Shopping for any business service is a high-stakes evaluation, especially one that affects the value delivered to your customers. For e-commerce businesses, one of the critical arteries supplying the lifeblood to your businesses is the choice of fulfillment provider. After all, the chosen fulfillment company will be responsible for receiving, storing, picking, packing, and shipping your product to customers. Essentially, the fulfillment company is responsible for ensuring that the value created by your marketing team, web developers, product engineers or procurement team, and customer service representatives, is actually delivered to your consumers in the expected condition, as fast as possible, without any flaws.
WarehousingAndFulfillment.com can be incredibly valuable in assisting e-commerce business owners through the process of finding the best e-fulfilment company. However, once you have your options narrowed down to three or four potential providers, what questions should you be asking in order to reveal the company that will provide the highest level of value to your brand?
We recently had an opportunity to speak in depth with Jake Rheude of Red Stag Fulfillment – an e-fulfillment company that was born out of this exact situation. When the ownership of an e-commerce company spent years unable to find a high-quality fulfillment provider that cared as much about delivering value to customers as they did, the decision was made to attempt to build the fulfillment provider they could not find.
One of the tools used to guide the development of Red Stag was a checklist that had been developed by their e-commerce sister company, which served as a set of “interview questions” used to evaluate potential fulfillment providers. Having outgrown two e-fulfillment providers, the owners of the e-commerce company had become all too aware of terms such as “shrinkage allowance,” which are often hidden in the fine print of fulfillment company contracts. They had also experienced firsthand the repercussions of a lackadaisical workforce, long-term contacts, hidden fees, and security issues.
The Fulfillment Checklist is divided into 2 sections. The first section delves into questions related to “Reliability”. The second section explores questions around warehouse “Security.”
There is no question about it – you must find a fulfillment provider that can consistently deliver high quality service, meeting the ever-increasing needs of your customers. In their fulfillment provider questionnaire, reliability is addressed by asking some critical questions:
The second section of the fulfillment provider questionnaire is devoted to the security of their warehouse operations. Critical questions are explored in this section, such as:
These are just a sample of the many questions that you can ask your potential provider before making what could be one of the most critical decisions for your logistics operations. The fulfillment provider questionnaire is conveniently crafted in a PDF document so that you can easily download and fill out. To view and download the entire PDF, click here.
If you are currently working with and/or looking into hiring a fulfillment company, you have many options to consider, and possibly more than you may think. Perhaps you think of a fulfillment company in simple terms: they receive your goods, warehouse them, and send them out to your customers. While it is certainly true that you can rely on your fulfillment partner for those basic services, you should know that some fulfillment companies offer specialized services as well.
While many logistics company force you to fit into their box of processes and procedures, some fulfillment companies offer specialized services that can be tailored to meet your company’s specific needs. One of many fulfillment companies we partner with here, Flexible Fulfillment, specializes in meeting each client’s unique needs. As an example of providing specialized services for their customers, Flexible Fulfillment provides services for a high-end leather jacket company that wanted to add that “special something” to each shipment they mail out. Specifically, they wanted each customer to receive a handwritten note to let them know the care put into their product, and they wanted the overall packaging to project the overall brand of the company.
In order to fulfill this wish, Flexible Fulfillment hand-folds each shirt in a very specific manner.
Furthermore, their staff places the hand written note inside before packaging and sending the jackets to the customers.
Little things like this can make all the difference to your clients and to your bottom line.
What kind of touches can you think of that you might want to add to your packages? It might be a hand-written note or it might be gift packaging. Perhaps, you have delicate materials to package in a unique and beautiful way. If you are looking for a fulfillment company that will perform similar tasks for you, and even if you are not sure yet what you want, make sure to look for one that offers additional kitting services and that offers flexibility in packaging. Many companies, especially the larger companies, simply won’t allow you to change or deviate from their standard way of processing orders. While this helps in some ways to reduce potential errors, it can be crippling to smaller and growing companies that simply have to provide a customized experience to their customers in order to grow and remain competitive.
Whatever your business, you know customer satisfaction and retention are key. As a crucial component of customer satisfaction, how do you make the customer feel as if you care about them – that they matter to you? A solid order fulfillment strategy, including some of these small touches can make all the difference. Imagine yourself in the customer’s shoes, receiving that little handwritten note. Imagine being aware that your delivery is special and unique. This is what separates successful online retailers – they think about every single detail from the time the order is placed until it reaches the customers. A highly flexible and unique fulfillment experience is becoming increasingly more important, especially as online retailing grows at an exponential clip.
Here is a question you may be asking yourself right now. All of that sounds great, but … how will it impact your bottom line? You might be surprised. If you are in the market for a fulfillment provider, you already know the benefits inherent in having an expert do the work for you. Your goods have to get packaged and shipped to the customer anyway and with the help of an expert distributor the goods get there securely and efficiently. The same is true of additional services. You could hypothetically do all this work yourself, but the man-hours would be too much, forcing you to allocate less time to other highly important functions of the business. An expert fulfillment company can work with you and help you to go above and beyond, with the know-how to do so efficiently and well, at lower costs with higher rewards.
Look at it this way. You want the best for your customers and that includes competitive pricing. Your overall costs include the cost of shipping goods from your manufacturing facilities to the consumer. What you want is a fulfillment company that can do this work efficiently. Fulfillment companies that do this well also know how to work within the process, to make small changes in accordance with your unique requirements. When you can find a fulfillment company like that, you know you are dealing with well-qualified experts. This kind of specialized service may not be for everyone but if you think it could work for you, you will almost definitely find that the benefits far outweigh the costs.
Do you have questions about finding the best fulfillment provider for your business? Would you like to know some of the options available to you? Contact us today and let us help you make the best match for your business.
Fulfillment companies are notorious for looking for new business customers that ship high volumes of orders. It’s no secret that a larger volume of orders produces more income for the fulfillment company, and with larger volumes there is typically less risk than taking on a start up or growing company. In fact, many fulfillment and 3PL providers will tell you that you shouldn’t even consider outsourcing your fulfillment until you get to a certain level of order volume, arguing that it doesn’t make sense from a cost perspective to outsource until you reach a minimum order volume. But is all of this really true, or are there instances when outsourcing makes sense even for a start up or small businesses? Are there companies that truly focus on start-up, smaller and growing businesses, offering a fulfillment solution that is affordable and workable for their specific needs?
It is certainly true that efficiencies are gained when order volume increases, but it’s absolutely untrue that smaller businesses shouldn’t outsource unless they reach a certain order volume. First, consider the situation where a small business would rather think “strategically”, focusing most of its internal efforts on growth rather than inserting product into a box and slapping a label on it. Not to minimize the importance of the logistics process as it is extremely important, but growth reigns in a business. In most cases, if you’re not growing sales, then you’re probably shrinking. Especially for smaller or start-up businesses, it could just as easily be argued that razor sharp focus on growth and marketing is absolutely critical to success and longevity of the business. Second, there are a wealth of other instances where outsourcing for a smaller or start-up oriented business make sense, such as international companies looking to expand presence into the US without opening up a physical operation, locating fulfillment closer to the manufacturer or supplier or customer base, or a wealth of other legitimate reasons.
The good news for start-up or growing companies is that there are some great options for outsourcing fulfillment with companies that have a favorable service and terms for their type of fulfillment project. These companies have focused on building systems, processes, technology and people to be able to offer a cost effective and flexible solution. In fact, if done the right way, these companies are capable of creating a diversified portfolio of clients that aggregately ships in high volumes, creating a unique solution that, as a whole, operates in a similar fashion to a fulfillment company that has a smaller subset of larger volume clients. “The other benefit we see is that oftentimes these smaller and start-up businesses grow significantly, turning into a larger volume shipper,” said Jeremy, owner of Justified Logistics who focuses on order fulfillment services.
Ultimately, the benefit of using a fulfillment company that specializes in shipping for smaller volume customers is plentiful. First, these types of companies are typically more flexible – they’re usually smaller businesses themselves with 1-2 regional locations, with processes and procedures but not over-the-top red tape that you have to sift through. For example, larger companies may require orders to be shipped out a certain way without deviation and in its own packaging, whereas small business fulfillment companies offer more flexibility to tailor the order and packaging experience. They understand, after all, that you have to find creative ways to win deals, so they are flexible to meet these needs. Second, smaller volume friendly fulfillment companies have more favorable terms, usually without monthly minimums, since they bank on the aggregate volume of all orders and know that every penny counts for start-ups and growing firms. Third, with smaller companies, oftentimes more dynamic and personable relationships can be forged, as you’ll likely be able to interface with upper level management and won’t be so much of a “number.”
All in all, it’s important to know that you do have options as a start-up or growing business. Although there are articles out there that claim you shouldn’t start outsourcing at an early stage, this couldn’t be further from the truth in a number of cases. By focusing on a company that caters to your particular situation, you do have options to offload this important aspect to a professional organization, so that other business areas can get the attention they need to succeed as a business as a whole.
Marketing departments and Crowdfunders are looking for fulfillment partners who understand their marketing needs, help with their branding, and have access to creative reward options. Many fulfillment companies are equipped to handle transaction mailing but do not have printing expertise. On the other hand, companies who are experts in printing t-shirts or giveaway items lack a complete fulfillment solution. To be your complete fulfillment solution, a fulfillment organization should have expertise in the following:
It is huge value add when you have a partner who has made the investments and connections to smoothly handle your needs for now and in the future. The right fulfillment partner can do more than just pick and ship.
It makes sense to start by analyzing your supply chain and to discover where most of your product is flowing to. The key to a successful and efficient supply chain is to consider the following questions:
Throughout this article, I will be referring to a consumer goods company shipping 40’ containers from Shenzhen (China) to Vancouver (Canada).
The location of Canadian customers falls roughly in line with a provincial population map. With that in mind, it is generally safe to assume that 38.4% of Canadians are in Ontario, 23.6% in Quebec, 13.1% in British Columbia, 10.9% in Alberta, 3.6% in Manitoba, and 3.1% in Saskatchewan. These provinces make up almost 93% of the Canadian population. All other provinces are under 3% or less.
The interesting thing about the map below is that it does not give you an idea of where people live within the provinces. 90% of all Canadians live within 100km (62 miles) of the US border. So the map below may look daunting, but the vast majority of Canadians are actually very close by.
The greyed out area makes up 0.8% of the Canadian population – not including polar bears.
Considering the above information, we can see that the 4 most likely locations to consider in terms of sheer population size are Ontario, Quebec, British Columbia, and Alberta.
The two key distribution hubs are Ontario and British Columbia as most consumer products come through Vancouver’s port, and the majority of perishable and automotive shipments pass through Ontario by road or rail. Ontario and Quebec make up 62% of Canada’s population, and this number is growing every year. Most major companies distribute their products from either Ontario or Quebec because the largest cost is the end delivery either to distribution centre, store, or the customer’s home address. If 62% of your customers are in one area, it makes sense to warehouse your product in close proximity. Furthermore, 53% of Ontarians live in the Greater Toronto Area, or within 1 hour’s drive of Toronto.
If product arrival is not time sensitive, it may be an option to utilize rail as a means to move product from Vancouver to Ontario or Quebec. Shipping by rail can save companies as much as 33% on shipping costs. However, if getting your product to your warehouse is a priority it makes sense to utilize air freight, or a reliable large carrier such as Challenger Motor Freight. Full truckload shipments from Vancouver to Toronto generally take 4-5 days of driving (weather dependent) for a single driver, and that time can be cut in half by team drivers.
Here’s an example to show why it often makes sense to warehouse your product in Ontario:
This is not to say never to warehouse product in Vancouver. If a customer has enough order volume in British Columbia or Alberta, it may make sense to warehouse some product there rather than sending it all the way to Ontario, only to ship it back out to West. That would be expensive and wasteful.
If you’re shipping from China to Vancouver and have customers all across Canada, my recommendation is to warehouse some product in Vancouver area, and to move the rest to the Greater Toronto Area. This is a broad and general statement, but at the end of the day it usually holds true. The key is to look at where your shipments are entering Canada, and to analyse your order destinations within Canada. Keeping the distance and time short on the final delivery is very important.
Article by Ryan Bennett of Challenger Motor Freight
In years past, fulfillment companies simply served as an outsourced shipping department, storing goods for companies and shipping orders to their customers. While the breadth of services have steadily increased over time in order to meet the rigorous demands of multi-channel fulfillment, including retail and e-commerce fulfillment environments, fulfillment has largely been…fulfillment. That is, until a new breed of fulfillment companies have cropped up that offer services outside of the scope of packing and shipping.
Perhaps it all started with some of the major online marketplaces, such as Amazon and eBay, offering fulfillment for companies selling on their respective marketplaces. For smaller and more regional logistics companies looking to compete with services like Fulfillment by Amazon, new and creative ideas had to be fostered to level the competitive playing field. After all, it seemed to make sense for a large number of sellers to not only list their products on a website but also have that same company fulfill orders. If traditional fulfillment companies didn’t want to become a dinosaur, they had to come up with a way to win back sellers.
Further complicating the competitive landscape was the introduction of additional sales channels online – from social media to crowdfunding platforms and beyond. Online merchants, with each passing day, had more and more sales channels online at their disposal – which was particularly intriguing for smaller and start-up businesses because they were finally afforded the opportunity to compete with bigger retailers and businesses. In fact, with the world at their fingertips, online merchants were only limited by the time and investment required to participate in these sales meccas.
Naturally, the first wave of fulfillment innovators chose the path of becoming a niche expert for fulfillment services in these specific online marketplaces. For example, some firms chose to focus specifically on fulfilling order for crowdfunding campaigns, or became e-commerce fulfillment experts – building sophisticated integrations with web store software programs so that they could receive online order, offer real-time reporting, and even in some cases offering support for inbound calls and order taking.
But a new breed has evolved to take things to the next level of service, offering even more than fulfillment itself for businesses that either don’t have the time or resources to take advantage of every opportunity. For Utah Based IFS (International Fulfillment Solutions), the move from straight fulfillment to value added services was obvious. According to Ryan Treft, President at IFS, the company saw a need to assist companies with selling in various online marketplaces. “We have essentially created a distribution arm of our company which allows us to offer the channels as additional sources of revenue for our clients. Half the battle in selling a product into retail has nothing to do with the product itself…it has to do with convincing the buyer to set you up as a vendor. That’s where we come in. We are the vendor of record with 21 major ecommerce retailers. We ask our fulfillment clients if they want us to manage sales of their product into any of these channels. Once they pick the ones relevant to their brand, we submit and we can add much easier than they can. We confirm the order, we provide the tracking, we buy product from our own clients to manage the channels they have chosen. “
This unique add-on service does a couple of things for companies like IFS. First, it adds tremendous value for fulfillment customers. According to Danny Villarreal of Zarbee’s (who utilizes IFS for value added services), “We have been able to fully offload our online orders and samples fulfillment and have confidence that our customers will be taken care of. The great part is that we can now focus on driving our marketing and business and know our fulfillment is in a solid place.”
But adding value isn’t the only benefit. In addition, these services make the entire process faster, bringing sales and profits to growing companies sooner than later. For another IFS customer, ATGStores.com, the add-on service was an easy decision. Because the process to add new brands is quite extensive, having a relationship with a current vendor already intact makes the process easy and to get things done fast. They were able to get from point A to point B much quicker than on their own.
Outside of the benefits to customers, value added, online sales oriented services does another very crucial thing – it allows these creative fulfillment companies to compete with much larger fulfillment marketplace competitors and fulfillment companies in general. As is true in business, healthy competition and changes in the marketplace spur innovation and growth. It will no doubt be interesting to see what will come about as a result in this most recent shift in fulfillment services. As online selling and logistics continue to collide, companies will continue to find new ways to add additional value and further differentiate from their competitors, which will help propel online sellers to a new level of potential success and continue to disrupt the logistics industry.
When it comes to logistics, small business owners know that warehousing is important. It in itself is part of managing the supply chain, and although simply seen as a place to store goods and prepare items for outbound shipping, warehousing and pack&ship orders, they are economically beneficial to both owners and customers.
First, it provides a central location for your products. Having a place to receive orders, store goods, and distribute products make the process systematic. With each arrival of shipment, responsibility goes to the warehouse personnel, and they’re going to be in charge with identifying, sorting, and dispatching the products to their storage locations, looking over security measures and environmental hygiene. Then orders come and go, and warehouse personnel keep up with the records before dispatching. Warehouses ensure that there is a place to store goods when there is not quite enough demand for the supply. Instead of leaving the surplus products somewhere, having a warehouse ensures that the there is a good place for storage somewhere to keep goods until they are needed or wanted again without having to haul everything by your lonesome self.
Second, it adds value to your operation. The good thing about warehousing is that you are more in control of your shipping and handling. Because warehousing increases the value of goods by providing services that make products available at the most convenient way possible, it lowers the costs and increases the value of customer service. Warehousing operations such as consolidation and assembly add value to the logistics of the business.
Third, the efficiency, capacity, and location of warehouses provide economic benefits. Consolidating operations, for instance, cut costs for outbound delivery, which works well for both business owners and their customers. Instead of shipping individual products from a plethora of sources, central warehouses help package and ship orders together as a complete order, effectively eliminating expensive shipping costs. This is beneficial for making a turn in profit for businesses, especially new ones. Besides, most warehouses provide processing, packing, and blending, and grading facilities, meaning, small business owners can save more by not having to pay third parties in the order fulfilment process.
Fourth, warehousing is also an effective contingency plan to make sure that orders are sorted and done on time. Warehousing service companies like National Products Fulfilment http://www.npfulfilment.com.au/ ensure that their clients get their orders safely and on time. Warehouses provide custody of goods, and as an added benefit, products kept in warehouses are almost always insured. With systematic efficiency, good warehouses guarantee a 99.9% accuracy level of storage and inventory, allowing you to sit back and relax while other people to do the job for you.
Finally, warehousing allows you to focus on the more important part of your business: making it in the dog-eats-dog world without having to worry about too many things. Which is why warehouse and inventory management is important for small-and-medium sized businesses planning to make it in the great big world.
Of course, there are different types of warehouses for different types of businesses, but warehouses — whether private or public or bonded, are guaranteed to help lessen the gap between production and consumption, that is what you call a proper order fulfilment process.
Outsourced warehousing and shipping can help companies alleviate the pain of storage and distribution and reduce overall costs. The theory is simple – warehousing and shipping companies specialize in these services, so they can perform them more efficiently and effectively than most companies can internally. Furthermore, by aggregating the combined services for the sum of all of their customers, third party logistics providers are able to achieve additional cost savings that they can pass on to clients. However, what about add on services, such as shipping or freight forwarding? Many third party logistics companies contract theses services out to another provider, not only adding another layer of communication but also adding another layer of cost to the equation. If you’re interested in achieving the best rates possible and looking at 3PL options, it might be wise to consider the use of a full scale logistics provider that not only has its own warehouse and labor pool, but also operates its own freight services.
Dealing with a shipping issue can be especially painful when using a fulfillment services company that contracts out freight services. Most likely, you’ll speak directly to the fulfillment company about the issue, and they’ll handle the communications with the freight company. Many times, dealing with multiple companies results in additional time wasted due to duplication of communication and correspondence. Furthermore, key information can easily be lost in translation, leading to more frustration. On the other hand, when a logistics management services company also has its own trucking services, all of the communication remains under one roof, and in most cases can be managed with a single point of contact. In addition to streamlined communications, the 3PL also has more control over fixing any issues and bringing proper resolution.
In most cases, warehousing companies mark up the cost of shipping services so that they can make some level of profit. Also, the warehousing company, in most cases, isn’t getting the lowest cost possible for freight services, unless they have significant volume that justifies a sizeable discount. Conversely, when a warehousing company has its own shipping division, it can offer you freight services without an additional layer of markup, helping reduce your overall freight bill.
One of the greatest benefits of utilizing a full service logistics provider is that it tips the scales of negotiating leverage in your favor. When you bring more services into the equation, the 3PL has the potential of winning more business, and will most likely be more willing to entertain the best pricing possible to win your business. Furthermore, with more areas within the business to make a profit margin, the 3PL company doesn’t have to make quite as much margin in each area to survive. And as your volume increases, you can leverage this increase into further potential cost savings, as the 3PL will gain further synergies through an overall increase in volume.
When selecting a 3PL partner, you’ll want to make sure they provide you with a web-based management tool, or platform, where you can remotely monitor and control all aspects of your fulfillment operations. Quality IT platforms allow for thorough reporting functions, quick order placement, control of automated procedures, integration across multiple online storefronts and intuitive digital asset management. Here are five key questions to consider, when assessing your fulfillment partner’s IT platform:
What reports does your fulfillment partner offer, and do they provide the visibility and metrics you need to analyze and budget your operations? Review and analysis of fulfillment operations can only occur if your fulfillment partner gives you access to its data. At a minimum you will want to have 24/7 web access to reports on available inventory, inventory history, inventory transactions, order status, order history, and billing. Data should be readily accessible, real-time, downloadable, and easy to read.
Does your fulfillment partner provide you and your sales reps with a web-based tool to place orders? If your company has internal staff and sales reps that will be placing orders directly with your fulfillment partner, you will want the order placement process to be as quick and easy as possible. This order placement tool should display available inventory, allow multiple user access controlled by you, and facilitate easy bulk ordering of both wholesale orders as well as single-item orders.
Does your fulfillment partner have an IT platform that allows you to set and automate important notifications? Many people like to be able to set certain notifications for themselves with their 3PL partner, so they do not miss critical information or points of action. Examples of common notifications among operations managers include low stock alerts, automatic re-order points, inventory receipt confirmations, and returns processed.
Does your fulfillment partner have the IT staff and resources to establish (and troubleshoot) IT integration between their fulfillment database and your ecommerce storefronts? There are countless sales channels available online for any given industry vertical. Linking order information and accurate inventory levels across multiple ecommerce sites back into your fulfillment operations can be a challenge.
Does your fulfillment partner offer list management services? Every time you sell your product online, you gain valuable information about your customer such as their address, items purchased etc. If you store and organize this customer information well, it can be a valuable source for marketing campaigns. Because they process and distribute your orders, your 3PL partner has access to much of your customer data and they should make this readily available for you at all times.
Outsourcing to a 3PL fundamentally means you are placing your trust in an outsider to complete and control one of the most important stages in your supply network. If you are going to place that trust in a company you need to carefully consider the following points when choosing a 3rd party fulfillment company especially if they are based in another country.
If you are thousands of miles away from your eCommerce fulfillment provider you are going to want total transparency. Find a company that uses a modern WMS and is flexible, adaptive and capable of being integrated with your software to deliver live information including warehousing, shipping and delivery which is vital for inventory control, customer service and even finance.
Many older warehouses batch collect orders into their system for packing. The problem that can arise from this is that if the orders are sent from a different time zone up to a 24 hours delay can be caused before picking even begins. It is best to use a company that automatically retrieves orders as soon as they are placed in your system.
With the time difference you will need a company that offers live reporting. You must be sure that your orders are being dispatched in good time. Not all companies offer this, find one that offers a full view of the fulfillment process. See infographic below which displays best practices in transparent fulfillment reporting.
Check how technology integration and data exchange will be handled. Find a company that offers simple integration with an open API. Given the time difference and distance you may want to consider operators whose technology is cloud based and can guarantee 100% up-time.
It is a fundamental benefit in a fast-paced business because it enhances the ability of managers and employees to, with the click of a mouse ascertain exactly how much product is in stock. The best companies offer batch control and best before date management so you can select what batches go to particular customers. Also look out for companies that offer inventory alerts that utilize sales data to automatically alert you to a potential stock out when there is still time to act.
You will need to contact the company from time to time make sure you choose one with great customer service and fast response times. When you are dealing with countries abroad you need to find a company that has some level of integration in there system and customer service. A ticket system is particularly useful as you won’t be able to reach the UK by phone at during parts of the day due to time difference.
Nobody wants returns shipped halfway across the world or worse to have to employ yet another 3PL to deal with returns. If the company can ship items out they should be adequately equipped to deal with items coming back.
There are a few companies the the UK that offers these services so do some research and choose a fulfillment company with a good rep for accurate picking, packing and fast dispatch times. Find a company that has been servicing its clients for some time. You want a company that can keep its clients happy and builds a good long term relationship.
James Hyde is Operations Director at James and James Fulfilment. James is an expert in order fulfillment and systems engineering. His company has reinvented eCommerce fulfillment in the UK.