CHRIS: Ron, one of the things that's always interesting about this is a lot of buyers groups tend to have some of the most complex scenarios. And I think this is because, l logistically it makes sense, you've got a lot of different participants, so you're going to have split payments and split shipping as almost a guarantee. But then you also tend toward having drop shipping. So you could have fulfillment from multiple locations, from multiple different drop shippers, and this is going to add up to be almost like a Cartesian explosion of different variables going on here. Because you also want to optimize the pricing and the inventory and making sure to fill a container.
This is really what we're dealing with. We're dealing with all of these things at once. And this is the reality of optimizing for these group purchases, we've got to be able to understand in real-time—with the data and the integrations between the systems—we have to be able to understand and present that to the user, as well as to the vendors, in an accurate way that is reliable and credible so that the user can make a sound decision when they're purchasing. [It also has to be] based on accurate fulfillment timelines, accurate inventory and pricing data, et cetera.
RON: Yeah, that makes sense. Matter of fact, I want to give a real-world example that just really expounds upon the complexity that can happen in just a simple scenario of buying a product on a group buying platform. One of our clients supplied and sold railroad ties. Most of the time when they sold these railroad ties—and they sold them in bulk—it was to construction companies and landscape companies that were doing things like—I think the last time when I was talking to them about this, they had a client that was building and won the bid to build one of the football stadiums. And I don't remember if he's NFL or was just high school stadium, but they needed like 70,000 railroad ties.
Well, if you've ever seen a railroad tie, these things aren't light, right? They're not small. They're not light. And I can't even imagine with gas prices today what it would cost to ship 70,000 railroad ties. But anyway, this scenario was, our client had 11 different distribution centers across the US where they would house these railroad ties and stock them.
But let's say, for example, someone in Salt Lake City is building a new stadium and they need 70,000 railroad ties. But right now the shipment hasn't come into Denver. So there's only 10,000 in Denver, and that's the closest facility, the closest distribution center, and there's 10,000 there. The next closest is in Seattle. And there's a couple hundred thousand up there.
So is it cheaper, potentially, instead of getting 10,000 from Denver and then the rest from Seattle, to just order them from Seattle because they're coming on a train? Like you and I've seen in so many of our scenarios, we talk about having to fill a container or fill a truck before shipping, because it's a flat rate per truck. Well, potentially it could be cheaper.
But on the other hand, what if that construction crew has a date that they need to hit and they can't wait that extra four days to get all of them from Seattle? They need to ship the 10,000 from Denver because they can get those here in time to start so it doesn't delay the project. And the cost of delaying a multi-million-dollar project is much more than the extra few thousand to ship those in. So we may not even be in control of this scenario that requires them to ship from different locations.
But how easy do we make it for that crew in Salt Lake to see how many units are available in each of the 11 locations? How easy do we make it to estimate delivery times and shipping costs? You think about all that, and based on the volume that people mostly buy from them, who didn't notify Denver that they were running low on stock so they could reorder or potentially transfer some? Maybe the ship came in, offloaded them in Seattle, and then, because gas was so expensive, they said, “Hey, let's just not ship them down to Denver. If they need some, we'll ship down, but let's not.” And they let them run low, and now, all of sudden, this caused a problem for their clients.
It can become very complex. You basically want to allow your buying group platform to provide the capability to allow your vendors to not mess up. Because the goal of your vendors and you together is to support and make it easy for your buyers if you're a buying group. And if you mess that up, you could potentially lose your buyers. Especially when they're buying in bulk like that, you definitely don't want to lose a client. Any additional comments on this before we move on to the next one?
CHRIS: I think that's perfect. Thank you.