CEO Bill Canady raised the minimum order size, cutting order volume 38% but boosting gross margin from 19% to 31%. The $22 orders that disappeared cost $40 to process. Fewer small orders meant fewer customer calls, so the company shut down its outsourced call center.
Order count dropped 38%. 38. That's a big deal. Average gross margin per order rose from 19% to 31%. I like that. 12 points. The orders that disappeared were the $22 ones that cost $40 to process. You know what I'm talking about. And the customers who still wanted the product consolidated. They stopped ordering every 4 times a month and started ordering once. It's good for them. Good for us. Then the downstream effect, which is the one I'd pointed at the board or pointed the board to. Customer service calls fell by enough that we closed an outsourced call center. We didn't need those. That center existed to handle order status, expedite short order shipments called on high frequency, the small orders. Take away the small orders and the calls stop. A whole vendor contract just ended, and that's music to your ears.
