Canflix to open Ontario warehouse

[YKdvd]

Good news for eastern Canflix customers - I was exchanging email with them, and they mentioned they are about to open a warehouse in Ontario. I'm not sure of the location, but they apparently hope to begin shipping from there as early as Monday (Feb 12).

They describe it as Canflix owned and operated, with inventory and staff, presumably making it similar to ZIP's approach, rather than the old VHQonline Ontario operation which appeared to be a mail expediting point to and from Vancouver (although people here indicated it worked quite well).

I asked, and apparently the system will prioritize "availability"; presumably like ZIP's "Order" option where it tries to send the highest title possible, no matter the warehouse. They indicated they are looking at adding an equivalent of the ZIP "Speed" option (which favors shipments from the nearest warehouse at the expense of your queue position).

I've sent back a note asking a couple of questions; whether the website will indicate where shipments have been sent from (unlike ZIP), and whether (like ZIP) the return envelopes from the "wrong" warehouse will be addressed to the customer's "right" warehouse.

[YKdvd]

It will be interesting to see how this works out for various types of customers. Obviously great for easterners - any Ontario shipments is better than none. For people in the west, especially Alberta, it will depend on how many slower Ontario shipments they wind up getting. The available titles each day are never going to balance out perfectly with the east-west mix of customer requests, and the problem would be more noticeable the smaller the size of the operation.

ZIP opened its second warehouse in Calgary around the time it bought out VHQonline (Sept 2005), which gave them 25,000 customers and 220,000 discs - I don't know the equivalent Canflix numbers, but for argument's sake put it 5000 customers. They have a much smaller range of titles than ZIP did, so it wouldn't be a full factor of five, but presumably there will be a fair amount of cross-shipping, especially for the lower-quantity titles. I can't remember how ZIP's fissioning affected Ottawa and Ontario customers, since the hubbub over their VHQ amalgamation problems drowned it out!

[Morgan]

Interesting. Have they been bought out by Zip and are keeping the Canflix name?

Or perhaps they bought out one of the Ontario based companies to go against Zip?

In my exchanges with them, Canflix mentioned the upcoming Ontario warehouse, but not even a hint of any connection with any other company. And I would eat a sock if they've been bought up by Zip already.

[alex]

Does this mean Canflix has purchased additional DVDs for this new warehouse or will they just be using it as an extra shipping point to distribute the existing inventory?

[YKdvd]

And I would eat a sock if they've been bought up by Zip already.

And I'll eat the other one...

I'm not sure if everyone thinks ZIP puts horse's heads in the beds of other companies, or are making offers that can't be refused, but whatever Canflix's exact arrangement in Ontario might be, it isn't with ZIP!

Man I hope they increased inventory because it's pretty slim pickings as it is now as far as the # of copies per title. Based on what I've seen with their game collection, most appear to only have a single copy in inventory... At least for Xbox 360 titles.

I think you'd almost have to be sitting on a pile of inventory to open up a new distribution centre like this so as to not affect the current subscribers out West.

In the simplest case, they would just split the inventory - you've still got the same customers, with the same queues, and the same returns coming in each day. The allocation routines treat it as one inventory, everyone gets the same discs they would have otherwise, but it may ship from the "wrong" warehouse. Your queue priority results wouldn't worsen, but there will be a hit on shipping times. How much depends on They might be able to tweak this a bit - sending a customer #3 instead of #2 from their list, for instance, so they get a "local" shipment, and it may not be a big deal. But I would think they are still small enough that there will still be a price to pay, either in cross-shipping or lower ranked selections. Even if the percentages work out over time, you can't deal in fractions of a DVD on a specific day!

The question is how much slower a cross-country shipment is. Obviously Alberta customers will take a hit, and Canflix customers in, say, Calgary may get fewer shipments. But here in Yellowknife I never had a big difference in shipments from Vancouver vs. Ontario back in the old VHQ/DVDflix days, so outside Alberta and perhaps the neighbouring provinces it may not be a big deal. And especially if they send returns to the closest warehouse, discs should spend a bit less time in transit than they do now, which will help turnaround times on the stock.

[dakos]

This would be good news for Ontario customers as long as we get most of our shipments from Ontario. I really liked CanFlix when I was with them back in early 2006 but their shipping times were too long to make it worthwhile.

YK/Morgan: Are we taking weeks or months here? No firm dates?

[dakos]

Sorry did not see the Feb. 12th date in the first post from YK.

[YKdvd]

I'm thinking this news coupled with the recent increase in the monthly price $21.95 up from $19.95 are most likely related. For $2 more per month I'll take an Ontario distr. centre...If that is the case you're right, the only people to then take a possible hit are Albertans.

They might have raised the price in any case - $19.95 is at the bottom end of the 3-disc market. Cinemail bumped their prices as well recently.

The neighbouring provinces might be a bit slower from Ontario as well - in theory the extra hours on the plane from Toronto-Vancouver vs. Calgary-Vancouver shouldn't make much of a difference, but things like more frequent flights, missed connections, deadlines, and whatnot probably increase the probability of something going wrong and getting to the destination main sorting plant later from long distance. For me, the difference between BC and Ontario didn't seem huge, but it might be more noticeable directly between large sorting plant cities. Any Vancouver/Calgary ZIP customers keeping track of times from the local warehouse vs. the next province vs. Ontario? But certainly if I were a Canflix customer in Calgary getting those 1-2 deliveries, I'd be prepared for some slower shipments once the Ontario warehouse gets up to speed - the question is how many, and that will depend not only on the size of their inventory, but what titles a customer is trying to get.