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

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