Oriel uses NetSuite to manage inventory, run promos, keep global operation on even keel
Crain's New York
03/25/07
By Karen J. Bannan

On the surface, the idea looked terrifically simple: Bring together some of the renowned winemakers of the world and sell small quantities of their choicest vintages under one label. But as entrepreneur John Hunt quickly found out, working with two dozen vintners - spanning the globe from Chile to Australia - and selling to customers across the United States is a wildly complex business.

Despite the odds, about two years after the launch of Mr. Hunt's Oriel Wines, the company is doing so well that he expects it to be profitable by year's end.

Oriel's success is due in part to the power of a good idea. But that success would never have been remotely possible if not for modern management software.

"We knew right away that we needed a platform that could support all [the facets of the business] without the need for a lot of human interaction," says Kelly Ford, the company's managing director.

Crunched by the numbers

That's an understatement. Manhattan-based Oriel has more than 20 suppliers and offers about 30 different vintages, which it orders in quantities ranging from 300 to 4,000 cases. These take anywhere from a few days to five weeks to arrive and must be paid for in nine different currencies, all of which are constantly fluctuating. On top of everything else, Oriel operates both retail and wholesale businesses, with different profit margins and varying distribution requirements.

To manage all these moving parts, Ms. Ford turned to a software package that allows small businesses to take care of everything from managing inventory and sales calls to creating marketing campaigns to organizing e-mail.

Ms. Ford, a former senior manager of knowledge management at International Business Machines Corp., chose NetSuite Inc.'s small business package, originally developed by Oracle Corp. Like some of its rivals — including Salesforce.com Inc.'s eponymous product, Sage Software SB Inc.'s ePeachtree and Intacct Corp.'s Intacct Small Business — NetSuite allows users to monitor a variety of functions from easy-to-use dashboards, just like pilots of 747s.

Leader of the pack

"Oriel Wines is definitely on the cutting edge," says Liz Herbert, a senior analyst with Forrester Research, based in Cambridge, Mass.

She notes that many entrepreneurs stretch programs like Microsoft's Excel spreadsheet program and Sage Software's ACT! contact-management software to help run their businesses, rather than using full-fledged management packages.

In some cases, Ms. Herbert says, this practice stems from businesspeople's ignorance of the products on the market. In other cases, "people wonder if the programs are worth the investment, since something like NetSuite runs $100 per user per month."

Ms. Ford has no question about the software's value to Oriel.

"For us, having an eye on the cost of doing business is critical," she says. "NetSuite lets us look at the cost of goods sold, the total revenue, total profits, gross profit margin."

If she needs to see how well a particular wine is doing in New York, she can pull up a report with a few quick clicks and get up-to-the-minute data.

Ms. Ford also relies on her software to cut the cost of marketing campaigns, as well as the time they take to produce.

Last month, Oriel Wines ran a Valentine's Day promotion for trade and retail customers and prospects. The campaign, centered on a rose called Femme Fatale, included everything from merchandising materials for merchants to e-mail come-ons — all produced with NetSuite's help. The push proved so successful that Ms. Ford churned out another campaign, this one geared to St. Patrick's Day; it took her just 24 hours.

She uses the same software to track, in real time, who's clicking through the Oriel Web site and who's buying. By looking at the "Profitability by Market" report, which she has access to via her dashboard, Ms. Ford can also figure out when she should use her own salespeople, and when to go with outside distributors. She can quickly see how much a staffer is selling, analyze the cost of the revenue and run a quick calculation to see how that figure compares with the cost of using a distributor.

Ms. Ford recently replaced her Florida sales rep with an outside distributor after running such a comparison, fattening the company's Florida profit margin in the process.

IN A NUTSHELL

ORIEL WINES

FOUNDED 2004
EMPLOYEES 10

REVENUES Over $2 million

MOST EXPENSIVE BOTTLE 2003 Sygnet, McLaren Vale, $100 at retail

LEAST EXPENSIVE BOTTLE 2003 Courant, Côtes du Rhône, $15 at retail