Taking care of small business
 

Monday, June 07, 2004
DYLAN RIVERA

When Co-Operations Inc. started 11 years ago, the company did nothing but make copies of software on floppy disks for its single client, Now Software.

But as times changed, so did Co-Operations. The fulfillment company has added a variety of services to meet its customers' needs. More than just replicating software, Co-Operations now stores and tracks inventory, packages products and ships them for a variety of mostly small businesses.

"We'll try anything once," chief executive Patricia Granum said.

Such flexibility has helped the company thrive, despite the down economy. Co-Operations has grown from $1.7 million in sales three years ago to $2.6 million in 2003.

Fulfillment businesses such as Co-Operations fill an important, growing niche in the nation's economy. They serve as a company's warehouse, enabling a business customer to focus on making and selling its own product, without the cost of leasing a warehouse or the hassle of maintaining inventory. Since they specialize in shipping, they also have lower per-unit shipping costs than most of their small customers could obtain by negotiating directly with a freight provider.

Formerly known as Express Software, Co-operations "came out of nowhere" last year when it bought defunct FSI-Fulfillment Specialties of Portland, said Walt Aman, vice president of AKA Direct, a Tualatin fulfillment company founded in 1968.

Other than AKA Direct, Co-Operations may be the only fulfillment provider in the Portland area with the same management for more than 10 years, Aman said.

Transportation companies such as United Parcel Service of America Inc. and FedEx also are getting in on the distribution game. And promotional product makers are adding distribution as a service, cutting into fulfillment companies' business, Aman said.

Granum said she isn't concerned about the giants of distribution.

"Our biggest competition is people who think they need to do all this themselves," Granum said. "To get them to do it this way takes a shift in thinking."

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