Another level of added value from 3PL with a difference

Exact Abacus is a software company providing ERP, WMS and supply chain management software. What makes them stand out in the eCommerce sphere is that they also have in-house warehousing and fulfilment capability, an outsourced customer services facility as well as eCommerce and marketplace management software.

This makes them attractive to online retail SMEs who can have one service provider seamlessly manage the process from online order to inventory control, to storage, to pick, dispatch and carrier management, along with service support to customers.

“We’ve got competitors in each individual area but there's no business that competes in all of them,” says Daena Hayhurst, sales and commercial manager at Exact Abacus. “Our customers appreciate that we can bring orders from all channels (Amazon, eBay and the rest), through the fulfilment process, with control of inventory and automated update of stock and order information on their channels. The main return for customers is saving time and enabling fewer directly employed resource in maintaining channel listings, storage and fulfilment. With many retailers there are too many senior people getting involved with day-to-day, repetitive low value tasks.”

Exact Abacus describes itself as a premium offering in its market. 

“We’re not the cheapest provider in the market, and actively try not to be. It's often the case that we find it very difficult to work with companies selling £5-10 products, for example, as we’re a premium provider,” adds Daena. “We’re able to offer people higher value for money and we have SLAs to back that up. Much of the market doesn’t have the capability to measure any SLAs that they may put in place.”

Exact Abacus aims to dispatch 95% of orders sameday and typically agrees a cut-off time with each client. With a picking process that is driven by IT, it has 99.9% picking accuracy.

A typical customer is an SME online retailer, who is already trading, although a third of Exact Abacus’ business is with start-ups. A start-up client could be shipping 5-10 orders a day, other businesses could be doing 200 to 500 orders per day. This is the company’s sweet spot, although they do have some clients that have thousands of orders per day. On the fulfilment side, Exact Abacus’ customers are typically in the £1-12 million turnover range.

Exact Abacus says there have been situations where online retailers have been so successful utilising their services, that they have outgrown Exact Abacus’ fulfilment service and moved to a different model such as self-fulfilling from a self-serviced warehouse facility.

“We’re pleased for companies when they grow significantly as it’s testament to the success of our services. and if they have to take things to another level and change things up we’ll make that process as smooth as possible. It is in the interests of both parties to do so, and we would try to give them continuity by offering our IT systems maintaining the software and eCommerce services to the retailer.

“Equally, the opposite has occurred, where a company has started by using our IT offering, and decided to divest itself of storage and fulfilment and outsource that to us.”

Eggs in one basket

A possible pitfall is the ‘eggs in one basket’ syndrome. Might a retailer feel uncomfortable to have so much of its capability outsourced to one supplier? 

Daena answers: “Ourselves and our clients have got to be singing from the same hymn sheet. But remember, customers can cherry pick what they want and use other suppliers if they wish. 

“Plus what can be considered a drawback is very much a strength looked at another way, because retailers have their end-to-end back office working on one seamless shared system, alongside customer services and fulfilment under one roof.”

Exact Abacus started with ERP software for mail order companies in 1984, and has substantial experience in providing IT for warehousing. Back in 2000 Exact Abacus took on some contracts for mail order companies where they actually handled the warehousing as well. 

“We’ve been through the pain of understanding how important software is as we have implemented thousands of warehouse and fulfilment systems through the years,” adds Daena.

Today, as eCommerce has boomed, fulfilment is the fastest growing part of the business, with the client base doubling year-on-year for the last four years. 

Around 2010 the company decided to get more aggressively into the channel management side.

“This was difficult in the early days as channel management is a complex area and the platforms often change the goalposts without notice, but we've been through the pain and our API integrations are very stable and fully supported. The trick was having the expertise in-house to be able to respond quickly to changes in the many channels, and being able to thoroughly test with our client base.” To illustrate the expertise, Daena continues “Exact Abacus now integrate with around 100+ Shopify websites, around 50+ Magento websites, and hundreds of Amazon/eBay stores and other web platforms via real-time APIs, managing millions of transactions each year.”

Returns

A number of Exact Abacus’ customers are in apparel retail, so returns are an issue managing returns is important. Exact Abacus charges a fixed fee for carrying out returns. 

“It’s a case of evaluating an item, identifying the customer, understanding the purpose of the return, and dealing with it according to the customer’s rules, terms and conditions. If the item is in good condition, it’s about getting it back into stock and available for sale as soon as possible. If it's damaged stock then it needs to be effectively disposed of written off as wastage.”

The company allows customers opt into its roster of carrier services. They can print return forms branded with their logo to be included in packages.

Black Friday has had an enormous impact on online retail and Exact Abacus is no exception. Some of its clients experience five or six fold increase in sales over the period.

Daena explains: “It was shock and horror in the early days. We have tackled it in subsequent years through robust forecasting with our clients and applying that to the resourcing model.

“In 2015, the spike was sharp at three and a half times volume over the Black Friday period. This year it was closer to a two and a half fold increase, but stretched over a six week period. We were only a few per cent out on our forecast this year which is pretty damn accurate. It means we're still making money and at the same time fulfilling orders competitively on time and not upsetting customers keeping our own customers, and their customers happy.”