By Steve Adams – HMF Express, LLC – circa 2014
Introduction
Customers of DHI members most value:
- A high fill rate
- A wide assortment of products
- Fast delivery
- Accuracy in order filling
Offering all of these services on your own can require a large inventory, extra shop space, added staffing, and consistently high utilization. That can be costly — and risky.
Instead, quick-ship and custom manufacturers can provide those high-value services while keeping a distributor’s operating costs low.
Many see quick-ship as a necessary evil that cuts margin. But if used strategically, it can actually increase profits. Here are five ways to make that happen.
1. Lower Inventory
By stocking only fast-moving products and using a trusted quick-ship partner for slower-moving ones, you can reduce overhead and improve cash flow.
Benefits include:
- Immediate savings from better inventory turns
- Money freed up to pay for quick-ship materials
- The option to lower prices (or keep prices steady and increase margin)
- More space for staging jobs, adding new lines, or even downsizing
- A one-time inventory reduction payoff — e.g., cutting inventory by $200K = ~$400K in buying power at the same margin
2. Reduce Payroll and Shop Expenses
Payroll can make up more than 70% of total distributor expenses. Outsourcing some fabrication to quick-ship partners can help reduce costs while maintaining service levels.
Example:
A single $20/hour employee can cost $60,000/year when you factor in benefits. That same money could be spent buying up to $160,000 of fabricated material from a quick-ship supplier.
This is especially helpful during:
- Rapid growth
- Seasonal demand spikes
- Projects outside your geographic reach
3. Reduce Risk and Exposure
Operating a shop carries risks: demand fluctuations, key employee loss, equipment breakdowns, injuries, and liability issues.
Let your quick-ship supplier handle complex or risky work — especially special preps. Keep the easy stuff in-house.
This can reduce:
- Errors
- Shop expenses
- Management time spent on corrections
Over time, those hidden savings boost your bottom line.
4. Reduce Lead Times and Gain a Competitive Advantage
Keep your fast-movers in stock and use a reliable quick-ship partner for everything else. This lets you offer 2–3 week lead times — or faster — on most jobs.
Quick-ship suppliers often build just-in-time to exact specs and ship as quickly as the next day. This positions you as the service leader in your region.
5. Streamline Your Ordering Process
On fast-moving projects:
- Pull standard items from stock
- Order everything else from your quick-ship supplier
What to look for in a partner:
- Fast order confirmations
- Acknowledgements for shipping and delivery
- Clear communication without the need to chase answers
This simplifies your workload, reduces project management time, and increases your capacity to handle more jobs.
Final Thought
So how could your business benefit from using quick-ship suppliers?
Only you know for sure — but with the market demanding faster and faster turnarounds, you’re almost guaranteed happier customers. And likely, more profit.
About the Author
Steve Adams was Vice President of Sales at HMF Express, LLC — a custom and quick-ship hollow metal manufacturer with facilities in Wilmington, NC, Atlanta, GA, and Chicago, IL. He has over 30 years in the industry and previously worked in sales and project management for a major regional distributor.
Originally published in the September 2014 issue of Doors & Hardware Magazine. Copyright © 2014 by The Door and Hardware Institute. All rights reserved.