Amway Taiwan markets more than 400 products in areas such as nutrition and health, cosmetics and skincare, home care products, personal care and household aplliances.
The volume of daily deliveries from Amway varies greatly, as is the case with all types of e-commerce. On average, 7,000 consignments are picked and packed every day for distribution throughout Taiwan, with up to 20,000 consignments in peak periods.
"Amway is our largest single customer in Taiwan and also the largest e-commerce customer in the APAC region," according to Jun Tak Ong, Managing Director, DSV Solutions Taiwan.
Amway, short for “American way," is not a run-of-the-mill e-commerce customer. Because only the 350,000 registered members and business owners (Amway Business Owners, ABO) in Taiwan can order from Amway Taiwan. The organisation is a so-called direct selling organisation whose members manage sales for other members. This means that Amway Taiwan has "only" just under 500 permanent employees who are tasked with servicing the 350,000 members with the promotional materials, training, etc., required when establishing the autonomous ABO business entities. Most products are ordered online, and 60% of the shipments are delivered directly to members, whereas some 40% concern distribution to the 12 shops and service centres in Taiwan.
Improved distribution efficiency
Amway previously organised all of its own transport and logistics. This resulted in a costly, inefficient solution with a single transport provider handling all deliveries from north to south on the almost 400-km-long and 144-km-wide island east of China.
"It was easier for Amway to cope with, but one transport provider cannot be equally strong all over the island, and the outcome did not justify the costs," says Jun Tak Ong who has now organised the distribution through four different transport providers: one provider delivers to shops and centres and three other companies deliver the goods to members in the north, south and central regions of Taiwan, respectively.
"Organising the transport with the most skilled suppliers in the respective areas both reduces costs and improves distribution efficiency," says Jun Tak Ong.
At the same time, DSV Taiwan took over warehouse operations which Amway had previously staffed with temps from agencies providing various value-added services in addition to picking and packing shipments. The workforce was unstable, its quality varied and the invoicing procedures involving several different suppliers were a mess.
Today, Amway Taiwan has dispersed its warehousing to two different locations where DSV staff manage picking and packing and value-added services, respectively: unpacking/packaging, relabelling (most goods are imported from the US and Europe and must be labelled in Chinese according to Taiwanese law). The value-added warehouse handles four containers a day before the goods are transported to the picking warehouse where the typical rate of turnover is two months.
Roughly 40 employees give it all they’ve got for Amway, the APAC region's biggest e-commerce customer.
DSV’s warehousing operation has also freed up a middle management layer, the previous supervisors, who have now been transferred to new functions at Amway.
"Today, Amway Taiwan has only one business partner to deal with, which has freed up lots of resources while reducing overall costs below previous levels, so they are very happy and satisfied," says Jun Tak Ong, adding that the business from Amway has raised the share of e-commerce at Solutions Taiwan to 30% of total turnover against only 5% previously.
Popular in Asia
"We’re experiencing a growing wave of interest in e-commerce at global level, so it’s of great value for us to be able to attract a customer such as Amway Taiwan," says Guillaume Burette, APAC Director, DSV Solutions.
"Not least in Asia, and particularly in Taiwan and China, e-commerce is more integral to trading because the economy and purchasing power have increased immensely along with the spread of the internet and the shopping culture. Take for instance Singles Day (11 November), where spending on online shopping in China is ten timers higher than the figures generated by Black Friday in the USA," says Guillaume, who is eager to learn the lessons that follow in the wake of the Amway operation.
"The large number of daily consignments helps us stress-test our systems and distribution capacity. While we have other e-commerce customers in the APAC countries, Amway is our first large-scale operator. We are now learning valuable lessons for the benefit of Amway, but also for the good of the other APAC countries," he says.
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