This is a YouTube video titled "Disruptive Ecommerce Order Fulfillment Vesalius Health Merchant Testimonial - Cahoot Peer-To-Peer" featuring a conversation recorded in July 2019 between Manish Chowdhary, founder and CEO of Kahoot, and David Foote, a merchant from Vesalius Health. The discussion centers on ecommerce delivery challenges, shipping costs, and how innovative solutions like Kahoot's peer-to-peer shipping model help improve margins and delivery times for sellers, particularly on platforms like Amazon.
This is Manish Chalkri, founder and CEO of Kahoot. I'm joined here with one of our esteemed merchants, Visaylis Health, David Foote. David, welcome.
Thank you.
So we are on the second day of IRC 2019 in Chicago and very pleased to have David join us. David is also a speaker at this conference and he spoke yesterday. David, please tell us a little bit about yourself and Vasily's health.
Vesalius Health is a distributor dealer of healthcare products. We're based in Indianapolis. We have 2,300 separate SKUs. Those turn into 10,000 listings on the top seven platforms. We named the company after a man named Vesalius who was the first anatomist in the 16th century in Belgium. So he's the first person to delve into human anatomy. And since we sell things that help person's anatomy get repaired, I named the company after him.
Well, very impressive. And you also spoke led a session yesterday on topic of from delivery pain points to sweet spots. So, David, tell us a little bit about what you talked in this session. What were the key takeaways?
Well, I liken delivery pain to Dante's Inferno. So I made a reference to how the pain coming from delivery is like being in the sixth circle of hell. And so then I went over the parts of the sixth circle of hell and I talked about things like items not being received, late shipments, false fake shipments, delivery expense. And then I gave samples of what we do as an organization to go through the process to solve those problems. And I spent a lot of time talking about six Sigma type stuff. We talked about the five whys so we would look at. I tried to have a takeaway of the five whys. When you have a late item, why is it late? And then break down via the five whys to get to the root of the problem. So you fix that problem. And I use what we found in the five whys as examples that people could take away.
Sure, that's great. I mean, and you also are very intimately familiar with the delivery cost and delivery time. You know, in the age of Amazon, you are a very successful Amazon seller and you also joined the Kahoot network. Can you talk a little bit about the shipping cost and the delivery time, how that impacts sellers like yourself on Amazon?
Well, on Amazon, they are continuing to raise the bar on delivery expectations. It kind of played to my company because I've been focused on metrics since day one. So whenever we had a delivery issue, we delved into it with the five whys to figure out how we can Avoid that problem in the future. And then I organized our shipping department to take advantage of Amazon because Amazon gives you 24 hours to ship an item. I tried to figure out how we could ship an item in 12 hours. So that gave me a bigger shipper window, which led to less problems, which leads to higher metrics and higher margins.
Sure.
Okay.
So what else, as a seller can you do to improve your margin? What else can you do to stay on top of this delivery time? What else can you do? Because the problems that you are facing are probably the same problems that many of the other sellers that are maybe watching this video are facing or will be facing. Can you talk a little bit about that?
Sure. That's how I came across Kahoot. Because the example I used at the presentation yesterday was Gatorade cooler. We're a Gatorade dealer and we sell this very large Gatorade cooler. So to ship it from Indianapolis to California costs upwards of $50. The cooler only sells for 109. So, you know, I've got big piece of my margin eaten up in shipping. Okay. If I ship that same cooler to Cleveland, it costs $14. Okay. So I have a really good margin on shipping it to Cleveland, but I don't have such a good margin shipping it to California. And that's where Kahoot came in with your peer to peer program where a seller of equal quality could ship my item for me out of their own inventory in California and that cost would be $12 instead of 50 and it would get there earlier.
Right. So what, you know, obviously change. Change is hard and innovation. What do you, you know, how do you think about embracing newer models like Kahoot into your business? You know, because retailers, you know, have never had to deal with this much change at the same time as we deal with now.
Yeah, change. You know, change is incumbent in E commerce. I mean, I like in my business of building a brick wall. So when I started the business in 2012, I built a really good foundation. And then from there I've been adding layers. Each layer makes my business better. So I liken to Kahoot to another layer of the business which would ultimately lower my expenses and raise my margins, which leads to more profit.
