Category Archives: Warehousing and Fulfillment Tips

How Warehouses are Reducing Costs by Using a Lumper Service

What is a Lumper Service?What Is A Lumper Service?

A lumper service is a group of workers hired by a shipper or carrier to help with the loading or unloading freight from trucks or trailers at a dock. Many shippers and carriers hire lumper services, but they are most common in food warehouses.

Lumper services are provided by third parties hired by shippers and receivers to work in their docks. The third parties are companies that specialize in lumper services. These companies employ professionals who understand the nuances of loading and unloading trucks and trailers.

Lumper services regularly work in the docks and either charge the shipper or the carrier for their service. Typically, the carrier informs the driver of the presence of a lumper service upon arrival at a dock so they may hand over the truck or trailer on arrival. Truck drivers pay for the lumper service but are reimbursed by the carrier or shipper.

Why Hire A Lumper Service?

Shippers and carriers hire lumpers to give their drivers time to rest and recuperate after a long journey. They relax while the third-party workers load or unload the trucks and trailers. The thinking is that since the driver has been on the road for many hours, there is no need to strain them on the various loading and unloading stops.

Hiring lumpers also reduces the risk of injuries to drivers that can disrupt work and increase the workman compensation costs for the carrier. Lumpers are experienced in handling different types of goods and load or unload faster than a driver would do. They also know the dock and warehouse very well, meaning that they can complete the job in a few minutes.

  • By hiring a third-party to handle the job, the logistics company benefits in three ways:
  • Drivers get time to recuperate and also benefit from reduced risk of drive injuries
  • The fast loading and unloading saves driver’s valuable time

Warehouse staff time is minimized, allowing them to focus on other tasks

The Cost Differences Between Unloading Inhouse And Hiring A Lumper Service

The average hourly wage of a dock worker is $16.32 and includes tips, bonuses, and overtime. The cost of using lumper services varies widely, depending on the amount of work and the number of labor hours required to complete a job. The cost can range from $50 to unload a truck to $250 to unload a full trailer.

For instance, Walmart charges a flat fee of $50 for most loads while other receivers charge according to the size of the load. The cost may be higher if the lumpers need to restack the freight. Typically, carrier companies include lumper fees in the freight charges so that this doesn’t become an extra cost they have to foot. This page provides a template for calculating the cost of using lumper services.

Even though it is hard to give exact figures, lumper services are cheaper than inhouse dock workers because they do not qualify for as many benefits as inhouse workers. Lumpers charge a lump sum for their services, unlike inhouse workers who require hourly compensation in addition to health insurance, safety gear, workman compensation, and leave allowances.

Lumpers are independent contractors responsible for insurance, injuries, and other costs they incur during their course of work. Using lumpers helps docks reduce liabilities, such as worker compensation and disability insurance premiums. Indeed, the reason docks insist on the carriers to pay lumpers is because it shifts the liability to the third-party agency that hires them.

Flat Rate Lumper Service vs Hourly Workers

Many of the costs associated with operating a warehouse are fixed costs that really can’t be lowered or changed. But one cost many warehouses are realizing that they can cut are on employee costs associated with container unloading and loading.

Normally a warehouse will have hourly workers slowly unload shipping containers which can vary costs depending on how fast the employee wants to work that day. On the other hand, a warehouse can hire a flat rate company to unload or load their containers for them for a flat rate. So instead of playing several workers an hourly rate and having to pay an unknown amount for each container, a warehouse can just pay a flat rate and let the Lumper company deal with it.

Example of the Cost Saving with using a Flat Rate Lumper Service

The savings associated with using a flat rate lumper service will vary but let’s look at this scenario. The Warehouse has a shipping container that needs to be unloaded, they can use two options:

  1. The warehouse uses 3 hourly workers to unload the container which takes 4 hours for a total of 12 hours. With current warehouse laborer wages the warehouse would be paying between $15-$18/ hour for their own employees or $21-$25/ hour for temp agency workers. So, for the 12 work hours required to unload the container the warehouse would pay anywhere from $180 at the lowest up to $300.
  2. Option 2 is where the warehouse uses a flat rate service and pays a pre negotiated rate to unload the container which starts at only $195 per container.

Other Advantages of Using Lumper Services

A common complaint among customers in the food industry is that their deliveries were not handled properly. There may be instances of cargo falling during transit or getting damaged. Lumper service companies help reduce these losses by loading and unloading food packages safely to minimize damage. Lumper services are popular with big grocery chains because they save them millions in labor and staff costs.

Some companies have in-house dock workers who handle the loading and unloading of freight. However, such workers often have other responsibilities apart from packing trailers. They can rush the loading and unloading or make other mistakes so that they can continue with other tasks. This makes them less effective than third party lumping services whose only focus is on loading and unloading trucks and trailers effectively.

Lumpers have worked at the dock for a long time and know the way around the warehouse. This increases the loading and unloading efficiency while reducing the risks of damaged goods and injury to the workers.

On average, lumpers make loading and unloading trailers quicker than it would be if it were done by drivers. Industry experts estimate that drivers unload at 25% of the rate of specialized lumping services. Lumpers are the helping hand that keeps freight rolling.

Lumpers reduce the costs that carriers incur in delivering freight. For instance, the carriers or freight brokers do not have to cover the cost of injuries incurred by the lumpers because they are independent contractors. They also save on training and equipment costs because the lumpers will bring their own equipment or hire from the dock owners.

For carriers, lumpers enhance relationships with receivers because they help restack or unload the freight without much hassle. Lumpers understand the customer or receiver’s demands and handle the cargo according to the requirements. For instance, lumpers understand how the client wants different goods arranged in the warehouse for easy retrieval and stack them accordingly.

Lumpers also help warehouses meet peak period unloading demands.  They help deliver goods on tight schedules by reducing the time it takes to load or unload goods and send them to customers. This reduces lead times, leading to improved customer satisfaction.

Lumpers enable warehouses to handle complex cargo more easily than they would without specialized cargo handlers. For instance, most warehouses involve third party lumpers when handling non-unitized cargo than when dealing with unitized cargo. It is also common for warehouses to use lumper services for unloading unitized loads of agricultural commodities and refrigerated goods.

Using lumpers reduces tax liabilities for shippers, carriers, and receivers because they are independent contractors responsible for filing their tax returns. In other cases, the third party hiring the lumpers shoulder the responsibility for filing their tax returns.

Understanding the Difference Between LTL and FTL to Maximize Your Fulfillment Strategy

Difference Between LTL and FTL ShippingSellers spend an average of 70-75% of their fulfillment costs on shipping. But it’s not that easy to know if you’re spending in the right places. There are a lot of variables to take into account. When it comes to freight (goods transported in bulk) you have two main choices, LTL (less-than-truckload) and FTL (full-truckload). Choosing between these two methods depends on several things: the size and weight of your shipment, freight classification, and delivery timelines. If you want help from an expert, it’s often best to outsource your freight to a third-party logistics provider (3PL) to help optimize your freight strategy.

LTL and FTL Explained

LTL refers to less-than-truckload. LTL is when multiple shippers’ freight is on the same trailer rather than having a single company’s freight exclusively on an individual trailer. Several LTL shipments are combined one a truckload to maximize space and fill it to capacity. This is a great option for shipments that are between two and eight pallets or any shipment that is less than 14 linear feet because it makes the most out of the available shipping space on a given truck. LTL is a great option for small businesses.

FTL refers to full truckload freight. FTL shipping is commonly used for large shipments that take up the entire truck, or most of it. With FTL, your freight is the only freight moving on an individual truck so you have exclusivity to the entire truck and theoretically are filling the truckload. You can reserve the truck with its full capacity even if you don’t require filling up the entire available space. Doing so would ensure that you won’t have to worry about your goods changing hands at any time or your goods being misplaced with other products.

Differences Between LTL and FTL

The biggest difference between LTL and FTL is that LTL gives you higher cost savings when you ship only a few pallets at a time. This is cheaper because you are only paying for the space you are using, rather than paying for a full truck that isn’t filled to capacity.

LTL and FTL also have a key difference in transit times. If you have a full truckload your carrier will pick up whatever you are shipping and drive it straight to the receiver—this makes transit very predictable. FTL carriers will arrange a firm delivery time since they are only picking up one shipment. However, the transit for LTL does not go directly to the end destination because of the different stops they have to make. With LTL the actual delivery date may be very different from the estimated delivery date, requiring more flexibility on your end.

There is also a greater chance of damage or missing items with LTL. Because your product will be alongside other products that need to be dropped off at different locations, your items will be loaded and unloaded in and out of trailers and warehouses several times before reaching the final destination. This increased amount of handling and exposure means a greater chance that your products could incur damages, especially if they are sensitive or fragile. On the other hand, a full truckload will load your products at the point of origin, seal the trailer, and take it straight to its delivery destination.

How to Optimize Your Options: FTL vs. LTL

There are no hard and fast rules by which you must abide by, however, there are certain situations where FTL might be more appropriate than LTL.

Choosing FTL

  • If you are shipping more than 12 pallets at a time, then the full truckload option is going to be best for you.
  • If your product is fragile and you need to avoid excessive loading and unloading by multiple carriers, the full truckload option is going to be best for you because you know that your fragile products are the only items within that truck.
  • If you need firm delivery and pick-up dates the full truckload option is going to be better because you can reserve a single carrier to transport your items. For time-sensitive delivery dates, you absolutely want the full truckload option.

Choose LTL

  • If you have a smaller shipment that is anything less than 12 pallets you will experience higher cost savings using the LTL method.
  • If you have some flexibility on the delivery or shipping date the LTL option is going to be much better suited for you as well. By giving you a pickup and delivery range at either end, as opposed to requiring a more specific time schedule, you can benefit from the savings of combining your shipment with another shipment.

Pro tip: It is important to be aware of how likely your products could incur damage during shipment. You want to make sure that they are sturdy enough for regular handling at various points throughout the shipping process or that they’ve been properly packaged so that being handled regularly is unlikely to cause any damage.

How to Work with a 3PL for LTL and FTL Shipments

As you have read, understanding and deciding which of these two freight options is best for your business can be a very complicated undertaking. Because of that, partnering with a third-party logistics provider (3PL) can often be the best option when it comes to shipping LTL or FTL freight, especially when shipments have special requirements or time sensitive deadlines. 3PL companies provide an advantage for businesses looking to find the most competitive rates in the market, along with service that they can count on. Here are a few benefits of outsourcing freight support to a 3PL.

Expertise

Freight shipping is often a core competency of many 3PL providers, both LTL and FTL included. They have the experience to be able to determine the best way to handle your freight since they provide that service every day for multiple companies. A competent 3PL will help you evaluate your shipping and choose the most efficient option. They will also be able to anticipate potential risks or higher costs, and continue to analyze your freight optimization for the best results to grow.

Cost Savings

Your company might only ship a few pallets each month to a small area, while a 3PL is shipping a significantly higher volume across the whole country or internationally on a daily basis. Their volume and buying power gives a 3PL leverage when negotiating rates with freight carriers. By partnering up with a 3PL, you get access to these cost-effective rates.

Visibility

It’s crucial for any business to know what is happening with their freight at any point in time. Many companies are afraid of the loss of control when using a 3PL for LTL or FTL. The reality is you gain more visibility and tracking capabilities than you might have had trying to manage the process yourself. A team of professionals will focus on providing the highest level of service to your company, including detailed updates from your shipment’s inception to when it reaches its endpoint.

The final decision between FTL and LTL shipping will depend on costs, timing and handling requirements for your freight shipment. In many cases, LTL will provide a cheaper option for smaller loads, but if your load is heavy for its size, irregular in shape or takes up more than half of a truckload, it makes sense to get pricing for both options. Sometimes, full truckload is the way to go even if your load leaves empty space on the truck.

Article written by Brian Tu, Chief Revenue Officer, DCL Logistics

Warehousing and LTL Shipping – Key Factors in Selecting a 3PL Partner

LTL Freight WarehousingChoosing the right 3PL partner is critical to saving your company time, money, and potential headache. Whether you are a B2B or B2C oriented company, be sure to understand what to look for when selecting a partner for your warehousing, supply chain and logistics needs. Have a clear definition of what you are looking for, your product details, and what to check off in terms of the service offering that will help you save time and money. Below we dive into a few factors to consider when you are shopping for 3PL services – especially in cases where you ship larger, LTL orders.

Product Needs Must Match 3PL Service Offering

Before even shopping for an outsourced 3PL service provider, define your wants and needs for your product, the specifications, and what is working and not working in your current fulfillment process. Identifying friction points helps your 3PL provider understand where they can help and what services they can provide to alleviate the challenges you have faced in the past.

Furthermore, knowing your product dimensions, pallet size, turns, shipping destinations, average order size, and more provides you and the 3PL companies you are looking at more detail into how they can serve you. This will provide proper alignment for you and the outsourced 3PL service provider and save you a lot of time and opportunity cost going forward.

LTL Shipping and Impact on Supply Chain

LTL shipping is typically a must for companies that ship larger orders. While shopping for warehouse logistics services, ensure that your 3PL provider offers tightly controlled LTL shipping services, as it has multiple benefits:

  • LTL Shipping Reduces Cost – If your shipment does not need FTL (full truckload) freight shipments, ensure you utilize LTL. “LTL enables shipments from multiple companies on one truck, which benefits your company as the shipment is divided amongst each company based on their own respective cargo weight. Additionally, this reduces the amount of handling vs. parcel shipping,” noted Brandt Jensen, CEO of Interwest Transportation, an asset-based 3PL that specializes in FTL and LTL freight warehousing.
  • Freight or Cargo is More Secure – LTL freight is loaded onto pallets most of the time. Additionally, a pallet typically is wrapped – reducing the amount of wear and tear, rubbing, etc. from contact with other freight within the trailer.
  • More Options for Service – within LTL shipping, options for service such as lift gates, inside pickup, special handling, freeze protection, and more are offered to ensure further security and ease of transport.
  • Tracking is Improved – Most carriers provide real time tracking for picking, stops, and delivery status. Having a palletized shipment is easier to track and simplifies the workflow process.
  • Reduces Emissions and Carbon Footprint – LTL shipping provides reduced emissions as it maximizes each truckload by combining multiple company’s shipments into one freight shipment. This reduces the amount of trucks on the road and helps reduce our carbon footprint, as well as your 3PL provider’s footprint overall.

The Importance of Warehousing, Freight Fleet, and Carrier Relationships

Warehousing, an in-house trucking fleet, and good carrier relationships are all pivotal to maximizing your relationship with your 3PL service provider. Each will save you time and money as there is less handling and the shipper can quote out various carrier options to choose the best value for you. While you can continue to manage your LTL freight carrier relationships, there are multiple benefits to finding a 3PL company that has its own LTL shipping division and/or has existing carrier relationships and ships high volumes of orders.

  • The importance of Warehousing – choosing a 3PL provider that has a powerful WMS (warehouse management system), the ability to rack or stack, as well as process returns is especially important to your entire supply chain. Ensure that you can track inventory, place inventory where needed, and that the warehouse has the processes in place to reduce handling and pick and pack fast for expedient delivery.
  • A 3PL That Owns Their Own Trucking Fleet – this cuts cost directly out of the shipping process. One less company means one less company to pay for handing and for their margin – which therefore increases your company’s margin. Common LTL discounts can reach 45-50% off published rates for 3PL companies that have preferred rates with carriers, and discounts can be significantly greater if the 3PL has its own fleet. Choose a 3PL that has its own fleet for freight delivery, and your P&L will thank you.
  • A 3PL with Carrier Relationships – multiple carrier relationships mean more options for a shipment to choose from, so you can get the best value from your 3PL provider as well as each shipment. If you have varied product and varied order quantities, this helps get the best value and cost on a per shipment basis. Once again, your P&L will thank you.

The Impact on Your Operating Expenses & Bottom Line

Knowing your product and order details, while ensuring your 3PL provider has a full service offering including LTL shipping, full warehousing capabilities with a powerful WMS, various relationships with carriers, and their own trucking fleet will help you save a large sum of money on your shipments, operating expenses, and therefore improve your bottom line. Before shopping for 3PL services, ensure you know your product, your current fulfillment process, and what you are needing across your supply chain.

Everything You Need to Know About Barcode Scanning Technologies

Barcode scanning is a critical part of the overall inventory management, fulfillment and shipping process that doesn’t seem to get as much attention as other warehouse functions. Without it, warehouse operations are subject to human error, leaving receiving, inventory, fulfillment and shipping errors with a chance to flourish. But when barcode scanning technologies are implemented and used properly, warehouse staff can operate with extremely low levels of errors – which is critical in our world of high-stakes e-commerce fulfillment and delivery.

The entire fulfillment process (receiving, inventory management, fulfillment, shipping and returns) can completely fall apart if all of these processes and procedures are subject to human error. In order to minimize errors to an acceptable level, bar code scanning technologies must be implemented. Bar code technology is vital because it allows you to automatically receive inventory, manage inventory, and pick and ship products with computer scanning rather than a set of human eyeballs (which are very prone to error!).

Barcode Scanning Technologies

Barcoding has gained mass adoption in warehousing because the cost of implementation is often very low and effective use of barcodes avoids errors and speeds up routine tasks.

While it is possible to encode all types of information in a barcode, in warehousing and retail the vast majority of barcodes are being used to quickly and accurately identify items. A string of numbers and or letters unique to each product is encoded in the barcode. When scanned, the scanner decodes this identifier which ensures the correct item is processed during receiving, counting, picking or packing. The barcodes themselves and the identifier encoded therein is not very useful on their own, but they become useful when coupled with a plan and a system that is often managed by the software you’re using.

Choosing Barcode Software

If you are planning to utilize barcodes you’ll want to choose software that has barcode support integrated directly or verify there is a suitable integration with an application (app) that can provide the scanning features you require.

Scanning functionality will ultimately come from one of three places. First, it may be part of an app that you’re currently using, like a receiving process in an inventory application that utilizes barcode scanning. An example of this would be receiving inventory in QuickBook’s SOS Inventory or Finale Inventory. Second, there are also warehouse management and shipping applications that become the central inventory hub or inventory “master” in addition to managing orders and creating shipping labels. They are likely to include multiple scanning functions including receiving, stocking and pick pack verification. An example would be SKU Vault’s inventory management software.  Third, there are applications that focus on specific scanning functions, like Pick and Pack verification and inventory receiving or cycle counts. These apps can add a number of scanning functions to your existing workflow. An example of this type of app would be GroovePacker.

If you are in the process of selecting apps for your workflow you can compare the cost of using a few integrated applications that include the scanning functions that are important to you and going with an all-in-one WMS that “has it all”.

Using an All-Inclusive Inventory Software Versus a Barcode App

Jumping into a larger application or suite that includes every possible scanning feature will be costly and may be unnecessary depending on your current needs. It’s also likely that while it meets all current requirements, there will be one or more areas where another solution would be preferable.  As with any business application or system it’s often wise to focus first on the items with the greatest potential return or cost savings now and in the foreseeable future. Since packing errors always result in a direct, tangible cost and poor customer experience, pick and pack verification is probably the first scanning feature you’ll want to incorporate. Eliminating shipping errors will immediately improve your inventory accuracy which will reduce out-of-stock scenarios and the customer service related to back-orders. Once errors are eliminated you can further increase inventory accuracy by using scanners for receiving and recounting tasks as well.

On the surface, it may seem less than optimal to have a number of apps working together to provide the functionality you need. Years ago, this was certainly the case because communication between systems was limited and often required custom development. Now, however, API’s make it much easier and more reliable to send the relevant data from app to app. This gives you the flexibility to use the best app for your needs in each of your business processes. When you outgrow one of the apps in your stack you can make a change without changing your entire system.

When integrating multiple apps there is a tendency to strive for a “complete” integration, and to integrate every data point possible. The opposite approach may serve you much better. Narrowing your focus to the data that will actually be needed by each app in your specific use case will greatly reduce the complexity of evaluating potential integrations.

The system as a whole should be carefully considered and the functions of each app understood. Only after the requirements and functions of each app are clear, is it possible to determine if the existing API’s will allow the data that each app requires to be sent and received as needed. On your own this would be a complicated task, which is why it is key to choose software providers that can provide knowledgeable support staff. Their suggestions and insight will be invaluable as you hammer out the workflow. Even when it’s clear that everything should work “in theory”, you’ll need an opportunity to test end-to-end and verify that everything is communicating as needed before making any commitments. A trial of 30 days should be sufficient. If you’ll be setting up multiple apps you should ask each provider when their app should be setup in relation to the other integrated apps. This can lead to a much smoother setup and give you more time to test with actual orders.

Let’s take a closer look at how barcode scanning works and can be utilized in these inventory and quality control operations.

Pick and Pack Verification

Barcodes are often used to verify items during the pick and pack process to ensure ordered items are all shipped accurately. Due to the high costs of mis-ships, this preventative scanning step is one that many shippers feel is critical. If your items are not already barcoded you’ll need to decide between barcoding individual items (more work upfront) and barcoding bins (more error prone).

There are a number of workflow options for implementing scanning in your fulfillment process. Initially, you’ll want to determine when in your workflow the verification should occur. This will impact the rest of the scanning process. The two main options are Scanning During the Pick or Scanning During Packing. Scanning can be done during both pick and pack, but if either of these are properly implemented, accuracy should be so high that the time required to add a second scanning step is not warranted. If you are planning to implement pick pack verification and you are looking to explore the various workflow and process options, see Pick Pack Barcode Verification Workflows for an in depth look at these considerations.

Receiving Inventory

Scanning items as they are received ensures that the correct item is being added to inventory. For example, three cases of one dozen units have arrived and the quantity is being recorded. In a manual process the items could easily be attributed to the wrong SKU. When using barcodes for receiving, the software is recording what was received and the SKU being updated is selected by scanning the barcode on the physical item. This ensures that inventory for the correct item will be updated. Your inventory or accounting system that generates purchase orders may include a receiving process that utilizes barcode scanning. If not, scanning can be done in any application that integrates scanner input in the receiving process and which can sync or export the updated inventory counts for your inventory system.

Stocking / Replacing Inventory

After inventory has been received and accounted for it will need to be stocked in your warehouse for easy picking later. Returns that can be resold will also need to be replaced in the correct location to complete the return process. Accurately stocking and replacing inventory is essential to your pick pack accuracy if you are scanning bins during picking rather than scanning individually barcoded items.

The process of scanning during stocking or replacing usually involves a scan of a product barcode which has been applied to the bin. If the items are not individually barcoded the process will likely involve keying in the SKU and then scanning a barcode on the bin to verify the stock location.

Recounts / Cycle Counts

As with the receiving process, the barcode scan in the counting process ensures the correct item is being updated when a count is conducted and entered. In a manual process, it’s far too easy to record an updated count for the wrong item leading to confusion and potential out-of-stocks.

Barcode software uses a scan to find and display the correct item so an accurate adjustment can be made every time. If item locations change often, each bin ID can also be encoded in a separate barcode. This bin barcode can be scanned to quickly enter a new location for a product that’s being moved. It’s also possible to have the scanner count each individual scan. In other words, each barcode scanned can be logged on the scanner itself and the total for each barcode can be output after the scanning is complete. This particular operation can be done by many scanners without additional software. The file generated by the scanner can be used to update the software being used to track inventory.

Generating and Printing Barcodes

Registered Barcodes may be purchased from resellers or directly from GS-1. It is important to have registered barcodes if you plan to sell to distributors or wholesalers that will put your products in retail locations. If your barcodes are to be used internally for inventory and packing verification, you don’t need GS-1 codes and therefore can use any value you like. In this case, using the SKU is a popular choice as the product SKU is unique for every product and variant. It is recommended to use all uppercase letters for SKUs and barcodes generated from the SKU to avoid case issues.

Some applications that handle barcoding can automatically generate barcodes from your product SKU and allow you to print barcodes in a standard format. If none of the apps you’re using have this functionality, there are a number of apps dedicated to printing barcodes in various layouts and formats, such as the popular program BarTender. For initial test runs, you can use an online barcode generator.

Thermal printers are a great choice for printing barcodes as their output is easily scannable and there is no possibility of ink smudging and making the barcode unreadable. One caveat is that thermal printed barcodes will fade over time if stored in a hot environment.

Business-Specific Quality Control Scanning Requirements

Preparing to use barcode scanning with your products tends to quickly identify any abnormalities in your product data. For example, you may have previously input barcodes provided by a manufacturer so they would be ready for scanning. It is during the implementation of barcodes that it will come to light that the manufacturer used the same barcode for all variants of a particular item. Since the variant SKU’s are different physical items and must be distinguished from one another, unique barcodes will be required.

In addition to helping you identify and resolve issues like these you may also find that the way you package or sell items requires more specialized scanning features. Let’s look at a few common cases where additional scanning features are either required or can improve the efficiency of your workflow and operations.

Kits, Cases & Multi-Packs

Pre-defined kits of specific items allow you to group and sell many items together. Customers love kits and they are a great way to increase your average order amount. Unfortunately, kit complexity often leads to packing errors, especially if you have multiple variations of a kit.

If you sell kits or plan to, you’ll want to be sure your pick and pack verification software includes support for kitting. If your products are ordered by the case or if you often use pre-counted packs to fulfill larger quantities of the same item, you will likely want features that allow you to type in the quantity being added (rather than requiring that each item to be scanned) and to define multi-pack barcodes that can add a predefined quantity of the item on each scan.

Configurable or Dynamic Bundles

If you allow the customer to choose between several variants that are part of a bundle you’ll need to verify your shopping cart is able to pass the selected SKUs to your scanning software so they can be properly verified. An example might be a desktop computer. Purchases can choose different amounts of ram, hard drive size, and a graphics card. The SKU for each of the selected options will need to be included as a line item in the order for verification to be possible.

Lot, Batch or Serial Number Recording and Reporting

There are many instances where companies may be required to do a recall for specific lot or batch numbers. Tracking these on the sales end may be difficult or impossible depending on your current software. Lot or batch numbers of the individual items in every order can be easily recorded during packing verification if the software supports it. In addition to recording the batch number with a separate scan, some dedicated scanning apps can recognize both the product barcode value and the lot number while they are part of the same barcode label. This makes it possible to verify the product and record the lot number in a single scan. Orders containing lot numbers can then be exported and archived so they are available in the case of a recall.

Multi-Box Scanning

If you often pack orders into multiple boxes and generate per-box packing slips you know how tedious and manual this operation can be. Since boxes are chosen during packing it’s possible to implement packing verification software that will allow you to record items by box and generate a packing slip that meets your needs.

Planning Your Scanning Process

When it comes to packing verification the most essential feature is a well thought out scanning process. It should be designed to be easy to use and fool-proof, so mistakes are prevented amid rush and distraction in a chaotic warehouse environment. Features like productivity metrics for your packing team are nice but not essential. What is essential is that you take the necessary time to plan out every step to ensure the highest level of quality over your entire inventory, fulfillment and shipping process.

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.

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.