Online retailer graduates to high-volume automated packaging and fulfillment

FragranceNet.com is a fast-growing online retailer of discounted brand name fragrances, skincare, makeup, haircare, aromatherapy and candles. The company has doubled sales annually for years, shipping more than 30 million packages and selling more than $1 billion in beauty products since 1997. After recognizing its manual packing and fulfillment process could not keep up, the company transitioned to high-speed, automated packaging operations.

“I come from a corporate background at a Fortune 50 company where if we had a 2% sales increase, we flew to South Beach for a party,” says Hector Dilan, FragranceNet’s director of warehouse operations for the last six years. “But our e-commerce sales have doubled here every year since the day I was hired.”

Symptoms of the growing pains included orders that sat in bins for days before leaving the warehouse, high manual labor costs and high packing material costs. Staffing up to meet peak holiday season was an even bigger challenge, particularly when 50% to 80% of annual sales are made between Black Friday and Christmas. The company ran extra shifts and hired large quantities of people requiring training for the 30 to 60 days they were needed.

Even a partially automated approach led to slow order fulfillment. The company’s conventional packaging system required a checker to manually place product in a box, adhere a shipping label and put it on a conveyor. Another team would add void fill to protect the product and the box would be sealed with tape.

“Peak season shopping can result in up to 10 times the normal sales volume for many days in a row, which strains fulfillment capabilities,” explains Dilan. “In just five weeks during the holidays, the company’s fulfillment operations had to work 16-hour days, seven days a week to meet the demand.”

In 2015, the company invested in new automated packaging lanes (Systems Technology) with compact, automated parcel packaging machines. The conventional packaging lane is still used for larger items and gift sets sold in higher volumes during the holidays. The new equipment helps to cost-effectively scale up from manual to semi-automated to full automation as growth continues. It can be used to package up to 20 orders per minute and can reduce labor up to 50% or more, producing an ROI in 10 to 24 months. The automated packaging system can also package items on corrugate base pad using shrink or stretch film without void fill. Contents may be totally random in size and shape, and may be any combination of products.

The packaging system uses two carton sizes. During most of the year, the majority of sales are single items or several smaller items in a single package. When needed, each line can be changed to adjust to larger packaging in as little as 10 minutes. The picking system recognizes which lane should be used, small or large, based on the items in the order. Shipping labels are automatically printed, applied and verified.

“The process helps us process our high-volume orders very quickly,” says Barbara Porter, FragranceNet.com’s chief technology officer. “Today, waiting two days to see order tracking is unacceptable.”