The Groupon Goods hybrid program combines drop ship and pre-buy fulfillment methods to improve the shipping process and deliver a better experience for the end customer.
For a hybrid enabled deal, Groupon will buy a portion of forecasted inventory demand to fulfill directly out of our warehouses in Kentucky and Nevada. This inventory will be sold alongside inventory from the drop ship warehouse, with orders routed to whichever location is closest to the end customer. The deal will continue to be sold under the existing permalink.
● Reduced inventory holding risk - Groupon cuts upfront POs to pre-buy inventory, vendor is paid up front according to payment terms
● Alleviates pressure on vendor fulfillment operations, particular during busy peak periods
● Vendor ships items to Groupon in cartons / pallets vs having to pick and pack individual items, saving on labor and freight
● Reduced cycle time and improved performance lead to better customer experience and have a positive impact on deal relevance score and ranking
● Significantly improved order to delivery time.
○ Groupon’s Kentucky warehouse averaged 1.4 days faster than drop-shippers for hybrid orders in Q4 2017
○ See demand distribution chart in appendix.
● Unlocks express shipping option in cases when vendor is not enabled to ship express
In order to take part in the hybrid program a vendor must be configured for Delivery Estimates (DE). Please contact your account manager if you are not already onboarded for DE.
How large are the hybrid pre-buys?
Groupon targets between 30-60 days of supply when purchasing inventory upfront to run in parallel with the dropship deal. All buys are evaluated on a case by case basis - in certain instances Groupon may opt to make a larger buy.
Please note that inventory committed to the hybrid program will need to be deducted from vendor available inventory to avoid the risk of oversell. In other words, if you send 500 units to Groupon’s warehouse you should reduce your drop ship available inventory by 500 units.
How often are POs cut?
POs are generally cut 2-3 days after costs and quantities are finalized between the vendor and the buyer. Some larger buys may take slightly longer as they require approval from Groupon finance.
Additional detail on the PO process (how to view, how to fulfill, etc) can be found here: gr.pn/2HfQWFB
How does replenishment work?
Groupon will automatically cut replenishment POs. We regularly forecast remaining days of supply and will send new POs when inventory runs low. Groupon typically targets 30 days of supply at our warehouses when cutting POs. Replenishment POs will come through automatically and follow the same process as regular POs.
My products are not labeled individually with SKUs or need to be kitted before being shipped, is that a problem?
No, Groupon can label and kit these at our warehouses. Please work with your buyer to identify if this is a requirement.
Will I be required to take back inventory that doesn’t sell?
No, Groupon does not require RTV in order to participate in the hybrid program. In some rare cases where we have excess inventory Groupon may bias orders to fulfill from our warehouses, which will result in a drop in drop ship orders. Groupon will always alert vendors before doing this.
How does co-op work with hybrid deals?
Co-op will continue to apply to all units sold in support of marketing. This will ensure future replenishment orders to keep the deal performing consistently.
Will the terms of my drop ship deal change by moving to hybrid?
No - while Groupon may require different costs and terms for the pre-buy inventory, nothing will change regarding cost or payment terms on the portion of inventory that will continue to fulfill from the drop ship warehouse.