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Using Fulfillment Technology to Boost Average Order Volume

Donny Salazar, MasonHub CEO and founder, sees opportunities for beauty brands to increase conversions and cart size by "bundling" products.

During Beauty Inc @20, Donny Salazar, founder and chief executive officer of fulfillment technology and services company MasonHub, hosted a workshop session aimed at helping brands increase conversions, margins and average order volume by better leveraging omnichannel fulfillment processes.

Salazar explained how his platform connects to e-commerce providers, and why brands should consider a “scaling” strategy regarding online selling. He also offered insights into how the pandemic-driven online shopping boom can be maximized by beauty brands this year, and beyond. Salazar also explained what differentiates his team (and the technology they developed) from others in the market. (Hint: He is a veteran merchant who know well the pain points of direct selling.)

“We help brands by focusing on scaling, which really means helping brands go into multiple channels,” Salazar explained. “It’s not just e-commerce and not just wholesale, but it’s across-the-board and requires handling their inventory management across all those unique and different channels.” That approach is based on fulfillment technology that features customization and testing capabilities as well as transparent inventory views and fully managed returns.

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Aside from using fulfillment technology to increase scale across channels, Salazar works with beauty brands to “bundle” products. He gave the example of a brand with 35 or 40 stock keeping units, but was able to bundle products together in more than 600 combinations. The result is not only higher average order volume, but reduced costs due to more items being shipped to a single shopper. For the customer, the value proposition makes it an easy sell.

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“With bundling [technology], you can also put together product combinations that anticipate what your customers need,” he said. “The other beauty of this technology is that you can make however many different combinations you want at any given time. And you can actually test what works best.”

Salazar discussed the benefits of brands drop-shipping inventory through orders taken online from retailers such as Sephora and Nordstrom, and even Amazon — all fulfilled through MasonHub.

Donny Salazar
Donny Salazar during the Beauty Inc @20 workshop. Courtesy image.

Separate from the workshop, Salazar shared insights about the second half of the year, and the challenges and opportunities facing brands. Even as vaccines roll out, and mask mandates drop, there are supply chain disruptions that will likely continue.

“One huge thing for the second half of 2021 is to continue to anticipate disruptions across the entire supply chain,” Salazar said. “Because of the uncertainty brought forth by the pandemic, it’s hard for suppliers to forecast demand, and because of that, we have seen wild fluctuations in supply and production. There’s also been a bullwhip effect from the pandemic, where there are still production delays because it’s become increasingly difficult to get raw materials.”

Salazar said brands need to plan as much “as you can to get product in ASAP, and have a backup plan, or you’ll miss your fourth-quarter numbers.”

“Aside from all that, major carriers [FedEx, UPS, DHL] are still running over 100 percent capacity and I don’t anticipate that going away anytime soon,” he said. “The carriers have to take time to expand their capacity to handle the explosive growth of e-commerce, so in the meantime, you should anticipate continued shipping disruptions and delays. The good news is, we are making progress towards coming out of the pandemic, but the supply chain still needs to keep up.”

Salazar also said as more people return to shopping in-person and in-store, “retailers and brands have to make sure they are resourcing all their channels properly. That means making sure you have enough resources allocated to supply your e-commerce, bricks-and-mortar and wholesale channels: people, marketing dollars, technology, operations.”