Linfox Target Retailers, Pitches ‘Better’ Than Amazon Fulfilment
Linfox has informed retailers it will provide them with “control” over distribution and prices, versus to Amazon’s fulfilment offering.
As it aims to acquire customers for its new fulfilment business, Linfox is reportedly in talks with for the provision of services (including warehousing, packaging and fast deliveries) to a variety of SMEs.
The company states by leaving pricing and promotions in the customer’s hands, it fills a market niche which won’t be met by Amazon when it opens its first fulfilment centre in Melbourne’s outskirts.
Chief Executive, Annette Carey, states of the downsides of going with Amazon fulfilment:
“Just as you lose control if you go into a bricks-and-mortars store, you can lose control going into an Amazon online marketplace”
“So if you want to retain that control, it’s a bit like having a bespoke specialist store; if you want to buy a Bang & Olufsen, you go to the Bang & Olufsen store, bricks and mortar. So it’s the same concept, but it’s an online version of that”
Notably, brands which sell through Amazon’s online marketplace do not hold control over product prices, nor how they are displayed on the website.
Linfox, however, utilise its logistics technology to interact with customers’ websites and determine what items have been ordered. The company then collects the items from its warehouse, packs and delivers them, and includes supplementary services as gift wrapping, tracking, handling returns and many others.
Mr Carey speaks of the process integration by stating that the retailer’s “online platform, which they control, interfaces directly into our fulfilment centre and then we take care of the rest to make sure it gets to a small specialist retailer or to an individual consumer”.
As reported by ChannelNews, Sennheiser has signed up as a Linfox customer – it also has its own dedicated repair centre in a corner of the fulfilment centre. The company is scheduled to automate some processes from early November.
Linfox’s fulfilment centre is reportedly handling about 25,000 units per day, and during peak periods it can increase to 100,000.
The company uses a variety of delivery groups (inclusive of Australia Post, Star Track and Toll) to dispatch goods nationally.
However, unlike standard logistics centres which deliver pallets of goods to stores, Linfox’s fulfilment centre can dispatch just one product to a customer (e.g. a JB Hi-Fi store in Melbourne) within a few hours, removing the need for the individual store to stock the product itself. The company also bundles orders which are made by the same customer, within the same day.
Linfox state its current fulfilment centre can cater to 10 customers, before requiring expansion. Ms Carey states they may “assess” the possibility of another Melbourne centre “as we go”.
President of Linfox’s Fast-Moving Consumer Goods Business, Kylie Fraser, states that retailers have appealed to its fulfilment centre’s ability to match the speed of Amazon’s deliveries, being as little as four hours time:
“There’s a lot of interest from the Cotys, the Procters & Gambles and some of the wine customers”, Ms Fraser says.
As reported by ChannelNews in June, both Belkin and Sennheiser are new customers to Linfox, however, the company is discussing its fulfilment services with other players, inclusive of those who are unable to pack and dispatch their own items.
Ms Fraser remarks that customers are demanding cutting-edge technologies and that some larger companies are under pressure to make their logistics and supply chains more streamlined, to reduce costs and increase competitiveness. She also noted larger companies need to match the agility of more smaller innovative organisations.
Concerning Linfox’s core trucking business, Ms Fraser states that the fulfilment centre is not expected to supersede this, however, it will help the company become more “future proof”:
Speaking of the changing retail climate, she remarks:
“It’s such a dynamic environment at the moment with so much disruption going on that if we just sit back and wait for it to happen to us, then we can quickly become irrelevant”.