ConversationsNOW: Warehouse Operations

Meet the Experts

Michael J. Grimme is the owner, CEO and founder of AMC Liquidators, also known as AMC Furniture Outlet, based in Tamarac, Florida. AMC Liquidators is a liquidator of fine furnishings and room décor from 4- and 5-star hotels, corporate offices, excess inventories and closeouts from interior decorators and manufacturers. Fifty percent of AMC’s business comes from retail. Jonathan McDonald is the director of wholesale operations at Texas-based Wisteria. Wisteria began in a garage, graduated to a catalog and now includes a robust e-commerce website and retail store. The company sells an eclectic collection of home and garden accessories from around the world. McDonald manages three warehouses including a 100,000-square-foot warehouse that serves as command central.

RetailerNOW: How do you manage your warehouse? How is it organized?

MG: The inventory is managed by bin. It’s not unusual for us to run multiple projects per day so we need to have a process that allows us to track that inventory.

We have been using NetSuite’s cloud-based business management solution for the past 10 years to manage pretty much every aspect of our business. It supplies the backbone for our fast-moving, complex business of buying and liquidating furniture and other goods from hotels and offices for resale to B2B and B2C buyers.

JM: I helped to design the warehouse two years ago, so this has become my seventh child (I have six kids). I’ve watched it grow over the years and as of October 1, 2013, we’ve unloaded more trucks in that one day than all last year. Two weeks ago, we sold $195,000 in inventory. Being organized is a requirement for us to operate successfully.

Inventory is on one side of the warehouse and shipping is on the other side. Best sellers are closest to the packaging area so my warehouse team doesn’t have to walk halfway across the warehouse to pick it. Our rows are numbered and we have letters assigned from north to south so it’s fast and easy to go straight to where the item is stocked.

RetailerNOW: How do you control shrinkage?

JM: I’m old-fashioned so I’m the first to arrive and the last to leave. But I also use modern technology so I can view the warehouse from my laptop at home. I surround myself with honest people and I tell my staff that if you lie to me, I’ll terminate you; if you steal from me, I’ll prosecute you. Having said that, we also employ tactics like keeping the inventory on one side of the warehouse and the shipping on the other side. If someone sees inventory where it shouldn’t be, there’s a red flag. We do inventory twice a year where everything is counted by hand but if a bin doesn’t look right, we’ll do a count on that particular bin.

MG: To monitor the area and control shrinkage, we have multiple cameras located within every section of our warehouse to monitor activity.

RetailerNOW: Are customers allowed in your warehouse?

JM: We don’t allow customers in the warehouse except during our warehouse sale that happens four times a year. During that time we invite customers to walk through the warehouse and shop and they love it. It’s from Thursday through Saturday and our biggest one happens in September because we’re trying to make space for the fourth-quarter shipments. It’s a big deal in our community and people look forward to the sales.

MG: We try to keep the customers out of the back-of-the-house warehouse space at all times as there is always a risk of shrinkage and we also have safety concerns.  We only allow AMC Liquidator employees to enter that space.  If customers do come back, it is only when escorted by a salesperson.

RetailerNOW: What safety mechanisms are in place to keep employees safe?

JM: We start every day with an employee meeting at 7:00 a.m. and after two hours we take a 15-minute break. Two hours later we have lunch and two hours after that we have another 15-minute break. I remind our team members that if they need help, ask for it. Our two biggest safety issues are cuts with box knives and improper lifting. We can’t over-communicate the need to be safe but we can’t always predict an accident.

I do a safety walk every morning to make sure the floors are clean and safe. If it rained the night before, I make sure we don’t have any wet spots on the floor. When the forklift is in the aisle, they know to get out of the way.

Employees must wear proper shoes so that means no open-toe shoes, sandals or moccasins.

MG: All of our employees wear back protection and steel-toed shoes. We also have them all wear the same red shirts so they can be easily recognized and seen.

Because the bulk of our inventory is pre-owned, it is loose and not boxed. We have the inventory placed safely in racks.

RetailerNOW: What is the one thing you’re most proud of in your warehouse and what’s the one thing you wish it had?

JM: My employees are my biggest asset. We couldn’t do this without them. Seventy-five percent of them are cross-trained to do more than one job and that’s important to us. We have 40-50 employees nine months out of the year and we double that figure in the fourth quarter.

In terms of our warehouse operations in general, I’d love to see more automation. The technology is out there to help with productivity and shrinkage. I think our computer system is a bit outdated and improving it will be a benefit for us.

MG: If a reseller or an end-user were to come here and want to buy multiple loads of inventory, we have it for them and they can take it offsite immediately. Only one trip is needed. If we are dealing with global customers, they can have their order in a matter of days since we are so close to several ports.

By taking a more professional approach to the liquidation business, we have grown tremendously. We are proud of the fact that we own our property and equipment—no need to lease or rent.

JM: I convinced the owners to let us buy our own delivery truck for local deliveries to our best customers and we’ve delivered orders to two former presidents as well as some major VIPs. Sometimes some of our customers want the furniture delivered and placed in their homes before their husbands come home so the service is important to them. Having that delivery truck has been a huge advantage for us even though we’re not in the delivery business. It’s about providing an extra level of customer service you wouldn’t expect.

MG: NetSuite has definitely been our backbone. The system enables us to know in real time what our inventory position is within our warehouse and what’s in the sales pipeline. I love that everything is in one location so that anytime we need to pull information it’s right there. And we can be totally mobile, so that when we’re at a hotel site or corporate office, we can do transactions right on the spot.

I also wanted to add that by having our own department for furniture restoration, we can modify inventory to meet large customer needs. And by being in the restoration business, we are constantly in touch with our sources of supply since we are always doing restorations for them—this gives us an advantage in acquiring inventory before anyone else.

Megy Karydes is president of Karydes Consulting, a boutique marketing and communications firm. Her work has appeared in national and local consumer and trade magazines including USA Today, Natural Awakenings and Chicago Health. Find her at KarydesConsulting.com and follow her on Twitter @megy

Technology-Assisted Sales

October 2013

In an era where technology is the name of the game yet face-to-face is still an important part of the business, is there a way both can live happily ever after? Technology has become so ingrained in our culture that customers expect retailers to be on top of everything—and technology is often the tool used. We asked two experts to weigh in on how they feel technology has helped furniture retailers manage their business and, more importantly, helped deliver outstanding customer service that can be realized in their bottom line.

Meet the Experts

Martin Fischbein, president of Furniture Wizard Software, provides software and technology solutions to furniture retailers, wholesalers and manufacturers. He has been involved in the retail furniture, television and appliance industry for more than 30 years.

Charley H. Darsey is president of George E. Darsey & Co., a furniture retail operation in Grapeland, Texas, celebrating 127 years in business this year. Darsey is the fourth generation to own and operate the business his great-grandfather opened. Fittingly, Darsey spoke to us using his iPad on the sales floor.

: How do you feel the best stores use technology (whether it’s an iPad, iPhones, etc.) to help in the overall customer experience? 

MF: Stores taking advantage of technology today are delivering a customer experience that’s unparalleled. The ability to have timely and relevant information at the sales associates’ fingertips adds to the efficiency of the furniture buying experience.

CD: I agree. We use technology in almost every aspect of our business. My salespeople have iPads that we furnish and we have an iPhone in our delivery truck that is connected to our blog. Customers love to see photos of homes on our blog with new furniture we’ve delivered that are taken by our delivery teams. On the sales floor, the iPads are used as a tool, not a crutch, for several reasons:

  1. The sales staff can easily look up all inventory stock.
  2. Sales can write up a temporary invoice and print to a wireless printer from the iPad so when the customer comes to the register to pay, all of the items are already on paper. When we are really busy, that is extremely useful. My best salespeople can keep selling and I have designated people to finish the paperwork and do the magic of collecting the money from the customer.
  3. From the iPad, we use our website to build a wish list on the sales floor for the customer when they need to “think about it.” We can send them a copy electronically and we include manufacturer model numbers because at that point, if the customer wants to shop, we are confident in our business to provide them the best product at the best price out there. Our website also includes the measurements of the item so a customer has that information to measure the space to be sure it will fit in their home.
  4. We stock around 120 different sofa sets, 30 different mattress sets and more than 35 bedroom sets, so we have a huge selection for a small town. We feed off other larger towns around us. I hope we don’t have to go to a catalog but when we do we keep them up-to-date on our Network Attached Storage (NAS) that we have connected to our iPads so we can all share those files whether it is a price sheet or a catalog.
  5. With the iPad, my salespeople can contact me directly if I am on vacation or on the sales floor with another customer and ask me any question they need to help that customer, without the customer knowing.

: What do you think retailers could do better in terms of technology and the customer experience?

CD: The furniture industry seems to be the slowest industry to move toward technology. Manufacturers that have the ability to purchase online sell more furniture (to me anyway). That does not mean you cannot sell a piece of furniture without the technology—technology just helps both the manufacturer and the retailer.

MF: Many furniture retailers we talk to are hesitant to take advantage of technology because they are under the impression that it will be too expensive. With hardware costs continuing to drop, the upfront costs of implementing technology have never been lower. If a retailer does not take the time to learn about, implement and embrace technology, they are giving their competitors a huge advantage.

: What are some easy, cost-effective ways retailers can incorporate technology into the buying experience?

CD: That’s the hard one. First, you have to appreciate technology before you can appreciate the cost and benefit. In 1994, my wife and I converted a 108-year-old family-owned business from the old huge posting machine and ledger to a computer system. In 2000, we purchased Furniture Wizard and QuickBooks and now we can say we have a great way to track our business, our customer purchases and how well a manufacturer or item sells. I can tell you exactly what our best selling day is and what the best selling hour of the week is and that’s very useful to any retailer.

: What do you feel customers appreciate the most when it comes to technology? Is it access to information, fast processing, the ability to make informed decisions or something else entirely?

MF: All of the above. Today’s younger consumers have grown up with search engines and Google. When sales associates have to abandon the customer to retrieve catalogs or call the warehouse to inquire about availability, your customers are not receiving the fast, efficient, informative experience they desire.

CD: I agree, but I also think it’s important not to let technology get in the way of talking to a customer and learning what the customer wants to buy from you. I felt so strongly about this that I took the iPads away from my salespeople for a while because I wanted them to listen to the customer. I think they like the fact that we use the latest innovation available to help them make informed decisions, but that does not replace the human factor. It has to be used as a tool, not a crutch.

: Do you feel incorporating technology helps a retailer’s bottom line, even though there may be a costly investment during the initial set-up process?

CD: Yes! Pick a program where the start up costs are not excessive and the learning curve is not that steep. At a minimum, it should offer inventory tracking, customer tracking so you can learn when you’re busy and can plan help to cover your busiest times, what sells the best and which manufacturer sells the best.

MF: The main benefit technology provides is quick access to timely information. Your inventory can work harder requiring less warehouse space, and then turn faster, generating more profit.

A final word from Darsey: “By the way, I am no expert. I just get to enjoy great customers.” Darsey may rely heavily on technology but he and Fischbein know that customer service is and always will be the best way to earn your customer’s business and loyalty. Technology is just one great way to provide exceptional customer service.

Megy Karydes is a freelance writer who is always on the hunt for great stories. Contact her at KarydesConsulting.com.