Aterian scales eCommerce delivery and meets customers' delivery expectations with Flexe Logistics Programs.
Key Takeaways
- Aterian needed to grow their domestic supply chain network—fast
- Flexe and Aterian partnered on developing a network of fulfillment nodes to support national coverage for 1-2 day delivery, optimizing cost and delivery speed. Aterian deployed a 12-node network with the Flexe Dynamic Fulfillment Program
- Now Aterian ships thousands of orders per day, delivering 76% of orders to customers in one day and 97% in two days
- Kevin Nohl, Aterian’s senior vice president of global supply chain, explains, “The Flexe partnership gives us the opportunity to grow very quickly without having to invest in large capital infrastructure costs. The Flexe Logistics Platform allows us to manage our inventory in real time across multiple warehouses and allows our network to work seamlessly.”
Challenge #
Consumers expect eCommerce delivery—fast #
Aterian recognized customers expect fast eCommerce delivery even amid a rapidly changing environment. Forty-four percent of consumers define “fast” as next-day in 2022, compared to only 14% in 2020. Thirty-five percent of shoppers abandon online orders over slow delivery speeds.
Speed is costly: 45% of brands don’t offer fast shipping options because it makes total costs too high. And success depends on having inventory in the right place at the right time.
To meet consumer demand—and customers’ expectations—Aterian required:
The ability to track, forecast and respond to customer demands. Aterian’s business model and technology platform leveraged consumer demand data to accurately meet customer expectations and deliver ecommerce orders within 1-2 days.
Rapid, dynamic network expansion. Aterian projected continuous, rapid growth. To grow fast—and meet customer delivery expectations—Aterian required a dynamic, flexible logistics network, without massive capital investments.
Warehousing to support various SKU types. From essential oils to refrigerators, Aterian’s portfolio of products sold on ecommerce channels needs a network of fulfillment warehouses that can service all sku types.
Traditional logistics solutions rely on large capital expenditures and term agreements. They deliver fixed capacity in fixed locations for fixed forecasts. Aterian recognized traditional solutions prevented the flexibility necessary for rapid product expansion and dynamic customer demands. The solution: Flexe Logistics Programs.
Solution #
The Flexe Dynamic Fulfillment Program powers two days or less delivery #
Aterian responds to customer demands, improves delivery speed and accelerates growth with Flexe’s Dynamic Fulfillment Program. The logistics program adds fulfillment centers closer to customers for rapid delivery. All without CapEx investments, fixed costs or long-term commitments.
Aterian easily and quickly integrated 12 fulfillment nodes within the Flexe Logistics Network. Aterian connects through a single integration and monitors performance with the Flexe Logistics Platform. As the business grows and demand shifts, Aterian adds or removes capacity where required.
Kevin Nohl, Aterian’s senior vice president of global supply chain, explains, “The Flexe partnership gives us the opportunity to grow very quickly without having to invest in large capital infrastructure costs. The Flexe Logistics Platform allows us to manage our inventory in real time across multiple warehouses and allows our network to work seamlessly.”
Inland Star—the Do It Right® operator for scalable fulfillment #
Inland Star Distribution Centers, Inc. is an employee-owned warehouse & supply chain service provider with a focus on partnership, stewardship and ownership. Their company focus is on the environment, health, safety, security and sustainability. They are an expert fulfillment provider with strategic locations capable of handling Aterian’s SLAs.
“Our whole culture is to Do It Right®,” says Michael O’Donnell, President and CEO of Inland Star.
Aterian requires key SLAs to meet customer order fulfillment and delivery expectations. To be fully functional, Inland Star trains its team on the Flexe Logistics Platform. The platform is intuitive and productive—especially in servicing a 3 p.m. same-day order fulfillment requirement Monday through Saturday.
Michael O’Donnell explains, “When we’re dealing with Aterian’s business in three key markets, we might get 3,000 orders today and another 4,000 tomorrow. We’ve got to ramp up to satisfy peaks along with being nimble to proactively ramp-down.”
The Flexe partnership gives us the opportunity to grow very quickly without having to invest in large capital infrastructure costs. The Flexe Logistics Platform allows us to manage our inventory in real time across multiple warehouses and allows our network to work seamlessly.
Results #
Now, Aterian reaches 76% of customers in one day and 97% in two days. And their compound annual growth rate (CAGR) is 61%*. Aterian’s partnership with Flexe paid off.
Kevin Nohl notes, “Aterian's growth has been phenomenal in the past few years. Our compounded annual growth rate is 61%* —a testament to our supply chain design and performance. As we grow, from a supply chain perspective, we need to ship more. The growth has been in parallel with the growth we’ve experienced with Flexe.”
About Aterian #
Aterian is the consumer packaged goods company of the future. Through their proprietary technology platform, they build and scale products ranging from essential oils to refrigerators for sale on major ecommerce channels: Amazon, Walmart, Shopify, ebay, etc.
Aterian focuses on three strategic pillars:
Build. Aterian generates insights via its proprietary technology platform and then builds CPG products from scratch to meet consumer needs.
Acquire. Aterian acquires companies to strengthen their existing portfolio.
Partner. Aterian partners with other CPG companies to manage goods and logistics via Aterian’s technology platform.
*based on financial information as of 12/31/2021
