Tag Archives: Warehousing

Seven Advantages to Outsourcing Fulfillment

21 May

Outsourcing order fulfillment has many advantages. Here are just a few to consider when looking at considering whether to keep fulfillment in-house or to outsource it.

1) Focus on business

Unless you own a fulfillment company, fulfillment isn’t your primary function. By outsourcing fulfillment, you gain time to spend on primary functions such as sales, marketing, supply chain, and innovation. Let the experts deal with storage, shipping, software, and other fulfillment-related requirements.

2) Financial considerations

There are financial advantages to outsourcing fulfillment. The costs of setting up a warehouse, staffing, managing, securing, and developing technological solutions is daunting.

3) Facilities

Start-up companies may not have adequate storage facilities or the funds to build them.

Fulfillment Services

Warehousing and Fulfillment Services

Fulfillment companies typically have thousands of square feet of warehouse space. Companies that warehouse their own inventory have additional expenses, too, such as staff and utilities. A fulfillment company distributes this expense through storage fees to multiple clients which results in a storage fee that is less than an individual company would pay to do it in-house.

4) Shipping costs

Unless a producer ships thousands of items per month, they don’t get the beneficial “bulk” shipping rates available to many fulfillment companies. The price these companies pay often deviate from standard shipping prices by 30% or more. In some companies, the savings associated with shipping bulk rates provided by fulfillment companies can outweigh the charges of the fulfillment company itself. You may also be able to negotiate a flat-rate for shipping—a single fee based on weight and service, as opposed to weight, service, and destination. This makes shipping expenses predictable, which makes budgeting easier.

5) Shipping materials costs

Similar in concept to the savings associated with shipping costs, shipping materials bought in bulk also are purchased at more favorable rates. When compared to the cost of purchasing supplies for shipping through retail outlets, savings can amount to 50%. Of course, this depends on the fulfillment company.

Often, fulfillment companies include the packaging fee in the cost of shipping, or per order. This is how fulfillment providers can quote “free packaging.” Most order fulfillment service providers make a list of standard cartons available to their clients. A company whose product doesn’t fit one these packages may need to provide their own packaging or pay an additional fee.

6) Behind-the-scenes fulfillment services

There are many hidden aspects to running an e-commerce business. Don’t forget to look at these services when making your decision.

  • Receiving and unpacking merchandise
  • Receiving orders via mail order, email, phone or phone
  • Processing of credit cards
  • Handling of returns, including inspecting merchandise and restocking
  • Preparing documentation for international shipments
  • Generating reports
  • Updating customer databases
  • Issuing customer credits
  • Maintaining inventory
  • Making bank deposits
  • Answering customer service phone calls, e-mail correspondence

7) E-commerce software need

Fulfillment houses develop intelligent e-commerce systems to help manage the many elements within the business. The e-commerce system is adaptable and may be able to integrate into clients’ ordering system. Some fulfillment houses may even host commerce sites themselves. The software also enables integration into respective couriers’ systems to provide clients with live information about package deliveries.

As you can see, fulfillment isn’t for the faint-of heart. Why not let the experts take care of this for you while you focus on growing your business?

 

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Fulfillment Services: Warehousing, Logistics and Shipping

17 Apr

Storage and warehousing

You will most likely need a place to store your inventory. You may also need a place that is willing to accept shipments on your behalf from your manufacturers. Storage options range from an informal self-storage facility where you drop off and pick up inventory yourself to a tightly-run warehousing operation that manages thousands of square feet of inventory, and handles receiving and shipping for you. Storage facilities are available for perishable items requiring refrigeration, temperature-sensitive items requiring air conditioning or heating or, more typically, warehousing providing protection from the elements. Third-party fulfillment services often charge a storage fee based on the product storage requirements and any required special handling.

Logistics

BusinessDictionary.com defines logistics as the planning, execution, and control of the procurement, movement, and stationing of personnel, material, and other resources to achieve the objectives of a campaign, plan, project, or strategy. In the first article of this series, Fulfillment Services . . .so much more than filling orders!, we compared basic fulfillment without any other services to a turkey dinner without anything but turkey. To continue the comparison, it is logistics that turns the simple turkey dinner into the outstanding meal complete with mashed potatoes, cranberry, stuffing, and pumpkin pie. It takes planning and execution to create a mouth-watering, sumptuous dinner where all the food is done at the same time and the quantity is abundant enough to leave everyone satisfied. Likewise in fulfillment, it takes planning and execution to have the needed products on hand, and then fill and ship the orders according to customers’ expectations.

Shipping

It is rare for a fulfillment company to provide its own courier services. In most cases, companies outsource shipping to courier or delivery companies. However, many times fulfillment companies—because of their large shipping volume—can negotiate larger shipping discounts with major delivery companies such as UPS, DHL, FedEx and USPS than small retailers can. Fast, dependable shipping is critical to the success of your online business and your fulfillment company’s top priority should be getting your orders to your customers quickly, accurately, and to their specifications.

Most fulfillment companies offer a range of shipping options to ensure  the most reliable and cost-effective delivery methods. Options range from overnight delivery to slower, but more economical, forms of shipping. Several options are available for international shipping but be sure to discuss this with your fulfillment provider to make sure they are capable of shipping to (and providing the customs paperwork for) the countries you expect to do business with.Full-Service Fulfillment Options

Two other topics to discuss with your fulfillment provider are turnaround time and accuracy rate. Can your fulfillment provider ship out orders the same day they receive them? What is their typical turnaround time? A good fulfillment company will ship out expedited orders the same day they receive them and the remainder of orders within two days of receipt. Also, a good fulfillment company will have an accuracy rate of 99% or better. This means orders are picked, packed and shipped correctly, and to the customers’ specifications. This is important as errors are costly in expense, time, and customer satisfaction.

Next week we’ll wrap up this series with a final look at a few remaining pieces of the fulfillment puzzle: customer service, reports, and procurement.

Fulfillment Services . . .so much more than filling orders!

11 Mar

A common misconception in the business world is that fulfillment services consist of nothing more than filling orders. Let us take a look at why that isn’t true, and what a full-service fulfillment provider offers.

As you can see from the chart, fulfillment, when done correctly, has many components to it. While each of them could stand alone, integrating them together provides added value for both you and your customer.

  • Website/Shopping Cart CreationMS Fulfillment Pie
  • Order Management
  • Processing Payments
  • Custom Kitting
  • Inventory Management
  • Warehousing
  • Shipping and Logistics
  • Customer Service
  • Reporting
  • Procurement & Printing

Each of these pieces is important and we will talk more about them over the next few weeks. For now, however, let’s look at the overall picture. Why is it so important to have all of these components?

Imagine having a Thanksgiving dinner with only turkey. No potatoes, no cranberry, no stuffing, no vegetables. No dessert, even. A Thanksgiving dinner with only turkey is like a fulfillment center that does nothing but fill orders. The core element is present, but the rest of the experience is missing.

A full-service fulfillment center not only fills the order but makes sure inventory is available, pre-packages sets or kits to save you and your customers money, coordinates and negotiates shipping to get the best possible rates, answers customer inquiries, and much, much more. Using the Thanksgiving dinner analogy once again, rather than serving only turkey, a full-service fulfillment company provides a coordinated package designed to give your customers the very best possible experience.

Eight Reasons to Hire a Fulfillment Center

28 Feb

Many people mistakenly feel that outsourcing fulfillment services is beneficial only for companies who ship hundreds of packages a month. That is not necessarily true. The obvious benefit of working with a professional fulfillment company is that your customer gets exactly what they order, but consider these hidden benefits gained by outsourcing fulfillment:

Leveraged Shipper Relationships

Fulfillment centers use overall volume to negotiate discounts with freight carriers. This allows fulfillment companies to spread shipping and handling costs across all their clients. Taking advantage of these discounts will help offset the costs of hiring a fulfillment center.

Ancillary Services

Consider the other services a fulfillment company may offer. Not only are there fewer administrative costs by having all of the work performed in one location but design, printing and direct mail services are usually less expensive in the Midwest than on either the West or East Coast. Partnering with the right fulfillment company can result in unexpected costs savings in other areas.

Fulfillment Services
Warehousing and Fulfillment Services

Kitting and Assembly

Many fulfillment centers offer the ability to assemble various components into bundles or packages. Kitting not only allows for additional sales opportunities but packaging pieces together before sending to the end user can help save on shipping costs.

Safety and Training

Quality fulfillment centers train their employees on products, processes and safety. This means you have a happier customer because they will receive exactly what they ordered. Safety is another important area of training. All customers share training costs which means a lower per-unit cost for you.

Space

Too often, storing products or shipping materials consumes valuable space. Fulfillment companies make incredible use of space and can share materials and staging areas amongst several clients. This is a great way to reduce your overhead costs.

Labor Pools

Fulfillment centers have strategies in place to accommodate both slow and busy times for all of their customers. When workers enjoy more consistent hours, they develop better skills which help to ensure your orders ship correctly, in a timely fashion, and at lower costs. This is especially important to seasonal businesses which have peak shipping times.

Management Time Spent

Getting the product into the customer’s hands is only one piece of the puzzle. Putting this step into expert hands allows companies to focus on marketing and other strategies to help grow the business.

Inventory Control

Fulfillment services work with you to control your inventory so that you don’t accidentally sell something you don’t have in stock.

In short, no matter how many or how few packages you send a month, using professional fulfillment services may be the perfect solution for your business.

Fulfillment Service Charges: What Do They Mean?

8 Sep

So you are ready to contract with a fulfillment company! This is truly a defining moment for your business.  Whether you email, fax, or have orders linked from your shopping cart, fulfillment companies charge for a variety of services.  The following terms and definitions may help you decipher the line items on the price quote:

CC Transaction: This is the charge to have the fulfillment company handle the processing of credit card transactions for you.

Kit Building:  This fee usually involves combining individual items to make sets or kits. 

Order Processing: Usually this is a cost per order that includes the printing of the packing slip and shipping label, picking the first item, plus picking each additional item.  This may also include a minimum fee for low order quantity or file alterations on your orders.

Product Assembly/Assembly: Usually, this is the cost for assembling products to make them ready to sell.  An example would be folding and poly-bagging t-shirts for proper storage. Assembly can include combining multiple products into an individual sku, labeling products, and pre-packaging items. One purpose of assembly is to avoid higher costs when items are shipped out individually at a later date.

Purchasing: This the fee to have shipping or product supplies ordered for you.  Usually includes checking inventory levels periodically and re-ordering as needed.

Receiving: This fee includes checking in product shipments, restocking storage/pick locations and entering data; usually charged per carton or pallet.

Returns: The fee to process items returned by your customers. 

Setup:  This is the initial charge that covers the cost of the preparations needed to handle your products.  These preparations may include the loading of data and  linking the shopping cart into the fulfillment software, phone connections and special storage requirements.

Warehousing:  Cost of storing your product, usually charged by the pallet or cubic foot.  Some companies count this on a weekly basis and then determine the average for the month.

Mediascope offers all of the services listed above, plus many more. Give us a call today at 1-888-644-0844 to discuss how we can help your transition to working with a fulfillment company!