Invacare sets handling fees

Saturday, May 31, 2003

ELYRIA, Ohio — The ongoing appeal of just-in-time inventory management has prompted Invacare to implement a new handling fee policy.

On May 1, for orders that total less than $250 Invacare began to assess a handling fee that ranges from $5 for all EDI/Internet orders to $25 for orders that come in via paper, phone and fax. The new policy does not apply to parts-only orders but does apply to hybrid orders that contain parts and product.

The decision to cease waiving freight charges was not easy, according to Steve Neese, Invacare’s vice president of customer service and e-commerce. The company spent several months before its May 1 announcement making sure its customer base understood why it was calling an end to the days of free freight.

“It used to be that everybody stocked products, and bought pallets of stuff that came in on big trucks,” said Neese. “But over the last three or four or five years, we have seen a migration of companies that have been using us as a virtual warehouse.”

Virtual warehousing does not come without costs. Neese cited Gartner Group statistics which reveal that the cost of processing an order is about $125. Assessing handling fees will defray some of those costs and opens the door to a new reward system as Invacare coaxes more of its dealers to place orders via Internet and EDI.

About 26% of Invacare’s transactions today are electronic. The company declined to reveal what percentage of its orders came in at less than $250. “For stock items,” said Neese, “it’s a lot of product.”

Handling fees are not unique to Invacare, and not new to the industry, but they’ve often roosted in the books among major vendors, unused. HME