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Fulfillment Partner

Finding the Right Fulfillment Partner for our Growing eCommerce Business

Guest Blog by Tom Schwab

The wonder of eCommerce is that it allows customers throughout the world to find your product day or night.  The ugly reality is that when that customer reaches the check out page they want two things:  They want it fast and they want free shipping.  Both are the number one reason for shopping cart abandonment.  Fail to meet either condition and you risk loosing the sale either to another website or a brick and mortar retailer that can provide faster availability.

Our niche direct to consumer medical products company was forced to expand from a regional player to a national provider.  Our customers would take their crutch alternatives with them on vacation.  Where they went, the call and orders followed.   Due to the size and associated dimensional weight of the product, air shipments were prohibitively costly.  Ground shipments while reasonably priced could take up to four business days from our Midwest location.  For patients struggling with the pain and limitations of crutches this was an eternity.  To continue to expand our business we needed to address this real logistical constraint.

As we searched for a fulfillment partner on the internet we were met with frustration.  The 3PL companies that ranked highest in Google were on page 1 for a reason:  They were big.  It was clear that they were not interested in small accounts by their responses.  Multi-year contracts, expensive set up fees, minimum shipment, minimum floor space and the need add expensive software to transmit orders all scared us away.

On the opposite side of the spectrum, there were many companies that claimed to do 3PL in addition to their core business.  What it was in reality was an attempt for them to fill empty warehouse space and provide an additional revenue stream in a down economy.  Questioning them about their process proved we could not count on them to provide our level of service our customers.

After months of dead ends that educated us what we could not accept and what we could not afford, we stumbled across WarehousingAndFulfillment.com, an easy to use online service that looked at our specific needs and gave us a quick quote of 5 potential fulfillment partners that potentially met our needs.  Beyond a simple matching service between eCommerce companies and 3PL providers, they had pre-screen the warehouses.  All the discussions with the potential partners were efficient, informative and addressed our needs.  Finally, we had choices instead of frustration. Within days we had chosen our partner and our product was on a truck headed for them.

We’ve now used the WarehousingAndFulfillment.com services 3 times as we’ve added additional 3PL partners throughout the US.  Clearly they have been a key resource for us in harnessing the incredible potential of eCommerce.  Now no matter where in the US the customer finds us, we can deliver to them in just 1 to 2 business days with free ground shipping.

Tom Schwab is an entrepreneur who has transformed a regional player into a national leader using the tools of a connected world and the strategy of Inbound Marketing for eCommerce.

Christmas Shipping Nightmares

by Will Schneider

It’s that time of year – last minute online purchases for your loved ones with the youthful anticipation of smiles on their faces Christmas morning. In particular, the great joy of giving the perfect gift to a child and watching their face light up when the wrapping paper is torn through like a vulture devours its prey. And the sigh of relief when it’s all over, knowing you pulled it all off without a hitch.

If only it were this simple…

All too often, the Christmas dream is turned upside down by a mis-shipment – whether the shipment arrives late or missing parts. And finally, it happened to us this Christmas…well more specifically to my 5 year old son.

Our parents bought our son a super duper all in one basketball, hockey, soccer set. Of course, no sooner than the wrapping paper had been ripped off of the box did he beg and plead for us to start setting it up so he could enjoy it. And within minutes of stumbling through the 100 step set up process, I realized that two critical parts were missing.

What were we to do? The toy was bought online. We could send it back and wait for the return and severely disappoint our son. Or we could get creative. With little choice in the matter, his grandpa quickly drove to the nearest Home Depot, looking for some PVC pipe and a saw. Within 5 minutes of getting back, we had the entire set back up and running and averted a huge Christmas disaster.

But we know that many of you either couldn’t replace a part as easily or flat out didn’t receive the present in time. With another Christmas behind us, we thought it would be an opportune time for us to gather up some of this year’s Christmas shipping nightmares.

Send us a note explaining your disaster and you may find your way to our top 10 Christmas shipping nightmares list for 2012. Send notes to [email protected].

 

Third Party Warehousing

Is Third Party Warehousing More Cost Effective Than In House Warehousing?

by Will Schneider

A great number of product based businesses consider outsourcing with a third party warehousing company as a viable option for handling the warehousing and distribution of their product. But once they begin researching these third party providers, they oftentimes get hit with “sticker shock” in terms of storage and fulfillment fees. They often think to themselves, “Is it cost effective to outsource?” Or better yet, “Will cost savings be realized by outsourcing warehousing and fulfillment?” These are extremely important questions that need to be analyzed from a detailed financial perspective in order to gain appropriate insights to make the best decision.

Do You Know All of Your Warehousing Costs?

One of the most difficult aspects of any in house versus outsourcing financial analysis calculations is the gathering of ALL “in house” costs. If any of these costs are left out of the equation, you’ll surely not be able to gain the proper perspective in your decision. What kinds of costs need to be included?

  • All salaries, benefits, insurance, and employee related expenses
  • All management expenses related to storage and distribution
  • All warehouse lease fees, including insurance
  • All materials costs, including packaging materials, etc.
  • All equipment costs, including ongoing maintenance costs and support equipment such as pallets, racking, computers, scanners, scales, etc.
  • All customer service expenses for support with your customers and any related benefits, insurance, and employee related expenses
  • Any software expenses related to inventory management and order management

Some of the most commonly overlooked areas are equipment purchases and adequate measures of management support related to the fulfillment process. Without a thorough analysis, you’ll potentially be left thinking that outsourcing isn’t the best option when in fact using a third party warehousing solution would be the best way to go.

The Added Benefits That Get Overlooked

In addition to forgetting to include certain in house costs, another common mistake is not accounting for other added benefits of outsourcing your third party warehousing. Some of these “intangibles” can really provide significant savings. They include:

  • Ability to use as much or as little space as needed for warehousing, thereby eliminating the risk of warehouse leasing and time spent negotiating
  • Synergy from opportunity cost of not having to spend valuable internal resources on distribution, thereby increasing time spent on other more important functions such as sales and marketing

Properly accounting for all costs and benefits will help you make the best decision regarding the use of third party warehousing. Don’t be short sighted when looking at the pricing proposals from fulfillment companies. Take into account all costs and you’ll set your business up for the greatest success possible.

Amazon Fulfillment Fees

Amazon Fulfillment Fees Increase Hits Online Retailers Hard

by Will Schneider

Most online retailers using Amazon Fulfillment will be hit hard starting in February of 2013 with a multitude of price increases targeted to combat increasing transportation costs. Most notably, the fee increases include an adjustment to the “weight handling” fee and an addition of a returns processing fee. These fees and increases will apply to anyone that self-fulfills through their system – in an attempt to further entrench customers by giving them incentive to fulfill by Amazon.

Like many of the price adjustments over the last couple of years, these recent increases hit retailers hard – and at a time when many online merchants are struggling to squeeze as much profit out of their company as possible and weather the economic storm of the last couple of years. In particular, smaller businesses may find these particular fee increases a heavy burden to shoulder next year.

“Of anything that we hear most about the Amazon Fulfillment network, the vast majority of comments are related to expensive pricing structures and challenges with unique service requirements and flexibility,” noted Will Schneider, CEO of WarehousingAndFulfillment.com. The well known fulfillment provider is definitely the “800 pound gorilla” in the fulfillment space, offering multiple locations, quality execution and tie in to its Amazon network. But, as Mr. Schneider notes, “for many smaller companies in particular, the large orientation of Amazon makes addressing the challenges of a smaller business difficult – from lack of branding options, difficult to come by personal customer service, and now a series of price increases that make is less competitive with other outsourced fulfillment options.”

Of course, a price increase is never easy to swallow, although oftentimes understandable. But the interesting part will be to see what the Amazon Fulfillment fees increase, which was announced during the holiday season, will bring for Amazon in the New Year.

Logistics Software for 3PLs

by Will Schneider

Ferber Warehousing just announced that it is selling its proprietary logistics software, Conveyorware.com, to fulfillment and logistics firms. The software, which includes decades of customs from industry needs and experiences, will be sold as a SAAS (Software as a Service), starting at just $100 per month for 5 users. It’s an all inclusive software, managing the entire 3pl process from start to finish, simplifying the systems needs of growing 3pls.

To learn more about the software, please visit the Conveyorware software at www.conveyorware.com or read the press release about logistics software.

Keep Your Shipping Costs in Line

Blog Post Written by Scott Reynolds, American Western Distribution

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

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

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

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

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

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

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

Encouraging Responses from Leads

by Will Schneider

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

The Beaten Path

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

“Does this separate you from the pack?”

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

Okay, So What Should I Do?

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

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

A Final Word On “Additional Questions”

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

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

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

Utah Company Wins Top 3PL Designation

by Will Schneider

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

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

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

The 24 Hour Follow Up Rule and Further Follow ups.

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

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

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

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

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

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

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

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

3rd Party Logistics Provider

by Will Schneider

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

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

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