Vintage Candy Co. review for Cahoot Fulfillment

Aug. 21, 2024

In-Depth Analysis of Cahoot.ai Pros: -Speed of Implementation: Cahoot.ai can be quickly integrated into your operations, potentially reducing the time to start utilizing their fulfillment network. -Valid Tracking Rate: The tracking rate is generally reliable, ensuring your customers receive accurate shipment updates. -Network Proximity to Customers: The distributed network can place your products closer to customers, potentially reducing delivery times if you can manage the logistical complexity of constant replenishment. -Label Automation: Automating label creation can save time and reduce manual errors in the shipping process. Commitment to improving: Cahoot.ai does appear to have a goal of creating and improving their service offerings. Cons and Their Perils: No Control Over SFP Program Metrics: Peril: The sales pitch of Cahoot’s command of SFP fulfillment, can contrast with Amazon’s program eligibility - which is independent of Cahoot. This distinction leads to false expectations that a contract with Cahoot is your gateway into the SFP Prime program. Even with excellent fulfillment performance, achieving and maintaining a 93.5% on-time delivery rate, controlled by independent carriers (UPS, USPS) failed for this writer’s company despite a total order volume of over 1000 orders shipped. This lack of control means committing to and investing in Cahoot.ai as an SFP solution might tie you into a particular contract that fails to deliver the benefits of SFP, potentially wasting valuable resources and time without gaining the competitive advantage of the Prime badge. Reluctant Initial Consulting: Peril: Small businesses requiring more hands-on guidance may find the consulting support insufficient after the initial onboarding. This reluctance can lead to misunderstandings of the program's intricacies or operations, resulting in implementation errors and inefficiencies that can affect overall business performance, health, and customer satisfaction, as well as straining the relationship between parties. Negative Weekly Cash Flow: Peril: Paying advance shipping deposits weekly can strain your cash flow significantly, especially if your sales cycle and receivables won’t align with these outflows (notably for Amazon Sellers). This negative cash flow can cripple small businesses, forcing them to either seek additional funding or risk insolvency. Exclusive Use of Cahoot’s Shipping Rates: Peril: Locking into Cahoot’s shipping rates for a specific period can prevent you from leveraging potentially cheaper or more favorable rates from other providers, increasing your overall shipping costs and reducing profitability. Handling and Box Fees: Peril: Additional fees for handling (fulfillment) and external boxes can potentially double your shipping costs, especially if those boxes that fit your items are not standard boxes being stocked. These fees erode margins, particularly for businesses with tight profit structures, making it harder to compete on price or invest in growth. No Net Cost Savings: Peril: Instead of saving costs, Cahoot’s service fees are added back into your cost of goods sold (COGS), negating the perceived financial benefits. This hidden cost structure can mislead businesses into thinking they are saving money when, in fact, their operating expenses remain unchanged or increase. High Margins Required: Peril: Cahoot’s model demands high margins to absorb the additional costs of outsourcing fulfillment. Low-margin businesses will struggle to remain viable under this model, as the added expenses can quickly erode already thin profit margins. Significant Cash Reserves Needed: Peril: The necessity for substantial upfront cash reserves to cover deposits and ongoing costs means only businesses with strong cash positions can participate. This requirement excludes smaller, less financially robust businesses and adds significant financial risk for those that do. Increased Time and Effort: Peril: The additional time required to manage maintenance issues and the overall fulfillment process can divert resources from other critical areas of your business, such as operations, sales, and customer service, leading to potential declines in overall business performance. Immature Software: Peril: While improvements can be rolled out, an immature software platform can lead to operational inefficiencies, errors, and unexpected downtime. Relying on such a system can disrupt your fulfillment process, leading to customer dissatisfaction and potential loss of business. Untimely Communication: Peril: Decisions that affect your operations, such as suspension, in our experience are sudden and without warning. These types of issues not being communicated timely, can lead to poor planning and reaction times, as well as jeopardize the health of your business on platforms like Amazon where you can have hundreds of orders that are due to ship completely fail to be processed, leaving you with a greater than 4% Late Order Rate. This lack of transparency can cause operational disruptions, missed deadlines, dissatisfied and ultimately, account suspensions. Particularly in the event that Cahoot decides to suspend fulfillment operations because of contractual issues. Non-Refundable EFTs: Peril: If there are Non-refundable electronic fund transfers, it means that even in cases of disputes or service dissatisfaction, you may not recoup your funds. This policy in practice increases financial risk, making it harder to manage cash flow and recover from unexpected issues. Conclusion: Cahoot.ai’s shortcomings pose significant risks, especially for small and low-margin businesses, especially in exchange for contracted services. The lack of control over SFP metrics, coupled with substantial upfront costs, handling fees, and negative cash flow, can strain financial resources and operational efficiency. The potential for miscommunication and immature software further exacerbates these issues, making Cahoot.ai a high-risk option for businesses without strong cash reserves and high margins. Careful consideration and thorough understanding of these risks are essential before committing to their services. This is a real customer review and is aimed at helping others make an informed decision before deciding to proceed with this company.