Nothing about Dollar Shave Club is traditional – not its business model, not its advertising and not its viral growth. Even so, when the eCommerce company decided to internalize fulfillment, it first targeted a traditional, on-premise warehouse management system (WMS).
Dollar Shave Club started up just six years ago as a subscription-based service that charges members a couple dollars per month for razors, replacement blades and accessories. It has since added personal grooming, shower and oral care products to its portfolio. CPG giant Unilever purchased Dollar Shave Club for a reported $1 billion in July 2016, evidence of the company’s tremendous potential.
In 2012, Dollar Shave Club (DSC) became an internet sensation with a hilarious video ad featuring co-founder Michael Dubin that led to a huge, unexpected spike in orders.
Why a Cloud-Based WMS?
Director of Fulfillment Lori Jackson figured DSC would build out an IT team to develop and maintain an on-premise WMS. However, when the organization ran the financial impact of an on-premise solution vs. a cloud-based system, there was a clear winner: the cloud WMS.
A cloud-based WMS turned out to be the right choice for a fast-growing, nimble internet retailer. Not only was it cheaper, but it allows Dollar Shave Club’s engineering team to spend its time improving the website and resolving any problems that directly affect customers. The business model can only succeed if the company is adding more customers and keeping current clients happy – so the technical staff’s knowledge should be applied there.
“I think the cloud is a platform that everyone should be thinking about using. It’s a kind of all-in-one shop,” Jackson said. “It’s interesting, our engineers were pushing to have it internally, and to this day they’re like, ‘Opting for the cloud is the best decision we ever made.’ So it’s popular here, for sure.”
And the cloud model eases any concerns about scalability. This is a business that had 200 percent year-over-year growth at one point and has continued to expand aggressively. Today, it ships out tens of thousands of orders every day from two distribution centers (in Southern California and Columbus, Ohio) without concern that the system will be overloaded.
That scalability has become even more critical as Dollar Shave Club expands internationally. It enlarged its footprint in Australia and Canada in 2017, moving to a larger 3PL. Those 3PLs run HighJump WMS via the cloud to maintain visibility across the global supply chain.
DSC has also recently opened a distribution center (DC) in Europe. They currently offer budget-friendly razors to customers in the United Kingdom and hope to be in surrounding countries soon.
Jackson notes the cloud has allowed the eCommerce company to move into new markets more quickly. An on-premise solution requires more commitment because the organization would need to set up its own facility, then re-implement the system. The cloud is more of a plug-and-play model, where 3PLs can plug into Dollar Shave Club’s network. So the company can gradually move into a new country while it builds up a customer base there, then bring fulfillment in-house once there are enough members to support it.
Any changes to the WMS are automatically reflected at all sites since it is in the cloud – no need to execute it at each DC. Total orders and total inventory across the globe are available for users at any location to see.
“The cloud WMS increases our flexibility within our international markets the same way it increased our flexibility within our domestic markets,” Jackson said.
Find out why Dollar Shave Club decided to switch from a 3PL to internal fulfillment in this article.