Category Archives: Warehousing and Fulfillment Resources

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

5 Tips for Shifting From Brick-and-Mortar to E-Commerce Sales

Brick And Mortar Offline Store To Online Commerce ShoppingWhile a number of brick-and-mortar stores are facing closure, Amazon and other e-commerce sites have experienced record sales. Rick Stein of the Urban Decision Group notes 30,000 store closures in the past five years. In the first few months of 2020, 2,000 have closed with an additional 15,000 more expected by the end of the year. At the start of 2020, department stores occupied 30% of all mall space. Fifty percent of those stores anticipate closures by the end of 2021.

Can Brick-and-Mortar Stores Survive?

Although some stores have reopened, many retailers aren’t able to survive business disruptions for extended periods of time. When asked about the possibility of closing permanently, there are varying tolerances for how long businesses can survive interruptions:

  • 5.63% will survive less than one month
  • 26.28% will survive 1-2 months
  • 34.07% will survive 3-5 months
  • 17.62% will survive more than 5 months
  • 16.39% are not concerned

From mid-March to mid-April, Stein surveyed 500 retailers. According to his research, 40% of apparel retail may never re-open as well as one in five restaurants. Through this time of social distancing, consumer behavior and shopping methods have taken a drastic shift towards online purchases. People who never before made a purchase online have now become familiar with researching products before making a purchase, checking reviews, and enjoying the convenience of home delivery.

Retail Sales by Category

As retail stores began to re-open in May, the Wall Street Journal reports sales rose by 18%. While this number is encouraging, YOY sales for May were still down 63%. YOY sales for April were down 85%, showing a slight improvement for May.

E-commerce Trends

In 2019, e-commerce transactions accounted for 12% of all sales during the last quarter of the year. 8% of all grocery sales are online. There was a 65% growth in online grocery sales between March and May 2020, however, retailers continue to work through operational complications and costs to improve efficiencies for these services. Beginning in March 2020, many small retail stores turned to Shopify and other ecommerce sites to facilitate online sales. Shopify alone saw an increase of 62% in new online stores between March and April.

Even as businesses began to re-open, retail outlets struggled to fill store shelves with inventory, especially the most desired items. Apparel and electronics categories have traditionally fared well with online purchasing. With closures and out-of-stock conditions, one in four people reported shifting to online purchases for restaurant meals, hygiene products, health products, and cleaning products. Mastercard reported 22% of all retail purchases in April and May were e-commerce transactions.

Prior to March 2020, the concepts of “social distancing,” “contactless delivery,” or “safer at home” were foreign. In a relatively brief period of time, these terms became part of everyday vocabulary. Many businesses were forced to close while others drastically changed operations to remain open using new methods of conducting business. The new normal includes face masks, enhanced cleaning practices, and adjustments to sales processes and procedures.

Changes to Shopping Patterns

PPIQ (Path to Purchase IQ) cites a few reasons why some continue to make in-person purchases. These include: 33% making purchases based on needs for immediate consumption; 29% resorting to old habits and aversion to new methods of buying; and 26% preferring to view products prior to making a purchase.

Those who continue to shop in person are taking more time to carefully plan trips. Shoppers stock-up on purchases and take time to make lists to limit their total number of trips. Fifty percent of people are trying to make quicker trips to get in and out of retail stores as quickly as possible when only 13% had this goal prior to the pandemic. The crisis also expedited online grocery shopping to levels that otherwise wouldn’t have been achieved for another three to five years. The shift to online purchases for grocery has spread to other retail businesses and will likely continue post-COVID.

There is a greater need for businesses to find new and multiple ways to operate and sell their goods to address the varying needs and preferences consumers share. Omni-channel retailers offering both e-commerce and brick-and-mortar sales are likely to be the real winners in the future.

Opening an Online Store

There are a number of decisions and steps to take to begin selling products online. Here are a few things to consider when selling your goods directly to consumers:

  1. Find a reliable technology platform to power transactions. These systems will help with inventory management as well as facilitating online ordering.
  2. Integrate ordering with your website, but also consider selling through social media accounts and online sales sites like eBay.
  3. Determine what policies, practices, and services you want to include. What is your return policy? Will you include any guarantees on satisfaction? What type of shipping or delivery services do you want to offer?
  4. Develop a marketing and advertising plan to promote your products. Create posts for social media, consider boosting your content through ads, incorporate email marketing, and develop a strong SEO program.
  5. Determine who and how you will pack and ship your orders. Plan for growth and consider outsourcing your fulfillment to a third party. Product Fulfillment Companies can take the hassles out of inventory management and processing your orders for delivery. This will allow you to focus more on building your brand and your business.

With changing times and much uncertainty in today’s business world, it’s more important than ever to be open to changes in your organization and operations. “We all must adapt and adjust to the current and frequently-changing environment in order to be successful. E-commerce fulfillment firms like PFS are making a number of adjustments to workflow and staffing as a result of the shift towards e-commerce orders,” said Jason Martin, Co-Founder of Product Fulfillment Solutions.

7 Reasons Your Brand Needs Value-Engineered Packaging

Packaging supplies play an essential role in every business that sells a physical product.

Keeping your products safe and appealingly presenting them are the two core functions of custom packaging – be it primary or secondary packaging.

But all too often, finding the best packaging solution is left to the last minute and an ‘adequate’ packaging solution is implemented in the form of off the shelf packaging. While these standard packaging products get the job done, it’s costly to scale and ends up burning a lot of your cash.

That’s where value-engineered packaging comes in.

In this article, you’ll see what exactly value engineering in packaging is, as well as 7 reasons that your brand should consider using it.

But first, let’s outline the basics:

What is value-engineered packaging?

Value engineered packaging is packaging that’s made from the ground up specifically for your product.

Materials, size, shapes and assembly processes are all individually assessed with your product, your fulfilment process and your brand’s values in mind.

The overall goal of value-engineered packaging is, believe it or not, to provide value in the form of optimised packaging by reducing your packaging costs.

Value engineered packaging lowest costs by assessing the way your packaging solution performs a number of roles, such as security, branding, and space optimisation.

Here’s how value-engineered packaging can help your business save money and perform better:

Reason 1: It lowers your unit costs

A simple packaging audit takes into consideration the existing materials, logistics and construction processes around your packaging. Cost savings are found by assessing the performance of your current packaging solution in these fields and then improving upon them.

For example, your product may be using both primary and secondary packaging when of a more robust form of packaging primary packaging may suffice.

This more robust material may fit more pieces onto a single pallet, thus keeping costs down even more.

As you can see from the two examples above, value engineering has both direct and indirect cost savings for your business.

Reason 2: It weaves sustainability into your DNA

Your brand may very well have sustainability and eco-friendliness at the core of what it does and therefore want to implement sustainable packaging.

If you’re delivering even the most carbon-negative product in single-use plastic packaging, you’ll do nothing other than disappoint your end consumer.

But using a packaging engineer, you’re able to work the cost-effective and environmentally friendly materials into your packaging.

Experienced packaging consultants stay on top of the latest materials technology and work with suppliers that can implement the ideal sustainable packaging solution into your brand, while also balancing costs.

The result of such a process is environmentally friendly packaging that helps your brand stand out and is marketable as complementary to your product and brand.

Reason 3: It improves your image

The effect your packaging has on your customer is best understood when you think of your packaging as another marketing channel.

When your customer has your product in their hand, they want reassurance that they made the right choice. And your packaging is the ideal place to remind your customers why they brought from you.

Take a brand that everyone is familiar with, Apple.

The brand’s image is one of sleek, modern sophistication that places emphasis on minimalism and cutting edge design.

And these sentiments are mirrored on the packaging of all their products.

iPhone packaging is understated, and either black, white or the same shade as the product. There’s little to no gimmicks on the external packaging, but rather the understated design is left to do the talking.

And this is the opportunity that tailor-made packaging can bring.

If your brand is overstated, loud, colourful and ‘in your face’, then these branding strategies can be worked into your packaging design.

Similarly, if your brand uses an understated design like Apple, higher-quality materials can be used to invoke the sense of touch into the buying process.

Reason 4: It saves you in shipping & logistics

Shipping and logistics are a two-time expense for your business.

Firstly, from the manufacturer to you, and secondly, from you to the end customer.

Passing on delivery costs to your customer is quite common, but studies show that customers now expect free shipping.

So by engineering your packaging so that it is as light as possible and uses space as best it can, you’ll minimise both these costs.

Custom sized packaging performs best when going from your warehouse to the end customer.

That’s because it takes up as little space as possible, be as lightweight and safe as possible – and all this by using the smallest area and volume as necessary.

Reason 5: It’s a good insurance policy

Keeping your products safe throughout the transportation process is essential, as returns for damaged goods can be costly.

Using a variety of software, experience and engineering principles, packaging engineers can analyse the existing structural weaknesses of your packaging.

From there, materials can be added or swapped or internal structures redesigned.

But if you’d prefer to keep your existing packaging, an experienced packaging engineer can make that work for you, too.

Void fillers, in the form of custom tissue paper or kraft paper, are a viable option, but they are an extra expense and create more work to implement.

To make the most of your current packaging solution, consider using a custom insert.

Custom inserts designed to hug your product and prevent any movement are an effective way to make your existing packaging safer.

Reason 6: It saves space in your warehouse

Whether you use your warehouse or a 3rd party fulfilment centre, space comes at a premium. Packaging that doesn’t store well lessens the amount of space you have for other merchandise, thus negatively affecting your fulfilment processes and cashflow.

By value engineering your packaging, your storage restrictions influence the design of your packing.

Saving space may come in the sense of shortening one edge so that more pieces fit on one pallet, or even go as far as replacing a corrugated cardboard box with a custom mailing bag.

Reason 7: It speeds up your fulfilment process

Value engineered packaging can have another positive effect on your warehouse operations. By working with your existing machinery or manual assembly possibilities, your packaging engineers can build an efficient assembly process into your packaging.

As your packaging is being designed from the ground up, engineers can remove the need for glue or tape without sacrificing structure performance.

Over to you

Value engineered packaging looks at your current solutions and potential packaging solutions under a detailed microscope then finds the best possible solution and works it into your business operations.

These tailor solutions also present better branding opportunities in the sense of a more memorable unboxing experience.

The overall result is custom packaging that keeps your packaging expenses down without sacrificing performance.

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Bio:

Phil is a bearded Australian living in Warsaw, Poland. When he’s not marketing Packhelp’s sexy boxes, he can be found trying to kill his houseplants or writing for his blog Expatspoland.

7 Signs You’re About to Outgrow Your Fulfillment Provider

7 Signs You've Outgrown Your 3PL WarehouseSeeing the progress of your business as it grows can be a rewarding and exciting experience. However, business growth comes with several challenges. For many companies, one of these challenges revolves around fulfillment options.

The following information discusses the seven key signs that you’re about to outgrow your current fulfillment provider. If your company fits one or more of these scenarios, then you should begin planning ahead to secure more sustainable fulfillment solutions.

  • You Need Additional Fulfillment Locations

As your customer base grows, your need for additional fulfillment centers will likely grow along with it. Warehouses that are not strategically located may cost you dearly in transportation costs, customer satisfaction, and sales. In some cases, shifting to a different location to better serve a higher concentration of customers can improve efficiencies. For other companies, adding multiple warehouse locations to decrease time of delivery and cost of delivery is a critical success factor. For example, Ruby Has Fulfillment’s bicoastal solution saves clients an average of 45% on shipping costs. Especially if your business operates out of only a single warehouse location, lack of additional warehouses may require you to look at new fulfillment solutions.

  • You Need Additional Sales Channels

There are several reasons why your company may need additional order fulfillment channels for sales. For example, if you own a small e-commerce B2C business, you may begin to penetrate the B2B market, and suddenly require EDI capabilities. Perhaps your customer demands have started to shift over the last several months, and they expect orders to be fulfilled through different means.

Whatever the case may be, quick adaptation to new sales channels is a common occurrence for owners of growing businesses. 

  • Your Current Fulfillment Partner Can’t Scale to Your Needs

 A growing business is a wonderful thing, but you and your fulfillment partner must stand ready to keep up with increasing demands. If your fulfillment partner does not have the capabilities to scale to your anticipated needs, then it may be time to begin searching for other options. For instance, if your current fulfillment partner is a smaller, single location regional provider that you partnered with when your business was just starting out, then it’s likely that they may not be able to quickly scale up to future increases. If your current company is having difficulty keeping up with your growing demand, you will likely begin to feel the pain of increased delays in receiving product and getting orders fulfilled.  

  • You Require Additional Technology to Keep Up

Your growing business may require a more streamlined inventory management system to keep track of both incoming and outgoing quantities. Perhaps more advanced labeling or tracking technology is called for. In some cases, integration with additional sales channels or other systems used by your company is required and can’t be fulfilled within your current operation. Whatever the case may be, it is important to determine the technological capabilities of your current fulfillment vendor, and see how closely they align with your projected needs. 

  • KPIs Are Not Being Met

If your fulfillment partner has demonstrated a pattern of committing costly receiving, inventory, order picking, or shipping errors, then this may be a red flag that it’s time to be looking elsewhere. For example, if inadequate inspection procedures are resulting in the shipment of damaged/defective products, an increase in the number of returns, and even lost sales, then something needs to change. Top fulfillment providers like Ruby Has Fulfillment ship with order accuracy rates of 99.97%. How does your 3PL compare?

  • New Capabilities are Required for New Products

If you add new products to your catalog that require special storage conditions (such as a climate-controlled environment, or cold storage), then you need to investigate whether your current fulfillment vendor can meet such specific needs. Even a simple shift in product offering can cause a fulfillment company to operate outside of their comfort zone and necessitate a move to a new company.

  • Additional Services are Required

As your business grows, you may need to invest in additional services, such as custom packaging, returns handling, FBA preparation services, or call center capabilities. If your current fulfillment partner does not have the infrastructure to support such add-on solutions, then you may need to look into companies that can serve as a “one-stop-shop” for all of your fulfillment needs.

It’s important to keep an eye on these seven signs that your company will soon outgrow your current fulfillment options. If you do so, you’ll be able to stay ahead of the curve, and smoothly transition to enhanced solutions and/or new partnerships as needed. 

Switching to a New Inventory Management Solution

Switching to a New Inventory Management SolutionIt’s a big deal to switch to a new inventory management solution. You need to train key staff members on how to use the software in their daily work and get everything set up and transferred from your old solution. Here are four things you can do to make this process as smooth and simple as possible.

Have at Least One Primary Trainee

You should assign one or more individuals to be present at each training session for the new software and to be the most familiar with its various functions. These individuals could be your warehouse manager, in-house accountant, chief financial officer, and/or anyone else who is qualified to be a system administrator.

Why do this? Because you need someone to be an expert while recognizing that not everyone in the company has to know everything about the software. For example, salespeople just need to know how to generate sales orders, warehouse workers need to know how to generate purchase orders, pick items, and receive inventory, and chief information officers need to be able to check order statuses, inventory turnover ratios, projected sales, and other big-picture information. They have specialized roles to play, which don’t necessitate access to the full software.

If you have a handful of individuals who are familiar with all aspects of the software, they will be able to train others on those parts of the software that they will use in their jobs. And if one expert goes on vacation, takes sick leave, or even permanently leaves the company, you still have others who possess the knowledge to keep things running in their absence.

Set Aside Enough Time for Training

You should expect training on the software to take several days. If you opt to have an expert come to your facility to train your staff in person and help them set up a new inventory database, you will likely spend several hours on the phone with them to prepare. The more information you’re able to gather ahead of time, the better off you will be when the main training session begins.

The amount of time it takes to get fully trained will vary from software to software, but a good rule of thumb is to expect to work with a software expert for two days at a minimum. That’s not including all of the prep time, but if you sign up for an on-site training, it’s safe to assume you will need to spend more than one day with them to get everything you require from them. Try not to rush the process.

Focus on Accurately Setting Up Your Database

In addition to getting trained, the most important thing to do is to set up your database. To do that, you’ll need to add every one of your parts, products, vendor pricing, and locations, among other things. An inventory management solution is only as good as the information entered into it. Start yourself on the right foot by making sure the information you add to your database is accurate and complete. You can do this by making extensive use of spreadsheets.

Spreadsheets Are Your Friends

If you’re moving information from another inventory solution to another or even from an accounting solution like QuickBooks, the way to do it is by first exporting it into Excel spreadsheets. Once everything is in a spreadsheet, you can go in and do all sorts of things to prepare it for importing into the new solution. You’ll likely want to reformat the column headers to match new requirements, clean up errors in the data, and add missing items so that they’re ready to be entered into your new database.

A trainer can help you with this, or you might even be able to find spreadsheet templates, how-to videos, and documentation provided by the inventory solution provider.

This guest post was created by Robert Lockard with Fishbowl.

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.

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 start-up 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.

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

The Cost of “Free Shipping” for Retailers

Free ShippingFree shipping: it’s an expected offering for many of today’s customers, who are unwilling to feel as though they’re paying more for an item than they would pay in stores. There’s just one problem: shipping isn’t really free, and it is retailers who are forced to contend with those prices. What’s the real cost of free shipping to retailers? What kind of impact does it have on the bottom line–and is it really worth it to offer it?

Fees are Going Up

The fees associated with shipping have always been a problem–and that problem isn’t going to go away any time soon. General Rate Increases (GRI) usually take place on a yearly basis for shipping companies, and there’s no sign in the foreseeable future that this will stop. For small businesses and other retailers who end up bearing the price of those increases, shipping increases can create significant hardship for the business.

Once Offered, Always Offered

When you offer a service for your customers, they’re going to be either frustrated or absolutely furious when that offer goes away–which means it’s important to consider future needs before opting to offer free shipping for your orders. “Customers who would be willing to make a purchase in spite of a shipping charge might quickly become frustrated when their free shipping goes away, leaving them scurrying to another retailer who will meet their demands,” according to Alex Canet at ShippingTree.

The Benefits of “Free” Shipping

While free shipping may come with some financial downsides, it also offers several key advantages. Before opting out, make sure you consider whether or not these advantages would be beneficial for your business.

  • Free shipping helps interested customers in your business. In fact, it’s been reported in some surveys that as many as 93% of respondents said that free shipping was one of the most important attributes an online business can offer when they’re deciding where to purchase an item and can encourage them to buy more.
  • Free shipping encourages impulse purchases. Instead of waiting around until they have enough to reach a reasonable threshold, customers will go ahead and pick up that item they’ve been eyeing.
  • Offering free shipping over a certain amount can encourage customers to spend more in an effort to meet that amount.
  • Customers are willing to spend a little more on your products when you offer free shipping. A slightly higher price is, in their minds, offset by that free shipping offer.

Making the Most of Free Shipping

If you’re offering free shipping to your customers, make sure that it’s benefiting your business! By following these strategies, you can make free shipping offers benefit your business.

Check your shipping cost threshold. Make sure that you aren’t shipping out items that are more expensive to ship than they actually cost. If necessary, set a spending limit for free shipping–especially if you’re a small business for whom shipping costs add up fast. It’s important, however, to make sure that limit isn’t high enough to turn potential customers away!

Examine your packaging. Make sure your shipping team is knowledgeable about how to package items in the least expensive way possible, which may mean using more standard carton supplies, generic and lower cost options without branding, or opting for padded envelopes where possible.

Work with carriers. If you use the same carrier on a regular basis, you may be able to negotiate savings on some shipping tiers–especially the ones you use the most frequently. By examining your shipping profile and characteristics, you can target the most frequently utilized size and weight packages and potential leverage that into further discounts. For example, if you have lower cost ground shipments that have the same general sizes such as beauty, make-up, and supplements, you can negotiate specific rates with carriers geared towards these shipments.

How Do E-Commerce Companies Pull Off Free Shipping Perks?

How e-commerce companies offer free shippingI’m sure you’ve heard about the importance of offering free shipping in e-commerce. Perhaps you’ve even seen some of the latest stats, where it’s being reported that upwards of 74% of online shoppers drop out of their cart due to high or unexpected shipping charges. It certainly makes sense that people don’t want to pay a lot for shipping, and especially due to the presence of companies like Amazon that offer all sorts of shipping perks, free shipping has become more the norm than the exception. But have you ever taken a moment to think about how companies are able to offer free shipping to online shoppers without dipping too far into profits? We’ve done some research and below are some of the findings.

Your Shipping Rates Play a Big Role

Most business-to-consumer shipping is done via small parcel shipping, though larger products may use other methods such as less-than-truckload (LTL). We’ll focus on small parcel shipping in this article but the same general rules apply for larger freight. If you’re an existing company with regular order volume, you no doubt have your own rates that you’ve negotiated with the carriers such as USPS, UPS, and FedEx. The shipping companies provide you volume discounted rates based upon how many orders you ship and other volume characteristics, such as percentage of residential shipments, average dimensions and weight, among others.

In order to provide any free shipping offers to your customers, the first step is to make sure that the rates you obtain from the carriers are as good as possible. If you haven’t had a discussion with your freight carrier of choice, be sure to reach out to them periodically (at least yearly but more frequently if you have events that may help justify a rate decrease) – and don’t be afraid to shop with another carrier that you aren’t using. Shopping your freight rates with multiple carriers increases the competition and can result in better pricing.

Assuming you do have the best rates possible based upon your own volume characteristics, there is still one other option to improve upon your shipping rates – using a fulfillment service. Fulfillment companies store and ship orders on behalf of companies. You may have heard of them before or perhaps you use one now. If you don’t use one now, using one may offer significant savings in freight costs. Like your e-commerce company, they also obtain freight rates from the various shipping carriers, and because they ship products for multiple companies, their rates may be significantly better than yours. By using a fulfillment service, you can “piggy back” off of their rates. This will help ensure you have the lowest rates possible so that you can employ some of the free shipping strategies. According to Joseph Palisano at Lincoln Warehousing, “we work with multiple carriers to ensure our customers get the best rates and services for their e-commerce fulfillment shipping needs.” If you are using a fulfillment service, be sure that you check with them every so often as well to make sure that you’re taking advantage of their best rates.

Identify Ways to Improve Other Warehousing and Shipping Costs

Improving shipping costs isn’t the only way to create additional margin to justify free shipping. Be sure to take a look at some of the other warehousing and shipping related costs of your business to see if there’s any wiggle room for improvement. For example, some of the major shipping carriers have “free box” programs. This is a way to decrease some of the packaging costs of your business. While you may not get some of the benefit of custom packaging, it allows you to cut down on part of your shipping expenses. Another alternative is to utilize recycled boxes or re-use boxes from returns. Every dollar counts when trying to help compete with other free shipping programs of competitors.

Sometimes, it makes sense to change some of your procedures to reduce fulfillment and shipping costs. For example, minimizing some returns can help lower overall costs. In this case, you’ll have to weigh the pros and cons and do a thorough analysis, but taking a creative look at your processes and procedures may open the door for other cost saving methods.

Finally, there may also be other shipping services that you can use to lower costs. For example, FedEX has its smart post option where their drivers deliver to a certain stage and then “inject” the package into USPS systems. Because of this, they’re able to offer the service at a slightly lower cost. These types of programs are worth looking into to make sure you’re as competitive as possible.

What is Your Competition Doing?

Before we provide a listing of some of the free shipping options at your disposal, it’s worth mentioning that you should always take a look at the free shipping competitive landscape in your niche before jumping in with both feet. Pay close attention to what others are doing. Are they offering free shipping? What types of free shipping offers do they employ on their site? By doing your own research, you can see how to best position yourself versus your competitors.

What Free Shipping Options Should You Use

Especially if you need to be conservative with your free shipping offers, it pays to know what available options are out there so that you can choose the most effective strategy. In rare cases, companies offer free shipping across the board – this is usually a very calculated decision and certainly isn’t for everyone. Also, some companies have the luxury of having a very high priced product, so they can lose some money on shipping due to their high margins to begin with. If you don’t have as much margin to pay with, here are some ideas to use:

  • Set a minimum order amount. You’ll have to determine the best minimum level, but this at least forces the consumer to spend over a threshold.
  • Offer free shipping for select items – e.g. only higher priced items. This helps you maintain control to offer free shipping on your highest margin items.
  • Offer a promotion for a certain period of time. This will allow you to minimize the free shipping losses to a certain period of time.
  • Only offer economy shipping, such as USPS ground. When you do offer free shipping, there’s nothing wrong with ensuring that it goes the cheapest method.
  • Use member and loyalty programs. Take a page out of Amazon’s book and require membership.
  • Put shipping costs into the product price. This is a bit riskier and will be dictated by your competitors’ prices.
  • Use selective free shipping options, such as “only if they abandon their cart” or in exchange for placing a review on social media.

Free shipping is by no means an easy thing to figure out. You’ll want to spend a good amount of time coming up with the best strategy. By taking a look at your costs, areas for cost improvements, investigating what your competitors are doing, and choosing between the free shipping options, you’ll put your company in the best position for success.

Medical & Health Care Product Regulations & Warehouse Requirements

Medical and Healthcare Warehousing Many medical and health care products are regulated by the Food and Drug Administration (FDA) and other agencies. Both business owners and warehouse companies need to understand how to handle, store, pack, ship, and track medical and health care products using procedures that comply with government standards.

How do you determine whether or not these regulations apply to you? Below are some common examples to guide you through this complex topic.

Non-regulated products

Cosmetics, vitamins and supplements, other beauty/health-related products may benefit from special handling, but they may not require that a warehouse to maintain the same certifications that are needed for drugs and sterile medical supplies. Specific items like nail polish, perfumes, and skin cleansers or moisturizers are subject to FDA regulations, as are some additives for color that are sometimes ingredients in makeup. Because of these detailed distinctions, it’s best to check the FDA directly about their current requirements for health care goods like cosmetics and beauty products. 

FDA-regulated products

Institutions such as health care organizations, pharmaceutical companies, scientific groups, and research facilities are likely regulated by the FDA, because they produce and sell items that can are obviously categorized as drugs, medical/surgical devices, or diagnostic tools. Some of these products need to be kept at a specific temperature, labeled discreetly for security reasons, or kept perfectly sterile (free from bacteria). Others need to be carefully tracked throughout the fulfillment process.

Medical devices

The FDA defines a medical device as any item that is designed and intended for human use in the diagnosis or treatment of a disease, or an apparatus that can modify the anatomy or a physiological process.  The range of products that fit these criteria is quite large; a medical device can be anything from an adhesive bandage to a neuromuscular implant.

Medical devices are grouped into one of three distinct classes, depending on the level of regulation needed to mitigate potential risks[i]:

  • Class I medical devices are subject to the fewest controls, because they don’t pose a great threat to others if mishandled. The FDA’s “general controls” on these devices include provisions relating to misbranding, device registration, and good manufacturing processes. Examples of Class I medical devices include tongue depressors, sunglasses, gloves, or an IV stand.
  • Class II devices must meet the requirements of Class I regulations (“general controls”) plus comply with “special controls” such as labeling standards, tracking requirements, design guidelines, mandatory performance standards, and post-market monitoring rules. Items such as surgical masks, powered wheelchairs, or syringes fall into this category.
  • Class III items are extremely specialized and present a high risk of illness/injury, therefore their controls are the most stringent. These are life-sustaining products like implants (heart valves, pacemakers, etc.) that require scientific review and approval in addition to the requirements for Classes I and II.

Although the FDA doesn’t require or recognize the ISO (International Organization for Standardization), almost all manufacturers of medical devices want their critical vendors to be ISO 13485 certified showing they have significant control and risk mitigation processes in place that document and show evidence of consistency in every key function they perform including detailed tracking of lot and serial number.  “This certification level gives stand-out credibility to warehousing companies seeking customers in the rapidly growing medical device industry in both forward and reverse logistics” says Steve Storr,.

  • ISO 9001[ii] is a quality management system that helps certified businesses ensure that their customers consistently receive high quality products and services.
  • ISO 13485[iii] sets forth quality controls and regulations specific to medical devices and their associated services. These standards apply to every aspect of the life cycle of a product and to any organization involved in the development, distribution, or implementation of that medical device.

Pharmaceutical products

As you might expect, there are several governing entities for the pharmaceutical industry. The main goal of these agencies is to ensure the overall safety of consumers, but their efforts also reduce of fraud and drug abuse, enhance health care provider operations, and aim to improve the quality of health care overall. The processes that manufacturers must develop and implement to comply with these regulatory groups are frequently complex and detailed.

  • Current Good Manufacturing Practices (CGMP) is the main regulatory standard for ensuring the quality of human pharmaceuticals as enforced by the FDA. The CGMPs provide systems for manufacturers to use to ensure that their products are as safe and pure as possible, and that their operations are fully equipped to maintain a high level of quality control. These standards apply mainly to the drug companies, but the storage, handling, and shipment of their products may fall under these regulations.[iv]
  • The Drug Enforcement Administration (DEA) is a government agency that combats the smuggling and use of illegal drugs in the United States. It would be the responsibility of the fulfillment company to ensure the highest level of security for drugs they handle for their pharmaceutical companies, and to comply in all other ways with the regulations put forth by the DEA.
  • The Drug Supply Chain Security Act (DSCSA) provides a system of tracking certain drugs through the supply chain to help the FDA ensure that consumers are not exposed to harmful products. As it relates to distributors: “The DSCSA requires wholesale distributors and third-party logistics providers to report licensure and other information annually to FDA. Additionally, to further enhance the security of the drug supply chain, manufacturers, repackagers, wholesale distributors, and dispensers are required to notify FDA and other trading partners within 24 hours after determining a product is illegitimate. See frequently asked questions for more information about filling out Form FDA 3911 for a drug notification.”[v]

Other potential regulations

This list is not exhaustive; there might be other requirements that apply to warehousing operations depending on the products they are handling. For instance, international shipments might be governed by the Customs-Trade Partnership Against Terrorism (C-TPAT)[vi] if the business owner has elected to participate in this voluntary partnership. This agreement between the government and the company adds a level of security certification to the business activities of this company and assists with border control processes by streamlining inspections.

General warehouse preparedness

Obviously, with so many details and laws to keep track of, you must be extremely careful when choosing a fulfillment partner for your medical/healthcare products.  A select few companies, such as Mendtronix, provide specialized services in the health and medical industries. While the regulations described above will dictate specific requirements for warehousing companies as needed, the basic characteristics of a fulfillment company that can handle all kinds of medical and health care products are as follows:

  • At a minimum, a warehouse that plans to handle medical or health care products should be clean and well-maintained overall.
  • The facility should have robust security systems in place; certain drugs and controlled substances are highly sought after and need to be protected from theft.
  • Fulfillment centers must be climate-controlled and have appropriate redundancy/backup power supply in the event of power loss. An increase in temperature can permanently damage fragile and perishable health care items and even jeopardize heat-sensitive medical devices.
  • Most pharmaceuticals and some types of equipment and require special attention to inventory called expiration date tracking. A warehousing company should be familiar with three common methods of this tracking:
    • FIFO – “first in, first out” means that goods are sold in the order they were received at the warehouse
    • LIFO – “last in, first out” means that the items that were most recently added to the inventory are the next in line to go out
    • FEFO – “first expired, first out” means that products that will be expiring first are prioritized for sale
  • A fulfillment center that is ready to process medical products and health care items should also have the capability to provide customized and specific packaging solutions, such as:
    • Inconspicuous labeling for certain drugs or devices, to prevent theft
    • Cold packs or insulation for highly temperature-sensitive products
    • Special handling to ensure the integrity of sterile items

The FDA provides helpful guides to help you categorize products on their web site.

[i] FDA Classification Overview (PDF) https://www.fda.gov/downloads/Drugs/DevelopmentApprovalProcess/SmallBusinessAssistance/UCM466473.pdf

[ii] ISO 9001:2015 https://www.iso.org/iso-9001-quality-management.html

[iii] ISO 13485 https://www.iso.org/standard/59752.html

[iv] Facts About the Current Good Manufacturing Practices (CGMPs) https://www.fda.gov/drugs/developmentapprovalprocess/manufacturing/ucm169105.htm

[v] Drug Supply Chain Security Act (DSCSA)

https://www.fda.gov/Drugs/DrugSafety/DrugIntegrityandSupplyChainSecurity/DrugSupplyChainSecurityAct/default.htm

[vi] C-TPAT: Customs-Trade Partnership Against Terrorism https://www.cbp.gov/border-security/ports-entry/cargo-security/ctpat