Hanley-Wood LLC has 730,000 total subscribers to its 14 magazines in the housing and construction industry. The media company's Exhibitions Division produces eight trade shows, including World of Concrete, which draws more than 60,000 industry professionals. In the past few years, the Washington, D.C.-based company has expanded into an ancillary business: Hanley-Wood acquired two bookstores to offer technical books for the construction industry.
Entrenched in the construction niche, Hanley-Wood's move was logical. But it wasn't without risks.
"The challenge in dealing with this smaller business is we're targeting customers with whom we have strong relationships on other fronts," says Nick Cavnar, vice president of circulation for Hanley-Wood. "If we get customers mad about book orders, they might be mad at the magazines or trade shows by extension." Dissatisfying customers was a real possibility when Hanley-Wood initially acquired the bookstores, Cavnar says.
The bookstores sell products primarily
through direct marketing operations. One bookstore relied on an internet firm to
handle orders, while the other processed orders internally. Neither method
succeeded. The internet company went out of business. The other bookstore
business ran a piecemeal operation, with various departments handling different
parts of the order process. It was "unorganized," Cavnar says.
A year ago, Hanley-Wood decided to consolidate its bookstore operations, which accounted for $1.2 million in annual sales, and select one vendor to oversee a full-service web and direct marketing fulfillment program. "We needed a way to bring it all together and make it more profitable," Cavnar says. Hanley-Wood considered three vendors, eventually choosing a Virginia-based distributorship.
Here's how the program works: Hanley-Wood publishes books or selects ones to market. It also sells additional products such as floating concrete kits for schools and T-shirts. Hanley-Wood handles the front end of the operation: It markets the products and generates orders. The distributorship manages the inventory; receives orders via phone, mail and email; processes payments; picks and ships orders; and provides Hanley-Wood with reports on the business. The distributorship also supplies all printing associated with the fulfillment operation, including boxes, shipping labels, shipping manifests and invoices.
Before it selected a vendor, Hanley-Wood considered three main factors, Cavnar says. First, it valued stability because of its experience with the failed internet-based vendor. The distributorship the firm selected is a 30-year-old company that serves other clients in the construction industry. (Also, a Hanley-Wood staff member worked with the distributorship while employed with another firm.)
Second, Hanley-Wood required a "sophistication of services," Cavnar says. "I was confident that as we grew, [the distributorship] could keep up with us." Fulfillment is labor-intensive, and Cavnar sought a vendor with an efficient operation. "Pick-and-pack involves a bunch of people in a warehouse rolling around carts, picking up books and hand-packing them in boxes," he says. The distributorship's inventory control and organization impressed Cavnar.
Finally, Hanley-Wood wanted a variety of reporting options for its two bookstore operations. "[The distributorship's] basic information technology was better than the other vendors'," Cavnar says. It relies on sophisticated fulfillment software and can generate numerous reports for Hanley-Wood or allow the publisher to go online and create its own reports. Not only does Hanley-Wood receive basic reports about orders and inventory statuses, but it can do complex analyses, such as tying costs per unit back to each item shipped.
The distributorship began handling fulfillment of Hanley-Wood's 450 books and products in November. Cavnar admits the transition hasn't been seamless. For instance, the bookstore that previously handled orders in house had to adjust to the systematic way the distributorship requires order information. In addition, Hanley-Wood's accounting department hadn't finalized an account for issuing refunds, so the distributorship couldn't issue customers refund checks.
Despite the glitches, Cavnar says the fulfillment program is passing one major test: Hanley-Wood's costs per order are lower than before. He's confident the relationship with the distributorship will continue to improve.
—Susan Keen Flynn
