Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, April 3, 1994 TAG: 9404030076
SECTION: VIRGINIA PAGE: D-1 EDITION: METRO
SOURCE: LON WAGNER STAFF WRITER
DATELINE: LENGTH: Medium
The latest mail-order "fulfillment house" to make its name in Roanoke is Asta Enterprises. The Melrose Avenue shipping center is the address that will appear across the country Monday night during the NCAA basketball championship for people wanting to order a souvenir program from the Final Four.
Asta doesn't print the programs. A Roanoke resident who wants a program can't walk into the Melrose Avenue building and buy one. Asta just takes orders, tucks the programs into envelopes and mails them out.
Joining Asta in the order fulfillment business soon will be Hanover Direct Inc., the fourth-largest direct marketer in the country. Add to those the other fulfillment or distribution warehouses in the region - Orvis Inc., L'Eggs Products, Kroger, Advance Auto, Home Shopping Network, Elizabeth Arden - and the valley looks like the Fulfillment Capital of the United States.
The question is: Why here? The answer is remarkably simple.
"We get lots and lots of calls about distribution centers, whether you're going to move things by truck or by UPS or whatever," says Beth Doughty, executive director of the Roanoke Valley Economic Development Partnership.
"It's because they get out a map and look at their customers and draw a circle around them, and we're in the middle of it."
One mail-order company told Doughty that a Roanoke location would save the company $1 million annually in shipping costs compared with a Lexington, Ky., location. The outfit landed in Charles Town, W.Va., primarily because of incentives provided by that community.
John Moticha, vice president of operations for Orvis Inc., explained that distributors need to locate close to either their customers or their suppliers, and most of Orvis' customers are in the Northeast and the South; Roanoke is halfway between the two.
The family tree of the valley's growth into a distribution hub began in 1972, when Salem's Ortho-Vent Co. got into the mail-order business. Ortho-Vent, later known as Stuart McGuire, shipped goods for Bloomingdale's and other big retailers. It later was sold to the Home Shopping Network for a fulfillment center.
But distributors spawned distributors, which attracted more distributors and a support system. CTC Distribution Services built one of its 32 parcel-processing centers in Roanoke County. United Parcel Service set up a hub facility at the Roanoke Regional Airport.
CTC's hub in Roanoke County gives distributors a cost advantage. CTC is known as a "zone skipper," because its trucks haul parcels to various postal zones, where the parcels can be delivered at local postal rates.
"The cost of [using CTC] is more than made up for by the savings in the postal rate," Moticha said.
Hanover also drew a line, but in its case the vendors' locations played a big role. A consultant told Hanover it should set up its new operation somewhere between Columbus, Ohio, and Greensboro, N.C. It picked a spot on the Roanoke County/Botetourt County line.
Hanover can quickly ship in the comforters and bedspreads advertised in its Domestications catalog, because most of those are made in Virginia and North Carolina. But the distribution infrastructure that had developed helped Hanover select the Roanoke Valley.
"When other people see you there they think, `Gee whiz, if all these other companies are there, there must be a reason,' " Hanover Executive Vice President Michael Sherman said.
But the distribution/warehouse sector's concentration in the valley brings with it a potential downside for the companies. The cluster of companies means workers can jump from one shipping center to another, depending on which one offers the best wages and benefits.
And the community's economic development recruiters - with a paucity of land for new development - - have the luxury and the need to go after only the fulfillment centers that offer the best jobs.
by CNB