The change in the SEVU website and recent references to EDI have me thinking. It appears as though SEVU may have moved to a fulfillment model whereby online orders are drop shipped from SEVU, rather than warehoused by the e-tailers such as Costco.com, etc.
This is a pretty common model in some industries, and has numerous benefits. In short, the customer logs onto Costco.com, for example. They select the product, submit their credit card number, etc., and payment goes to Costco. Costco subtracts their margin from the money received, and the remaining revenue and order is immediately (sometimes batched overnight) sent to SEVU. BTW, EDI stands for Electronic Data Interchange. It's a relatively standardized set of formats and standards used in many industries. SEVU ships the product directly to the customer. It doesn't take much sophistication to print Costco's name and address on the return address label. The customer believes they bought it from Costco, but neither Costco nor SEVU have to pay freight to a Costco distribution facility, nor does Costco incur inventory expense. Greater margins for all concerned and a much more efficient fulfillment process. SEVU can do this with multiple vendors, so they can spread production and demand variables across multiple vendors (rather than manage multiple inventories and forecasts, there is now only one to manage). In the case of a return, the customer simply sends it back to the address on the packing slip. It may say "Costco, but it's physically the SEVU facility. Once again, much more efficient as it bypasses Costco.
Establishing an EDI interface with a company like Costco isn't difficult, although it's yet another supplier ledger and they don't set them up casually. I have worked with Costco in a very similar capacity. They can be a pain in the butt and very difficult to please. If SEVU has an EDI relationship with Costco, it says quite a bit.
I hope I'm right about this. It's not the kind of thing that's newsworthy to most, but as some here know, I'm an Operations guy. I view it as a huge step forward.
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