The Science of Supply

CWR Wholesale Distribution offers hundreds of marine products from its New Jersey and Florida locations

As a teen back in the early ’90s, Brian Swanke bugged the owner of CWR Wholesale Distribution in Bayville, N.J., for a job because he didn’t want to smell like a French fry after working at McDonald’s. He got a job sweeping floors and stocking shelves while he saved for a car and strategized plans to become a doctor. 

In those days, CWR was a mail-order business with about 20 customers. Today, Swanke is the company’s CEO, overseeing two locations and a core business in electronics with marine gear and equipment from more than 300 brands. 

“I still stay involved in all aspects of the business,” Swanke told Soundings Trade Only. “I understand the issues. I’ll still work in the warehouse and work to figure things out.”

Distribution centers like CWR offer inventory management, order fulfillment and supply-chain flexibility to keep recreational marine shops, businesses and technicians humming along. Innovations in technology have helped CWR to grow. Back in the early 2000s, an enterprise resource planning system tied to the company’s website shopping cart moved CWR from being a small regional distributor to becoming a fulfillment house for the country. These days, the technology has shifted toward web-to-web interfaces that help manufacturers keep tabs on inventories, shipments and deliveries, as well as overall stocks. 

CWR’s main facility is still in Bayville, and is now about 20,000 square feet. There’s space for modular storage, so usable square footage is closer to 29,000 square feet. The company also has a similar-size facility in Tampa, Fla., that opened about 10 years ago to serve Florida’s large customer base.

“Better time in transit equals cost savings,” Swanke says, “but it also equals a better customer experience. In general, the Florida business runs 365 days a year, and we knew we had to open a location there.”

How the Business Works

CWR does not sell to consumers. Its client base is suppliers, dealers and other industry pros. “We ship to a couple different segments of the business, including boat dealers,” Swanke says. “There was a portion of time when boats came in naked, without a lot of electronics, so the boat dealer would put all of it on. It is changing a bit though, because a lot of boats come OEM-equipped now.”

He says he thinks of a boat’s electronics as being similar to a car stereo: “Today, you couldn’t really change the stereo in a brand-new car, as the dash is an infotainment system, but 20 years ago, it was common to do that. Boats are sort of getting like that, but there’s still a lot of aftermarket business.”

That aftermarket business can include boat dealers helping a buyer get financing for add-ons such as radars, dock lines, life jackets and rod holders, all of it rolled into the boat’s monthly payment.

Another segment of CWR’s business is consulting with installers. “This would be a guy with a van, maybe a couple guys working for him, maybe he has a couple of working vans,” Swanke says. “They’ll usually work out of a home, and they don’t stock product. They get the product when they need it and go to the boat directly. They’ll ask us for specific recommendations, and we’ll provide the right product for that boat.”

Online sales to these customers has grown so much that IT is a large department at CWR. The company’s system can directly integrate into other companies’ websites. “Their system looks at our inventory, pricing and shipping times, and they’ll put in the order on behalf of our dealer right to their customer,” Swanke says. “That’s a drop-shipping order, and that’s probably about 50% of the business now.”

CWR also has seven people doing sales nationwide, knocking on brick-and-mortar doors at stores and talking with dealers who do installations. “The goal is to expand that force to the west and, somewhere down the road, get another location out West,” Swanke says.

Inside the Bayville Shop

At CWR’s facility in New Jersey, products move out the doors to a trailer in a back lot that gets picked up every night and replaced with an empty one. It’s all part of streamlining the order-to-delivery process. With its offices and two-story warehouse buzzing with employees stacking, picking, and packing goods for shipment, Swanke explained how CWR has managed growth by adopting better tech, concentrating on time and space efficiencies, and doubling down on the care of their employees to notch outstanding records for long-time employment and low turnover. 

“Efficiencies are key for us,” Swanke says. “In this market, margins are slim: single digit. It’s all about volume. If you start touching a product two, three and four times and doing things manually, I don’t know how you’d make money, especially with the costs of wages.”

Other costs have gone up over the years too, he says while picking up a box: “We’ve been using this box from a supplier for over 20 years, the same box. Twenty years ago, this box cost us 11 cents. Today, it costs us 37 cents. Everything has gone up drastically. The only way to sustain it is to become more efficient.”

Swanke moved the company from paper tracking to a scanning system. Tech, marketing and website operations are all in-house now, including servers on-site in New Jersey and Florida. About a year ago, warehouse workers were given scanners to eliminate paper for shipping and receiving, and to receive instructions at the start of shifts. “A few seconds here and there lead to hours of efficiency at the end of the week,” Swanke says. “It also reduces shipping errors to zero-out of this facility.”

Training is also part of CWR’s business. Trolling motors, gyrostabilizers and many other products require technical knowledge to install and use. Swanke oversees a yearly training and expo event — this year for about 140 vendors and 300 customers — that includes manufacturer training sessions as well as National Marine Electronics Association training for dealer certifications.

“Our customers are asking us for this training,” Swanke says. “If we can educate our customers, we’ll feel more comfortable selling them the products, and that will help our business.”

The Process

Near CWR’s receiving bay, there is what Swanke calls the “mission control screen.” It posts real-time orders at every stage of fulfillment, showing how many orders await completion, how many items have been located, how many have been boxed, and how many have been shipped.

Swanke says his team also constantly analyzes the warehouse itself for efficiency opportunities in how to pack goods, divide shelves and compartmentalize items for better space-saving and accessibility. All suggestions from staff are welcome.

Every item that comes into the warehouse gets its UPC code scanned, setting the gears in motion for storage and shipping of that product. The item gets linked to a SKU, and weighed and measured, determining a specific shelf where the product should be placed.

Some of the larger items, such as trolling motors, come into the warehouse with proper packing for shipment, so they are stationed close to the delivery trucks. Once an order is processed, it gets a proper label and off it goes. A UPS truck comes at least daily to the New Jersey location, always twice on Mondays and, in the busy season, often twice daily. 

Some distribution centers use tools such as artificial intelligence in robotics and predictive analysis of trends, but so far, Swanke hasn’t adopted them. “We do use AI on our website for questions from clients,” he says. “That AI looks at our database, and if it can’t get an answer, it will connect to a live agent on chat. We are also using AI, like everyone else, to answer tech and manufacturer questions. We are not using any AI technology for forecasting, but we are using historical data from the last 20-plus years to figure out the seasonality of our products. We’re looking at using AI more and more, but we’re not there yet.”

Situations are always evolving. A few empty racks resulted from CWR moving more heavily into ice-fishing gear and equipment a few years back, only to have it sit on those shelves during the recent warm winters. This past winter was the first one cold enough in a few years to support demand for the products, and all that gear flew out of the warehouse and left empty shelves.

Reducing the time to stock, pick up and place items, Swanke says, also includes looking at product history. CWR captures data and analyzes it to distinguish fast-moving from slower-moving items, and then positions faster-moving products toward the front of the warehouse.

“We have over 500 racks and over 5,000 shelves, so our systems will have our employees pull orders in the best order, so they are not walking all around wasting time,” he says. “One person will pick hundreds of orders efficiently and effectively down the aisles, grabbing what he needs based on what the computer says. The goal is to limit the number of steps and limit the number of touches.”

The company did work with a consultant to consider robotic sorting, but costs and space made that option impractical, he says.

“We had a consultant come in, looked at our facility, and we considered a moving, stocked robot that pulled out a product when our employee needed it. We called that a giant toaster oven. The problems were cost and space, so we opted to not look at it yet.”

For the items delivered to the packing stations, the automated systems read the UPC symbol and determine whether to use the U.S. Postal Service, FedEx or UPS for delivery. The system also produces specifications for the proper box, and a machine delivers the precise amount of packing material and sealing tape called “void” to fill the box, and the exact length of tape to seal the box, all to meet the shipper’s requirements. 

Staffing and the Future

Swanke says CWR has about 45 full-time employees in its warehouses, with the company doing about 50% more business than in 2019 with the same number of staff. In total, CWR employs about 90 people with low turnover. “I think it’s being a family,” he says. “We care about them and try to treat them right.”

John Lisa, CWR’s warehouse director, has been at the company for 25 years. The toughest part of the operation, he says, is moving people where they are needed. They cross-train employees to work in different areas of the warehouse.

“I won’t stand over people’s shoulders until they get the work done,” Lisa says. 

“They know their task and I check on them, but they get it done. I think cultivating teamwork and helping each other is huge. It starts at the top when they see the company leaders getting along and helping each other. I want people to enjoy coming to work. We’re here more than with our families. We have to get along.”

Swanke says that in the past five years, CWR’s biggest challenges have been supply-chain issues and staffing. Friends and family members helped out during the pandemic. Currently, Swanke says his biggest concern is the high cost of boats and goods. 

“The consumer, I think, is starting to hit a ceiling where he says, ‘OK, I want that new equipment for $5,000, but last year it was only $4,000,’” Swanke says. 

“At the Atlantic City Boat Show, the talk was that boating is heading toward where the golf market went. It got so expensive that no one went golfing anymore. Topgolf has become more popular, and it’s a fraction of the price of golfing. It’s a huge concern that there’s no entry-level boat anymore, and a lot of it, I think, is that technology in the boats is so expensive.”

Boating skills have long been passed down from generation to generation, Swanke says. He adds: “If one generation stops, the whole chain stops. I think that might be where we are getting now. I think it’s a serious problem.”