E-commerce merchant Sailrite has built a consistently growing, profitable business with a few cornerstones to its success, including investments in content marketing, efficient warehouse picking and keeping up-to-date with e-commerce trends and regulations.

Sailrite.com sells fabric, canvas, sewing machines, do-it-yourself sewing kits and sewing tools. It also manufactures its own sewing machines and fabrics. Its products are geared toward the marine market and boat owners who want to make their own sail or boat upholstery. However, many other industries have uses for Sailrite’s products, including anyone who needs a sewing machine that can handle heavy-duty fabrics, such as sewing for costumes or for RV or outdoor furniture, says Matt Grant, vice president of Sailrite.

“Sailrite is like a hardware store for canvas fabrics,” Grant says.

Sailrite also sells business-to-business for distributing finished products, such as sails, whereas Sailrite.com sells the tools and equipment for consumers to build their own products.

Sailrite’s origins

Indiana-based Sailrite is a family business, now with three generations, that started in 1969 as a catalog retailer. Today, Sailrite has 62-70 employees. Part of that staff is its customer service employees who take orders over the phone, which brings in about 25% of sales, Grant says.

“Phone is important to a lot of customers who feel like not just a customer but members of the family who like to pick up the phone and talk to us about their order,” he says.

Sailrite launched its e-commerce site in the early ’90s, when having a website was more of a novelty, Grant says. “Nobody expected a website to do much of anything. If you had a website that could take an order successfully, people were impressed,” he says.

Now, the majority—at 75%—of Sailrite’s sales are via its e-commerce site. Online sales continually grow 10-15% year over year, and in 2017, online sales at Sailrite.com were north of $15 million, Grant says. Sailrite also is profitable but invests much of its profit back into the business to continue growing, he says.

Grant also notes that, largely speaking, Sailrite is not impacted by adverse economic conditions. Many of its customers are middle- to upper-class consumers with boats and coastal homes. If times get tough, its shoppers are more likely to do repairs or make things themselves to save money, which would not hurt Sailrite, Grant says.

Efficient warehouse picking

Sailrite attributes part of its ability to keep up with growth to its efficient warehouse picking system.

In 2014, Sailrite moved to a 70,000-square-foot building from its previous 25,000-square-foot space. With a larger space, the retailer knew it needed to update its paper-based picking system, which was already inefficient, Grant says.

The retailer went with logistics vendor The Descartes Systems Group Inc. because it could provide a radio frequency (RF) gun that used “off-the-shelf” software with a few custom builds, Grant says.

Main benefits include on-the-spot inventory updating and a picking queue. The update allowed Sailrite to double the picking speed of its employees, Grant says.

With a pick queue, every order made is categorized by a few factors, such as how fast the order needs to be shipped to the customer, inventory availability and the product’s cost. For example, the system will push an order that is for next-day shipping to the top of the picking queue. If Sailrite doesn’t have all of the order’s SKUs in stock, it will not put that order in the picking queue until all elements are available. If there is an order for fabric that costs $100 per yard, the system will have it in the queue for a more experienced employee who knows how to handle expensive materials. None of these features were available before this new system.

Having orders funneled to employees with the appropriate skillset also has helped with employee retention, Grant says. Previously, when pickers first started, they were trained on how to handle all orders, which took about two days and was overwhelming, Grant says. Now, Sailrite can designate if orders can be handled by beginners, and new pickers will only receive those orders. Training only takes 30 minutes and employees are less overwhelmed at the start and more apt to stick around, Grant says. If employees get bored with easy orders, they can talk about moving up and receiving more training for complicated orders.

“It’s good for our customers and good for our training staff, and it’s really good for our company because we are not wasting time training and then losing people,” Grant says.

With the larger warehouse, it would be inefficient for pickers to walk back and forth along the floor to find products, as they previously did with the paper system in the smaller space. With the new system, pickers receive the orders they need to pick in a certain order, with a suggested walking path so they can efficiently pick all of their orders.

Also with the new system, employees can change the description of the inventory in the system. For example, if an employee unrolls fabric to measure 50 feet for an order and finds the roll only has 49 feet, he can update the system to reflect the actual measurement. This way, another employee will not waste the same time to unroll the fabric that is not suitable for an order.

“We had to work with Descartes on all those scenarios and get their input and our input to build a system that works for us,” Grant says. Sailrite pays a monthly fee for the system, and each new feature costs a few thousand dollars for the custom work, he says without revealing any more about costs.

Grant is happy with the system, and Sailrite only needs half the number of employees with the new system than it did with the older system, Grant says.

Online sales for holiday 2018

The holiday season—although not its peak season—helps grow sales during a non-peak period.

Sailrite’s peak period is the second quarter, as that’s when shoppers are thinking about their boats and outdoor life, Grant says. And even though November and December is a slower time of year, the holiday season is usually good to Sailrite.com, Grant says. Sailrite offers promotions during the Thanksgiving weekend, and it sells many products for consumers shopping for themselves, he says.

“Black Friday and Cyber Monday are probably the steepest peaks we see all year round, when we sell literally hundreds of sewing machines during that time frame,” Grant says.

So far this holiday season, Nov. 1-Dec. 7, online sales are up 12.5% compared with this period last year, he says. He is pleased with these results.

A focus on content marketing from the start

Another foundational piece of Sailrite’s business is creating content about its products. The retailer used to have a print magazine with its how-to content, which it has since put on its website.

“It takes a lot of time to generate quality content, and if you started writing content in the late ’60s and early ’70s, you certainly have a lot more to present to customers electronically than people who just started,” Grant says.

Sailrite has heavily invested in video content. It has two videographers and six employees in its marketing department that produce the content in its in-house studio, complete with faux windows, a replacement floor and professional lighting.

“We put a lot of energy and expense into production of content in video form. We do it because it’s necessary to create this lifestyle,” Grant says.

The videos range from 30 minutes to 2.5 hours, and are “not meant for the idle participant,” Grant says. In addition to its website, the videos are also on Sailrite’s YouTube channel, which has more than 177,00 subscribers.

“We want the customer to become fully invested in what we are showing them, and then they buy the equipment, they buy the supplies and then hopefully they become a lifetime purchaser,” Grant says.

Sailrite tries to listen to consumers and create content based on what they are interested in or what they would use the videos for. For example, shoppers will call in and request for Sailrite to make a video about a certain topic, and if enough shoppers call in, it will make a video.

Sailrite also gets ideas on what videos to create based on what shoppers create with the machines. The retailer has photo contests for shoppers to pose with products they’ve made with Sailrite materials. Its most recent contest drew more than 250 entries, and Sailrite could see all of the different applications for its products, such as creating a tailored suit out of Tommy Bahama fabric, Grant says.

Sailrite remains relevant

Staying ahead of the game—like it did with content marketing—is something Sailrite still strives to do today, Grant says.

Next on its list to tackle are a new website design and mobile marketing text messages. In fact, Sailrite is hoping to better weave content into its site in the next redesign.

Sailrite is also testing a text marketing program and will likely roll it out on a larger scale, Grant says.

“A lot of orders are coming through mobile, and we try to do things early, and we are starting to think, is an email database enough anymore, or do we need a texting database?” he says.

Keeping up with broad e-commerce issues

Besides ensuring it is keeping up with shoppers’ changing preferences and needs, Sailrite also is challenged with larger e-commerce issues such as online sales tax collection and tariffs.

In June 2018, the U.S. Supreme Court ruled in the South Dakota v. Wayfair Inc. case that, for the first time, allowed states and local governments to require online retailers to collect sales tax even if they don’t have a physical presence, or nexus, in the state or local tax jurisdiction. Since then, 23 states have adopted online sales tax law, each with their own nuances.

To deal with all these changes, Sailrite is in the process of implementing vendor Avalara Inc.’s tax software; however, the software doesn’t instantly solve all of its issues. For example, Sailrite doesn’t just have to worry about ensuring it is paying the proper taxes going forward, but also remitting back taxes and ensuring it is calculating that correctly, he says.

Sailrite has been working on implementing the sales tax software for months, and they are still figuring it out.

“Literally we’ve spent 100s of man hours from multiple staff here at the building, and we’re not sure how all the pieces come together,” Grant says.

On the tariff front, Sailrite is concerned about the additional tariffs squeezing its margins, as parts of its sewing machines are sourced in China, Grant says.

But rapid changes are just the nature of the e-commerce industry, which is always moving fast, he says.