Mhlnews 526 Handling1

Handling Old Stuff With New Thinking

Oct. 1, 2007
This online retailer can manage an inventory of 75 million items with a little (make that a lot) of help from its friends.

Mark Nason, vice president, operations, at Alibris (Sparks, Nev.), sounds almost relaxed when asked how he’s able to keep track of more than 75 million items—mostly rare and out-of-print books—considering that there are about five million transactions happening every day, worldwide.

“The coming and going of the books is the easy part,” says Nason, with a hint of a smile in his voice. “The number of transactions (in and outs) is tiny, compared with things like price changes, adds, deletes, etc. It’s more of a stream [of information] than a lake.” And, while it’s as easy to drown in a stream as it is a lake, Nason’s company has managed to stay afloat, quite nicely, thank you, with major assistance from partners like UPS (Atlanta) and its wide array of logistics and material handling services.

How it Works
Alibris is a business onto itself. While there are similar types of online retailers, no one does it quite like this, or in such huge volumes. Alibris brings all the interested parties of the book world together, into the same room, says Nason, and then the company brings something special—trust.

“The piece we bring to the equation is integrity in the transaction,” says Nason. “We know there’s all the diverse clients—sellers and buyers—around the world who can’t find what they want or have too much of something to sell.”

That diversity extends to language, currency and understanding of the transaction—or quality of the goods. “So, if there’s one thing we can say to our B2B partners,” he says, “or our customers directly, it’s that we stand behind this [sale]. So, let’s venture out to get you what you’re looking for and see if we can facilitate what would not have otherwise happened.”

Alibris is a worldwide network of book merchants— from cozy little cottages in small-town England, to bigbox merchandisers in the heart of America. Its mission is to facilitate sales of rare and out-of-print material between sellers and buyers. It brings the parties together via the Internet. It also maintains a distribution center in Sparks that houses about a half million volumes; however, it has no storefront of its own.

For nearly 10 years, Alibris has relied on the logistics knowledge and strengths of UPS for order consolidation, repackaging, custom invoicing and overseas shipping, including customs clearances.

For Alibris, simple, or regular, online transactions, the kind that match an order to an SKU, are like any other retailer transaction order management system. Nason says they’ve built a logic into the system that says, if you’re ordering from a seller in western Europe, and you, the buyer, are in western Europe, move the book in western Europe.

Finding rare books, such as this copy of How to Dress Salmon Flies from the author’s collection, are all in a day’s work for Alibris’ worldwide network of book merchants.

“Now,” he says, “if that book is in Europe and it’s moving through the U.S., we move it through the Sparks distribution center. There’s logic applied to whether it’s direct or going to pass through here.” Alibris has continental consolidation points in western Europe and Australia. Nason describes the set up as having three distribution points: one in the east, London, England; one in the west, Perth, Australia; and Sparks, as the middle of his world.

So, depending on where the books are and the volume of volumes in an order, there might be some consolidation of orders required before shipment.

“Some of our B2B clients don’t want individual pieces,” says Nason, “so we have to bundle and ship whole orders. This consolidation is where UPS enters the picture. It has an operation at Gatwick Airport in London for handling all the European orders, and the one in Perth for all the Asian/Pacific orders.”

And, since the vast majority of Alibris’ orders do not come out of the distribution center in Sparks, what Nason actually runs is a massive, finely tuned cross-docking operation.

“You’re right,” he says. “It’s worldwide, and its permutations are infinite.”

While the potential for the business might be infinite, paying attention to details is what has separated Alibris from would-be competitors. The integrity of the bargain Nason spoke of earlier comes from that attention to detail.

“We have to validate for the buyer that the seller has the book in the condition they’ve described,” he says. “Then, we validate for the seller that the buyer has the payment. We assure the transaction, and we have to speak to the quality of that transaction.”

Nason says he holds all the sellers to the same quality standards of timeliness and fulfillment. “The question is not, did you fill the order, but, did you fill it on time?”

What’s the lesson here for other material handling managers? Nason says the lesson is about honesty. “Cross docking, or what we call net docking,” he says, “is really speaking to the integrity of the process. We never meet the seller or buyer face to face, and we never see the book. Yet, it’s a very personal transaction on the Web site. You feel that you have someone in the room looking out for your interests—someone you can go to.”

Controlling Inventory
Inventory controls are mainstays of what Alibris is and what it means to the book world and book exchangers. The seller might list a book once with the Alibris network, yet it’s potentially sold through many channels. For a small seller, trying to manage its inventory in those many channels where the books might be sold through would be a daunting task. Learning that a book sold someplace in the world means the seller has to remove it from the listing on its company Web site, as well as the Web sites of all the places it is listed, for example.

By using the management program Alibris provides its participating vendors, when a book is sold, it is removed from the inventory of all the potential selling venues in a microsecond.

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