, solved two of GBB’s initial operational issues all in one. Distribution and delivery via air or over the road became much more efficient, and, as a result, GBB’s ability to care for their clients in a timely manner increased.
To resolve GBB’s re-packaging issues, QLS was able to appropriate a portion of their warehouse space in Dallas to serve as a new fulfillment and packing solution for GBB. The team at QLS was able to alleviate GBB of the necessity to ship products out to their 3rd party packer and then pay to have their products shipped back to their point of origin. This capability not only saved GBB considerable outlays in shipping and overall bottom-line costs of goods sold for tens of thousands of units annually, but also centralized the entire process allowing for a faster and more accurate order fulfillment process and a more cost effective to-market process for new product lines.
To address GBB’s desire to enter the digital sales marketplace, QLS proposed using the already converted portion of their Dallas warehousing space and tapping further into the QLS fulfillment group. By utilizing both inhouse groups, QLS was able to create a custom order packing operation to help GBB achieve their digital goals. By using this space, QLS was able to provide not only a location, but also the manpower and technology to fill custom orders of GBB’s products as needed. This allowed GBB to be an effective supplier in the digital world without the additional costs associated with 3rd party custom order fulfillment.
To facilitate GBB’s entry into the direct-to-consumer channel, GBB, QLS, and several on-line order processing platforms collaborated to create a custom and integrated digital sales and fulfillment environment. GBB’s products could now be ordered on-line and shipped directly to businesses, GBB’s other business partners, or to individual household consumers alike. By tapping into this new environment, GBB’s entire product catalog could be marketed and sold to two completely new and separate North American markets. Additionally, through QLS’ warehouse management system, orders are submitted via EDI to allow for quick and error free order processing to locations in the US, Canada, Mexico, and Puerto Rico.
Ultimately, the geographic change, the marketing and distribution repacking operations, along with being digitally integrated and centralized, GBB’s partnering with QLS has allowed Global Beauty Brands to not just achieve but rather excel in all their goals:
- Improve shipping times and point of origin
- Improve customer service through timeliness and accuracy
- Increase warehousing space/Expand inventory
- Reduce packaging and logistical costs by approximately $150K per year
- Limit repacking costs
- Facilitate entry to digital marketplace
- Facilitate entry into direct-to-consumer sales
- Improve order transmission, picking, packing, and shipping
* Global Beauty Brands is a fictitious name for an actual client. Out of respect for client confidentiality, QLS does not disclose current or prior clients.
