by Will Schneider
Looking at a pricing proposal from a warehousing and fulfillment vendor is akin to browsing the statutes of a typical homeowners association. Although it may be a good solution for sleep troubles, reviewing the pricing proposals of warehousing and fulfillment companies should be done with great care and diligence. Below are some tips to help avoid some of the challenges of warehousing and fulfillment pricing.
Taking a few precautions when looking at warehousing and fulfillment proposals can help in avoiding unncecessary troubles, and can lead to a long-term agreement that works for both sides.
As a whole, third party logistics companies have not progressed as rapidly as they should have in terms of transparency, technology, flexibility and communications protocols. There are several speculations as to why this happens, but realistically, third party logistics providers can neither afford nor justify the necessity to take the risks required to stay ahead of the curve with newer technologies and policies. Luckily, there are a few things you can watch out for when selecting a 3PL for your company.
Believe it or not, although this seems obvious, this question is actually not to verify reputation or stability. There is an obvious correlation between the longevity of a 3PL provider’s time in business and their ability to maintain up-to-date policies and procedures. If a provider has been in business long enough to have evolved through several decades of changes, you then need to determine where they currently stand in terms of technology, communications, transparency and flexibility. More times than not, you will find that the companies that have been in business through many transitions are more up to date than those with only a few years, or less, in operation. More importantly, the 3PLs that have been in business through many transitions will also have a much better ability to adapt to future technologies and trends. A company that has only been in business for a short time will have most likely utilized all of its resources to purchase the software, hardware, machinery and resources necessary to operate within current standards (or perhaps even slightly antiquated standards), but will not have the ability to adapt to any necessary changes within the near future.
It isn’t so much the size of the 3PL, or even the number of locations, but the fact that a 3PL has multiple locations is a direct example of the company’s ability to network and provide communication between multiple locations, which directly relates to the ability to communicate to their customers.
While certain companies seem to be under the impression that a web presence isn’t for everyone, the truth is, when relating to any business, it is for everyone. It is a necessity. Notice however this was not limited to a “web page”. There is much more that goes into a successful 3PL then a simple static web page. There should be details, functionality, interaction, customer portals, billing and payment options, account/inventory access, communication tools and more. Social networking and integration should play a part as well, so you are able to see reviews, testimonials, feedback and more.
There are several debates on the effectiveness, and even the definition of transparency, when referring to third party logistics. While some companies maintain that their expertise and experience should be sufficient in proving their standards of service, this is a very antiquated argument. With today’s technological advances and communication protocols, companies should be able to see much more than they are accustomed to. Real-time inventory tracking, account management, invoicing and account history, inbound and outbound activity, delivery and pickup scheduling, activity logs and more should all be made available to your company by any third party logistics provider. The transparency of a logistics provider is imperative to ensure that your company is able to monitor all KPI’s (Key Performance Indicators). Without the ability to monitor the performance of a third party provider, you lose control of your overall performance indicators to your customers.
With these tips to look out for, you will find an ideal 3PL for your company, which will lead you to a greater profit margin and better success and satisfaction rating overall. Remember, when selecting a 3PL, you are putting the performance of your company in someone else’s hands, so you should make sure they are up to the challenge.
Article written by Southern Worldwide.
A company’s shipping costs, whether it’s parcel or freight, usually comprise of at least 10% of their overall expenses. It is therefore imperative for shippers to be more knowledgeable in various cost reducing methods that will increase the company’s bottom line. Shipping with FedEx and UPS can be very expensive, so here are a few ways to reduce those costs.
Did you know that 3% of packages delivered by UPS/FedEx arrive late? Their Money-Back Guarantee policy states that you are entitled to a full refund on that shipment, even if it’s only minutes late! However, the catch is that they make you initiate the refund process, and don’t do it automatically. Requesting credits for service failures, overcharges, weight discrepancies, etc. can definitely add up and will significantly reduce your costs. However, you do have to be knowledgeable in the 40+ parameters for refunds (service failures are just one of those parameters) to claim them and constantly be monitoring your account which can prove to be very time consuming. Furthermore, the carriers only give you a window of 15 days from the date of invoice to claim those refunds. Using a 3rd party parcel and freight auditor is recommended to both increase your refunds and save you time.
If you are a high volume shipper of either ground, domestic express, or international, then most likely you can negotiate with your carrier for better rates. Don’t be ashamed to ask for it. You are the customer who is spending hundreds, if not thousands of dollars every month and therefore have the right to obtain higher discounts. To effectively negotiate with UPS/FedEx, shipping managers need to be very knowledgeable in their shipping needs, volume, and projections. If one isn’t up to date on this, it is recommended to consult with a 3rd party auditing firm.
Another way that UPS & FedEx make their money is by overcharging the customer on insurance costs. While UPS/FedEx charge $0.70 for every $100 of Declared Value, a 3rd party will charge significantly less, usually around $0.30 per $100 of Declared Value. So for a shipment that has a declared value of $5,000, UPS/FedEx will charge you $34.30 (the first $100 of declared value is free) and the 3rd party will charge you only $14.70. So that equals to a 57% discount by using a 3rd party! Multiply this amount by hundreds of packages that you might insure a month and you are greatly decreasing your insurance costs.
By taking a close look at these couple of freight bill items, you might find that you’re able to save quite a bit of money each month. As is usually the case in business – inspect your freight bills and regularly commit time to performing an analysis of the numbers so that this often ignored area gets the attention it needs.
This article is a guest post written by Eytan Sebag, President of Betachon Freight Auditing, a company that specializes in auditing Fedex UPS accounts, negotiating carrier contracts, and LTL Brokerage services.
By Will Schneider
Over the last couple of years, Steve Berry, President of Battery Universe found some interesting ways of growing his business in these difficult economic times. In addition to upgrading his website, adding a retail outlet, and franchising his business, he found that adding new items in previously unoccupied niches helped fuel growth. Over time, these new products became a significant percentage of his overall business. The only catch – it added to his company’s workload from an inventory management perspective. So he had to get creative about how to manage the growth of SKUs (in his case over 1 million unique items) so that it didn’t overwhelm the business. “At first it was pure excitement, seeing sales grow at a great clip,” said Mr.Berry, “but then we realized that we had to come up with some strategies to minimize workload in our every growing inventory SKUs.”
And Battery Universe isn’t the only company that is faced with such a challenge. Many businesses are faced with similar challenges. “It’s not uncommon for some of our clients to have SKU counts in the thousands and beyond,” noted Mark Chandley of Adeptiv Solutions, an order fulfillment company that ships products for online retailers. So where can companies turn when they SKU counts seem to be busting through the roof? Here’s a few tips to streamline the processes and remove some of the clutter.
Managing a large volume of SKUs can be an extremely difficult task. But with a little bit of creativity, and a whole lot of technology, management can become, well, manageable.
FLINT, Mich., January18, 2013 — NorthGate announces they have achieved ISO 9001:2008 certification. Perry Johnson Registrar, Inc., (PJR) assessed the Quality Management System of our Corunna Road and Dort Highway facilities in Genesee County Michigan and declared NorthGate to be in conformance with ISO 9001:2008 standards. PJR issued Certificate # C2012-03268 effective December 27, 2012.
This certification is the culmination of years of consistent top-quality work, and the dedication of our employees, stated Teresa Witt President of NorthGate. She continued saying, “although NorthGate has been operating under the guidelines of ISO 9001:2000 standards for many years, I believe our decision to upgrade to ISO 9001:2008 Certification is a proactive one that not only anticipates the demands of customers, but also demonstrates NorthGate’s commitment to providing quality products and services.”
The scope of the certification for NorthGate’s Corunna Road packaging and order fulfillment processing center entails; design, development, assembly, sub-assembly, sorting, inspection, packaging, warehousing, shipping, supplier monitoring, processing, and distribution for automotive products and other industries.
The scope of the certification for NorthGate’s Dort Highway reverse logistics, packaging and order fulfillment processing center involves; development, sorting, inspection, packaging, warehousing, shipping, supplier monitoring, processing, and distribution for automotive products and other industries.
ISO 9001:2008 is a set of international standards and guidance documents for quality management and quality assurance. The standard represents an international consensus on good management practices, policies and procedures with the aim of ensuring that our organization can consistently deliver the product and services that meet the customer’s quality requirements.
NorthGate, is a third-party, cost effective business solutions provider of Warehousing, Packaging, Fulfillment Processing and Reverse Logistics services. We are an independent, family-owned business dedicated to providing hard work and outstanding customer service. NorthGate offers a strategic location in the heart of North America’s industrial engine, where we have prime access into a vast array of major US and Canadian cities. Our vision is to be your partner… now and in the future, through every challenge, and every success.
By Will Schneider
In our fast paced world, waiting too long for a product or service is not a good thing. From waiting in line at the bank to complete a transaction to waiting on the phone for a customer service rep to respond to an inquiry, people have little patience. And the more people wait, the more their tempers flare and the less inclined they might be to purchase again. This is especially true with regard to online ordering of product. Because the internet moves at lightning speed, customers’ expectations are high when it comes to the speed of delivery of goods purchased online.
If timely shipping sounds unimportant, just talk to Dennis Bamber, President of Technologydrive.com, an ecommerce fulfillment services company that specializes in storing and shipping goods for online retailers. “Recently, I purchased a rubber drive belt for a vacuum cleaner on the internet from a top online retailer for vacuum accessories,” said Dennis. “Great selection and great prices – but I was still waiting for the drive belt three weeks later! I’m guessing that they delayed in picking the order because it was only $6. But in doing so, they lost my future business.”
And Dennis’ sentiments are by no means the minority. The predominant theme is that customers expect online orders to be shipped quickly and error free. On top of that, online consumers are used to low cost shipping and free shipping, which places an additional squeeze on small business profits. It’s a high level of expectation for small businesses to meet. So what can be done to make sure that you satisfy your customers’ needs and operate at a level of profit that’s sustainable?
The most important thing to remember is that shipping can either be a competitive advantage or an Achilles Heel. By realizing that shipping is another area to “touch” your customers and provide them with a favorable experience, you’ll be able to take advantage of this often overlooked opportunity and turn more of your customers into raving fans.
Guest Blog by Tom Schwab
The wonder of eCommerce is that it allows customers throughout the world to find your product day or night. The ugly reality is that when that customer reaches the check out page they want two things: They want it fast and they want free shipping. Both are the number one reason for shopping cart abandonment. Fail to meet either condition and you risk loosing the sale either to another website or a brick and mortar retailer that can provide faster availability.
Our niche direct to consumer medical products company was forced to expand from a regional player to a national provider. Our customers would take their crutch alternatives with them on vacation. Where they went, the call and orders followed. Due to the size and associated dimensional weight of the product, air shipments were prohibitively costly. Ground shipments while reasonably priced could take up to four business days from our Midwest location. For patients struggling with the pain and limitations of crutches this was an eternity. To continue to expand our business we needed to address this real logistical constraint.
As we searched for a fulfillment partner on the internet we were met with frustration. The 3PL companies that ranked highest in Google were on page 1 for a reason: They were big. It was clear that they were not interested in small accounts by their responses. Multi-year contracts, expensive set up fees, minimum shipment, minimum floor space and the need add expensive software to transmit orders all scared us away.
On the opposite side of the spectrum, there were many companies that claimed to do 3PL in addition to their core business. What it was in reality was an attempt for them to fill empty warehouse space and provide an additional revenue stream in a down economy. Questioning them about their process proved we could not count on them to provide our level of service our customers.
After months of dead ends that educated us what we could not accept and what we could not afford, we stumbled across WarehousingAndFulfillment.com, an easy to use online service that looked at our specific needs and gave us a quick quote of 5 potential fulfillment partners that potentially met our needs. Beyond a simple matching service between eCommerce companies and 3PL providers, they had pre-screen the warehouses. All the discussions with the potential partners were efficient, informative and addressed our needs. Finally, we had choices instead of frustration. Within days we had chosen our partner and our product was on a truck headed for them.
We’ve now used the WarehousingAndFulfillment.com services 3 times as we’ve added additional 3PL partners throughout the US. Clearly they have been a key resource for us in harnessing the incredible potential of eCommerce. Now no matter where in the US the customer finds us, we can deliver to them in just 1 to 2 business days with free ground shipping.
by Will Schneider
It’s that time of year – last minute online purchases for your loved ones with the youthful anticipation of smiles on their faces Christmas morning. In particular, the great joy of giving the perfect gift to a child and watching their face light up when the wrapping paper is torn through like a vulture devours its prey. And the sigh of relief when it’s all over, knowing you pulled it all off without a hitch.
If only it were this simple…
All too often, the Christmas dream is turned upside down by a mis-shipment – whether the shipment arrives late or missing parts. And finally, it happened to us this Christmas…well more specifically to my 5 year old son.
Our parents bought our son a super duper all in one basketball, hockey, soccer set. Of course, no sooner than the wrapping paper had been ripped off of the box did he beg and plead for us to start setting it up so he could enjoy it. And within minutes of stumbling through the 100 step set up process, I realized that two critical parts were missing.
What were we to do? The toy was bought online. We could send it back and wait for the return and severely disappoint our son. Or we could get creative. With little choice in the matter, his grandpa quickly drove to the nearest Home Depot, looking for some PVC pipe and a saw. Within 5 minutes of getting back, we had the entire set back up and running and averted a huge Christmas disaster.
But we know that many of you either couldn’t replace a part as easily or flat out didn’t receive the present in time. With another Christmas behind us, we thought it would be an opportune time for us to gather up some of this year’s Christmas shipping nightmares.
by Will Schneider
A great number of product based businesses consider outsourcing with a third party warehousing company as a viable option for handling the warehousing and distribution of their product. But once they begin researching these third party providers, they oftentimes get hit with “sticker shock” in terms of storage and fulfillment fees. They often think to themselves, “Is it cost effective to outsource?” Or better yet, “Will cost savings be realized by outsourcing warehousing and fulfillment?” These are extremely important questions that need to be analyzed from a detailed financial perspective in order to gain appropriate insights to make the best decision.
One of the most difficult aspects of any in house versus outsourcing financial analysis calculations is the gathering of ALL “in house” costs. If any of these costs are left out of the equation, you’ll surely not be able to gain the proper perspective in your decision. What kinds of costs need to be included?
Some of the most commonly overlooked areas are equipment purchases and adequate measures of management support related to the fulfillment process. Without a thorough analysis, you’ll potentially be left thinking that outsourcing isn’t the best option when in fact using a third party warehousing solution would be the best way to go.
In addition to forgetting to include certain in house costs, another common mistake is not accounting for other added benefits of outsourcing your third party warehousing. Some of these “intangibles” can really provide significant savings. They include:
Properly accounting for all costs and benefits will help you make the best decision regarding the use of third party warehousing. Don’t be short sighted when looking at the pricing proposals from fulfillment companies. Take into account all costs and you’ll set your business up for the greatest success possible.
by Will Schneider
Most online retailers using Amazon Fulfillment will be hit hard starting in February of 2013 with a multitude of price increases targeted to combat increasing transportation costs. Most notably, the fee increases include an adjustment to the “weight handling” fee and an addition of a returns processing fee. These fees and increases will apply to anyone that self-fulfills through their system – in an attempt to further entrench customers by giving them incentive to fulfill by Amazon.
Like many of the price adjustments over the last couple of years, these recent increases hit retailers hard – and at a time when many online merchants are struggling to squeeze as much profit out of their company as possible and weather the economic storm of the last couple of years. In particular, smaller businesses may find these particular fee increases a heavy burden to shoulder next year.
“Of anything that we hear most about the Amazon Fulfillment network, the vast majority of comments are related to expensive pricing structures and challenges with unique service requirements and flexibility,” noted Will Schneider, CEO of WarehousingAndFulfillment.com. The well known fulfillment provider is definitely the “800 pound gorilla” in the fulfillment space, offering multiple locations, quality execution and tie in to its Amazon network. But, as Mr. Schneider notes, “for many smaller companies in particular, the large orientation of Amazon makes addressing the challenges of a smaller business difficult – from lack of branding options, difficult to come by personal customer service, and now a series of price increases that make is less competitive with other outsourced fulfillment options.”
Of course, a price increase is never easy to swallow, although oftentimes understandable. But the interesting part will be to see what the Amazon Fulfillment fees increase, which was announced during the holiday season, will bring for Amazon in the New Year.
by Will Schneider
Ferber Warehousing just announced that it is selling its proprietary logistics software, Conveyorware.com, to fulfillment and logistics firms. The software, which includes decades of customs from industry needs and experiences, will be sold as a SAAS (Software as a Service), starting at just $100 per month for 5 users. It’s an all inclusive software, managing the entire 3pl process from start to finish, simplifying the systems needs of growing 3pls.