As the manufacturer and distributor for leading digital brands – including Halfbrick Studios, the creator of the massively popular Fruit Ninja game – ToyFoundry needed a reliable shipping and logistics partner to fulfill the demand of its Asia-Pac customers.
When a game developer approaches ToyFoundry, they typically have a large audience playing their game and creating a demand for physical products: t-shirts, stuffed toys, phone cases, and more. ToyFoundry’s team helps these game developers monetize and convert their digital brand into a physical one and using an outsourced fulfillment partner lets them leverage global distribution that is usually reserved for the largest of firms.
We are always going to need to distribute stock and we need to rely on our partner for this. Having this means ToyFoundry can concentrate on everything else. That’s the biggest benefit: knowing that we can give our partner that problem – shipping and distribution – and we know they’ll get it right.
ToyFoundry sets up the necessary business identities in strategic locations to take care of sales taxes and imports, manages enterprise web hosting, and handles 24/7 customer support in multiple languages (nearly one-third of Fruit Ninja’s customers are based in China, making this a necessary ingredient for growth). For shipping and logistics, however, ToyFoundry uses a warehouse and an outsourced order fulfillment partner to ensure that products are located close to their Asian and Australian customers and are readily available when needed.
In order to continue on their growth trajectory, however, ToyFoundry faced several challenges:
ToyFoundry’s market reach spans the globe, and setting up staging in multiple locations was important to satisfy demand wherever it came from. While it could easily fulfill its European and American orders, shipping to customers in China, Korea, and Australia was more difficult. ToyFoundry, itself based in Hong Kong, knows the value of lower shipping in winning customers: shipping to Australia is often very expensive.
This is why ToyFoundry decided on using a facility in Hong Kong. “The Australian customer is used to buying online and expecting higher shipping costs, but Hong Kong is close enough that they receive their products quickly and cheaply,” said Verstege. “The Australian customer is important to us, and so is the Chinese, Korean, and Japanese customer. Now that we stage in Hong Kong we can reach all these markets, as well as our customers in Europe and the Americas.”
Whereas orders sent from the U.S. to Australia can take weeks to arrive, ToyFoundry’s shipments from Hong Kong arrive faster and cost less.
Another advantage of a flexible supply chain is having a fast time-to- market, which allows testing prototype products and accepting preorders without suffering the holdups that can be typical for a shipment undergoing customs inspection.
“It allows us to accept pre-orders and know that we’re not going to have any hold ups,” says ToyFoundry’s co-founder Mark Verstege. “One of the issues with customs is that while they do x-ray scans and inspections at port, what you were hoping would take a week can end up taking two or three weeks. Hong Kong as a staging platform means that we can ship product out on the water, but in the meantime we can hold some reserve stock in Hong Kong so that we can start releasing those pre-orders to customers quicker. Ultimately we’re going to still push products to where the customers are to take advantage of cheaper shipping and quicker delivery, but for pre-orders the delivery time isn’t an issue. What is important is getting it out the door as quickly as possible once manufacturing is complete.”
ToyFoundry manages manufacturing and selling for its customers, but uses a partner to handle the shipping, warehousing and logistics of the products. This very vital part of the process is large enough in scope that relying on a partner yields significant benefits. According to Verstege, picking the right partner is vital: “We are always going to need to distribute stock and we need to rely on our partner for this. Having this means ToyFoundry can concentrate on everything else. That’s the biggest benefit: knowing that we can give our partner that problem – shipping and distribution – and we know they’ll get it right.”
Being able to integrate warehouse operations into sales operations is now also possible with application programming interfaces (APIs). This sort of integration allows controlling inventory management and shipping from a software layer, which improves efficiency and provides a level of control that previously did not exist. For ToyFoundry, this means being able to manage inventory in four warehouses on three continents from a single dashboard in a browser. The orders that come in to their customers’ online stores are routed directly to warehouse operations and can be fulfilled with a single click. And when a product refill is needed in one of the warehouses, the orders for that region can be fulfilled from elsewhere so there is never a break in fulfillment.
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