Case Study
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Top 5 brand in Household Supplies category has increased its profit by 36%

Profit increase by $130,540 within 5 months

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Karim Saydashev
Oct 17, 2022

Our client was able to achieve these results using HyperC:

Save over 20 percent annually on the shipping costs for containers and trucks

49%

Labor сost reduction

42%

Storage cost reduction

24%

Shipping cost reduction

The Challenge

In 2021 our client was facing some serious issues with inefficient supply chain operations and lack of planning activities to avoid recurring Out of Stock problems.

Our client could not correctly estimate the future demand for most of the products, and overestimated the stock value to store on the 3PL Warehouse. At the same time, the inventory planning for the remaining products was underestimated, which was leading to serious Out of Stock problems in the busiest months of November and December, as there were no products available on 3PL, and they could not be delivered to Amazon in time.

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eliminated
$135,000

damage from lost sales

Two popular SKUs experienced “Out of Stock” events in the last 2 months of 2021, which has led to $135k lost sales, additional air shipment and marketing costs. To bring back their initial ranking spot, the client had to launch an additional marketing campaign (about $9k additional costs).

In 2021 our client had relatively high shipping costs for domestic and overseas shipments (4.48% from total revenue), the storage costs for both Amazon FC and 3PL much higher than our typical benchmarks (1.89% from total revenue) compared to 0.9% from total revenue with HyperC.

Additional expenses happened because of incorrect demand estimations. As a result, the company had to arrange frequent shipments to Amazon in an effort to keep its warehouse stocked, and send by LTL and SPD instead of FTL.
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The Solution

Our Client has used HyperC Supply Chain visibility solution to find the best way to make shipments more cost-effective, and improve their Amazon Inventory Performance by 30%+

increased the pallet utilization by

21%

Decreased LTL cost to

$0.05  per lb

Decreased SPD cost to

$0.26  per lb

Using the Advanced AI Demand Forecasting, HyperC has been able to combine the shipments for acheiving maximum savings in transportation and storage costs, increase average pallet utilization by 21%, and lower the LTL costs by half (to $0.05 per lb) and SPD costs by 28% (to $0.26 per lb) using the access to privilege shipping options.

87%

reduction of SPD shipments

The amount of SPD shipments was reduced from 41.1% in 2021 to 5% in 2022, which allows shipping with FTL or LTL methods, making the shipping process more cost-effective.

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Our predictive modeling system took into consideration seasonal trends and the individual
trend of each product.

Because of this, it became possible to decrease the inventory levels in the 3PL and amazon warehouses with low sales velocity. However, popular products were purchased in large quantities from the suppliers, so they could always be delivered when needed, especially during peak seasons.

This allowed decreasing the warehouse storage costs by 42%
+36%

Profits

Our client has managed to avoid lost sales and damage from ranking loss, and lower its shipping costs by 24 percent, which resulted in an increase in its net margin by four percent (4%) and profit by 36%.

Direct shipments from the suppliers to Amazon by sea were also an important part of the success, as well as introducing a well planned mode of shipment schedules, so it became no longer necessary to ship by airplane.

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​​With the help of our quantitative and qualitative forecasting models, we were able to predict which items would be most likely to sell out quickly. We then shipped these items directly to Amazon warehouses to minimize shipping expenses

We were able to help the client find a faster and more effective way of shipping goods by ship from Turkey, with lead time reduced from 70 to 45 days.