Compete in the Changing Auto Aftermarket with UPS
UPS helped K2 Motors harness the power of their growing business.
K2 Motor’s phenomenal expansion — a tenfold increase in sales in seven years of operation — has placed “growing” demands on expansion planning and fulfillment.
UPS and online power eBay teamed with K2 to offer consultative solutions that boost efficiency and cut cost/ complexity, giving K2 valuable time to focus on their core business.
In 2003, Jacky Lau, Executive Director of K2 Motor, saw a chance to give customers some-thing new — a robust website offering acces-sories and parts for their automobiles.
“E-commerce means opportunity to a lot of people,” Lau says, “if they can learn how to capture it.”
K2 certainly has. The company has successfully leveraged the consultation, technology and shipping support of UPS and the online market-ing opportunities of eBay.
Lau and two partners have grown their business from a half-dozen employees in a 2,000-square-foot building in City of Industry, Calif., to a 60-person operation housed in 45,000 square feet in nearby Walnut. Annual online sales have skyrocketed from $2.4 million to more than $18 million — tenfold growth in seven years.
Lau flatly credits much of K2’s success to his fulfillment capabilities.
“UPS is one of the biggest advantages we have over other companies,” he says. “The UPS system and warehouse services allow us to fully focus on the growth of our business.” Through integrated technology and breadth of services, UPS can accommodate what customers need to be successful in today’s changing marketplace.
UPS and eBay have been close to Lau —and one another.
The two companies are natural partners. eBay offers sellers a marketplace without store fronts or cold calls or phone solicitation, accessible from any room with a computer. UPS is poised to deliver the buyer’s goods — literally — with outstanding reliability and professionalism.
In fact, UPS designed solutions for online commerce very early, creating a small package function integrated into online eBay and PayPal screens. The option allows small-business sellers like K2, anywhere in the United States and Canada, to easily calculate shipping rates and display them with product listings. Sellers can print UPS shipping labels, send email notifications and track packages.
They can pay UPS for shipping when printing their label from within PayPal.
These options kept the K2 engine humming. Plus UPS offered more. Shipping was one thing, but what happened before and after shipping mattered, too. Both UPS and eBay are helping K2 Motor to improve the buyer experience.
“UPS is one of the biggest advantages we have over other companies. The UPS system and warehouse services allow us to fully focus on the growth of our business”
— Jacky Lau, Owner
Technology fuels growth
A company that grows sales tenfold and expands warehouse capacity twentyfold in just seven years needs technology and smart planning.
First, a Customer Solutions team studied the ways K2 did business. “They treated our business like it was their own,” Lau says.
UPS learned that K2 used a technology called ChannelAdvisor to pull in orders from channels on the Internet. Then K2’s internal systems, customized to communicate with ChannelAdvisor, brought together orders, inventory and shipping transactions.
WorldShip® put K2’s internal system into overdrive. Easy-to-integrate, easy-to-use technology connected to K2’s internal system to pull out shipping information and eliminate the need to manually key shipping orders. WorldShip also allowed K2 to print labels and send tracking information back to eBay. In all, human keyboard time — and the opportunity for error —were greatly reduced.
The productivity improvement amazed K2. “We went from a dozen people processing 200 orders a day to a dozen people processing 800 orders a day,” Lau says. “What a difference.”
Awareness in the warehouse
UPS added further value by reengineering the K2 warehouse.
First, Customer Solutions helped Lau understand warehousing, inventory methodologies and metrics. A “Warehouse 101” overview allowed the owner to set standards and measure flow better.
“We don’t have the vision or the experience that UPS has,” Lau says. “UPS deals with millions of packages every day, so many of the things they show us are eye-popping. We’ve learned how to do things differently and more efficiently.”
UPS outlined manageable phases for K2’s transition to its new warehouse in 2008.
Phase 1 moved the company to its larger Walnut facility, with racking designed for optimum inventory and processing, and with other efficiencies in layout and logistics.
“UPS showed us ways to pack our shipments that saved us 30 percent in costs,” Lau says. “We processed much more, and much more quickly.”
Phase 2, the implementation of advanced warehouse technology, is now in the works as K2 continues to grow. And the company continues to use UPS small package and freight to deliver K2 from its warehouse to the world.
Beyond the sales are real people
One consistent message from K2 sounds as sweet as the rumble of a finely tuned automobile engine: Success takes a team.
“Our biggest opportunity in the future is expanding globally,” Lau says. “And UPS is always looking at the opportunities that are around the bend for us — always thinking ahead. ”
“It’s not just a channel that UPS and eBay offer to us,” he says. For both companies, it’s about the people — how they care for us. Our account managers and our driver are always thinking of us and how to help us grow … instead of simply selling to us.”
Having the right resources can help your business navigate the evolving aftermarket industry.
UPS can help you serve both B2B and B2C customers in one streamlined supply chain. From flexibility to efficiency, we can help you:
- Optimize your supply chain so your business can gain and keep its competitive edge.
- Locate distribution networks in places that allow you to reach customers quickly.
- Increase staff productivity with software that can integrate your existing order systems.
- Improve warehousing management for greater inventory accuracy.