Episode 147: Mastering Kitting Projects with Matty Toomb of Profill

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You know, it's always going to come back to, to culture, and I'm really excited when people do go back to work. And you have companies now who want to have something on everybody's desk when they come back.

Yep.

That's where we're going to see some real creativity and If you could build that out right now, then you'll be— if you had 3 different options to say, here's a $5, a $10, and a $20 package for everybody's desk when they come back to work at these quantities, you'll be ahead of the game. The people who really— you know, my best years were, you know, when the dot-coms crashed and when we had the financial crisis in 2008. People who in those bad or tough times, the stronger ones advertise more. So if you can begin that, create that marketing now, you'll be ahead of the game when things open up.

It seems that most of us in the business are suddenly creating more and more kits for customers these days. Work from home kits, welcome back to work kits, safety kits, kits that are being drop shipped to residential addresses and addresses all over the world. Campaigns like these are an amazing opportunity to create a unique experience for your customer and their audience. And since so many of us are getting into kitting, I thought it would be helpful to have a highly tactical conversation with a campaign, kitting, and fulfillment expert to chat about all the important aspects: creative design, messaging, packaging, building a beautiful unboxing experience, freight, and how to price these complex projects. Our guest today is Maddie Toome. Matty has worked in the promotional industry for 30 years for some of the most well-known firms, soaking up best practices related to culture, creativity, and operations. He has won 5 Golden Pyramids and 4 Addy Awards, demonstrating a creative approach to the business, and has continued to develop professionally by getting a certified project management degree. After writing over 16,000 orders as a distributor salesperson and executive, he joined Profill Fulfillment in Cincinnati, Ohio, 2 years ago. Profield helps distributors with their kitting and fulfillment projects and large company store programs, serving as the back office. It's a perfect position for Matty because he understands well the needs of the distributor, the client, and the end user. Hi friends, this is Bobby LeHew, the Chief Content Officer at CommonSKU. Today we published the schedule for our first virtual conference, SKUCon@Home. SKUCon@Home features keynotes, one-to-one networking just like in real life, and a signature experience breakout sessions led by industry pros in the trenches. Topics include growing sales through adversity, creative e-commerce to drive sales, marketing matters, leading your sales team through a tough time, navigating sales in the new climate, and much more. In 48 hours, we sold a stunning number of tickets. All proceeds are being donated to United Way Worldwide. You can learn more and register at commonskew.com/skewconathome. We would love to see you there. This episode is brought to you by Commenscue, the work-from-anywhere platform that powers your connected workflow, enabling you to process more orders and dramatically grow your sales. To learn more or begin your free trial now, visit commenscue.com. Now here's my conversation with Matty.

We get projects that are large volume, 20,000 kits, but the one that we're working on now that is very complex is less than 60 quantity. It's just as important, and it involves a crystal award. So there's a level of packaging that we have to provide that's going to provide, you know, safe transit. It involves an apparel item, a polo shirt that We have to make sure we assign the right size shirt, two different color shirts, blue and black. You have 7 items going into the kit and we're waiting on one item before we can fulfill the whole thing. So everything is set up to go out the door. And then when they decide to ship it FedEx, And you're a UPS, you know, primary, you're primarily shipping UPS. Now we've got to set it up with our FedEx shipments and it's global. So it's, it involves commercial invoices that you have to sign 4 copies of. And you got to make sure it's going out by a certain date and email all the tracking numbers and There's just a lot that goes into, you know, getting paid a couple dollars to kit a project.

As a distributor with Robin, you know, we shipped— we were smaller than you, but we shipped over 50,000 packages a year, and we did fulfillment and kitting. And there was a lot of complexity in these projects, from, like you said, about the products to the method of shipping. One of the things you mentioned was that most of these are international, and that is a major part of the complexity because you're dealing with importing and exporting. You're dealing with specific items that might have different requirements depending on what country you're going into. Let's back up a little bit, and if you had to create a checklist for distributors as they're working through a project like this with their customer, what are the kinds of things they need to be aware of?

Well, I definitely, whether it's kitting or any promo project, that I start with who, what, where, when, why, how, because it extracts all the necessary information that you need. And then I think the most important thing is I always ask specifically for a perfect spreadsheet because what your client gives to you is usually not in the format that's needed for kitting. They might have everything all in one line. It might be a Word document. It might— the changes that happen, you know, don't give us the spreadsheet until it's final, final. The shipping method is just as important, but that spreadsheet has to be right. And if something goes wrong with delivery, you can always point back to the spreadsheet.

Kitting projects to me were always really great projects to have. You were able to demonstrate your unique value prop to a customer, and actually they were quite profitable. I was really surprised to discover this early in my career. Here we had a warehouse and fulfillment and distribution. And the kitting projects that came across were complex. They were difficult to price, but they were actually very profitable in the long run. I always thought it was just me. And then one time at SKUCon over dinner, I was talking with Scotty at Icebox and Danny from Brandfuel, and we all agreed that we loved kitting projects. One of my early favorite projects was for a large oil company, and all the, the only thing they wanted was they wanted every employee to show up, and this is a very, very large company. I forget the number of employees, but it was a $20,000+ project. What they simply wanted was a small treat like a sucker, or I forget, it was like Sweethearts or something that had a clever message on it, onto a cleverly printed product arrive at every desktop when they showed up at work one day just for a special message. And it was a $20,000+ $1,000 project. And, you know, you have a 3 to 4 time markup in that, including all your labor and all your materials. And there were moments like those that I was like, I love these projects. For one thing, the customer can't do it themselves, and it's something that you could really demonstrate your strength. So I agree with you that they can be very helpful, very profitable. I know a lot of folks do them, like you said, at no cost. I would highly recommend that this is a place where you can build significant profitability, particularly now in this season where we're probably doing more work-from-home kits, more onboarding kits for employees as they get back into the workforce, maybe as they're coming back, welcome-back kits. It's a unique opportunity for us.

And the opportunity to add the packaging to make that, there's suppliers out there who can produce a 4-color printed box at 12-piece minimum. It, if you have a really good graphic designer that you like to use, you can create, you know, that box and really make that, that kitting project special.

Let's talk about pricing for a minute. And I want to bounce to how we used to price these things. So our pricing sort of resolved, revolved around a method of every time you touch that product, you had a cost associated to it. And so that meant when you were receiving the product, that's a part of the cost. When you are staging the product to get ready for kitting, that's a part of the cost. Typically we only think of the assembly time, how much time it's going to take us to assemble the project. And then you have one of the most expensive costs, which was the admin cost, the sales rep or the person responsible for managing the project on behalf of the client. So in a way we had assembly costs, staging costs, packing costs, admin cost, and then of course delivery and freight costs. Anything I'm missing out of this?

No, you're absolutely right because, you know, there's so much time that goes in, especially if you're dealing with apparel, you know.

Yeah, right.

You can't just throw that shirt into the box. It has to be folded properly. And the best thing you can do is to pay the decorator to polybag and put a sizing sticker on it. And it'll save you so much time for 35 cents.

On all of those stages of pricing, from assembly to staging to packaging to admin and delivery, there I would attribute the cost of the personnel that were working on that. So, you know, if you had a warehouse employee, the hourly wage, and then we had a 3 to 4 time markup. I'm going to tell you about a funny cost, a line item cost that I had built into this, Matty. And see what you think. We had some clients who are notoriously difficult and would not let go of information or give us detailed information. And so I had a line called Prada, and it was from the, the movie Devil Wears Prada, for that type of personality that was a little bit high maintenance and wouldn't give us information. And it was like a percentage increase cost, and with a few clients, this actually worked. I know it sounds like a crazy fee and I don't recommend that, but it gives you an idea, though, of the kinds of things you run into with kidding, because a lot of your clients don't really know what they're doing either as they're putting together some of these projects.

Well, you have to— I think you have to pad it a little bit because you don't— you don't know what you're going to run up against. And I had an interesting situation where we did boxing gloves and the, we thought we were doing a great job and very efficient with the kitting. And then we realized that they, we got to one of the last boxes and the laces were in them and we're, we had to go back through the thousand boxing gloves and lace them up. So you just don't know what you're getting into sometimes. And And you try to, but you have to deliver that perfect package to the customer. It'll come back to bite you.

The most complex project we ever worked on was a Christmas campaign. And believe it or not, you would believe this. We had over a million touches in that campaign. I forget the quantity. It was a massive amount, obviously, but it was 12 different components, 12 different separate campaigns that went out to match the 12 Days of Christmas and went out every day of the 12 days right before Christmas. And so everything had a card, everything had a promotional item, very complex, and the customer loved it. Absolutely.

It's all about the execution. And I think what helps me is, is having a certified project management background as well as I've worked in an ISO facility that you document every single step, no matter how minute. So that helps to put together the kitting pricing and efficiency.

What types of projects are you seeing right now that as distributors and as suppliers in our audience, we can all keep an eye out for ourselves?

Well, I definitely think coming up with items that are other than PPE and transitioning, adding a little creativity to to the product. You know, you could take it— one of my favorite items is a tissue box. So it kind of ties into the healthcare that we're all thinking about, but you can be creative with 4-color process and work with human resources or the sales and marketing team for your client to come up with 4 really good messages for a product like that. Yeah, I mentioned the packaging. For the exterior of the box. But something as simple, one that I saw that was, you know, you see people doing a nice pair of $30 headphones for all the Zoom meetings that we're having, but all they did was add a round stress ball to that shipment. And it, all of a sudden, it tells a different message. It's a different story.

Yeah.

You know?

That's right.

It's because they added a dollar. And to the budget. So I think it's about, you know, it's always going to come back to culture. And I'm really excited when people do go back to work. And you have companies now who want to have something on everybody's desk when they come back. And that's where we're going to see some real creativity. If you can build that out right now, then you'll be, if you had 3 different options to say, here's a $5, a $10, and a $20 package for everybody's desk when they come back to work at these quantities, you'll be ahead of the game. The people who really, you know, my best years were, you know, when the dot-coms crashed and when we had the financial crisis in 2008. Because I was working people who in those bad or tough times, they, the stronger ones advertise more. So if you can, if you can begin that, create that marketing now, you'll, you'll be ahead of the game when, when things open up.

I think one of the aspects we tend to overlook with kidding projects, or we take for granted rather, is that what you just said is these campaigns are very emotional campaigns. You think of in retail, the unboxing videos, that are happening on YouTube, or when you yourself personally get an exquisitely wrapped gift at a special moment or to convey a special emotion, it's a unique experience. And so while we as distributors are scrambling for the practicalities and the tacticals about getting the project done, we just cannot emphasize enough all of those small touchpoints about the beautiful packaging, the imprinting you said on the box, like you said, and that experience when you open it, everything we can build into that, you know, not just a box full of a bunch of junk thrown in there, but everything carefully placed, everything carefully executed so that every single unboxing moment is an emotional touchpoint that really conveys the message. Like you said about the headphones and the stress ball, these products and containers are like emissaries of an emotional experience.

And I love that the messaging is is just as important.

It's everything, I think.

Yeah.

Yeah.

I mean, this is just one that I saw recently that had multiple products in it, but they tied a keyword into each of the sentences. You know, this is a heartfelt reminder that you are an extra special, and it had us because it had a straw in there. Thank you for coming to the aid of your patients because they had a Band-Aid dispenser, first aid kit.

Right.

You know, we celebrate your commitments. So if you could tie the, you know, be creative with the messaging, you know, one of my, one of the best self-promo that I've seen recently has been containments because you have to have your fresh breath during your Zoom meetings. So, you know, they're having a little fun with it, but, um, you know, just the, the, the messaging that goes along with these dropships, I find, yeah, is the most creative.

We had a client that had two campaigns running. They were a client that was a sales company. They had two campaigns running at the same time. One was called a 777 campaign, and what it was was seven different tiny campaigns that were small, like sub-$5, which meant an inexpensive item with very clever copy and beautiful packaging, even with a small package. There were 7 of these that the sales force used to hand-deliver or mail. And then they also had an upper-end project that was like a $50 unit price for hard-to-reach prospects, hard-to-reach customers. What's fascinating to me is many of these customers would deliver these campaigns and they would get the same response from a lot of sophisticated buyers. So on one hand, they had the $50 campaign going out to hard-to-reach prospects, but I'll be damned if it wasn't that, that small 777 campaign that was inexpensive but cleverly done. And the words I heard frequently used from the clients that executed these campaigns from their prospects was the prospect would finally come out to shake their hand and say, okay, You got me. That was really clever. And really, all it was was an opportunity to have a human moment, and it kicked open that door in a way that can't be done with virtually any other experience. So that's what I loved, I loved about it, is you can become— you— it's a canvas. It's an opportunity for you to exercise your creativity and your prowess on behalf of your customers and achieve some significant objectives.

And though those stories and those those projects are going to help you get new customers down the road.

Absolutely. If you're doing any project, whether it's 50 units or 5,000 or 10,000, I was telling a friend recently, especially if you're dealing with international, something will go wrong. It's not really— if you're doing, let's say for example, you're going to ship 10,000 packages, it's not really a question of if anything will go wrong. It's a matter of when and to what percentage. And the more you can help your customer understand that, hey, we almost always have less than half a percent of error. So if we're going to ship out X thousand packages, we expect there could be a problem with delivery from UPS, or there could be a problem at customs with receiving these products. We just want you to be aware. Here's our contingency plan. That's one of the things I encourage distributors to do, because once they ship those 5,000 projects for a customer, sometimes the only thing the customer hears back is the bad news.

Yeah.

So if you shipped 5,000 and they got 50 calls from someone and those 50 calls were, hey, I didn't get my stuff, their perception is things went wrong.

And then, and then, you know, it's always the same places. So when I did 145, yeah, 145 shipments and 11 of them were, you know, typical Brazil, Russia, you know, just certain countries, you know, we have issues with. And yeah, and then, but if you have your country of origin and you have all the commercial paperwork filled out correctly, it just lessens those chances. But the one that we did for 60 pieces, it was Bristol, UK and Mexico City. And it had nothing to do really with the countries, but just the addresses were so difficult and complicated that, right. We were using Google Maps, we were at the FedEx office, you know, whatever it takes to get those 2 packages out of the 60 delivered and just get a really good tracking number. You know, it was probably 2 or 3 hours of wasted time, but all, you know, you don't want that phone call coming back to say, you know, what happened here? So just do whatever it takes to, to make sure that those deliveries globally get, get to the right person.

Let's help folks here because you and I were talking before we hit record that these are not the kinds of projects you want to do in-house if you are not equipped to do so. There's just way too much expertise required to do it well. And naturally you can't, a lot of us can't now with the stay-at-home in place. What is some of your advice as folks are seeking an outsourced partner like Profil?

I would say, you know, we're able to respond so quickly with an estimate and for us to, to walk you through that questionnaire and then, and then we're— and then go compare it to you doing it yourself. The other thing is Profil's, you know, been around for 13 years and works with distributors 100%. So you have somebody who understands the needs of the distributor and the end user there. You know, the team is just like your back office. So versus going to a 3PL outside the industry, that I would say that's probably the biggest benefit is the, that expertise working in the industry. Um, and so if we're able to provide that, that first estimate, then you can compare it to doing it yourself.

I mean, you simplified your pricing recently. Can you walk through that with us real quick? And we'll provide a link as well.

Yeah. So it was always very painful to do an estimate because we'd have to go to operations and they would have so many questions. So, right, I always found that our decorators' price lists are so easy to read that if we could just create a kitting and fulfillment price sheet that's the same where you have the quantity down the left-hand side and the number of pieces going into the kit across the top, then people can figure out their costs and do their own. Yeah. So I love this. We really, you know, I'm creating it to changing it up a little bit to where it's just one page, but you basically, how many items go in the kit is question one. Question two is choose your packaging. And that's either a mailer bag if it's soft or brown box, and there's different sizes available. And then third, three is we give people, you know, the hardest thing to quote is the freight. So we just used Mail Innovations for a 1-pound or less box. And that's really eye-opening to people that a 1-pound box costs $4.50 and people freak out about it. But try going to the post office and shipping a 1-pound box in your local town now. I mean, it's $7, $8, $9. So don't, you know, it gives people an idea to say, okay, it's $1.75 for the kit and it's 80 cents for the box. And I know it's going to cost me $4.50 to ship it. I'm going to tell my customer $10 and leave it at that or $9.95. Yeah. So yeah, it's a great tool for distributors to use.

I love that. I'm glad we brought up the freight question because that is probably one of the number one pushbacks that I got from customers when we were doing fulfillment. I'll bet you I fielded this question every week. Do not apologize for freight costs. What has happened is Amazon Prime has changed the conversation and shifted expectations for freight. The reality is that UPS and FedEx are lifelines that get your project where it needs to go on time. And aside from that, the recent oil crash, freight is fuel, and fuel is cost, is expensive, and labor and all of that. So I would encourage folks, do not be apologetic. Also, you can get— you can make money on freight and not be— and not apologize for this. It's always kind of been a secret that no one wants to talk about. And if customer asked— a customer asked me if we make money on freight, absolutely. It's part of our landed cost, just like any other component in our cost, is a part of our landed cost, right? So I would— I want to encourage folks really not to shy away from that, not to back down from it, because what you'll find with kitting projects is the customer just doesn't want the complexity of doing it themselves. And they might bristle a little bit about something or another, but stand your ground when it comes to freight costs, right?

And if we can, you know, because of the volume that we do on a daily— I think we, we might have shipped 700,000 shipments last year. So our freight discount is pretty good with UPS. And right, if we can provide a lower cost on the freight and the distributor wants to, you know, add on a little, they can, they can do it and feel comfortable. Um, and then I just tell— I, the same thing I used to tell my customers, there's no free artwork and there's no free freight. So Yeah, just, you know, you don't want to deal with it. You can just get your client's shipper number and, and, and no one will ever see it. It'll go into some bottomless pit, but you won't have to write it. But right, you know, some people do want to get an estimate, right?

And by the way, if the client is indifferent, I would argue for you to, to, to do the freight yourself so that you can bill that as a chargeable item. But Matty, any last comments, any last thoughts?

I would just, you know, have people, you know, continue to be creative because creativity will definitely help you get the next project.

And I would add, begin to really think through your customer's purpose. Begin to think through the next 6 months and what they have. Do they have Welcoming kits back with employees who are coming into the workforce again, back to their headquarters. Are these safety kits when they arrive at their desk so that they know that they have a— if it's a mask or whatever it might be, hand sanitizer— that it's all there waiting for them to provide a safe environment? Think through the kitting opportunities. And kitting doesn't always mean shipping. Kitting can mean just that it's kitted together for one experience. But as we face the unknown in the next several months, your customer is going to need ideas from you. That are beyond a simple product. And I think the kitting solutions provide such a unique advantage for distributors to demonstrate their creativity as well as their high-touch service in a way that very few products can. So, Matty, I'm glad to have you, um, on SkuCast. I wanted to talk with you about this because I know it's a hot, uh, project to talk about right now. And thanks for your advice and always being willing to share.

Absolutely. Thanks for having me, Bobby.

Thanks so much for tuning in to this episode of SKUcast. Be sure to keep up with our latest content by subscribing to SKUcast on iTunes or to our blog at community.commsku.com. Until next time, friends, thanks so much for listening.