Suppliers
Inventory
Returns
Distribution Center Location

In order to achieve our value proposition of offering our customers a "low-price" product while still offering superior service to our customers, matrimony.com will need to be highly operationally efficient.

Suppliers
Our relationships with suppliers will be fundamental to our success. Ideally, we would like to use a distribution model that involves direct interaction between manufacturers of wedding gifts and ourselves. However, due to limited volumes in the beginning of operation, we feel we will initially need to deal primarily with wholesalers. As a result, in the first years of operation, we will monitor sales volumes of products made by the different manufacturers. As volume levels increase for a specific manufacturer we will consider approaching that manufacturer directly to take advantage of volume discounts and manufacturer rebates.
Another crucial aspect in relation to suppliers is our need that they support our electronic commerce requirements. Electronic Data Interchange (EDI) is a key strategy to reduce our costs. A primary consideration in our selection of suppliers will be their ability to support EDI. As far as possible, we intend to write specific EDI requirements (i.e. x12 transaction sets) into our distribution agreements with suppliers.

Inventory
In order to minimize costs, matrimony.com plans to hold minimal inventory levels. To facilitate this goal, we will only inventory high volume products. We will establish certain volume levels that determine whether a product is considered high or low volume. As mentioned before, the information as to whether a part is high volume or not will be stored on the matimony.com part master. We will review parts on a regular basis to determine if their volume levels have changed.
If a part is determined to be high volume we will stock a certain predetermined number of those items. When the inventory levels get below a predetermined level, our system will automatically initiate an EDI reorder transaction to our supplier. If a part is considered low volume it will not be stocked and will only be ordered from suppliers when we actually receive an order from our customer.

Returns
In order to reduce costs, one of matrimony.com's strategies is to reduce returns. We feel high return levels could add significant costs to the organization. Coupled with this is the fact that under traditional registry systems it is quite typical for brides and grooms to end up returning a large portion of what they receive. We have a two pronged approach aimed at reducing returns.
First, we will encourage the use of the "preview" function (Description of Business- Bride & Groom Registration Management). This function allows couples to "return" unwanted gifts before they are shipped. Our second strategy involves the criteria we use to select the products we offer for sale. We intend to only offer primary wedding products that are unlikely to be returned.

Distribution Center Location
We plan to create a highly sophisticated linear programming model to determine the optimum location of our distribution facility. This model will take into account freight costs, sales tax implications, land/building costs, supplier locations and our target customers.
Our gut feel is that our initial distribution facility will be in the Seattle metropolitan area. Based on our target customers, we would probably entertain the concept of a second distribution center in San Jose if the volume was there and it made sense from a logistics/freight perspective. When we were originally designing matrimony.com we had planned to use an organization like FedEx as our logistics arm. After listening to several www.amazon.com speakers, we decided that during start up it would be more beneficial to operate the distribution center ourselves in order to achieve maximum flexibility and get a full understanding of the business. We also felt the costs of setting up an initial relationship and process with a company like FedEx would probably be very high. We don't rule out working with someone like FedEx in the future.