Three years of cultivating new front- and back-end technology is bearing fruit for Sustainable Supply Co. LLC. The online distributor of “green” or “eco-friendly” building materials, cleaning supplies, and maintenance, repair and operations products recorded a 67% sales increase for the third quarter, says CEO Brian Fricano.
The massive sales lift resulted from new technology and a renewed focus on its customers, Fricano says. “It was a combination of things, including being hyper-focused on customer retention,” he says. “In July we rolled out free shipping on all orders, coupled with improvements in customer service and loyalty programs.”
Previously, the free shipping threshold was $75, but internal analysis showed many orders topped $75 anyway. “So we looked at how to lower the barrier for the customer to do business with us the first time, but also had to have our supplier partners on board with this,” Fricano says. “We approached some suppliers late last year and got several ‘strategic suppliers’ lined up to take a leap of faith.” Sustainable Supply, which sells online at SustainableSupply.com, needed supplier buy-in because, while it holds some inventory, most orders are drop-shipped.
So far, Sustainable Supply has negotiated free shipping terms with a few strategic suppliers. In return for absorbing the shipping fee, those suppliers’ products get preferred placement on SustainableSupply.com and in email promotions, he says. “Freight on brands and suppliers that are not participating is absorbed by Sustainable Supply, but is partially offset by marketing allowances and rebates that we have in place with these suppliers.”
Through the first nine months of 2017 Sustainable Supply’s sales are up 61%. Sales usually slow somewhat in December, Fricano says. But the company likely will surpass its B2B E-Commerce 300 projection of $20.29 million in 2017 online sales. Sustainable Supply is No. 199 in the 2018 B2B E-Commerce 300.
The wholesaler has also improved customer retention and its bottom line with a rewards program it rolled out in 2016 and an automated reorder service. Customers get 5% back on all purchases and those who regularly reorder products such as cleaning and breakroom supplies and toilet paper can determine quantities and frequency of deliveries, Fricano says.
Many of Sustainable Supply’s customers are small to midsize companies and they want to automate replenishment to avoid devoting time to the repetitious process, he adds. To use the automated reorder service, customers choose from among eligible products, as noted on product pages, then select the desired delivery frequency, ranging from one week to six months. Customers receive an email two days prior to shipping and can cancel an order any time up until 24 hours before delivery.
In addition to its rewards program, Sustainable Supply recently started an account management program. Larger customers used to working with sales reps rather than strictly ordering online have been assigned account and business managers. Those managers reach out to customers that tend to place recurring orders online to try expanding the range of products they buy, Fricano says. The company also has a three-member project management unit that works with small to midsize contractors for price-quote requests and other services.
Fricano attributes much of Sustainable Supply’s growth to its extensive technology upgrade. “We are wrapping up a three-year software conversion that has helped us scale up the business, including new enterprise resource planning, customer relationship management and financial applications, and a new e-commerce platform,” he says.
In the past, the company had three different technology platforms and a stand-alone accounting system performing those functions, but now is using Oracle NetSuite for all back-end functions. It aims to go live on the Magento Enterprise 2.0 e-commerce platform in December. The long-term I.T. project “sucked lot of resources and energy, but we were still focused on growth,” Fricano says. He estimates the cost of the new technology at more than $600,000 but says it would have gone over $1 million were the systems hosted on-site rather than cloud-based.
Sustainable Supply also operates specialized websites Eyewashdirect.com, targeting schools and businesses, and Portablehandwashing.com, which sells to food stands. There are plans for additional, focused websites in the next several years “in certain product categories as offensive and defensive acts against companies like Amazon Business,” Fricano says. First up will be a website offering building materials for smaller-scale projects undertaken by property managers, aiming for rollout sometime in the first half of 2018.
While it hedges against competition from Amazon Business, Sustainable Supply does sell some products on the marketplace. Products sold through that channel mirror those already sold on the marketplace, not those more unique to its own websites, Fricano says. Sustainable Supply also sells on eBay.com and to a limited extent through Walmart.com. “We have a toe in the water,” he says. “Walmart is the best competitor to Amazon and we think they are going be a major player.”
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