Getting products from Armenia into the hands of our American customers isn’t always the easiest task. And this is why we’re very excited to announce a big update. We’ve relocated our US distribution to a new, self-run warehousing facility in Los Angeles!
It’s not just that LA is home to a huge number of Armenian expats (to the extent that they even teach Armenian in some of the public schools there). Our team has also grown to include a new partner there, which enabled us to take over the fulfillment of our own products completely in-house. And as anyone running an e-commerce business can tell you, that is a huge game-changer, since outsourcing fulfillment costs tend to make up 15%-20% of product retail across the industry. But this is not just about money.
Our journey with fulfillment over the last few years has been a difficult learning experience, about what can go wrong when specialty, handcrafted products fall into the wrong hands. We hope that in telling our story, it can potentially help future businesses looking to import high quality, perishable goods from Armenia. The way we see it, we’re all in this together!
First of all: When we say fulfillment, we aren’t talking about our personal feelings of achievement. We’re talking about the complex process that takes place between when an order is placed and when our products reach your doorstep.
In this day and age, you really can’t talk about fulfillment without talking about warehousing. Warehousing boils down to some very simple concepts that anyone with a kitchen can understand. A good cook knows what ingredients they need, how much they need, how quickly they will go through them, where they will store them, and how long before they expire. A variety of factors, like how much space they have to store goods, as well as how quickly they are consumed, determine how much can be stored at a given time.
When applied to a business, as you can imagine, effective warehousing is very dependent on making reliable predictions about customers’ spending and purchasing. Covid-19 threw many of those predictions up in the air. As you may have noticed, we spent most of the summer out of stock of some of our best-selling products for months.
On top of that already unpredictable market, there are a few additional considerations that are unique to our company:
- We must undergo a complicated customs process whenever we want to add new products to our shelves.
- Our products are all-natural and require specific warehousing conditions, like temperature controlled environments, and first-in, first-out expiration-date tracking (to be sure customers never receive expired products).
- As a premium brand that cares about the environment, we want to ensure a beautiful presentation with a low carbon footprint for customers from warehouse to doorstep.
It is this last point which has been a perpetual thorn in our side since we began distribution in the US in 2018. In the beginning, we did an extensive search process for fulfillment centers that were large enough to be affordable, but small enough to provide specialty services mentioned in point #2. We ended up settling on a well known, large-scale fulfillment center to warehouse our products.
We’re happy to reveal the name of this company to other business owners over email, but have decided to withhold their name from this article, as our experience was not positive. We were with this company for about a year and a half and during that time, inventory was lost (once they lost an entire box of our products!). We also learned from customers that the products they were receiving were damaged and dirty. When we confronted the company about it, they said it was because there was “dust floating around in the warehouse” and that the best solution would be to wrap every single box in an additional layer of plastic.
It is upsetting how readily manufacturers and fulfillment companies turn to plastic packaging as the solution to every problem. Your products are getting dirty in the warehouse? Cover them in plastic! Your boxes don’t fit your products? Fill the empty space with plastic!
It may work for other companies to let large fulfillment centers shove their product in whatever box they’ve got lying around, but such an unintentional approach to fulfillment is not only bad for the environment, which we at Nairian care about, it’s also logistically inefficient, and a terrible end-experience for the customer, who is now tasked with disposing of all the unnecessary materials.
We asked the fulfillment company to pull all dirty products out of their inventory, which they did, and we were shocked at the extent of the damage. They offered us a small credit as recourse, but in order to receive it, company policy dictated that we had to destroy the inventory in question (whose retail value was seven times more than the credit offered). These were products whose exterior packaging was damaged, while the contents inside were perfectly good.
This is how we got to know one of the biggest problems in 21st century commerce: The people in a fulfillment center are about fifteen steps removed from the people in the field laboring to create the products they’re handling.
Our products are handcrafted. Each bottle represents the labor of about 50 people, many of whom live and work in the village of Aragyugh. From the farmers in the field, to the distillation team, to the laboratory staff, to the box and bottle manufacturers. This is a full supply chain of labor, people who work for us and take pride in what they make. That it was even an option to send perfectly good products to landfill is a sad indicator of the times.
At this particular company, the disconnect was made worse by the fact that their customer service team was located in India, thousands of miles away from where even the fulfillment was happening. Thus, ended our relationship with “well known, large-scale fulfillment center.” We also had a very brief experience with Amazon, which was also not a good fit for our company for many of the same reasons.
Fortunately, during that time and despite our difficulties, US sales grew to the point that we could actually afford a more premium fulfillment service, which we found in a fantastic company called Verde.
Based in Boise, Idaho, we were attracted to Verde because of its emphasis on sustainability and because of its extreme transparency. You’re only ever a phone call away from the company’s CEO, Greg McRoberts. We especially loved receiving Greg’s weekly emails detailing current events in the world of supply chain, and explaining what those updates could mean for our business.
Our experience with Verde, which lasted until just a few weeks ago, was excellent. We were assigned a dedicated customer service person, who knew our brand and was able to answer questions and resolve issues promptly. For anyone outsourcing their fulfillment, this type of care is essential. We would recommend them to any business looking for a conscientious, environmentally-minded, third-party fulfillment company.
We decided to bring our fulfillment operations in-house only after our team grew to include an enthusiastic partner in Los Angeles, who was excited to take-on warehousing and fulfillment responsibilities (which, if you can swing it, is the holy grail for small-businesses!). The only problem: All our products were in Idaho!
So, last week, our partner ventured to Boise to retrieve our products from the Verde warehouse. He loaded up a truck, with the help of Greg and his friendly staff, and began the 13 hour trek back to LA!
He took in some interesting sights along the way. And at a rest stop, he found a map where visitors from all over the world pinned their home countries on a map. Armenia’s already been repped several times!
What can you expect from us moving forward? No shortage of personal touches in your Nairian packages. In fact, if you’re ordering from a location close to our LA warehouse, we’re even doing local deliveries to your doorstep, which helps us save on cost and emissions. You can also know that every order is packed with care by members of our Nairian family—people who truly believe in what we’re doing and have personal ties to the product and the people in Armenia. We’re excited to start this journey of self-fulfillment!