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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 communications

    Launching 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. Payment

    Computer 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 change

    Emerging 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 networks

    Because 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-connected

    While 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.

The Best Times To Use a Fulfillment Company For Amazon Related Orders

Amazon FulfillmentIt’s no secret that Amazon is the powerhouse when it comes to online commerce. If you’re thinking of selling products through Amazon’s marketplace, you’ll want to make sure you have the preparation process figured out down to a T.

If you’ve ever seen an FBA warehouse (Fulfillment by Amazon) operation in action, it’s pretty impressive. They employ more that 15,000 robots to help retrieve products, have huge conveyor belts to transport product from storage to packing stations, and they ship 35 items every second. In fact, Amazon’s outbound shipping cost is over $1.5 billion a year!

One of the main reasons why Amazon can ship so many items each day is because they’ve streamlined their inbound process. That minimizes the time it takes to receive products and get them ready to be picked, packed and shipped. They’ve been able to streamline their receivings by passing the preparation process on to its vendors.

Failing to comply with FBA product preparation requirements may result in the vendor being charged for non-compliance and/or their products being returned, disposed of, or even blocked from future shipments to the fulfillment center.

Amazon does offer its vendors guidelines such as its Quick Reference Guide on how to prepare inventory for FBA. However, the opportunity cost of vendors preparing products for fulfillment takes away from sales and marketing. A lot of fulfillment centers—like ShipMonk, for instance—saw an opportunity and began offering FBA prep services to help vendors prepare their inventory before it’s sent to an FBA warehouse. Everything from opening containers and repackaging thousands of SKUs to simply labeling products correctly with barcodes—prepping products for FBA is essential if you want to be a successful Amazon vendor.

Here’s a list of various FBA Prep Services:

  •      Quality control
  •      Repackaging
  •      Labeling
  •      Fragile item preparation
  •      Loose products
  •      Sold as a set
  •      Boxed units
  •      Poly bagged units
  •      Case-packed products
  •      Expiration dates

Now that you understand the importance of Amazon preparation, you’re probably wondering if you should do it yourself or look to a fulfillment center for help.

The answer isn’t anywhere near cut and dried. Therefore, you’ll need to take into account the following:

Where is your product manufactured?

The best solution would be for your manufacturer to prep the products for FBA for you, but you’d have to calculate how much that affects your shipping rates. If you’re importing from China or another foreign country, you’ll probably want to save as much as you can on shipping to the U.S. To do this you’ll need to put more than 1 SKU on a pallet—which is great for lowering costs but makes the product unfit as an FBA receivable.

How many SKUs do you have?

If you have a lot of different SKUs that require different prep services, it may be too much to keep track of and stay up-to-date. Also, do you have the space and equipment to de-palletize and repack the products on pallets or in boxes for FBA?

What packing materials are needed?

If you need specific packing materials such as poly mailers, fragile item wrapping, or labels, a fulfillment center may be a great option. They have various materials in stock and may even give you a discount since they can purchase in bulk.

What’s your profit margin?

How much are you selling your products for and what are you making? If you have room in your profit margin, it probably makes sense to outsource the FBA prep service. Then you can focus your efforts on expanding your product line and/or selling more product. (Unless, of course, you just love working in the warehouse, then absolutely, you should not outsource!)

Is the risk worth the reward?

Can your business afford to have its products returned or be billed a non-compliance fee for failing to meet FBA standards? A reputable fulfillment center will include in their SLA that if something happens due to not following FBA guidelines, the fulfillment center will assume responsibility.

Are there seasonal spikes throughout the year?

You may want to prepare inventory yourself throughout the year except for the holiday season. During that time, you’ll probably want to focus on customer service and marketing. So consider outsourcing FBA prep during those busy months and then take it back into your own hands if you want to cut back on outside costs during the off season.

What can I be doing with the resources it takes to manage FBA prep?

This is the million-dollar question that only you can answer. Most business owners can manage the FBA prep process, but—will it take away from growing your business?

 

Kickstarter, Indiegogo, and General Crowdfunding Best Practices When Fulfilling Orders

crowdfunding fulfillmentThere isn’t any question that the world of crowdfunding has opened new possibilities for the world of business. If you’ve gone in this direction to promote your business and sell products, you’ll know you need supreme organization in order to ship orders properly once your campaign is successfully funded – as well as plan for any order fulfillment needs after the campaign is over altogether. The fulfillment and shipping for your crowd funding campaign will offer some interesting hurdles, as you’ll be left with a large volume of orders potentially to ship within a certain period of time – and you don’t want to disappoint your supporters.

This is why it’s important to study some crowd funding best practices to see what others have done to make fulfillment a success during this critical time. Considering you’re introducing a product for a first-time consumer base, you won’t get a second chance to make a good impression. If orders end up turning up missing or delivered late, it could severely damage your reputation before taking your startup to the next level. Things can also be negatively impacted if you manage to deliver well; yet don’t take time to protect the product from being damaged in the packaging. 

Planning Fulfillment in Advance

An important thing to know now before you start a Kickstarter or Indiegogo campaign is to plan all fulfillment processes before the eleventh hour. Far too many businesses think they can plan how to ship an item only after they reach their fundraising goal. Don’t fall into this trap, because you’ll start to think you can handle it all on your own and then potentially miss your deadlines.

The first decision to be made is whether you’re going to ‘self-fulfill’ or if you’ll use the services of an outsourced fulfillment company. Self-fulfillment means that you’ll be shipping all of the orders yourself. If you don’t have any funds to potentially outsource, you might be forced to use this method. Furthermore, if your overall order volume is low and/or you don’t anticipate continuing to ship products after your campaign, self-fulfillment might be the best option. However, if you do plan to continue to sell your products after the crowd funding, or if volumes will be a little larger, then using a fulfillment provider can take the headache out of shipping. There are companies that focus and specialize on fulfillment for crowd funding campaigns, such as ShipBob. They have great experience with operating these types of campaigns.

Secondly, you’ll need to figure out what your plan is for international shipping. This is a factor that many companies face as quite a few campaigns will garner backers in various countries. If there is a sizeable order volume from a particular country outside of your locale, it might be beneficial to utilize a fulfillment service in that country. If not, it will help you to understand your fulfillment costs and timing to meet everyone’s expectations. 

What Will Shipping Costs Be, Including Shipping Time?

No matter how you look at it, crowdfunding is still a business, and fulfillment needs to occur as quickly as possible. You only have one impression to make in sending your products fast to your new customers. Without planning some best practices, a lot of this can go wrong very quickly. Estimate your shipping costs and how long shipping is going to take. Know this weeks in advance before you even start doing any fundraising.

By posting this on your fundraising page, your new customers know exactly what to expect rather than automatically assuming you can take on two-day deliveries.

Creating Communication Portals With Customers

There isn’t anything worse than failing to provide communication methods for your crowdfunding supporters. If there are any shipping concerns, they need to talk to you immediately. Every one of the customers who gave you money should get top priority if they message you with a shipping problem. Be sure to open up every possible communication medium, including live chats if possible.

Always respond quickly as well if you rely on emails. Don’t make customers wait hours or days to hear back.

Planning the Order File

One best practice that helps operations run smoothly is to figure out how you’re going to translate all of the customer’s data into order information and ultimately packing slips and shipping labels. If you’re running this in house, then you might want to look into some fulfillment and/or shipping software. Oftentimes, these software programs will allow you to upload an Excel or CSV file into the system, thereby generating orders and labels. If you use a fulfillment company, they will be able to take the file and create the orders. Also, fulfillment companies will be able to integrate with your systems so that they can receive the orders over automatically.

Ensure a Pleasant and Powerful Experience

Packaging is a critical component of shipping that many companies forget to pay attention to until it’s too late. When your backers open your rewards, it’s extremely helpful for them to have a great customer experience so that they refer your product or company to others in their network or purchase from you in the future. Powerful and lasting impressions can be made with your backers by using creativity in terms of the packaging of your products. Some packaging efforts cost quite a bit, and this may or may not be in your budget. However, simple and cost effective measures can be taken in order to leave your backers with a smile on their face when they open their orders.

All in all, it takes a good amount of time and effort to plan out and execute a successful crowd funding campaign. By taking the extra time up front, you’ll save yourself a lot of pain and you’ll set your company up for future success.

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.

ShippingEasy

We will start with ShippingEasy.com which has many benefits to using their service as an alternative to outsourcing. There are various packages available with the premium package costing $ 99 a month for businesses shipping up to 6,000 orders a month. The full list of plans can be seen here including the free Starter plan up to 50 orders and the Enterprise plan for unlimited orders. This comes with an account manager and comprehensive training. All you need to get started is an internet connection and you can access your account on your web browser. It does seem to live up to its name in being easy to use. The interface is easy to navigate as everything is clearly marked. The workflow will help you enter your orders into the system. You can set your own parameters such as carrier, weight, dimensions, etc. The printing page will help with packing slips and shipping labels and such. All in all, most reviews will tell you that shippingeasy.com really is as easy to use as they promise. There are only a couple of things that you might want to consider beforehand. You may want to speak with an account manager if you ship irregular packages as the system only accepts length, width, and height. Also, the best shipping rates are on the Plus and higher plans (which offer Flat Rate Green, ShippingEasy’s proprietary cubic rates) – though the Basic plan offers Commercial Plus Pricing and the Starter plan offers Commercial Base Pricing (all of which are less expensive than the retail counter). They integrate with the biggest and most used platforms such as Ebay, Amazon, Shopify, Etsy and Volusion, etc. The full list of integrations is here. They offer reporting as well as inventory management. Their order management is in real-time and they give you a customizable view of order details. Another feature is that it syncs shipping status and tracking info back to online stores and sends an automatic confirmation email to customers with full tracking info. There are many other features and integrations but we encourage you to check them out and maybe even start with their trial program if this feels like the right fit for your company.

ShipStation

Secondly, there is Ship Station. Just like the above it offers many different packages and pricing is not much different. 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 Shippingeasy.com. 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 the other software we reviewed above 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.

Both Shippingeasy.com and Ship Station have many similarities so it would come down to whether reporting and customizable interface are more important such is the case with Ship Station or if having a quicker customer service such as with Shippingeasy.com is the case. We will start reviewing more companies and software that could potentially help your business so please keep coming back for more information and reviews.

Proactive Approaches Separate Customer Service Quality in Fulfillment Companies

Fulfilment Center Customer ServiceWorking with a fulfillment company requires extensive communication to ensure that everything runs efficiently. Whether they are simply providing customer service to your team or handling a more extensive function such as direct communication with your end customers, the quality of this communication can make or break the entire fulfillment experience. What separates customer service quality in fulfillment companies is paying attention to various details you may not think about until they happen. It’s why you should look carefully at your contract before working with a fulfillment center and see how they approach communication with you. Or, discussing it over with the manager can give you an idea.

Here are some things to consider so that you can avoid having any difficulties with the service provided by your fulfillment center.

Proactive vs. Reactive Responses in Customer Service

You can quickly determine which center has the best approach to customer service based on whether they do things proactively or reactively. In the latter case, the support team may only contact you when sending you a bill, or responding when you have a problem. Using a proactive method, on the other hand, is where they’ll let you know in advance about specific issues, improvements, or savings that will benefit your company. Always be sure to ask if the fulfillment center has a proactive support team and what frequency they’ll proactively reach out to you. Another good way to determine if they offer proactive customer service is to discuss the technology systems that they use and have them provide examples of how it helps them identify potential issues, track ongoing performance, and manage email and telephone communication for your company. Ideally, you should always have a symbiotic relationship with your fulfillment provider where communication happens frequently.

Support Staff Availability

Most people have experienced poor customer service where you have to spend 10 minutes to get a hold of a live person, get put on hold for extended periods of time, or deal with representatives that aren’t able to handle the issue at hand. The same potential negative scenarios exist with your fulfillment operation unless you ensure that they have adequate support staff, training, and availability. The stakes are even higher if they are providing any support to your end customers. “Statistics show that when a company fails to respond properly to customer concerns, it all reflects badly on you, the retailer. A lousy customer response in dealing with a return could lose you a customer for life, including getting highly unfavorable reviews on influential places like Yelp,” according to Max Zitney, who runs Ships-A-Lot in Warren, Ohio.

It’s imperative you choose a fulfillment center that has support available during the appropriate business hours of your company. Most importantly, you need to have multiple contact methods as well to deal with an emergency. Methods of emergency correspondence could include text messaging, direct phone calls, using service such as Slack for transparent conversations, or standard email.

Mobile communication is equally essential, especially when you need to travel for business and can’t visit the fulfillment facility in person.

Working With Account Managers on Communication

The account manager in your fulfillment center should keep communication going on a regular basis, including messaging you at agreed upon intervals to update you about what’s going to occur. Having daily or weekly briefings confirms which items are getting shipped, which items get handled on returns, and details on warehouse procedures. If there’s any changes in technology or other procedures, the account manager should let you know so you’re aware of any slight downtime during transitions.

In addition, you should get monthly reports from this manager detailing everything from accuracy, speed, to savings they’re giving you. When the fulfillment center can save you money through more enhanced technology, it only helps you in a time when customers expect deliveries yesterday rather than today.

The Delivery World of Tomorrow

Future of DistributionYour Guide to Deliveries of the Past, Present, and Future

Pulp science fiction often gave us an image of the future that involved bio-domed malls, pneumatic tubes delivering mail directly in our homes, and milk still delivered by hand but from flying trucks. However, the true future of delivery will likely be hordes of boxes zipping through the air in flocks.

Products will get to market in automated fashions with robots doing much of the piloting, whether that’s through ocean channels or direct-to-home drone delivery. Distribution pushes ever forward to cost reduction, agile delivery, and expanded access.

Innovation has always been at the heart of each economy’s distribution model – from the Minoan civilization adopting the first aqueducts in the 2nd millennium BCE and the introduction of diesel-powered refrigeration trains on cars in the 1950s to the automated warehouses of today.

Delivery Tech That May Go the Way of the Dinosaurs

Understanding the future of delivery should start with a strong foundation of the past and of what we’re using today that we might not use in the near future. Here are two areas that we think may face an extinction event in the future.

The 1900s Wholesalers

Distribution became a specific function of businesses, and sometimes the only service offered, in the early 1900s thanks to recent increases in mass production. Creating goods quickly meant they could be sold quickly if they made it to new markets. Wholesalers stepped up to allow manufacturers to move large quantities of goods, leaving the wholesaler to make local deals, sometimes at a right of twice what they paid the manufacturer for it.

Goods-Branded Stores

You’ve read the section head and you might think that we’re crazy. I mean everyone loves the Apple store right?

But two of the most common things we buy are purchased from stores that aren’t necessarily associated with their products: food and clothing. Grocery store chains typically aren’t named after a product they carry or sponsored by a specific food maker because they simply stock too many items. The same goes for most clothing stores, which are branded separately even if they offer their own clothing line.

Amazon did this on the Web, moving us away from buying direct from the manufacturer to a more all-purpose store. And, that was the big shocker because everyone thought the Internet meant selling more goods directly to the customer.

Intermediaries actually became stronger and manufacturers have had to reduce costs because new e-commerce distributors control market access by making it convenient for the consumer.

Delivery, Meet George Jetson

Amazon is the perfect segue into the future, even if the brand is supplanted at some point, because it is among the most vocal brands predicting what the future of delivery will be.

Even as the company starts operating more delivery vans and trucks in local markets, it has openly discussed not needing the employees driving those trucks. There are a few paths forward that Amazon and others may take in the driverless future, and here are our favorites, as detailed by Red Stag Fulfillment in their article on The Future of Distribution.

Flying Deliveries

Drones are the easiest thing to point to as a future for distribution. There are already trials and some autonomous units don’t need an operator. The biggest concern is that they’re limited to about 10 lbs. with a 10-mile delivery radius, and they seem fairly easy to compromise.

Also, how will a delivery drone deal with a multi-unit home? Where will it drop off goods at an apartment building? How many consumers would buy and install a drone landing page so they could get a package?

What this may end up creating for a short time is a central location where packages are dropped off and then picked up by the user whenever it’s convenient. However, that part of the model feels old and antiquated.

Driverless Trucks

The autonomous vehicle rage makes the daily commute sound nice, but it could make the biggest impact in deliveries. Image an autonomous truck that doesn’t have to worry about HOS rules. It never speeds and can automatically adjust to road conditions or traffic updates, always with a preference for low-traffic routes.

RFID tags already provide trucks with plenty of information on cargo, so it isn’t farfetched to think they could supply trucks with delivery information when they reach a warehouse gate. It’s a more predictable and stable supply chain.

Robotic Warehouses

Full automation should be put in the “likely reality” category perhaps ahead of either drones or driverless cars. Current technology already does much of our sorting and order/inventory management. Amazon’s Kiva robots can even do some basic picking.

Manufacturers have long used cameras for quality control, so that isn’t a stretch in the warehouse either. One thing that may be difficult is recreating the custom packaging that’s taken the industry by storm. But then again, that’s just about teaching a robot proper filling order and paper-folding with a quality-check from an optical sensor.

Robots may also learn to be more delicate than humans and can have tighter controls on governance – never skimping on the bubble wrap.

Who Will Connect the Dots?

This is going to seem a little far-fetched (excuse the pun) but we think that the old-shaped, extra-sensitive or especially unusual item will be the perfect place to look in order to know that the future has arrived.

Unusual items to not be local and they don’t fit well within automated systems. They’ll have extra packaging requirements, need specific carrying instructions, have limited pre-staging options, and will require every point the supply chain to touch.

The future of unusual item shipping may involve something as complicated as specialized trucks that can bring a selection of goods to a local planning area and then have drones fly from the truck to the customer’s home. This will likely require a human driver initially to ensure that a safe and secure parking location is chosen for the delivery base.

Or, we could be looking at a more routine distribution side of the supply chain, with production taking the new route. 3D printing continues to improve and may allow manufacturers to set up local production facilities for these kinds of orders, so that geography is no longer a limiting or controlling factor.

The future of distribution is likely going to be the same kind of disruption we see in many other areas of tech. It’s exciting to think about these scenarios coming to fruiting, and perhaps more exciting to see what we didn’t expect becoming reality.

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.