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Receiving Product into Your Outsourced 3PL Warehouse – How to get it Right!

Receiving Process at a 3PL warehouseWhat all is involved in the Receiving Process?

Receiving product into the warehouse is arguably the most important step in the fulfillment process. If inventory isn’t recorded accurately, mistakes will most certainly follow – resulting in everything from stock outs as well as order mis-picks.  “Everything else within the fulfillment operation will literally fall apart if your outsourced 3PL (third party logistics) warehouse doesn’t have a rock-solid receiving process,” according to Chris Jenkins at Warehousing Pro, a Nashville, TN based warehouse and fulfillment center.

What all is involved in Receiving? Simply put, receiving is the process of bringing product into the warehouse, counting it to make sure total units were received (both total and by item), inspecting it for damage or other issues, performing any prep work to get it ready for actual inventory and sales, physically locating it into the proper area of the warehouse, updating the 3PL’s warehouse management system (WMS) to reflect all accurate data, and posting this information to client systems.

How is Product Sent to the Warehouse?

Product can be sent to the warehouse in a variety of ways. The most common ways that product is sent are using:

-Containers: Usually 40 foot or 20-foot containers, sent from overseas. These containers can either be packed “floor loaded” (meaning that they stuff all of the boxes into the container without pallets and try to get in as much product as possible) or pallet loaded (the cartons within the container are stacked and wrapped on pallets within the container). If the container is floor loaded, it will take the warehouse longer to process the receiving of the container and thus costs will increase.

  • Pallets: Usually pallet load quantities are shipped to the warehouse via Less-than-truckload (LTL) shipping carriers.
  • Cartons: Usually cartons of product are shipped in instances where the quantities are much lower, the products are much smaller or there is an urgent need for receiving the product and thus it is shipped by expedited air freight. Cartons are shipped to the warehouse via small parcel shipping carriers (FedEx, UPS, USPS, etc.).

How is the Product Identified?

Product identification is a critical success factor in the process of accurately receiving product into the warehouse. Without appropriate product identification, items can be allocated to the wrong SKU, causing order mis-picks and inventory accuracy discrepancies.

In order for the 3PL warehouse to accurately count the product, there must be some identifying markers on each carton at a bare minimum. This will allow the warehouse staff to know what the contents are of the carton. For increased accuracy, and to allow the 3PL warehouse staff to perform receiving functions more efficiently and effectively using computer technology (such as bar code scanners or radio frequency identification “RFID” smart labels), cartons can be labeled with scannable bar codes or RFID smart labels. To sum it all up, product can be identified in these ways:

  • Basic labels that identify the SKU/item
  • Scannable bar code, RFID smart labels, etc

Sometimes, cartons contain multiple SKUs, in which case they must be opened to verify that the contents of all SKUs are present, or the outer carton (commonly referred to as a “master carton”) will contain many inner boxes (commonly referred to as an “inner carton”) with each contain a product. In the case of mixed cartons, it is critical for the cartons to be labeled as mixed pallets to flag the warehouse staff.

Furthermore, adding more details to the carton labeling can assist the warehouse in more quickly and accurately processing the shipment of product. For example, if the cartons are label with not only a SKU label but also quantities within the carton or even product descriptions, warehouse staff will have more knowledge to better receive the product. Of course, if cartons are bar code labeled, or labeled with an RFID tag, warehouse staff can simply scan the cartons and more effectively process each carton.

What Types of Inspection is Conducted?

Of course, counting the product is the most commonly known step in the receiving process. Counts can take the form of high-level carton counts (relying upon the quantities within each carton to be accurate) where cartons aren’t opened and the sum is taken of all master carton counts on one end of the spectrum, to breaking open each master carton and counting the contents of each inner carton at the other end of the spectrum. In some instances, actually opening up each box and inspecting the contents is necessary, as detailed below.

The cost to perform receiving in these different scenarios will vary, with costs increasing based upon the amount of time it takes to perform the process. Furthermore, the level of accuracy increases as the depth of inspection increases. In some instances, there will be a trade-off between increased costs and increased levels of accuracy. The only way to validate with total certainty the contents of a shipment is to break open and count all items, but this may not be feasible in all cases. If contents of a carton aren’t individually verified, it’s important to note that this could lead to inventory discrepancies.

But counting the product isn’t the only function that gets completed within the receiving process. The warehouse staff must also perform other important steps, including inspecting the product as well as any ancillary functions to prepare the product for sale.

When warehouse staff inspect the products, the first and least invasive form of inspection that they can perform is to simply check the outer cartons for any damage. The next level of inspection could be to break open an agreed upon number or percentage of cartons to inspect the product for damage, giving a higher degree of confidence that the products are in sellable condition. In cases where products are of extremely high value or are highly susceptible to damage, opening up and inspecting each carton for damage may be necessary.

Items may not only be quality checked (QC’d) for damage – they may also be checked for other factors. For example, an inbound receipt of printed t-shirts may be checked to ensure that not only the printing is of good quality, but that the printing is of the correct color, etc. Another example is that products may need to be inspected to verify that each component is included within the product.

What Ancillary Receiving Functions can a 3PL Warehouse Conduct?

In certain circumstances, a 3PL warehouse will need to conduct other functions during the receiving process in order to get the products ready for sale. These include but are not limited to:

  • Labeling for automated inventory and picking/shipping (such as Amazon Prep/FBA labels)
  • Kitting to assemble units together
  • Testing to make sure products work (such as electronic products)
  • Poly-bagging/Shrink-wrapping (such as poly-bagging t-shirts and apparel received from screen printers)
  • Stripping off supplier/manufacturer labels
  • Repackaging into other packaging (e.g. branded packaging)
  • Preparing for subscription box models
  • Preparing for high-volume pre-orders/back-orders

Where Does the Product Get Placed in the Warehouse and in the WMS?

After items have been counted, inspected and prepared for sale, there’s still work to be done. First and foremost, the product will need to be placed in the warehouse. For bulk stock that will be used at a later date, oftentimes it will be either stored in pallet racks or floor stacked in areas away from standard picking areas so that it’s out of the way until needed at a later date. For stock that will be picked and packed and shipped, oftentimes the product will be stored in pallet racks in such a way that it can be picked easily and quickly. This may necessitate putting them in pick bins, etc.

Second, all of the counts and data are entered into the 3PL’s WMS. Once entered, they can be viewed (most frequently online). 3PL warehouses that have even tighter controls over their processes will even make sure that this data gets synced to client systems, so that inventory counts will display appropriate (e.g. inventory levels will display correctly on Web Stores for consumers to order). Because these client-side and 3PL side systems sync, it’s extremely important for information to be not only timely but accurate.

How Long Should All of This Take?

Overall, the speed of the receiving process varies from company to company. Depending upon the size and complexity it can take days, and for some instances it can be done same day or within a few days. Sometimes there will be a heightened sense of urgency to process things quickly (e.g. when back orders exist and customers need products delivered quickly). In these cases, special provisions can be made with the 3PL in order to devote more resources to receive the product quicker. The biggest indicator of success is having an agreed upon timeline for different scenarios so that both sides are on the same page with regards to expectations.

Account Management Models of Fulfillment Providers

Customer Care SolutionsEnd User Support Services for Order Fulfillment

When it comes to warehousing, customer service means different things to different people. When some people think of customer service, they think of what is known as “end user” customer service or outsourced customer support. This service occurs between your client (or end user) and your customer support team, whether that team is in house, outsourced by you, or outsourced by your warehouse. That being said, while some warehousing companies do offer end user customer service, call center services and fulfillment under one roof, such as Our Serviceworks, this is a highly specialized service and is only available through a handful of warehousing providers. Most warehousing companies either don’t offer end user customer support or they offer it through a third-party call center company. If you do need end user customer support and intend to use an outsourced warehousing and fulfillment company to perform these services, make sure that they do it all in-house – otherwise it would potentially be easier and more affordable to skip the middleman and outsource these services yourself.

Standard Order Fulfillment Support Services

What most warehousing fulfillment companies dooffer is direct customer service for your business and the other businesses they serve. Warehousing customer service provides your business answers to questions about order status, inventory on hand, order changes, reporting, shipping and receiving, errors, returns, to anything that affects your account or your inventory.

The most common way most outsourced warehousing providers offer customer support to clients is via email, chat or telephone, but there is a growing push towards email to resolve account matters. Though impersonal, most larger companies like Amazon, Shipwire or ShipBob host a dedicated customer service department, but customer accounts are handled by anyone who answers the phone or email, and your business will likely get a new representative every time you call or email with a concern – even when calling about the same issue. While this does help ensure timely and even round-the-clock customer support where available, it can be frustrating to businesses who must constantly wait for the representative to familiarize him or herself with the account notes or ask the caller to re-explain the problem each time. It also makes it difficult for your business to get customized service that fits your individual needs like they would with a smaller business with dedicated customer support.

Combatting the problem of a too-big customer service department is where the smaller, regional warehouse comes into play. Though smaller in size than Amazon, ShipBob and Shipwire, smaller warehouses often offer big differences in customer support. For example, unlike with larger warehousing operations, smaller warehouses can offer dedicated customer support to your business. This means your account is either handled by one contact within the company, such as the company president himself, or your business is assigned one dedicated person who handles your account and can be contacted directly whenever you need support. This business model enables your business to reach out to an expert on your individual account, eliminating the frustration of briefing a new customer service representative every time you call about an ongoing issue.

Another benefit to having a dedicated account manager is that they become very familiar with your business and its individual needs. Even when there are no issues present, your account manager can be a useful member of your team. They learn your inventory, shipping patterns, preferences and any specialized account details, and will advocate for you and your business.

Unfortunately, there are still downsides to dedicated customer service. For example, though having a dedicated representative often means a quicker resolution to your issue, if your dedicated representative is busy with multiple accounts, out sick, or even on vacation, it could take a while to get a response. This is why many warehousing companies familiarize several account representatives with your account, so there is usually someone around to help you out if your primary representative is unavailable. The downside to having multiple representatives on your account is that your backup representative or representatives may not be quite as familiar with your account as your primary representative is, leading to more delays in service.

Choosing the Best Service-Oriented Fulfillment Center For Your Business

Using a warehouse with dedicated customer support can be a rewarding experience for any business, but there are important key factors to remember when selecting a warehouse. Though its important, don’t just choose a warehousing operation for its customer service department. Make sure the provider has everything your business needs in addition to top-notch customer support.

Another thing to remember is that your business and its relationship with your customer support person and warehousing provider will work better the more involved you are in the relationship. This means holding regular meetings with your team to go over any issues and inventory. How often you choose to do this is up to you, but it is recommended that you meet as frequently as weekly, monthly or quarterly.

Finally, familiarize yourself not just with the warehousing company’s policies, but with their customer service practices as well. Learn who your representative or representatives are, get their contact information and find out what you can expect in terms of timeliness of response, means of response and more. This will ensure a great working relationship with your customer support team, so in the rare case that there is an issue, you are already comfortable with the individuals assigned to assist your business.

Choosing a 3PL WMS

Choosing a 3PL WMSYour business is growing, and you need technology that can help you keep pace. As a third-party logistics (3PL) provider, you likely already have a warehouse management software (WMS). But now that your business is evolving and growing, you’re looking for something more…

  • Capable.
  • Flexible.
  • Scalable.
  • Innovative

But where do you start? When you try to search for “3PL warehouse management software” online, you get innumerable results.

First, you need to identify your challenges, and then based on that, you’ll be able to determine which features matter most to you.

Challenges that 3PL Warehouses Face

As a 3PL, you face additional challenges that other businesses don’t have to deal with. You’re turning warehouse management into an outsourced service. So you aren’t on the hook for marketing your customers’ products, but they’ll be unhappy if your management leaves them with dissatisfied customers.

Handling Clients, not Just Inventory

Yes, you manage products, but you also manage your customers. Their requests, questions, needs, and more. Even though they know you have other customers, they’ll expect you to courteously and promptly respond as if they’re your only customer.

Many times, customers will reach out to you when they have a fulfillment emergency. Perhaps product demand grew faster than they expected, or their product got picked up by an influencer. Whatever the case may be, they’re contacting you, and they need to onboard quickly before their business gets banned in the marketplaces.

You need lead time to set up new clients, and you don’t always have as much as you’d like. Wouldn’t it be nice to have a streamlined process that looked the same for each client, while allowing them to receive individual treatment?

Lack of Real-Time Reporting

Without real-time reporting, you’re going to struggle to make rapid-fire business decisions. If your clients decide to have unexpected sales (as they may be prone to do), does your data tell you how many temporary workers you need to hire?

Are you going to need those workers to work overnights and weekends?

Do you need your customer to place orders for additional inventory so they aren’t out-of-stock?

These are questions that require fast answers. Of course, to be sure you’re coming up with the right decisions, you need real-time data. Real-time data from all of your sales and supply chain channels comes from integrations that connect to your system.

Business Scalability

As you grow your 3PL business, one or two new clients may require you to scale your capabilities. You will seek to grow by landing larger clients with larger budgets. However, once you start to gain those clients, your warehouse capacity will reach its max, which means you may have to add new warehouses to your network.

You’ll need more equipment and more employees, which means you’ll generate more data that can help you run your business smartly. Investing in technology that can support your business growth for the next 3, 5, or 10+ years is a smart investment.

You must build scalability into your business model to have sustainable growth and see the most return on your investments.

What to Look for When Choosing Your 3PL Warehouse Management Software

If you’re looking for a solution that allows you to treat customers as individuals, provides real-time data, and has built-in scalability, then you’re looking for a 3PL warehouse management system. There are so many warehouse management systems to choose from in the marketplace (we created a short list of the top 3PL warehouse software solutions here for your review). Here are some areas you should consider when looking for a 3PL WMS in order to bring efficiency (and profitability) to your business.

Fulfillment Process Optimization

You want your 3PL WMS to help you build better operations processes. That means your software should guide your employees in executing advanced picking methods and tools such as:

  • Zone picking
  • Batch picking
  • Pick-to-light
  • Fulfillment robots

Picking can account for as much as 60% of your warehouse labor costs. Using advanced fulfillment techniques in a non-3PL warehouse can be tricky without the best technology. Handling orders for multiple clients’ customers adds a whole new layer of complexity.

This complexity is why you should use a WMS that has multiple client architecture.

Customizable and Integrated Billing

Your 3PL business has unique billing processes. You should be able to customize your WMS to reflect your requirements. The 3PL WMS that will be easiest for you will let you integrate your billing accounts, and systemically automate billing for functions and services like:

  • Product storage
  • Receiving
  • Fulfillment and shipping fees

If your WMS doesn’t integrate with your billing service, then you’ll have to export this data and import it into your chosen billing platform. This integration can make things much easier when your business goes through financial audits or is preparing for tax time.

Client Portals and Dashboards

We mentioned this above, but multiple client infrastructure is a must have for your business. As a 3PL, you’ll want to extend your great tech to your clients.

Customers want 24/7 access to their business information. As a trusted partner, you want to grant them that access, but you have to make sure that they can only access the right data. Having customer portals is a great way to allow your clients to get a bird’s eye view of their inventory, while securing the data they shouldn’t have access to.

You also operate using many different sets of credentials in order to integrate seamlessly with your clients’ operations. Managing all of their marketplaces, shopping carts, and carrier credentials can easily get out of hand.

You want to present a custom solution, which means taking all of the various channels in stride. You can give your customers the ability to access their information in real-time, and view whatever data they need to make business decisions.

Many businesses struggle to turn over the management of such a critical part of their business. With a client portal, they should be able to view things like receiving, inventory, orders, and reports.

Don’t Forget Your Dashboard

So client portals are wonderful and help foster great relationships between you and your clients. But a great dashboard will help your warehouse run smoothly. When you log into your WMS, you should immediately be able to gain a sense of warehouse operations.

As their service-provider, seeing all of the data in one easy to use dashboard will save you from trying to compile it yourself.

Multi-Channel Integrations

With the account integrations you’re certainly going to want, it becomes a lot easier to trust the data behind your reporting. By minimizing the need for manual data entry, you lessen opportunities for human error. Imagine, you could have real-time 100% accurate data across your entire warehouse.

Real-Time Data and Visibility

If all of your clients’ sales channels are integrated with your WMS, then information will flow from the moment their customers hit the “buy now” button. Most modern 3PL WMSs integrate with barcode scanning technology. This allows for real-time updates on the status of all of your clients’ orders:

  • A picker has received the pick list on their mobile device and is walking the pick face right now.
  • The picker has picked all of the required inventory and is moving to the packing station.
  • The shipping label is waiting at the packing station as your packers scan each item’s barcode.

A truly advanced WMS not only gives you the pulse of your warehouse, but also helps keep your ops in sync. Warehouse operations are kind of like an orchestra. Different parts that create a greater whole. Could you imagine how rough the orchestra would sound if you couldn’t get the percussion and woodwind sections in harmony?

A great 3PL WMS keeps your operations synchronized and streamlined, bringing harmony to your warehouse.

User-Friendly for Easy Training

Your employees shouldn’t need to spend weeks training on your WMS in order to use it effectively. During your 3PL WMS search, look for interfaces that are clean and simple. If it’s easy to use, then you’ll have no problem implementing the system across your warehouse operations.

When you bring in temporary warehouse employees during an operations surge (like the holidays), they should be able to easily grasp your WMS as well. Minimizing their lead time increases their effectiveness during their time working for you.

A System That Grows With Your Company

Your business development department is hard at work generating new business. Marketing and sales are sure to be qualifying and disqualifying leads every day. Every time you land a new client your foothold in the industry grows. You’ll be able to pursue bigger clients.

This means more revenue for you, but also a higher demand on your resources. Look for a WMS that won’t flinch if you need to add a new warehouse (or five). Do you want to take your company international? Any WMS you choose should have no trouble adding an overseas warehouse.

Remember This When Looking For Your 3PL WMS Solution

You want flexibility, scalability, and a WMS that’s innovative. You don’t have to compromise on any of those wants and needs. You can find a great 3PL WMS that’s perfect for your business. Keep your challenges and business priorities in mind during your search for the perfect WMS.

Schedule some demos, and ask the hard questions. If you don’t ask them now, then you’ll get your answer later, likely during a crisis. There’s a warehouse management system out there that can help your company grow. You can count on it.

Warehousing and Fulfillment Fees Rise According to Latest insightQuote Survey

2017 WNF Warehose SurveyIn December 2018 and through January 2019, we conducted our annual warehouse costs and pricing survey. This year, we polled around 600 warehouses and had even more participation than in 2017, and we’d like to thank everyone that took the time to fill out the confidential survey.

Before we launch into the results, it’s important to point out some of our assumptions. First, we did not record which answer was associated with a particular warehouse. This was done to allow vendors to confidentially answer questions without fear of providing key information about their specific company. Second, if we found any of the survey answers to fall far outside of the extremes, we did not include the results in the averages outlined below. For example, if someone indicated that they paid $75 per square foot per year for warehouse space and the next highest amount was $18, we did not include the result so that we could accommodate for any order entry errors. Unreasonably high or low answers to our survey questions could have been a result of misunderstandings related to the question or an error in entry. Third, we did not segregate the results by geography. We acknowledge that this definitely has a tendency of skewing some of the results, as we do have vendors that operate in the United States and Canada. Fourth, in cases where results were given in various formats for a single question, we made our best attempt to compute averages based upon the most common answer type given. As an example, some respondents answered that they pay a warehouse management employee a salary, while others indicated that they paid an hourly salary. Similarly, some respondents provided answers to how much they charge for pick and pack per order as a flat order fee, while others responded that they charge a per order plus a per item fee. Finally, if there were any responses that warranted further explanation, we elaborated on those responses in our discussion below, so that readers of the results can understand the various responses received.

Summary of 2018/2019 Survey Results

Overall, the hot fulfillment and warehousing market, bolstered by e-commerce fulfillment growth and increased demand for timely processing of internet-driven orders, seems to have caused warehousing costs (mainly warehouse leases and labor related costs) to rise. As a result, the end of 2018 and beginning of 2019 has seen an increase in warehousing and fulfillment pricing for outsourced services. The survey showed that costs rose in all areas for warehouses (warehouse lease costs, hourly employees rates, and management salaried staff), and as a result overall profitability decreased slightly. In order to keep up with rising costs, providers of warehouse and fulfillment services increased their pricing offered to customers across the board as well, including storage fees, pick and pack fees. Furthermore, fulfillment companies opted to extend lower shipping discounts to customers as well.

2019 Warehousing and Fulfillment Pricing and Costs Survey

Below are the results of our latest survey. In order to make the results easier to digest, we’ve segmented them into the following categories:

  • Performance Data
  • Agreement Terms
  • Warehousing Costs
  • Pricing and Discounts

Performance Data

For performance data, our main objective was to see how many fulfillment providers use performance data to gauge the quality of their work. We asked the following questions:

  1. Do you measure performance?
  2. What is your picking accuracy?
  3. What is your inventory shrinkage rate?
  4. What percentage of customers do you retain each year?

In the survey, we found that 82.93% of companies polled measure their performance in some way. The average picking accuracy for order fulfillment companies was 99.19%, and the average inventory shrinkage was 1.26%. Respondents, on average, retained 99.52% of their clients. Performance data results didn’t vary significantly from our 2017 survey.

Agreement Terms

We get a number of questions, both from warehouses as well as companies looking to outsource, about the standard terms of agreement that fulfillment houses employ. In our survey, we asked:

  1. What terms do you offer on your agreements? (month to month, annual, multi-year, or no term) This question allowed warehouses to respond with multiple agreement types, since many firms are flexible and offer different terms to different customers.
  2. Do you increase your pricing on a regular basis?
  3. If you do increase your pricing, what percentage do you increase pricing?

In the survey, we found that 56% offer month-to-month agreements, 61% offer annual agreements, 37% offer multi-year agreements, and 12% don’t require an agreement in all cases. Month-to-month agreements rose slightly in popularity from 10.26% to 12%. More significant, however, were increases in annual and multi-year agreements. The use of annual agreements rose from 38% in 2017 to 61% in 2018/2019, and the use of multi-year agreements rose from 25% to 37% over the same periods. Furthermore, 64.29% of all respondents said they do increase pricing yearly. The rate of price increases nearly doubled – in 2017 the average increase was  2.37% and our latest survey indicated that the average rate increase is now 4%.

Warehousing Costs

It’s helpful for warehousing companies to see what others are paying to maintain their warehouse. In the survey, we asked:

  1. What is your yearly cost per square foot of your warehouse space?
  2. What is your starting hourly rate of your warehouse staff?
  3. What is your annual pay for a warehouse management employee?
  4. What is your corporate profit?

The average cost per square foot of warehouse space was $7.79, a marked increased of $6.53 in 2017. The average starting hourly rate of warehouse staff was $13.32, and the average annual pay for a warehouse management staff was $50.524 (2017 results were $11.44 and $47,478 respectively). The average corporate profit came in at 7.25% for 2018.

Pricing and Discounts

In order to get a feel for the going rates of fulfillment companies, we polled warehouses and asked them questions relating to their pricing and discounts that they offer customers. Not only do warehouses need to understand the competitive landscape, but we also get tons of questions from companies looking for outsourced fulfillment services that are looking to uncover the average fulfillment pricing, costs and fees. For pick and pack fees, we asked:

For order fulfillment pricing, we asked:

  1. What is your average pick and pack price for a single item direct to consumer order?
  2. What is your average pick and pack price for a business to business order?
  3. Do you offer discounted pick and pack rates?
  4. If you do offer discounted pick and pack rates, what is the break with which you offer the discount and how much of a discount do you offer?

The average pick and pack fee for a single item B2C order was $2.86 (up from $2.64 a year ago), whereas the average fee for a B2B order was $4.17 (up from $3.74 a year ago). An overwhelming 74.29% said that they do offer discounted pick and pack fees based upon volume of orders (which was unchanged from 2017), and the average discount was applied at 1,000 orders per month (with the highest frequency of responses either 500 or 1,000 orders per month). Discounts ranged from 5% up to 10%.

We did introduce an additional question in the 2018/2019 survey – ‘Do you charge differently for Amazon orders, and if so by how much?’. We found that 57.14% do in fact charge different for Amazon orders. On average, fulfillment houses charge $1 more for Amazon orders.

For storage pricing, we asked:

  1. How do you charge your customers for storage?
  2. What is your average price for storage?
  3. Do you offer discounted storage fees?
  4. If you offer discounted storage fees, at what breaks do you offer discounts and what discount is offered?

The most common way of charging for storage was pallet storage (90.24% – which was a 10% increase from 2017), followed by storage per bin (26.83%), per square foot (24.39%) and lastly per cubic foot (12.2%). These percentages reflect that companies, in many cases, offer more than just one storage pricing. Warehouses shied away from pricing per cubic foot in 2018 and into 2019.

The average pallet storage fee came increased only slight from $13.02 in 2017 to $13.20 in 2018/2019. The average cubic footage charge was $.5, the average cost per bin was $2.85, and the average cost per square foot was $.66. A full 48.65% of respondents offered discounted storage solutions (mostly at pallet levels), which was largely unchanged from last year’s survey. The average discount was 10% given at roughly 500 pallets.

We surveyed the warehouses about their shipping pricing and discounts. Questions included:

  1. How do you charge for shipping?
  2. If you offer shipping discounts, what discount do you give for ground, express, and LTL shipping?

With regard to shipping pricing, again we found that many companies offered a number of approaches. The most common approach (43.90%) was to allow customers to use their own rates. This was interesting, as many fulfillment providers rely upon making margin on freight. Not far behind, however, was the option of offering a cost plus model, where they mark up their shipping costs (41.46%). About a third of the respondents (31.71%) offer a percentage discount off of published rates, and 14.63% responded that they don’t apply a discount at all. When discounts were offered, the average shipping discount for ground was 20.02%, for express was 29% (both of which were decreases from 2017. 51.33% was the average discount given for LTL freight.

Set Up, Account Management, Receiving, and Returns Fees

In 2018/2019, we expanded our survey to ask questions about other ancillary fees fulfillment companies sometimes charge. The questions included:

  • If you charge a set up fee for a new client, how much do you charge on average?
  • Do you charge a routine account management fee, and if so, how much and how frequently?
  • Do you charge returns fees, and if so how much?
  • Do you charge receiving fees, and if so how much?

The average set up charge was $336, but some companies charge as much as $2,000-$10,000 depending upon the complexity of the integration. 56.41% of companies in our survey indicated that they account management fees, and the average fee was $226.54 per month. 84.62% of those surveyed indicated they charge returns fees and the average charge per single unit return was $3.53 (although some companies charge the same as their standard pick and pack fee OR around $35 per hour). Most companies polled charge a receiving fee (94.87%). Receiving fees varied widely including depending upon the unit of measure: $.25 unit; $7 pallet; $31.95 hour; $373.33 container; $1.21 carton.

Your Best Options for FBA Prep And Long Term Storage

Amazon Long Term Warehousing and PreparationAmazon is a beast. They pull in sales of over $51 billion dollars a year with a net profit of $1.6 billion. They’re lucrative because they are always innovating. Amazon’s most recent venture promises to prep your stuff. The company now offers a full range of packing services called FBA (Fulfillment by Amazon) Prep. But are they really the best option out there for your business? And do they have your best interests in mind?

What is FBA Prep?

Fulfillment by Amazon (FBA) has packaging and prep requirements for any product that lands in their fulfillment centers. Their sentiment is that when units are properly packaged and prepared it reduces delays, saves on cost, protects your product while stored, and enhances the customer experience.

Previously, Amazon required you to prepare inbound shipments and goods in certain ways, but they didn’t provide a service to help facilitate these preparation services. But now Amazon has some warehouses that are being dedicated to packing and prepping for FBA. They essentially prepare products to send to Amazon DC’s. Amazon then does all of the shipping.

However, some of these requirements can be very restrictive and they will not ship your product if they don’t conform to their policies. Therefore, it’s always best to double check rather than losing revenue. You might also consider looking into a third-party fulfillment center to see what their requirements are. They may necessitate cheaper materials that could make all the difference in the world for your budget.

How Does FBA Prep Work?

If you decide to use FBA Prep, Amazon will pack all eligible products for a per-unit fee. After enabling the service, you choose Amazon to prep the products that you ship to fulfillment centers. Once you build a shipping plan, Amazon will provide an estimate of fees based on those schematics. So, the process can be a tad lengthy, and you have to jump through a number of hoops.

Then the FBA Prep process begins. Consider the following:

Ticketing

When it comes to ticketing, Amazon still expects the vendor to not only create shipping plans but print the labels too. This is so they can track the inbound shipments. A third-party vendor may make it easier on a business by creating the plan themselves.

Bundling

Rather than bundle units, Amazon has been known to break them up when necessary. As they state on their site “Your qualifying units may be split into multiple additional shipments.”If you seriously need bundled shipments, Amazon may not be the best choice.

Bubble Wrapping

Amazon will ship glass and other fragile items. The FBA Prep service includes bubble wrapping and labeling.

Stickering Shrink Wrap

Amazon does not shrink wrap anything. They bag the following: liquids, apparel, fabric, plush, textiles, baby products, small, and adult. If you seriously need your product shrink-wrapped, a third-party fulfillment center might be your best choice.

Cross-Docking

When you have Amazon prep your products, FBA Label Service may be applied to certain items and you will be charged a fee. Same with anything that requires an Amazon barcode. There have been issues with Amazon surprising people with hidden label fees, so keep your eyes peeled.

Third Party Fulfillment Centers Offer an Alternative to FBA Prep

Amazon is not the only place to offer a prep and pack service. Many third-party fulfillment companies also have this on the menu. And by working with another fulfillment center you may save on overall costs. Amazon is notorious for hidden and “surprise” fees. These tacked onto your order could cripple a budget. Oftentimes, third party fulfillment centers will offer preparation services for FBA at a reduced cost as opposed to using Amazon’s prep service.

Furthermore, using a third-party fulfillment centers offers a host of other benefits. First, these outsourced fulfillment services enable multi-channel shipping through other online platforms. So, if you do business on your own website, or other marketplaces like e-bay and Etsy, it’s ok.

Finally, using a third-party fulfilment house allows you to avoid Amazon’s dreaded long-term storage fee penalties.

What is Long Term Storage Avoidance?

Surprisingly, Amazon doesn’t want you to overstay your welcome. The company will charge you a fee if you store at their warehouse for too long. It’s referred to as the “FBA long-term storage fee.” On the 15thof every month the company conducts a cleanup of their inventory.Inventory that has been in fulfillment centers for 181 to 365 days incur a long-term storage fee (LTSF) of $3.45 per cubic foot.

Items that have been in US fulfillment centers for more than 365 days on the inventory cleanup date incur a long-term storage fee of $6.90 per cubic foot. And it goes up from there. This is what leads to long term storage avoidance. Nobody wants to work with Amazon if they can’t afford to store their stuff.

There are many programs and apps you can install that will use data based on SKUs to help you identify long-term stock issues. Additionally, if you think an item will take a long time to sell, wait until just after the 15thto list. This will give you the maximum time.

Of course, you can avoid all of this noise by working with a third-party fulfillment center. The long-term storage fee is mostly unique to conglomerates like Amazon and is rarely something you would see with traditional third-party warehouses. Long term storage fees are a serious business and why risk having your stuff held hostage?

 

 

How to Increase Your Warehouse’s Order Fulfillment Efficiency

The main function of any warehouse is to store and dispatch goods. The more effectively you can do this, the more profit you will make.

By using the best infrastructure, equipment, and operational processes, you can maximize your warehouse’s order fulfillment efficiency, both now and into the future. We have devised some key tips to help make sure you achieve this.

Motivate Your Employees

Many warehouse positions are not the most glamorous, however. For everything to functioneffectively, every employee must work hard.  A great way to motivate staff is to offer incentive pay. This gives them an opportunity to pocket more on payday and lets them know you appreciate their efforts. Another simple, but effective method, is to offer prizes or a free staff lunch if weekly, monthly, or quarterly goals are reached.

All businesses have problems hiring and retaining capable staff. Offering regular pay raises to employees who work hard can save you money over the long-term. The wrong ratio of inexperienced to experienced staff can lower efficiency.

Each new team member will work less productively at first and require training from an experienced team member. This means you will have two people working at less than the optimal rate.

Containers Are Crucial

You want to select the right containers for your products. These should be easy to load your goods into. They should also fit nicely onto the truck without any wasted space.

Different forms of inventory often require dramaticallydifferent containers. Ensure you are using the appropriate container to store food products, for example. You may be required to meet specific regulations based on the product in your warehouse.

With so many container options available, it is in your best interests to assure you are using the most suitable ones. Do some research and assess exactlywhat your needs are.

Use the Right Pallets

pallets

If you areusingpallets,make sure they are the right type. Many people do not realize the variety of options available. Selecting the correct type can make the transportation and storage of goods a lot easier.

Different pallets have different strengths and weaknesses. Metal pallets are extremely durable and long lasting. They can withstand high heat and corrosive materials. Thismakes them ideal for pharmaceutical warehouses. Plastic pallets are also a great option. These are light, but also durable. They are also very affordable. Do not forget the traditional wooden pallet. These are highly versatile and come in many shapes and designs and are recyclable.

Make sure you consider how you will be using the pallets. Are they going to be moved by pallet jack or by a forklift? Will they be stored at ground level or up high in the racking? Also, consider the weight and size of the inventory that will be loaded on top of them.

There is a lot to think about. Just remember, to fulfill your orders, you are going to need to safely and effectively store your goods.

Keep Up with Technology

Do not get left behind when it comes to technological developments. The latest equipment can make your warehouse much more efficient. If you do not have the voice-enabled technology yet, consider implementing it. Thiscan be used to optimize a variety of warehouse systems.

For example, your order pickers can wear headgear which tells them where to go, what to pick, and where to deliver it. They do not need to waste time reading an order sheet or taking verbal directions from a manager.

Obviously, there is quite a high upfront cost to install such a system and train staff in how to use it. The important thing is to think long-term. You will have increased order fulfillment efficiently for years to come while also increasing profits.

Optimize Racking for Your Warehouse

Optimize Racking 

Storing your goods in an organized manner allows your staff to locate, package, and dispatch them much quicker. Selecting the right racking is crucial. Size, strength, and accessibility should all be considered. You want your employees to easily access the rack, select the right item, and move it safely.

It is important to understand the different types of racking available. If you have many small items, use flow racks while larger items may require cantilever or pallet racks. Consider what your inventory is and the different options available.

Make sure your racking is scalable. There should be options for enlargements as your warehouse expands its business, therefore requiring more storage space. You do not want to select a racking system that will eventually need to be replaced. Choose one that can be increased incrementally over time.

Last, and perhaps most importantly, make sure you optimize your racking for the space available. A key consideration is racking height. You want to make sure you are taking full advantage of your warehouse’s vertical dimensions.

Always Put Safety First

If an employee gets injured, this can derail your whole operation. They are unable to work, and morale is reduced throughout the whole warehouse.

Always maximize safety. Any incident should be fully investigated, and employees should be encouraged to speak up whenever they notice a hazard.

Safety First

Make sure you have a quality rehab program for injured employees. Thiscould include regular visits to an on-site or off-site physical therapist. Employees should initially start out on light duties and progressively move to more demanding tasksuntil they are back on their normal workload.

Continuous Improvement

Always strive to make improvements to your warehouse. You may believe you already have the best containers, racking, work procedures, and technology, but there is always room to improve. Involve employees in this process. They can often give good feedback and advice on what could be improved. This will help you continually make progress and never settle for mediocrity.

Final Thoughts

Everything from the racking, pallets, and containers you choose to the technology you use and even employee morale can affect your order fulfillment efficiency. Hiring the right people and taking measures to retain them and choosing the right equipment to store and dispatch your goods will result in a robust operation and greater profits.

Everything You Need to Know About Retailer Chargebacks

Retail Fulfillment EDI ChargebacksLanding a PO with a big box retailer is without a doubt a tremendous opportunity that provides an exhilarating feeling. Whether your product is going to be placed on the shelves of the retailer’s stores or your product will be offered on their online web shop, your sales are likely to see a spike just simply due to the exposure. But the moment you receive the retailer’s vendor manual or routing guide, it will become quite apparent that logistics standards of business-to-business transactions are completely different than consumer shipping.  The compliance requirements are so stringent, in fact, that many companies find the need to either beef up their internal shipping resources to handle the increased workload or outsource the fulfillment to a professional fulfillment company that is well-versed in business-to-business transactions. As if retail compliance wasn’t intimidating enough, an intense feeling of panic may strike the moment you start reading about potential ‘chargebacks’ for non-compliance with the vendor’s standards.

What are Chargebacks?

Chargebacks are financial penalties for non-compliance with retailer standards and requirements. In other words, retailers charge you when you make a mistake. Each retailer has their own set of standards and requirements, which are usually outlined in their vendor manuals or routing guides. These standards govern how they send your company a PO, how you submit information about a shipment to their organization, and how product is to arrive at their distribution warehouses or to their end customers, among many other things. Because every retailer is different, further complicating the matter is that you’ll be required to perform tasks different for each retailer you do business with. These standards aren’t limited to big box retailers alone – many smaller ‘mom and pop boutiques’ implement their own set of standards as well.

Why Do Retailers Issue Chargebacks?

Retailers issue chargebacks in order to cover the costs of non-compliance with their standards. When retailers receive products or orders that aren’t prepared according to standards, they have to invest time and resources in order to get the product or order in suitable format for processing, which is a direct cost to the retailer. Chargebacks, therefore, are an attempt to offset these costs. For example, if your product arrives at a distribution center without appropriate labeling, their employees will have to re-work the product so that it is ready to be placed on their shelves and sold to customers.

What Are the Common Chargebacks and Fees?

Chargeback fees are typically assessed per occurrence. Here are some examples:

  • Submitting an incorrect EDI (electronic data interchange) invoice or ASN (advanced shipping notice) information
  • Incorrect or insufficient information on the ASN
  • Sending product without a ship notice
  • Not using the correct shipping provider
  • Sending product to an incorrect shipping location
  • Damaged or un-scannable labels
  • Missing or incorrect shipping labels
  • Labels applied incorrectly on cartons
  • Shipment received too early or late
  • Labels placed on the wrong carton
  • Wrong items in a carton or substituting unapproved product in a shipment
  • Non-authorized partial shipments of products
  • Products not packaged correctly
  • Damaged product
  • And the list goes on…

The most frequently assessed chargebacks are due to EDI Invoice/ASN errors, mistakes in labeling, pricing errors, incorrect or insufficient product sent to the retailer, and early or late shipping arrivals. Not surprisingly, chargebacks are punitive and can be hefty. In fact, some retailers charge as much as $50 for not using the correct shipping carrier (plus the cost of any freight differential) or shipping product early or late, up to $100 for missing or incorrect shipping labels, or up to $100 for ASN mistakes. Needless to say, these punitive costs can add up quickly. In fact, most people familiar with chargebacks often complain that retailers seem to over-capitalize on these penalties and turn the process into a revenue source for their organization.

How Do Companies Minimize Chargebacks?

Obviously, the goal is to minimize chargebacks, strengthen your relationship with the retailer, and maximize sales through the channel. Therefore, making the partnership successful will involve a multitude of items, including testing and ensuring proper delivery of PO, Invoice, ASN and other electronic notifications, ensuring that orders are prepared accurately, labeled exactly as specified and shipped flawlessly (to the correct location, via the correct carrier, and on-time without damages).

The key to this process begins with becoming thoroughly knowledgeable of the retailers’ requirements detailed in the vendor manual or routing guide. Companies that manage this process in-house oftentimes have to appoint a single person or group of people that can champion the entire relationship from start to finish. The challenge with appropriately managing a program in-house is that successful business-to-business retailer order processing involves a multitude of departments – information technology for proper EDI and transaction processing, accounting for correct pricing and payment information, customer service for responding to requests timely and accurately, and warehouse staff and management for ensuring the proper build out and shipping of orders.

The next step involved after a thorough examination has been conducted related to the routing guide is to implement appropriate systems (e.g. EDI) and create processes and procedures (along with mechanisms for auditing and/or quality checking) for all of steps involved. The amount of time spent in creating a high-quality process is critical and thought must be given to each step in the process. As a result, most companies will create a manual of its own which it can use to detail all of the steps and quality checks. Successful rollout of a new program will continue with thorough training of all departments related to their unique and collective responsibilities, and some companies go so far as to run a multitude of test transactions through in order to check the processes for any weaknesses which can be changed or updated as needed. Finally, no successful plan is complete without a way to measure performance, with regularly scheduled meetings to discuss challenges, successes, change recommendations, etc.

Frequently, companies choose to outsource this function to a competent warehousing and fulfillment company that specializes in EDI retailer transactions. A company of this nature has extensive experience in the software needed (EDI software) and routing guides, and is highly capable of implementing a program from start to finish with minimal or no errors. In fact, most EDI-capable fulfillment companies, have experience working with a multitude of retailers, giving them the ability cover varying needs and providing them with an ability to adapt well to changes. Furthermore, some outsourced providers will go so far as to guarantee transactions will be completed without error, or else they will cover the costs of chargebacks themselves in order to correct the problems. It should come as no surprise, as a result, that outsourcing this function is highly popular.

Why Your E-Commerce Fulfillment Company Should Provide a Dedicated Account Manager

Dedicated Account ManagerE-commerce fulfillment is extremely fast paced and consumers have high expectations. From next day and same day delivery to quick answers to questions, todays’ consumers demand logistics services at a level never seen before. If you outsource your fulfillment, working with a company that is able to meet and exceed these expectation levels is no longer a ‘nice to have’ but rather a necessity. One of the best ways to ensure this takes place is to ensure that your partner provides you with a dedicated account manager.

How Most Fulfillment Companies Handle Service

First, it’s important to differentiate between customer service to ‘your company’ versus ‘your end customer’. Most fulfillment houses provide service to you or members of your team rather than answering emails and calls directly from your end customers. If you’re looking for a company to handle inbound service for your end customers, you’ll need to make sure they offer inbound call center services and text/email/live chat support. Only a very small percentage of fulfillment companies offer inbound call center services and other inbound support services. In fact, most companies that outsource both fulfillment and call center services use separate providers, which helps them to diversify the risk of these services.

Second, most fulfillment companies offer a collaborative approach to servicing your questions and the questions of your customers. In the collaborative approach, questions get answered by a number of different contacts, rather than one person in particular. For example, when working with a smaller warehouse, some questions may be sent to the warehouse manager or warehouse staff, while other questions get sent to a customer service department or even an executive level team member. When working with larger companies such as Amazon, customer service is handled by an entire customer service department. In both instances, your questions will be answered by different people, depending upon who is available at the time.

The Problems with Customer Service ‘As Usual’ in the Fulfillment Industry

On both ends of the spectrum, whether from a large provider like Amazon or a smaller regional fulfilment company, service becomes challenging when so many different people are involved. For example, if you’ve ever experienced the “big business” customer service of Amazon, you know that it oftentimes is quite painful just getting a live voice on the line, and nearly every time you interact with a customer service agent it will likely be with a different person. Because of this, the customer service rep will generally have no background knowledge or familiarity about your individual company or circumstances, and you’ll have to experience the torment of longer interactions as you wait for the customer service rep to look up basic information in order to help with each request.

For smaller fulfillment companies, the frustration is similar in that being serviced by different team members nearly guarantees that the experience will vary from contact to contact, with no one person really achieving a high level of depth of your account needs. Unlike the service from a larger dedicated customer service department, smaller companies also present the challenge that your questions will get answered when the appropriate person has availability to answer. Without a single point of contact from a person dedicated to providing service, you may find yourself waiting for responses when you need a quick answer.

The Dedicated Account Manager as a Solution

Thankfully, there is a hybrid approach that some high-level fulfillment centers offer – a dedicated account manager for each account. In this scenario, the fulfillment company will provide you with a dedicated person who will act as a single point of contact for most all inquiries. Because this is their only job to perform at the fulfillment center, they are available all throughout the day to quickly respond to your questions, or find answers by coordinating with other members of the team.

Companies that use the Dedicated Account Manager solution tend to sing of its praises. For example, AJ Khanijow of Fulfyld notes that, “Having a dedicated account manager for each of our client accounts has led to an increased level of customer service at Fulfyld that differentiates us from our competitors. Each of our clients have their account manager’s direct phone number and can text/email/call them at any time.”

Account Managers assist with any trouble shooting, inventory management needs, and simply go the extra mile to streamline the clients’ logistics process.

The Pros to Having a Dedicated Account Manager

Dedicated Account Managers are an ideal solution for providing excellent customer service because they:

• Are generally able to respond faster than, on average, any other method
• Become extremely knowledgeable of all of the details of each individual account that they manage
• Offer a single point of contact that is consistent and unchanging
• Can get quicker answers from other team members if needed

Because customer service is so critical, it’s imperative that you choose the best fulfillment company to handle inbound customer service questions and provide quick resolutions. Using a company that employs a dedicated account manager strategy offers the best solution to meet these stringent demands.

Give Your Start-Up Business the Best Chance to Succeed by Outsourcing Warehousing, Fulfillment and Shipping

Start up fulfillment Do You Recognize Them?

Our world is full of a bustling, hard-working community of entrepreneurs who are starting up small businesses with big dreams.

Often, they are working full-time jobs and launching their businesses on the side.  Almost invariably, they plan to shift the balance over time until they can quit their day jobs and operate their own businesses exclusively.  Most have no clear plan for achieving that goal.

  • Some are creating bath soaps in their kitchens, wrapping them by hand, storing them in their closets and mailing them one by one as online orders come in through their websites to their laptops.
  • Some are having trendy apparel created in the Caribbean, storing items on hangers in their garages, and shipping them out as orders are received; they are literally finding the blue shirt, the pink skirt, and the hibiscus scarf, wrapping them up together, printing the packing slip, and mailing the package.
  • Still others are hand-tooling belts and buckles, designing and creating jewelry, writing and self-publishing books, formulating new fragrances, and creating hundreds of other products for offer in the Internet marketplace.

The product vision is limited only by imagination.  The business model, on the other hand, may be limited by square footage, personal time and energy, and logistical realities.  And this is where so many start-ups hit a wall.

Scaling the Wall

So, what to do when you hit the wall?  When your garage is full, your closets overflowing. When your fingers are numb, your body and brain begging for sleep. When you feel like Lois Lane alone out there in Startupville. Or like Pi in the middle of the Pacific.

In true entrepreneurial spirit, you won’t let it stop you—not a chance. But if you look closely at the wall, you’ll see a message written upon it.  “Get professional help!”

This doesn’t mean you’ve lost your mind (despite feeling, sometimes, as if you have). It’s simply time to engage a professional warehousing and fulfillment service provider, now, before you lose control of the really important aspects of your start-up business. Outsourcing at this point in your growth arc will enable you to scale fluidly, and substantially, without losing focus on managing and building a successful business.

Take Your Business Pulse

There are some questions you should ask yourself, at this stage, which may help bring clarity to your situation and confirm your next steps. We suggest jotting down your answers to have the entire picture in front of you.

  • How many products (or SKUs) do you offer?
  • Where are you storing them?
  • Is air-conditioning required? Refrigeration?  Humidity control?
  • How many orders are you filling each month?
  • How many items are in each order?
  • Do you fill orders on demand each day, or on a weekly schedule?
  • Which carriers do you use to mail or ship? Do you have a preference, and why?
  • Do you mail/ship in envelopes, small boxes, or large cartons?
  • Where are you storing them? (And your packaging tape, and mailing labels?)
  • Do you use special protective cushioning, paper straw, or other special fillers?
  • Where do you store those?
  • How many invoices do you print each month?
  • How many packing slips? Mailing labels?  Return labels?
  • How many returns do you process per month?
  • Which product/item is your best seller? Your worst?
  • When is your next new product due to launch?
  • Are all items accounted for in an inventory control system?
  • Have you established reorder points?

Answering these questions about your current business operation will help you determine whether it’s time to take your start-up to the next level, enabling you to boost sales and spur your next growth phase.

The Best Solution for You

Depending on your geographic location and the cost of rent and labor in the area, you may want to consider renting a small storage bay and hiring packing labor on a contract basis. One or two days a week, or every Saturday, for example, might be a productive co-working schedule for you.  With this approach, you’ll still be doing a lot of the fulfillment work yourself, in addition to managing hired help, but in some situations it may be a logical next step.

Another approach is to find a professional fulfillment center to handle the entire process for you. An expert, established warehousing, kitting and fulfillment provider will also be able to create and manage paperwork, shipping, receiving, tracking, automated inventory control, and reporting functions on your behalf.  A large center will employ teams of people skilled in those various functions and will have plenty of warehouse space, racks and pallets. They will have the necessary staff to cover breaks, absences and vacations. They’ll have negotiated aggressive shipping and freight rates due to collective volumes, and will have their own licensed fleet for local service.  They’ll be able to accept pallet- and truck-size deliveries, unload and process them efficiently.  And they’ll be bonded or insured against damage, theft and natural disasters.

In short, a professional warehousing and fulfillment service provider will handle all the fun stuff that you don’t want to deal with (and, as a busy start-up, shouldn’t have to).

Supporting Your eCommerce Site

Most start-ups sell online—many exclusively online—and therefore use eCommerce software applications to enhance their websites with product specifications and images, shopping carts, secure purchasing options and similar functionality.

An advanced warehousing and fulfillment center will add significant value to your fulfillment services by integrating with online eCommerce platforms, such as Shopify, WooCommerce, Brightpearl, eBay and Amazon, for example.

Here’s a brief description of how that integration can work, using a fulfillment ordering platform, which we’ll call Conduit, as an example on the vendor side. The vendor’s proprietary application programming interface (API) browses your eCommerce website regularly throughout the day. Orders received since the last visit are sent to the fulfillment company and fulfillment staff are alerted. The orders are filled, with all the actions and paperwork that entails, and all systems are updated accordingly. Inventory counts are updated in virtually real time, product is shipped, and the fulfillment crew trades high fives for being so efficient.

The warehouse management system communicates the status of those orders to your eCommerce application. And the process begins again. As shipments are tracked, that data is captured in the warehouse management system. Returns are also easily processed.  Essentially, all fulfillment activities are recorded in the fulfillment center’s system, enabling it to generate a variety of preset reports at selected intervals. Many of these can be customized to meet your unique needs.

Of course, orders can still be communicated by email scan or fax, but using automated tools adds measurable speed, efficiency and productivity.

Don’t Be Afraid to Ask

Asking the right questions, of yourself and any potential fulfillment service provider, helps you to clarify your current needs and better understand the options available to you. This clarity will translate to a greater return on your fulfillment investment and a higher probability that your start-up will become the business of your dreams—prosperous, profitable and successful.

This article was written by Gail Blount at JKG Fulfillment. In addition to custom product packaging and fine commercial printing, JKG Group performs warehousing and fulfillment services for enterprises and entrepreneurs. Experience has taught us the important value of these services to start-up businesses as they outgrow their home offices and storage closets.

Your Fulfillment Operation Can Improve Customer Satisfaction

Customer Satisfaction in FulfillmentThe e-commerce marketplace is crowded with competition and building long term relationships with satisfied customers is a key strategy to maintain a successful business. Fulfillment operations hold a prominent place in this chain of satisfaction. As a third party logistics provider, you can help your clients improve their performance, which will improve both the client relationship with the customer and your relationship with the client.

To ensure you provide your clients with the tools for success, check your services for these seven pillars.

1. Accuracy

Make sure your fulfillment service is accurate. Audit the process at least once per quarter and identify areas for improvement. Implement improvements on a continual basis.

Customers who receive incorrect or delayed orders are more likely to leave feedback, and it’s not going to be positive. By raising the bar on accuracy, the fulfillment partner actively maintains customer satisfaction for the client.

To make sure improvements are successful, involve all fulfillment staff in the process. Sprocket Express includes the warehouse employees in broad meetings and allows everyone a voice. When staff are involved, their level of accountability increases and everyone feels part of the solution.

2. Speed

Arrange same day shipping whenever possible. Some fulfillment centers will even go the extra mile to process last-minute orders for clients, typically for a small handling charge or manual processing fee. When a VIP customer orders after the cutoff time and expects 5-star service, the client wants to accommodate and please the customer. This is a key factor for many businesses when choosing a 3PL.

A good 3PL actively maintains relationships with all shipping carriers and negotiates for better rates annually. They pass the volume discounts on to clients, improving the bottom line.

3. Presentation

First impressions are important, so the packaging must be neat, new and clean. Labels need to be professional, relatively straight. Talk to clients about customized packing tape or labels for a more cohesive brand image.

Inside the box, all items should be securely packed with clean filler. Customers who receive damaged or dirty merchandise are left with a bad impression of the company. As the last pair of hands to touch the customer’s items, the fulfillment provider has the responsibility to handle every order with care.

4. Transparency

Maintain transparency throughout the order and fulfillment processes. Provide clients with real-time tracking information and inventory results. Customers should also receive prompt shipping notifications and tracking details. When everyone has access to the information, there are no secrets or surprises. This one of the ways that blockchain may enhance supply chain management in the future.

Fulfillment pricing can be confusing to some clients. Client representatives should be available to discuss billing clearly and provide backup such as inventory cycle counts or guidance for the software system.

5. Flexibility

The more flexible you are in the fulfillment process, the more likely a client will feel like you are a partner, rather than just a vendor in the chain. If possible, assign customer representatives to each client so there is a personal connection between the fulfillment house and the business. Representatives should be empowered to handle special requests and rush orders.

6. Humanity

Automation has an important place in the supply chain, there’s no doubt. But it has its place. When confirming orders and shipments, automated responses are appropriate. However, clients may have special needs or requests; they may need to call for changes. 3PLs that offer only automated service cannot properly serve these needs. Clients appreciate the option to speak with a human at their fulfillment warehouse to resolve issues and make changes.

7. Initiative

Clients don’t always know how you can help them, so they might not ask. A good fulfillment center anticipates needs by helping manage supply chain inefficiencies such as overstocked inventory. Make sure your clients know what you offer for added value services like kitting and subscription services.

When a client sees that their 3PL is acting as a partner by making valuable suggestions and taking responsibility, the relationship is stronger and both businesses are poised for greater success.

Conclusion

Fulfillment centers that take an active role in the chain of satisfaction offer better service and maintain happier clients. By following these principles, you solidify confidence among your clients, who will be more likely to recommend your service. Plus, you will help improve customer satisfaction, which keeps everyone growing. Here’s to mutual success!

Article written by Dan Cence, Sprocket Express Fulfillment