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Keep Your Shipping Costs in Line

Blog Post Written by Scott Reynolds, American Western Distribution

Keeping Your Package Shipping Costs in Line – Small to mid size companies

Shipping packages has become increasingly more expensive with the cost of fuel continually on the rise. Companies need to keep a close watch on these costs. It pays to review your invoices regularly for mistakes and insure you are charged correctly. Was the package a residential or commercial delivery? It matters, delivery to a business is less costly than to a residential address. Was the fuel surcharge invoiced correctly? Finding these mistakes can save money.

Another method of lowering costs is through increased volume. Each time you sign a new account, check with your carriers to see if they can offer a higher discount with the additional volume. We recently were fortunate enough to acquire a new account that will be shipping thousands of orders per month. This volume could have a great impact on our shipping rates, for all our accounts, and also put us in a position to acquire additional new business as a result of reduced rates! We called our carrier reps in for meetings to see what programs were available to us with this new business. Allow plenty of time for this. The reps are busy people and they tend to travel a large area so they may not be able to see you for a week or longer. The various carriers have many different programs to offer plus they have partner programs with each other that can offer additional savings! Once you receive the cost analysis back from the carriers, compare them and don’t be afraid to ask for a better rate if the first analysis isn’t what you were expecting! If you don’t ask, you won’t receive. We did and the rates that came back to us averaged another 3 to 4% discount!

Make sure to compare fuel surcharges (FSC). This also can greatly affect the total cost. Some companies charge a percentage of the delivery cost and others charge by weight. Depending on the type of product you are shipping there could be tremendous savings by choosing the company whose FSC best fits your needs (providing their basic rates are competitive). In this particular case we saved $.32 cents on the average order just on the FSC not to mention the basic rates were the most competitive offered!

Another method of keeping your package shipping costs in line is through the carrier pickup. Most carriers charge a fee for this service that can be waived if you are near their drop off location and have the ability to deliver the orders to the terminal yourself.

From startup companies to small companies to midsized companies, shipping fees are a large percentage of the total cost charged for your services. As a result you need to pay due diligence to this segment of your cost structure as it could make or break you in efforts to signing new accounts and keeping current customers!

About American Western Distribution, www.awdaz.com located in Phoenix, AZ, specializes in providing World Class Warehousing, Distribution and Logistics Services. AWD receives product for companies that don’t want the expense of a ‘brick and mortar’ organization but require our services for storage, order fulfillment and distribution of their products. All of our programs are custom tailored to meet each customer’s needs!

Encouraging Responses from Leads

by Will Schneider

Whether you get a lead from us or via other marketing channels like your website, the first challenge is to turn that lead email into an interaction. Over the years, we’ve learned a great deal about getting quality responses from prospects. This often overlooked area represents a tremendous opportunity, if done the right way.

The Beaten Path

Most companies use this initial interaction to showcase all of the wonderful things about their organization. They tell the prospect how amazing they are, how many years they’ve been around, what services they offer, among other miscellaneous “company facts.” Sometimes, they also include another listing of questions that they need answered in order to provide an accurate quote. This may work sometimes, but we’d like to challenge you with one question:

“Does this separate you from the pack?”

First, if most companies use the same approach, it’s going to be particularly difficult for you to stand out. Second, consider the context that this prospect is also speaking with other companies and that the ease and comfort ability of communication and degree to which a relationship begins to formulate may sway the decision making process. Third, remember that most people are self-centered, so a focus on your company rather than their company, albeit subtle, plays a role in their reaction to your pitch.

Okay, So What Should I Do?

We are confident that there are two things that help companies put their best foot forward. First, and most important, you’ve got to find a way to stand out from the crowd. This could be your unique corporate culture, your unintimidating approach that serves more as a consultant than a “sales rep”, or a host of other approaches. Needless to say, the less you look like a sales rep and the more you look like an advisor, the better you will find your interactions. You have to find a way to break free from the mold.

Second, we’ve found that companies that focus on the prospect and their needs have the best chance of success. Are you looking at the prospects website, if applicable, before you fire off the email? Is there common ground that you can introduce into the correspondence? When prospects hear you talking about them, it’s much easier for them to engage. One of the secrets of high performing sales teams is that they find pain and show the prospect how they’ll take away that pain. And the pain can be completely different for each prospect.

A Final Word On “Additional Questions”

We know that many leads aren’t going to provide enough information initially for you to be able to accurately quote right away. However, we’ve found time and again (by talking to prospects) that when they get another big list of questions, the chances of them responding decreases exponentially if done before some common ground and relationship building has been established. Unfortunately, some of your competitors are firing off a pricing sheet right away. This doesn’t mean that you have to change everything you do…but knowing what others might be doing can help you achieve great results.

The big challenge here is to create some value outside of pricing. If everything boils down to a pricing game, then it becomes a numbers game and the lowest price wins. Creativity is extremely important in deciding on an approach.

There are so many factors in getting people to respond, from timeframe of response to quality of content to actual pricing. And we believe that by finding ways to separate from the pack and by focusing on the prospect you’ll find yourself in a very strong position versus the competition.

Utah Company Wins Top 3PL Designation

by Will Schneider

Each year, WarehousingAndFulfillment.com designates a select group of fulfillment companies as “Top 3PL Companies.” The process to be selected is stringent, including a thorough examination of shipping and picking error rates, customer service references, analysis of technology, among many other things.

Today the company announces that Anchor 3PL, a 3pl company out of Utah, was been added to the list of top 3PL companies for 2012. Anchor has done a stellar job of exceeding the expectations of its customers, and we’re pleased to add them to our award winners for 2012.

To view the entire article, please visit: http://www.prweb.com/releases/2012/7/prweb9729740.htm

The 24 Hour Follow Up Rule and Further Follow ups.

Blog Post written by Allan Himmelstein, owner of Sales Coach, AZ.

Years ago, when I was working for a European company, they had a 24 follow up rule. From my experience, most companies can increase revenues by at least 25% just by improving their follow up methods.  This simple rule changed the company I was with, and we increased our sales by 30% / year for at least 5 years.

Some companies are relying way too much on their website and automated responses.  The first job of any company is to build credibility.  How credible is your company, if you do not follow up within that 24 hours.

So my next questions is “How have you trained your people to follow up after that first contact?  How many of you get a second and third call?  If you do, is it the just checking in call, or just touching base call?   You check into a hotel, and you touch base in baseball.  The idea in following up is to show that you can add value to their business, and to build a further level of trust and credibility. It is best to first ask the prospect for permission to follow up.    Have a purpose.  I have read that the average sale takes 7 touches.  Today it probably takes more, because people are more reluctant to trust someone.  Remember to deliver value on every call, and every correspondence.  So here is my list of ways to follow-up.  If you have more, please add to them.

  1. General Follow-Up – Make sure before leaving the appointment, that there is an agreement on what details need to be followed up and when.  After sending follow up phone call to make sure the information was sufficient.
  2. Send Articles Related to Their Business – these sets the tone that you are a resource of information.   You can find many articles in trade magazines, or the internet.  Make sure to send a handwritten note tying it back to what you previously discussed.
  3. Share Your New Company’s New Product or Service – This is a no brainer, and so important.  Even if it does not pertain directly to them, it may show that your company is an innovator.
  4. Customer Testimonials – Don’t be shy.  If you got them, flaunt them.  Testimonials are powerful, especially if they are from someone that your prospect knows.
  5. Look for Referrals for the Prospect – Ask first what good referrals for them are?  The idea is that we are all in this together.  Again be a resource not just a salesperson.
  6. Send News Articles about Their Company – Set up Google Alerts about announcements about their own company.  Send Congratulations.  This shows that you are interested about the goals and opportunities of the prospect.
  7. Add them to Company E-Newsletters – Again the best way is to ask for permission, but if not ask for forgiveness.

Send Competitive Information – Your buyer always wants to know what competition is doing.  Just make sure that it is public information, and that you are NOT sharing any trade secrets.

About the Author: Allan’s clients have spanned local small businesses, national corporations, and international firms attempting to improve sales, or launch sales in the US market. The success of Sales Coach AZ is based on developing customized, implementable plans that capitalize on existing resources. My core belief is that “selling” can be transformed into “opening doors”.

I actively leverage my background as a Fortune 500 C-level executive to effectively maximize results.

3rd Party Logistics Provider

by Will Schneider

If you’re operating a new business, chances are that you may not know what a 3rd party logistics provider is and what they can do for your business. And contrary to popular thought, 3rd party logistics providers offer more services than most might think. So we thought it would be important to define the term and then show you some of the important things that these companies can provide for your small business.

Logistics companies help bring your product from manufacturer or supplier to your end customers. And for some, this could entail quite a bit of steps. For example, let’s say you have your product produced in another country, and you sell your product to consumers in the United States. In this case, you will have to ship it to the United States, clear customs, deliver it to whatever warehouse will store and ship the goods, and finally ship orders out as needed to customers. All of these services can be fulfilled by a 3rd party logistics provider.

So what is the benefit to using one of these companies, you might ask? Well, for starters, this is a lot to manage on your own. So having someone help take care of this part of the business lessens the load significantly. Also, these companies are experts at what they do, so they can oftentimes do it better than you might be able to do yourself. Finally, they ship a lot of products for many companies, which means that they get great shipping rates from freight companies – and they can pass these great rates to you so that you can save money for your company and your customers.

Cost of Direct Mail

by Will Schneider

So you’re considering sending out a direct mailing to prospects and/or customers? Before you take the plunge, it’s important to understand what’s involved in the costs and also what the expected return on investment would be for the mailing.

As for the costs involved, you’ll be looking at two main components when doing a direct mailing. First are the costs related to printing the mailing. This cost varies depending upon the type of mailing, whether that’s a letter, post card, or other type of correspondence. Other things that can impact the cost of the printing are the type of the stock of paper you use (higher quality will cost you more), as well as whether or not you choose to use color instead of black and white. And finally, with regard to printing, you can either choose to do a self-mailer (which does not require an envelope), or insert the direct mail piece into an envelope or box, depending upon what it is.

Second are the costs related to actually sending the direct mail piece in the mail. Of course, this will depend upon the size of the piece.

So should you proceed with your direct mailing? That really depends upon the potential return on investment! In order to determine the return on investments, you have to compare the cost of direct mail to the expected return. Return can be quantified  in terms of how much business you can expect to get from the mailing. The latest averages indicate that around 1.75% of all direct mail ends in a sale. So for every 100 pieces sent, you might get 1 person to purchase.

The last step in determining whether or not to use a direct mailing is to calculate your potential sales that could take place and compare that with the costs of the mailing. So if your average sale is $100, and you expect to send 100 direct mail pieces, of which 1 will purchase, your total sales would be $100. If the costs of sending the direct mail piece is $50, then your return on investment is $50.

Knowing the costs involved and making a decision based upon potential return on investment will help you make wiser decisions regarding direct mailings.

What to Look for in an E-Commerce Fulfillment Company

by Will Schneider

When it comes to choosing a company to deal with your e-commerce fulfillment, it’s important to know what to look for in order to save time, money, and prevent headaches in the future. With an experienced fulfillment company by your side, you can streamline your process which lowers operational costs and gets your products to your customers’ front doors as quickly as possible. Here is a short list of the things that matter most in terms of logistics companies so you can rest assured you are choosing the right one for your individual needs.

Experience. Some e-commerce business owners choose any fulfillment company to process their orders, but only some have the experience that is necessary to do so effectively. The difference between traditional fulfillment companies and e-commerce fulfillment is that the latter exchanges information over the Internet as opposed to via telephone, fax, or email. As you can probably guess, this is a much quicker way to get the order processed and out the door; therefore, looking for an experienced e-commerce fulfillment company is important for timeliness purposes.

Prices. Of course when it comes to logistics services it’s tempting to choose the option with the lowest price tag. Unfortunately, however, that approach can turn out to be a costly mistake in the long-run. While it’s important to compare prices, it’s important to never sacrifice experience for pricing. Finding the right balance between cost-effectiveness and quality of services is the safest and most reliable way to get the right services without breaking the bank.

How to Pick the Best Public Warehouse

by Will Schneider

When it comes to making business decisions, choosing to outsource public warehousing only goes so far. Instead, it’s vital to pick the right public warehouse that truly save money and time.

Public warehousing is a strategic decision made by a company, but choosing the warehouse that best meets a company’s needs is often overlooked. Public warehousing is usually used for short-term storage solutions, such as holding extra products during busy seasons. But it’s important for a business to select one that meets all of the company’s demands. So here are some things to look over when choosing the best public warehouse:

Be Strategic – A decision process should definitely be used that involves several levels of management. Make sure put the appropriate time and analysis into the selection process and just don’t pick the first public warehouse that’s listed.

Begin with Detailed Location Analysis – One of the advantages of public warehousing is not being tied to a single geographic area. In-house distribution may be in New York but with public warehousing a company can choose a place that can better serve customers elsewhere. Request for a proposal from the public warehouse, this may give insight on the market that works best for the company.

Know System Capabilities – Make sure that the public warehouse provides the necessary system support – not only for current production but future advancements.
Leave Room to Expand – Usually public warehousing is short term, however, businesses should consider future expansion plans that could turn the contract into something more long-term.

Evaluate Public Warehouse Networks – Again, a lot of preparation is looking down the road. Look and see if the provider’s other locations may be beneficial to future expansion. Does the company allow movement into new and profitable markets?

Timing is Everything – Find out how long it takes to move and start using the public warehouse. This should give an idea of how long the process will take and how much money it will actually save.

Visit the Site – This seems like an obvious step but sometimes businesses jump into things without even seeing a public warehouse. Examine the facility’s cleanliness and maintenance standards and how was the relationship of employees and management. These are all indicators of a well-managed public warehouse.

Check Independent Sources – Make sure to evaluate independent references. They usually have insight of how the public warehouse is run and how it helped out their business.

Is Fulfillment Right for a Start Up Business?

by Will Schneider

Each month, quite a few start up businesses visit our site looking to find information on whether or not it makes sense for them to use outsourced warehousing and fulfillment services. Usually, they’re looking for the costs of fulfillment services to see if they can afford to use them. In our opinion, there’s really two good reasons to do the warehousing and fulfillment internally to start. And we believe there’s one good reason to outsource from the very beginning. Let’s explore the options…

There’s really two good reasons to not use outsourced warehousing and fulfillment services as a start up. First and foremost, if you’re core business involves distribution or if you believe that the logistics are so important and critical that you cannot outsource, then by all means keep it in house. However, most companies don’t fall into this bracket. Secondly, we totally understand that your start up may be constrained by capital, and therefore you may not have the funding to be able to use a fulfillment service. In this case, the only option is to use your own labor – which, by the way, isn’t FREE!

Which brings us to our last point – why we believe that many small businesses would be best suited by outsourcing fulfillment. If fulfillment and warehousing aren’t your core business and if you at least have enough money that outsourcing is an option, we believe that it can be the best option for you. Why? Because of that beautiful thing called “opportunity cost.” A lot of small business owners like to have control over all aspects of their business. But by keeping control of the fulfillment and therefore processing orders yourself, you lose valuable time that could be spent elsewhere – like in sales and marketing.

It is absolutely true that the biggest problem that most companies will face is a “sales problem.” And by sales problem, we mean not enough sales! Think of it, what inhibits you most in your business? Not having enough funding (or sales) to expand and do what you need to do to run the business the best way possible. By getting the warehousing and fulfillment of of your shoulders, you’re much better suited to spend time where it needs to be spend – in growing the business. And if you’re not growing as a business, you’re shrinking.

What do Fulfillment Companies Charge?

by Will Schneider

One of the most frequently asked questions that we receive through our site is “what do fulfillment companies charge”? Of course, this is somewhat of a complicated question to answer, but we wanted to give those new to “fulfillment” a broad idea of the types of charges that they’ll encounter should they decide to outsource their fulfillment.

We understand that in order to decide whether you should do fulfillment in house or outsource, you have to have an idea of the costs of third party fulfillment. Before we elaborate on some of the more common charges, we wanted to give you a few words of wisdom when comparing costs. First, when comparing to the costs of doing it in house – make sure that you’re looking at all of the costs that you’ll incur to do the fulfillment in house. This means that you can’t ignore things like management time and the most commonly overlooked cost – opportunity cost (what you could have done with your time had you not been, for example, on the warehouse floor shipping packages). Second, when comparing costs among various outsourced fulfillment companies, make sure that you’re comparing apples to apples. This is a very difficult task, because for some reason many fulfillment companies like to make things extremely complicated! But beware, because what seems like good pricing at first glance may not be the best option when you look at all of the fees.

Okay, so on to the most common fulfillment charges! These are the most common types of charges that you’ll see in the fulfillment industry. If after looking at these charges you’re interested in getting “live quotes”, then just let us know and we’ll get you connected.

  • Receiving to count and enter your materials into inventory (each time they receive inventory)
  • Storage of goods per pallet per month (or square footage or cubic footage)
  • Processing of orders either a flat per order fee OR a per order fee combined with a per item fee
  • Shipping charges (usually a discount off of published rates – and most likely better than you’d be able to get on your own)

There are other fees that vary from company to company – such as account management, fees to interface with a shopping cart, returns fees, etc. Remember, keep a close look on all of the charges when comparing costs – not just between fulfillment options but also when you’re comparing against keeping it in house.