Category Archives: Warehousing and Fulfillment Resources

Information about warehousing and fulfillment for those new to warehousing and fulfillment.

The Remarkable Diversity of Warehousing and Fulfillment Companies

Diversity of Fulfillment Companies
Diversity of Fulfillment Companies

Ask experts like Entrepreneur Magazine, and you might think that fulfillment services do nothing more than handle “the process of receiving, packaging and shipping orders for goods”. Yet, fulfillment services are much broader than that. In this article, we are going to look at the ways that modern fulfillment services have branched out, and in some instances, how they transitioned entirely from another form of business into a fulfillment service.

We are also going to consider the creative ways that some fulfillment services have met the challenges of being a low margin, high volume service with a lot of seasonality. This is quite important. After all, a low margin business means one in which the product or service sells for close to the price it costs to produce. They are typically required to be high volume to generate good profits, yet many fulfillment services experience a constant flux of seasonal business.

Because “necessity is the mother of invention”, many fulfillment services find ways to create more stability.

This is not to say that fulfillment services are not a good business to enter. In fact, many firms don’t even set out to work as fulfillment service providers. Instead, they begin by simply making and/or selling their products. They enjoy a bloom of success and realize that they cannot find a company to handle their needs. This is also a moment when necessity fosters growth and such businesses then turn their attention to fulfillment in addition to sales and/or production.

Investing in Fulfillment

Firms that invest in the technologies, space and staffing essential to quality fulfillment may also branch out and become a third-party fulfillment provider for other firms. Filling a need they also experienced could be a fantastic way to grow a business. For instance, a company that manufactures or sells products and handles its own fulfillment may also offer “third party” fulfillment that integrates with its own. This can offset the risks of fully dedicated fulfillment services with their seasonal ups and downs.

Keep in mind that working in fulfillment can also illuminate some niche markets or needs not being met by other providers. For example, one fulfillment company in our network in Texas, Warehouse Pro, began as a soap making firm. They also warehoused their own goods, storing as well as handling all of their soap shipments to customers. This same firm then invested in third party fulfillment because they had ample warehouse space available and had mastered the technologies used in the industry.

This same firm also expanded their offerings into manufacturing and fabricating, including some welding and fabricating and even making custom sails for boats and other vessels. They have also provided specialized services for credit card companies!

What we want to emphasize here is that fulfillment companies have much more than basic services for a website retailer. They are one of the most creative groups, finding many ways to monetize and leverage their capabilities. Should you require such things as large scale storage, customized services or even bulk shipping, they may be your ideal solution.

The Services You Might Find

Without putting on our “creative thinking caps” and getting too crazy with ideas about services that fulfillment providers might offer, let’s just do a basic run down of what you might find with one:

  • Warehouse and Distribution services – They may handle your storage and do your customized shipping for your firm. Usually, it means an entirely customized approach that includes your specialty packaging, the inclusion of additional materials, and more. Typically, you can request them to handle things in very specific ways and even offer shipping in a large number of channels.
  • Custom Packaging – Their relationships with packaging suppliers often means they can provide clients with a lot of support in finding customized packaging solutions for almost any sort of good or product.
  • Climate Controlled Warehousing – Not all items can exist happily in the sweltering heat, high humidity or freezing cold of a standard warehouse. A fulfillment provider often has a warehouse that remains comfortable and optimal for any number of product categories or types. You may not even use them as a shipping service but merely as your ideal storage space.
  • Inventory Storage – There are so many instances of a project or group requiring large quantities of inventory. They get the best rates if it is purchased at once and in bulk. Then, the problem with where to keep it as the project or business proceeds, arises. This is when creative fulfillment services can step in and offer a good solution that allows them to monetize unused warehouse space.
  • Logistics and Transportation – As groups with tremendous experience in the use of major shippers, a fulfillment service is one of the best candidates for help with the transportation and logistics relating to any number of businesses or items.
  • Manual Integration – Anyone making a move from traditional inventory management and warehousing to online sales has a lot of data to enter. A lot of fulfillment services have begun to offer this precise service. Helping you to inventory your existing materials, make sure you have SKUs for every possible item, combination or kit, and then integrating this information across your online sales platform and the warehouse or fulfillment service’s system.
  • Manufacturing – It is amazing to look at the ways that fulfillment services also integrate smaller scale manufacturing into their options. They may make displays, packaging, and so much more.

Fulfillment services are a must for those with online business eager to hand over the management of order processing, shipping and returns. They can save tremendous amounts of money, and offer a diversity of effective solutions. Don’t overlook them when you need everything from climate controlled, bulk storage to setting up an online business and shipping large amounts of goods. As a business full of fluctuations, they adapt well and have a lot of answers for many kinds of businesses.

Steps to Successful E-Commerce Fulfillment Launch on a Tight Deadline

Successful E-commerce Fulfillment Set up
Successful E-commerce Fulfillment Set up

As an online seller (or someone beginning a business focusing on online sales), you have a lot on your plate. It could be the main reason behind the decision to make a fast switch and outsource your order fulfillment. While it means handing over control to another business, it also means sparing you added costs and hassles (such as staff, warehousing expenses and more).

Unfortunately, it can also mean that you may inadvertently put the success or failure of your business into the hands of others.

How? After all, you have done due diligence about products and offer good customer service, how can e-commerce fulfillment have any negative impact? Wrong items, shoddy packing or handling, lengthy delays in sending orders…these are but a few of the glitches that can affect your bottom line.

Fortunately, we offer these simple steps to ensure you can setup up your e-commerce fulfillment segment effectively, and quickly, and without a lot of issues that could cost you some of your first customers.

The Basic Steps

Before you start sending your inventory to an e-commerce fulfillment provider and preparing to link your shopping cart to their warehouses, take a moment to review the basic steps involved with a rapid switch to new fulfillment provider:

  • Account Setup
  • Integrating Shopping Carts
  • Sending Inventory to the Fulfillment Provider
  • Ensuring They Understand Your Preferences for Sending Orders to Customers, Handling Orders and Completing Orders
  • Handling Returns

If you understand that your e-commerce order fulfillment provider is in charge of that many steps of your sales (and returns), as well as inventory management, you begin to see why you shouldn’t rush the process too much. While you can easily setup operations in a matter of days – take the time to review the steps noted, and be sure all of those proverbial ducks are in a row. Let’s spend time looking at each point in a bit more detail:

Account Setup

You are going to need to create or review the contract that will exist between your firm and your fulfillment provider. This is going to outline all of the key details and protocols. The contract should specify all of the issues that follow (below) and include any contingencies in the event of a breach of contract or other issues.

Some of the points you want to emphasize in the contract or account setup include issues like shipping/order cutoff times each day (as this can allow you to provide faster shipping times) and how you prefer communications to occur.

Your account setup also has to include specifics about communication. How and who will communicate with the warehouse and fulfillment provider? What about billing procedures, reviews and major points of contact?

Finally, a key part of setting up your account must be a proper testing period. Test ordering, test order changes and test returns. Test communications, inventory controls and all of those crucial details before launching.

Integrating Shopping Carts

Your e-commerce fulfillment provider may already have some proprietary software that could be used in your online store and which will also deal with everything from packing slips and customer communication to returns. It should also relay details to your end, letting you or your team know when items are sold, what’s going on in terms of inventory and more. Keep in mind that some of the best providers can integrate with popular platforms and shopping carts already in use.

Be sure that any previous order information can be securely transferred as this eliminates the need for clients to create new credentials. Also, you want to be sure that you can always find out where any order might be at any given moment in time. The best systems allow shoppers to make changes and updates (including cancellations) right up to the moment the item is tagged for shipping – this is something to double check if it is important to your customers.

Sending Inventory

As one of the most substantial steps in getting your new e-commerce fulfillment provider up and running quickly, we are going to dedicate a bit more attention to this part of the process.

At your end, it begins with you doing a thorough inventory and creating a master list of all of your product numbers (SKUs) and all product details. This will even include items out of stock or temporarily unavailable. Be sure you give your fulfillment provider every bit of data – even variations, sizes, colors, kits, combinations and more.

It is going to be your responsibility to coordinate the shipping of your materials to the fulfillment provider’s warehouse, and to be sure that comprehensive inventory data is included. You are also going to be tasked with coordinating and/or arranging the shipment.

Once it arrives at the destination, your new fulfillment team will have to re-inventory and then properly store the product. They are more than likely going to need the time to enter data into their system.

If you have products that require a lot of attention during selection, packing or even during returns, it may be in your best interest to arrange some sort of product training. If the fulfillment center is at a great distance, a manual may be best. However, if you feel it would benefit all involved to do in-person training, it could be a key to success. This is true in shipping, as well, and you may want to be sure the items are packaged in the way you require. If you want specific wrappings, tags and labels inside of packages, be sure this is detailed in your contract and as you setup the fulfillment process. If there are to be additional inserts or special packaging – make sure you are clear about how this will arrive, be ordered, maintained, and so on.

Sending Orders, Handling Orders, and Completing Orders

It is going to be in your hands to let your fulfillment provider know which shipping methods you prefer. Before you begin the process or transition, be sure that your chosen provider is able to handle the kinds of shipments you desire. If they are unfamiliar with international packing and labeling, this can become a serious problem. Also, be sure you are guaranteed the kinds of shipping terms you need – orders out at a specific time each day, changes made before orders are shipped, and so on.

Also, pose the question of what happens in the event of an error. What if the wrong items are shipped? What if the wrong method of shipping is used? What if inventory tracking is not done properly and an item sold is not available?

Planning for contingencies and knowing how you want specific issues handled before you begin is another key to success. You can often avoid such issues by acknowledging that they can occur and proactively troubleshooting.

Handling Returns

Will your provider handle returns? If so, what is the process they must follow? How are they to communicate issues about returns to you? This is crucial because you need to understand what is returned, why and how to overcome this costly issue. You also need to be sure customers are getting premium service where returns are concerned.

Yes, this is a lot, but if you work with a reputable firm that has experience in the process, and you use these steps, you can be up and running quickly.

The future of distribution is promising for emerging markets

Future DeliveryWe’re at a turning point in the history of distribution—think advances like sci-fi-esque drone delivery. Getting to this point took not only great infrastructure, but also some pretty big technological advances. Plus, it took us a while to get here in the first place.

In a previous article, we explored what the future of distribution has to offer. However, the future of distribution for us, in developed nations, is different than that of emerging markets.

While the major cities of developing countries generally have sufficient (and sometimes equivalent) infrastructure, electrification, distribution networks, retail outlets, and supply chains, the rural areas don’t. So the question our friends at Red Stag Fulfilment got us thinking about was: How will the future of distribution for emerging markets look as a whole?

In this article, we’ll explore the future of distribution in emerging markets, and how it just might surpass our own here in the first world.

How are emerging markets different?

Any effective and efficient distribution system allows customers to buy what they want when they want it, without unreasonable markups. However, when it comes to emerging markets, this may prove difficult given the lack of infrastructure. The quick change of pace, though, is an advantage.

First you have to look at modern cities in developing countries. Surprising to some, these newly built cities often rival our own transportation, communication, and financial systems. Here, modern-day distribution activities chug along and will surely advance as ours do.

However, in rural and remote regions of emerging markets, these systems are far less advanced and sometimes nonexistent. In some places, there’s no internet access, no banks, and no roads. So, how are these people going to become buyers in the market? And how are businesses supposed to reach them? Currently, it’s difficult and sometimes impossible. However, we may see them “leapfrog,” as Red Stag puts it, into the future.

Before any assessments on the future, though, it’s important to examine the position emerging markets are currently in.

3 challenges facing distribution in emerging markets

  1. Transportation 

    In developing countries, there often isn’t enough modern distribution for a wide variety of products. The big cities might rival those in developed nations—and even surpass it in some ways—but the rural regions often have poor roads, not enough delivery trucks and no local wholesalers.Even if the local distribution system is scraping by, it’s probably increasing the cost for the customer because everything takes more time and effort. To reach modern standards, emerging markets need to invest in not only roads, but airports and delivery point too.

  2. Marketing and communicationsLaunching a product in a developed nation is based on a formula of research. To find out the best way to market your product, you simply, and methodically, examine the people—i.e. by age, earnings, education, work history, interest, etc. In a developing nation, this is problematic, mainly because this information often doesn’t exist.

    In emerging markets, statistical data is often incomplete, inaccessible, or has just never been done. So, companies who want to break into a market have to start from the ground up.

  3. PaymentComputer and mobile payments rely on debit and credit cards, but the people out in rural areas of developing countries often don’t have access to banks. That means that even if people are given internet access or a mobile device, if they don’t have a bank account or credit card, integrated and internet sales are impossible.

    Today, our modern distribution network is all about filling ordersand fast. The fastest way to do so is by electronic payments, so if that’s not an option, fulfillment will be slow.

3 advantages emerging markets have in the future of distribution

  1. Rapid changeEmerging markets are doing just that: emerging and unfolding before us. Thanks to modern technology, the building up of their cities and infrastructure is taking a lot less time than it did for us in the developed world.

    On that note…

  2. They have the chance to establish efficient, high-tech distribution networksBecause there was no previous infrastructure in these new cities and rural areas before, establishing efficient distribution networks is actually simpler in some ways. If the new technologies of today prove to be workable, they can quickly grow, spread, and be implemented across developing nations. Emerging markets won’t have to displace, replace, or disrupt modern distribution technologies that are currently in place in developed nations.
  3. They’re mobile-connectedWhile developed countries tinkered away at landlines, the developing world often couldn’t scrape together the time, effort, and funds that it took to get that infrastructure in place. So, instead of cutting the cord and moving to mobile like we did in developed nations, emerging markets simply skipped that advancement all together and went straight to cell phones. In fact, today it’s emerging markets that are dominating mobile growth and even cell phone internet usage.

The future of distribution in emerging markets

To get insight into how distribution in emerging markets will adapt to the latest technology, we can actually look to the event above when many developing countries skipped landlines and went straight to cellphones.

This “leapfrog” event proved to be beneficial for the developing world. In the modern American home, the landline is almost obsolete, and increasingly people are shopping on their mobile devices instead of their computers. So as the developed world adapts to mobility, the developing world just builds upon it.

Essentially, this leapfrog effect could play out in distribution systems too, giving emerging markets the upper hand. For example, it might not matter that rural areas don’t have roads to be accessed by trucks. If drone delivery really pans out, these packages can be delivered regardless, since they travel by air.

In fact, it could even be better. Long distance drone deliveries would cut back on the time needed to fly, warehouse and ship out to customers, like the existing, modern infrastructures in place now.

Red Stag looks at this leapfrog effect and the major payment issue to come up with a colorful example of what an order, fulfilment, and delivery could look like in a future emerging market.

“A doctor in a small village looks at his old mobile phone and realizes that he needs a new one. He goes to the distributor website and examines the various models. He decides on a sedate black model, but with the highest amount of memory, and places his order. A window opens with instructions for an encrypted text message transferring the money for the purchase. Immediately after he sends the text, he receives a confirmation text message, and the website confirms the order and a scheduled delivery date the next day at 2:00 pm by drone.

In the warehouse, the order is received and converted to a specific black phone with the required memory. The corresponding phone RFID tag is assigned to the order, and an automated process picks the correct phone from the shelves and brings it to the loading dock. A drone arrives back from a delivery and picks up the item and the corresponding delivery address. It loads the phone and several other items and leaves.

At the scheduled time, the doctor is at the hospital, but on the way home he drops by the local store to pick up his package which the drone dropped off there. He is pleased with his purchase and visits the distributor website to give a good rating and a positive review. Despite being in a developing country, he has received his delivery more quickly than his rural counterpart in a developed country and he has paid lower transaction fees than the 3% to 5% common for online purchases with credit cards.”

In the end, the future of distribution for developing countries is promising, as long as the future technologies we’re talking about actually prove to work. Even if one of these countries is facing tough infrastructure challenges and development issues, the technology we predict for the future can surpass them.

Real-Time Inventory: What it Means and Why It’s Important

Real-time Inventory Management

No doubt you’ve seen plenty of analysis in the business world about real-time technologies and how it’s bringing more immediate results to companies. Whether it’s real-time metrics, marketing, or communications – bringing more immediacy to customers and business associates helps companies make smarter decisions for the future in our fast-paced world.

Similarly, real-time information is critical in your supply chain as well. At the heart of this is properly managing your inventory so your company can effectively re-order product and effectively stock product so that both excess inventory and stock-outs are avoided. The best way to get a handle on inventory is to use software that gives you real-time inventory management capabilities.

Just What is Real-Time Inventory Management?

Real-time inventory management is the process of recording sales and purchases of inventory immediately through the use of a software so that your company gains a complete picture of what’s occurring with inventory, enabling your organization to react quicker to supply chain needs. Rather than periodically updating inventory at pre-determined intervals (usually through the use of inventory counts), real-time systems record every transaction (both purchases of new stock as well as outbound orders and all of the associated costs) in real-time.

The inventory management system serves as the backbone for recording overall receipts and sales of product. For companies that work in a brick-and-mortar environment, point of sale systems provide the technology that enables real-time updates for product sales, whereas companies that sell online will be required to integrate their online sales channels with their inventory system in order to record sales. There are some enterprise level systems that bring all of these functions under one “software platform roof”. Furthermore, companies will oftentimes supplement these systems with other tools, such as RFID (radio frequency Identification) technologies or bar code systems in order to more quickly and effectively record new receipts and sales.

Benefits of Real-Time Inventory

Adding new software and/or supporting technologies to move towards a real-time inventory environment can be a significant expense for companies, so understanding the benefits of moving in this direction is critical for your fulfillment center services. As mentioned previously, the first benefit is that it allows your company to avoid stock outs and excess inventory more quickly than a periodic inventory management scenario. By updating all receipts and sales in real-time, you can tap into up-to-the-minute data, which will enable you to more effectively budget supply and demand of your product. Physically counting inventory on a periodic basis takes more time, and those delays, especially in our age of same day delivery expectations can significantly impact buyer satisfaction.

Which brings us to the second benefit of real-time inventory: enhancing the customer experience. One of the worst-case scenarios is to have a ready, able and willing buyer, only to lose them because you don’t have adequate stock for them to purchase your product in store or online. Not only does this impact your immediate sales potential with that customer, it may also have a negative impact on future sales – not only with that particular customer but potentially with others within their sphere of influence if they decide to share their disdain with others on outlets such as social media.

Third, implementing a real-time inventory system will likely bring some physical benefits to your warehouse as well. First and foremost, this method of inventory management will likely require your warehouse to become more organized. Furthermore, it will also more than likely result in less overall recounts of inventory if diligently managed.

Fourth, real-time inventory is a wonderful asset to your accounting and finance team as well. Knowing exactly how much inventory you need at the right times (and what’s left over) gives you a more accurate picture for the accounting department. Just estimating what your inventory stands at could pose a major rick to the profit reporting you do each quarter. Real-time metrics work to help catch errors immediately so you don’t experience extra downtime scoping out a problem.

Remember – Real-Time Inventory Doesn’t Guarantee Success

Just because you implement a real-time inventory system doesn’t mean that there won’t be mistakes, so knowing the potential risks will better help you avoid any potential pitfalls. For example, theft of product, mis-pick errors, damage to product and recording errors (at the receiving or picking/shipping level) can throw your inventory levels out of balance. Strict adherence to processes and procedures is critical to the success of this type of system. In particular, pay close attention to controls over the receiving process, since an error in this department will only compound problems further on down the sales process. Furthermore, a scheduled quantity of cycle counting will help assist you in more proactively catching inventory discrepancies.

A lot of times, taking the giant leap forward into real-time inventory is daunting for growing companies. Outsourcing fulfillment is a way to tap into the real-time environment without having to make the commitment to purchasing new technologies and management of the additional requirements. Professional third party fulfilment companies specialize in all aspects of warehousing and distribution and will have the necessary software to bring your company from periodic to real-time.

In-House Fulfillment: When it’s Better to Keep Fulfillment In-House and How to Maximize Performance

In-House FulfillmentMany businesses struggle with the idea of outsourcing to a fulfillment center or 3PL warehouse to help save time and money. While many businesses find benefits to this option it is not for everyone. We will outline some reasons why this is not always the best solution, and give you some guidance on how to manage your own fulfillment better. We will also provide a couple of reviews for some products that help businesses perform better on their own.

What are Good Reasons for not Outsourcing?

The first thing that probably comes to mind is cost. When profits are not high yet it might be difficult to start outsourcing fulfillment. When looking to use a fulfillment center there are start-up costs involved, storage costs, charges for movements, charges for employees that they are using to fulfill all of your business needs, etc. When there is not a lot of extra cash flow these costs can be very daunting and to some just not an option at all – especially if you have to rely upon your own time in lieu of paying a fulfillment center. Of course shipping costs can be very high for companies with a smaller order volume which is where a fulfillment center could help you save money, as these companies usually do have a better rate. Look at what costs your company is incurring for all of these services and compare them to the rates of these fulfillment companies and 3PL warehouses and you will find your answer. As a start up, you might have to boot strap it a while until you can afford the cash flow expense of an outsourced solution.

Then there are the businesses that have specific needs that entail too much work to outsource without a large potential for problems. For example, there are many different businesses that rent out clothing on a monthly basis to their customer. When these boxes get returned the clothing needs to be dry-cleaned and inspected thoroughly. Not that this is impossible to outsource, but these unique services will more than likely not be provided by many 3PL warehouses or fulfillment centers. Most outsourced warehouses ship standard goods and anything out of the ordinary could become problematic. Odd sizes and unique requests will add to the cost of outsourcing your business needs. When it comes to these niche companies it will more than likely be better to keep this side of the business under your own control.

Speaking of control, there are also businesses (and their owners) that need a little more control over their process. Outsourcing to a 3PL warehouse or fulfillment center means letting go of part of your own business. If you’ve been handling your own fulfillment and have created a working procedure for yourself, it could be difficult to let go and hand this over to another company. Most fulfillment centers have a streamlined process in order for them to best handle fulfillment for many different companies using their services. It is very important for a business owner to find a company that meets their needs as well as a good partner to work with. This may be hard to find for certain companies so maybe the own fulfillment process could be streamlined better instead of looking for it elsewhere.

How to Manage Your own Fulfillment Better?

If outsourced fulfillment isn’t in the cards, then you need to make sure you are armed with the right processes and systems to do it effectively. Anything can be managed on a very small scale, but as you grow, additional sales will expose any problems in the fulfillment process and will result in potentially catastrophic errors.
So what are the most important things to help your business? In order to be successful with in-house fulfillment you will need well-trained people and the right technology and software. It’s what all of the professional 3PLs and larger companies use to ensure success. While you may not be able to purchase robots to pick orders, certainly bar code scanning and inventory software are affordable options to significantly reduce errors.

When you look around you will find quite a few fulfillment software platforms to help you manage your business better. These software platform companies know that not every business is going to fall in line with outsourcing to a fulfillment facility. As such it can be overwhelming for you to try to find something that works right for your business. One of our recommendations would be to seriously consider other alternatives before using any shopping cart plug-ins. While these do have their pros and cons, you may run into trouble with these in the long run. The positive aspects are reasonable prices, free trial periods, no selling limits and unlimited storage. On the negative side, they may lock you into inflexible work flow processes that either set your company up for errors to take more time to process, and the customer service is sometimes erratic. They also frequently charge you with transaction fees, something you’ll see add up dramatically as your order volume rises. In addition, many of these services don’t offer refunds, bringing nothing but a money-losing risk when you need to gain the most profit. You need to find something with dependability and experience, as well as scalability. Lastly, it’s smart to avoid any service locking you into a contract, despite seeming impossible to find.

What to consider for In-House Fulfillment Software?

If not outsourcing is the right choice, you need to look beyond and see what tools you can use to make fulfillment work better in-house. You’ll need something that will fully integrate with your existing systems to avoid transition problems. In our quest to help businesses find what is the right fit for them we’ve started reviewing some of these Software platforms.

ShipStation

One option is Ship Station, which offers many different packages and pricing. For their platinum package they are charging $ 95 a month for shipping up to 6,000 orders a month. This is also entirely web-based so you only need an internet connection. However, the interface seems to be more difficult to navigate than some of the others. There are many options and it will take some extra time to find your way around but there is also a dedicated account manager as well as many forums to help you navigate the interface. It may be a little more difficult to find your way but it does offer you a way to customize your interface so you can have it set up the way you would like to see your information in front of you. Also their reporting is much more comprehensive. You can pull up reports for almost every aspect. It integrates with all of the biggest platforms as well and also syncs shipping status and sends tracking info direct to the customer. Many of the features are the same as other shipping software but there does seem to be a difference in dealing with customer service. It can take up to one business day to have certain issues resolved.

Interviewing E-fulfillment Companies: What Questions Should You Be Asking?

Questions to Ask Your E-Fulfillment ProviderShopping 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?

How an E-Fulfillment Company Became a Fulfillment Company

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.”

Checking for Reliability

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:

  • Do you offer an Order Accuracy Guarantee?
  • If you make an error on an order, will you pay an error penalty fee on top of correcting the mistake?
  • Do you have a “no hidden fees” policy?
  • Do you offer free account setup?
  • Do you have a Technology Team available to resolve any system or technology issues?
  • Do you have a policy on inventory shrinkage or damage?
  • If any of my inventory is lost or damaged, will you reimburse me for the cost of that inventory?
  • Do you offer an Inventory Accuracy Guarantee?
  • Do you offer an Order Processing Guarantee?
  • Do you have a backup generator so the facility and systems are always online?
  • Do you have a no long-term contract agreement?
  • Is inventory received within one business day?
  • Is Your Warehouse Operation Secure?

Checking for Security

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:

  • Does your facility have a 24-hour monitored security camera system?
  • Does your facility security system have multiple power source backups?
  • Do you have website security with 100% uptime?
  • Does your facility have 24-hour camera coverage of every square foot of operation?
  • Does your facility have an individualized access control system with on-site management?
  • Do you do full background checks on your employees?

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.

Fulfillment Companies Can Offer Specialized Services – Just Ask!

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.

Going Beyond Shipping a Package

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.

foldingjacket

Furthermore, their staff places the hand written note inside before packaging and sending the jackets to the customers.

insertthankyouandjacket

Little things like this can make all the difference to your clients and to your bottom line.

Fulfillment is the Key Word

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.

Fulfillment and Customer Satisfaction

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.

Additional Costs of Specialized Services of Fulfillment Companies?

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.

Fulfillment Companies Mean Quality – and Quality Counts

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 for Start-ups and Small Businesses

fulfillment for start upsFulfillment 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?

Why Optimal Order Volumes are a Myth

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.

So Start-up Friendly Fulfillment Companies Do Exist?

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.

The Right Kind of Fulfillment Company Offers Advantages to Smaller Businesses

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.

Fulfillment is More than Picking and Shipping

Print Fulfillment SolutionMarketing 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:

  • Dedicated Graphic Design TeamGood design is an essential part of presenting your business and governs your marketing. A fulfillment house that has a dedicated graphic team can provide a constructive eye on your print elements and give input on what would print effectively. A good graphic team can make sure whether a particular font or text size will print correctly or catch simple spelling or grammar errors. These simple corrections can save an organization from costly mistakes. A dedicated graphic team can check the artwork and also if the artwork is setup on the correct template. Also, a proper archival system ensures that the files are available for future print runs if needed and future re-runs should look same as the first run.
  • Onsite T-shirt ProductionCustom printed t-shirts are not only an important giveaway but also used by organizations to raise additional revenue. A custom printed shirt offered for sale for charity or an artist selling shirts to his/her fan base must be produced cost effectively. Most custom t-shirt print houses fulfill T-shirts on demand which is expensive and does not help organization raise money effectively. A good fulfillment house should have ability to produce custom printed shirts onsite so the shirts can be printed with lower cost and quicker turnaround.
  • Promotional Printing A good fulfillment must have a good print department. Catalogs, brochures, info and sample packs, branded premiums, and coupons are common examples of printed items used to promote a product or company. A promotional fulfillment program could be a one-time event or an ongoing campaign. Promotional fulfillment could be targeted at new prospects and/or existing customers. Other popular items distributed through print fulfillment programs include educational materials, repair and training manuals, sheet music, calendars…basically any printed item that is offered to consumers can be part of a print fulfillment program. A fulfillment department with print capability to help support these marketing initiatives.
  • Consultative ApproachA fulfillment partner is an extension of you business and should be readily available to take a phone calls or answer email. There are an overwhelming amount of options that you do not have time to go through yourself. You should be able to rely on their expertise in recommending solutions and products and trust them to cut through and let you choose from a handful of the best options.

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.

Selecting a Canadian Warehouse Location

CanadaWhere to start?

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:

  • Where is your port of entry?
  • Where are your customers mainly located?
  • Does your volume qualify you to have multiple locations?

Throughout this article, I will be referring to a consumer goods company shipping 40’ containers from Shenzhen (China) to Vancouver (Canada).

Analysis of the Canadian Consumer

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.

CanadaWarehousing

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.

Reducing Shipping Costs & Delivery Times

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.

Reducing Shipping Costs & Delivery Times

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