Monday, December 12, 2011

Selecting Shopping Cart Software

Shopping Cart Software
The shopping cart software, or ecommerce platform you select for your online store is a lot more than just a way to enable customers to pay for orders on your website.  The right software will provide tools and support to not only sell more products but operate many other parts of your online retail business more efficiently.

If you are looking evaluate options for selecting a shopping cart program click here.

The following is a list of ways a comprehensive shopping cart software/ ecommerce platform helps an online retail store.
  • Payment Processing – payment support for credit card processing, PayPal or other methods of processing payments
  • Webpage Design – including step by step wizards and store front design templates to get your store setup plus most will also integrate into the backend of your existing website
  • Inventory Control – processes to keep track of your inventory, set up low inventory alerts and generate reports
  • Shipping – tools that calculates shipping costs for orders with integration to small package carriers like FedEx, UPS, and the USPS
  • Tax Calculation – help to calculate sales taxes, which is complicated to handle on your own
  • Customer Management – reporting and purchase history for customers
  • Marketing – integrated information on affiliate programs, search engine optimization, social network marketing, site analytics, and conversion optimization
  • Security – protection of confidential information for your customers
  • System Integration – connection to the software with your ecommerce order fulfillment provider
Plus a few more ideas....
  • Administration and Inventory Control – Functionality to support business needs from Account and Inventory to Mobile Applications
  • Marketing – Support with social media connectivity, cross-selling and up-selling at checkout
  • Support – Features like SSL secure checkouts, fraud protection, backup, restoration, and cookies
  •  SEO – Control over title tags and descriptions to help maximize the store for search engine optimization
  • PCI Compliant Hosting – A Payment Card Industry compliant hosting environment
  •  Up-Selling and Cross-Selling Features – Offering customers products of a greater value that what they are considering plus offering complimentary products
  • Product Reviews – Enabling customers to post reviews of products on the site
  • Price Management – Flexible options for pricing enabling promotional or other pricing options
  • Catalog Management – Simple, set up and addition of products on store including images
  • Site Analytics – Monitoring of site activity and user tracking for optimization
  • Product Feed Support – Able to create a feed of your products to shopping comparison sites



Thursday, October 20, 2011

We need more supply chain experts on executive boards

Tim Cook, Apple’s new CEO, was originally hired by Steve Jobs back in in 1998 as the Senior Vice President for Worldwide Operations before he was promoted to COO in 2007. His experience in manufacturing, logistics and the supply chain prior and during his tenure at Apple has helped make Apple’s supply chain one of the industry’s best and a large part in the technology company’s meteoric rise.

Should more technology companies follow suit and place supply chain expertise on the executive board? Michael Koploy, ERP Analyst at SCM Software Advice argues that the current state of the global economy and the importance of supply chains to successful tech companies means more executive positions should be filled with supply chain graduates.

Unfortunately, a supply chain talent crisis is holding back the industry from being able to place more graduates on the executive board. Ken Cottrill discusses the lack of high-level supply chain talent in his whitepaper Are You Prepared for the Supply Chain Talent Crisis? If and when talent catches up, Koploy believes that individuals with the following characteristics will be the most capable of C-level ascension:

  • Global supply chain management experience
  • Experience managing a team that adheres to just-in-time, lean and Kanban fundamentals
  • Supply chain management (SCM) software experience using solutions equipped with business intelligence (BI) and forecasting/planning functionality
  • Ability to organize and execute both operational and strategic supply chain initiatives and improvements.
More more on the topic, check out Koploy’s blog post on the topic at: Consumer-Driven Technology Creates the Need for a C-Level Supply Chain Focus.

Thursday, September 1, 2011

Help for online retailers to understand what to look for when outsourcing order fulfillment

If you are an online retailer and are finding it difficult to keep up with your pick pack operation  and shipping customer orders, it may be time to think about finding a third party order fulfillment center. Similar to other difficult business decisions a growing company has to make, it is important to understand all the costs associated with outsourcing your fulfillment and shipping operation to an outside company.

The following is a breakdown of the general areas of cost a typical business will face when bringing on an order fulfillment service resource. Each company's needs and situation are different, but understanding these costs is vital to making the best business decision possible to position your company for maximum future growth.


Storage (a.k.a. "rent" for your products): Fulfillment centers will charge storage for the space an online retailer’s products take up in the warehouse. This is generally done on a per square foot  or per pallet basis.


Inventory Inspection and Receipt: Since most online retailers are having their suppliers ship the products directly to an order fulfillment warehouse, the online retailer is not able to inspect the shipments to make sure the products are the correct quantity and in good condition. A fulfillment center becomes that extra check to make sure the supplier is sending the right products and will report any discrepancies to the client.


Order Charges: Packing orders is the main part of the whole order fulfillment service, although not necessarily the largest cost. These are the labor costs for preparing and boxing up orders. The rates are generally based on a flat per order fee, plus a cost for each additional item included in the order. The more orders a retailer ships with a fulfillment company the lower the per order cost will be for the most part. The order cost is intended to cover the systems and time to receive the order, prep the pick ticket and other paperwork, as well as the time to physically build the carton, locate and pick the items on the order.


Material Costs: Simply stated, material costs include the cost of cartons and packing materials. Most fulfillment centers are buying boxes in bulk so this is one area a 3rd party fulfillment center can help reduce costs.


Shipping Costs: These costs will make up the majority of the expense of getting products to customers. Here's a link to reference useful information on calculating costs for shipping small packages. Many fulfillment operations will allow their customers to ship on their account numbers with FedEx and UPS, thus providing better shipping rates than most customers could negotiate on their own.


Returns: As some products are inevitably returned from a retailer’s customers, the fulfillment center can help inspect items and report to the retailer details on the returns.


Initial Move: There is often an initial inventory move of products from the online retailer to the fulfillment warehouse. This means there are potential costs for the shipping and receipt of the products as they are brought into the fulfillment center.


System Integration: The process for integrating an online retailer’s ecommerce shopping cart software may require some customized programming expense. How orders get communicated to the fulfillment warehouse can happen in a variety of ways (EDI, API, Email, or even fax).


Some fulfillment centers will offer bundled pricing that includes a certain amount of storage space and a certain number of orders shipped in a period of time. Or, the fulfillment charges may be calculated as a percentage of sales. There is nothing wrong with either method of pricing, just be certain the rates accurately reflect your true activity levels.


One-Time Charges
Possible Units of Measure
Account Set Up
one time charge
Software Integration
one time charge
Monthly Charges
Possible Units of Measure
Monthly Software Charge
fixed charge per month
Account Management
fixed charge per month
Activity Based Charges
Possible Units of Measure
Order Processing
per box charge
per order charge
addt'l charge per  piece
Packing Materials
per carton
per envelope
box assembly charge
Receiving
per piece
per SKU
per carton
per pallet
per hour
Storage
per cubic foot
per shelf
per pallet
Shipping
per order handling fee
surcharge to use your own account
SKU Fee
per SKU
Returns
per order
per hour
Paperwork Preperation Charge
per Interntional Order
per Freight Order (LTL shipment)
Pallet Preparation Charge
per pallet
Rush Order Surcharge
per order
Kitting/ Assembly
per item
per hour
per order


________________________________

Kenneth Kowal  ecommerce order fulfillment for online retailers.

Sunday, August 28, 2011

Wednesday, June 22, 2011

Strategies for Online Retailers to Deal with Free Shipping

There are a number of good strategies to deal with the free shipping war going on right now in the online retail space. The bad news is there is no FedEx "Free" option that companies like Amazon know about, while you are stuck shipping FedEx Ground. The key is to manage your shipping costs while also packaging those costs in the right way to your customers so they can see the holistic value of your products and not make purchasing decisions based on just on the perception that the shipping is free.

- Free Shipping for a minimum purchase or on certain products: A key to being able to offer low cost or free shipping is to have enough margin built into your product to cover those costs. Knowing your margins and shipping costs can help you develop the right model to know the points in which your margins can support covering shipping costs.

- Flat Rate Shipping Options: For many online retailers, the shipping costs for their customer orders will be very different order to order. This is the result of weight, size, and destination being different depending on the product mix. With some analysis from your order fulfillment operation you can determine your average shipping costs and charge based on the average. Displaying shipping costs earlier in the check out process reduces cart abandonment and a flat rate shipping cost can make this easier.

- Shipping Clubs and Optional Upgrades: Many online retailers offer a service that for a one time fee you can receive free or upgraded service - see Amazon Prime or Shoprunner. Or consider on top of a flat rate price, the option to upgrade from Ground to Second Day Air for a small up charge.

______________________________

Twitter: @kennethkowal

Friday, May 20, 2011

How Do Online Retailers Offer "Free Shipping?"

A question we get a lot from clients is "How can so many online retailers offer free shipping?", which is then followed up with "What can we do to compete with free shipping offers?"

There are a couple of reasons online retailers are able to offer free or cheap shipping, unfortunately the reality is that there are no free shipping service options with Fed Ex or UPS or the Post Office or anyone else. So whether you are a large shipper, ecommerce startup, or growing online retailer there is no such thing as free shipping.

What large companies do get, that startups and small companies typically do not, are substantial discounts on small package company's published rates. In addition, if a company is shipping a very large amount of the same size packages there is often the chance to get preferential rates in those circumstances.

Clearly if you are a startup or small online retailer you are at a significant disadvantage because you are without the leverage to negotiate better rates with FedEx or UPS. But in the end, just like your business, the big online retailers are covering the cost of shipping with the margins in their products.

What to do about it as a startup or small online retailer? Obviously it is paramount to figure out ways to minimize shipping expenses because these are costs that are not going away no matter how big you get.

Consider alternatives to FedEx or UPS by looking at the options offered by the USPS. Many companies find that Flat Rate Priority Mail boxes are a good way to reduce costs. FedEx and UPS charge hefty residential, extended delivery area and fuel surcharges that hurt the economics of shipping Business to Consumer (B2C) with them.

More distance equals more cost so your shipping location is directly correlated to your shipping costs. Most of the people in the US are located in the mid-atlantic and northeast part of the country. If you are shipping from San Francisco to customers in New York, the cost could be double or more than the cost to ship to New York from a location in Pennsylvania. Another advantage the big guys have is the ability (as in volume) to ship from multiple points within the US. They can service most of the country with cheaper ZONE 2 or 3 shipments, as opposed to expensive ZONE 8 shipments going coast to coast by having multiple warehouse locations to ship from. Similar story, but it does take volume to make it worthwhile to set up multiple shipping points around the country.

Many 3rd party order fulfillment warehouses will pass on their volume discounts with FedEx and UPS, so look into a partnership to outsource your product shipping. Your operation will potentially benefit from the collective volume of all the customers shipping from that fulfillment center.

_____________

Freight Services for Online Retailers
Order Fulfillment for Ecommerce Etail
Logistics Software for Online Retail

Friday, May 13, 2011

Want free industry advice from "experts" on shipping and fulfillment?

Two websites you may want to check out if you have questions on shipping and fulfillment are Quora and Focus. Both give you the chance to post questions and get answers from industry "experts" that will hopefully be helpful. Here is a link to an example of a question from Quora.

http://www.quora.com/Whats-the-cheapest-shipping-method-for-businesses-shipping-high-volumes-of-small-boxes-within-the-U-S-where-the-box-weighs-more-than-13-ounces?__snids__=18166978#ans388442

Or, feel free to contact me at kenneth.kowal@yahoo.com to talk about order fulfillment and logistics. Visit kennethkowal.com.

Wednesday, May 11, 2011

New Resource to Help Online Retailers with Order Fulfillment and Shipping Questions

Have, or looking to start, an online retail store? Check out www.shipstarter.com - they will offer some free advice to help you navigate the complicated process of getting your customer orders packed and shipped.

Monday, May 9, 2011

Thinking of using offsite storage services?

If you are a manufacturer, or any business that has a need to warehouse and storage products then you may have considered outsourcing as an alternative to keeping the product in your own building. So, what are the costs that go into using a 3rd party warehouse for this service that you should be aware of.

Storage Costs (of course), which are typically charged by the month and on a per pallet or square foot basis.

In/ Out Charges are the handling charges for physically unloading the product off the trucks and putting them away in the warehouse, and then loading them on trucks again when they leave the facility.

Paperwork Fees are the cost for preparing shipping paperwork like the Bill of Lading Form.

Pallet Preparation Fees can include the cost of adding shrink wrap, re-palletizing boxes, or other labor costs involved in getting pallets ready to ship out of the warehouse.

_________________________________________

Ken Kowal is Director of New Business Development for Landis Logistics and FillShip.com, serving online retailers and manufacturers with order fulfillment and warehousing services in the PA, NJ, and NY area.

Thursday, May 5, 2011

Do you ship a LARGE amount of a SMALL number of products?

A great way to drive efficiencies within an order fulfillment operation is to, of course, be more efficient with the packing process.

One great opportunity to do that is if you have a certain number of unique sku's that typically ship alone, and at a high volume. Instead of waiting for each customer order to come in for a product that will likely be shipping by itself, utilize some down time to pre-package the products in its shipping container so that when the customer orders do come in it is simply a matter of printing and applying the shipping label to the package.

Tuesday, May 3, 2011

Reasons to Consider Flat Rate Shipping from the USPS

Here is an interesting article from the Practical Ecommerce website (click here).

This is a question that comes up a lot when I am talking to online retailers. I would add to the points in the article that regular priority mail can also be less expensive than the flat rate option so don't just assume flat rate is always the best option.

It should also be noted that being able to track packages is a concern for online retailers as the Post Office service does not provide as the same level of tracking capabilities as FedEx and UPS offer.

Many third party order fulfillment services will offers a greater discount off of UPS/ FedEx shipping rates so if you are working with a 3rd party, the tipping point at which the USPS is a more expensive option often happens at a lower threshold than what the analysis illustrates.

Outsourced Order Fulfillment: What to do about the cartons?

Some of the questions we often receive when talking to prospective clients who are considering outsourcing their order fulfillment are in regards to the shipping cartons used to package customer orders. As in, does the online retailer supply their own boxes or do we as the 3rd party fulfillment provide the cartons.

The answer is actually that it can work either way. Most fulfillment centers will stock a variety of sizes to accommodate a range of product sizes. Because these specific sizes are being bought in bulk for several customers by the order fulfillment warehouse, they are typically available to the clients at a lower cost than if the client were to purchase the cartons themselves. If a client requires a "non-standard" size that the order fulfillment center does not stock, they'll  often buy them on behalf of the client and mark them up slightly to cover administrative/ carrying costs (10-20% is not unusual).

If a  client wants to supply their own cartons, or use free cartons, provided by a carrier (like USPS, FedEx, UPS) then the fulfillment center may charge an assembly fee ($.20 +/- per carton) to cover labor and dunnage costs to build the box and prepare it for shipping.

If you are shipping a food product then packaging become a bit more complicated and insulted cartons will easily run 3 to 4 times the cost of plain corrugate.

Monday, May 2, 2011

Social Media and the Supply Chain

Social media is proving to be more than just a hip fad. It's a medium that will change marketing and business at an alarming rate over the next few years. Here are some statistics from a recent article on just how big social media is becoming:
  • Facebook has over 500 users. These users spend over 700 billion minutes every month on the website
  • 200 million Twitter users send out about 95 million tweets every day.
  • Over 100 million users have created a LinkedIn account, with over 1 million users signing up each week.
Businesses are now learning to use social media to increase their brand presence, connect with their customers, and learn how to improve their offerings and operating efficiencies. How can logistics and supply chain operations use social media to ensure their operations are lean and their productivity is maximized?
This topic is discussed in a new article on WMSG by guest blogger Luciano Cunha. Cunha discusses how social media can be used to maximize supply chain demand planning, but under the caveat that context must be considered to ensure that data is accurate and useful. He discusses two paradoxes (the Real-Time Paradox and the China Paradox) that exemplify this need to consider the audience when using social media data. In the article, he also provides guidance and suggestions on how to effectively use social media and the Connected Experience for better logistics management.
You can read the article in its entirety here: http://www.warehousemanagementsystemsguide.com/blog/social-media-supply-chain-042711/.

Wednesday, April 13, 2011

Online Retailers: Not Sure How Much to Charge for Shipping?

One thing online retailers find challenging when operating an online store is deciding how, and how much to charge for shipping. Obviously covering the cost of shipping and handling is a must, but the latest trend for many retailers is to offer reduced or free shipping. It has gotten to the point that many consumers are starting to expect free shipping, even at the expense of paying more for the product (the cost has to go somewhere!). Being smart and efficient in how a company pays for the costs of order fulfillment and shipping is paramount as these costs often make up the largest % of a company's operating budget.

I recently came across this article that nicely summarize the shipping costs and policies of many of the top retailers out there. It's a good read if you are looking to create your own shipping rates for the products you sell.

Click for an articles on Important Questions to Ask a Potential Order Fulfillment Company & Order Fulfillment Services.

___________________________

Ken Kowal is an expert in order fulfillment for online retailers. Check out more about order fulfillment on Twitter (@kennethkowal).

Friday, April 8, 2011

How Are Returns Handled at an Order Fulfillment Warehouse?

A frequent question we receive when talking to prospective order fulfillment online retail clients is in regards to the returns process. How does it work - Can you handle returns - Can you inspect the product - How do you report the returns - Etc?
In most cases, the answer is that a typical fulfillment service can handle returns however you, as a customer need them to. For our clients, the returns process most often will include the following steps:
- the returned product is delivered back to our fulfillment warehouse
- it is checked in and referenced by its original sales order
- the order and product information is recorded and emailed back to the online retailer
- based on the customer's direction, the product is inspected and returned to inventory to be sent out again
- or, for some clients all returns are set aside and the client periodically comes on site to inspect the items
- or, some clients have all items (most often food fulfillment products) disposed of, or returned to the manufacturer 
The returns process of course starts with the communication to the customer on how to go about returning the products they need to. This is often done with step by step instructions that may be listed on the packing list, or the website. A returns label may accompany the orders as well. FedEx and UPS offer simply ways to have a pre-paid shipping label sent with the order to facilitate the return.
When it comes to inspecting the returns, setting up specific guidelines regarding what to look for is key. Many products are commonly returned into inventory but many require a much closer examination. Setting clear expectations and procedures at the outset is very important to make sure the process runs smoothly.
The cost for managing returns is really dictated by the requirements so there is no "list" price for returns in most cases. Once the fulfillment center has a track record of the types of returns and the amount of work that goes in to inspecting the returns they can often put together a "per return" cost. Prior to that, most fulfillment centers will charge based on their warehouse hourly rate.

Monday, April 4, 2011

Receiving Product at a 3rd Party Order Fulfillment Warehouse

When a company has outsourced its storage and order fulfillment warehouse operations to a 3rd party distribution center, the receiving process takes on added importance. This is because the company is relying on that warehouse to be their last check to make sure the products they have ordered are getting delivered in good shape and in the correct quantity.



Aside from simply storing and reporting on inventory levels of products being keep on site, a warehouse is the inspection and counting inbound product. Since the customer is not able to do it themselves, the 3rd party warehouse has to play that role – and do it right.


One important step to ensure the Receiving process runs efficiently and accurately is for inbound shipments follow any procedure the warehouse may have in place for an ASN (Advanced Shipping Notification). The ASN is a heads up to the warehouse that product is coming in and helps the facility be prepared to inbound the material.


This also speeds up the time it takes for the product to be entered into inventory, and of course be available for filling future orders.


The following are general steps in the Receiving Process:


Before signing the Bill of Lading:

Check for visual damages to cartons and product

Count verification against the Bill of Lading



Once the product is unloaded from the carrier:

Verification of product id’s/ SKU’s and quantities against the ASN

Further visual inspection for damages

Lot/ Serialization number recording into WMS

Product put-away


Getting the receiving process done right is the first key step to maintaining an accurate inventory within a warehouse or order fulfillment facility. Visiting logistics social media and networking sites focused on the supply chain (such as http://www.cha1n.com/, http://www.blogsinlogistics.com/, and http://www.logipi.com/) is a good way to learn about best practices for receiving.

Sunday, April 3, 2011

Order Flow Process: Pick and Pack Fulfillment


Order Process Flow for Pick and Pack Fullfillment www.shipstarter.com

Wednesday, March 30, 2011

Leveraging Technology for Your Order Fulfillment Operation

Technology is the cornerstone of a well-running order fulfillment operation, whether it’s helping to manage orders, control inventory and warehouse operations, manage freight, or support real-time reporting requirements. It’s through technology that guess-work is eliminated from the order fulfillment pick and pack process, human error is reduced, and products and content go to market faster and at lower cost.




When it comes to fulfillment-related technology and systems, there are no absolute solutions. One size does not fit all or even most companies. Moreover, implementing a technology infrastructure to support your fulfillment operations is not only about hardware and software systems. Savvy companies and marketers use technology as an enabler to gain process efficiencies, access mission-critical information, and run their businesses better.



Here’s a quick litmus test. Take a quick look at your existing order fulfillment services operations: is the technology you rely on flexible, giving you room to grow and adapt to change? Does it support the flow of information seamlessly through the entire order fulfillment process - from order entry through to shipment? Can you access data and generate reports in real time to support critical decision-making? Are you making technology investments in the processes that need them most? Whether you are utilizing the expertise of a third party fulfillment provider or managing your logistics and operations internally, all of these are important considerations whether you are a startup order fulfillment operation or large multi-location operation.



As you assess your technology strategy to support new business initiatives or enhance your existing infrastructure, here are some insights that will put you on the right path:



Start With Strong People

The foundation of a strong fulfillment infrastructure is having expert, knowledgeable information technology (IT) professionals supporting your program - either in-house or through your outsourced fulfillment partner. IT professionals who understand technology and are experienced in the business side of fulfillment can provide your company with important, big-picture expertise. Additionally, in the outsourcing model, if your fulfillment provider does not offer value-added technology related services as a core competency (i.e., e-commerce site development) they should have partnerships in place to provide the support you need in a seamless manner.

Ensure Flexibility on the Front End

A flexible fulfillment technology infrastructure starts on the front end with the intake of order data. Your fulfillment partner should have the capability in their order management system to accept orders from various ordering mechanisms: e-commerce, call center, electronic data interchange, file transfer protocol (flat file, text file, XML, etc), and others. Order management systems built on flexible technologies such as enterprise resource planning (ERP) can be easily adapted to support your changing requirements.

Keep Data Flowing Through the System

Customer order information should move seamlessly from the front end to the warehouse/inventory management platform and ultimately through to final shipping. By automating the flow of information through the fulfillment environment, technology can facilitate faster, high quality order processing and shipment. Moreover, your fulfillment provider should offer you the ability to view critical customer order data at all points in the process. Real time data access will help you make more informed decisions related to production requirements, inventory levels, and customer buying patterns, while providing visibility into areas where costs could be reduced.

Use Technology to Improve Process Control and Fulfillment Accuracy

In the picking and packing of orders, technology can be an important enabler to further speed up the order fulfillment process and maximize quality. Technologies such as radio frequency identification (RFID) and bar coding can facilitate “system directed picking” helping the fulfillment provider’s employees to pick and pack high volume, complex orders where there is little margin for error.

Invest in the Processes that Need it Most

Simply put, some fulfillment processes don’t require technologies like RFID or bar coding to get the job done. The critical determining factors are speed and quality. For example, some fulfillment programs, like literature distribution, are less technology-dependent. Here, a manually driven pick and pack process can still meet time to market goals.

Lower Costs in Transportation Management

In the transportation management area, technology can be a further enabler to reduce the costs of your fulfillment program. Leveraging rate shopping programs, your order fulfillment pick and pack partner can work to compare carriers and select the most effective options for each shipment. This can help reduce overall freights costs while continuing to ensure prompt customer delivery.

Maintaining Your Lifeline to the Customer

Since information is the lifeblood of your decision making process, you need data on all facets of your fulfillment program. including inventory, orders and more and you need it in a real time manner. Leveraging technology, your partner should offer you the capability to extract data from the fulfillment infrastructure and generate real time reports in the format you require. Access should be easy and at your convenience online 24 hours a day giving you an instant, on-demand snapshot of your critical business activity.
_____________

Ken Kowal is Director of Sales and Marketing for Landis Logistics, which specializes in ecommerce order fulfillment for startup and online retailers.

Order Fulfillment Services Outsourcing: Why it’s Right for Your Business

Justifying the outsourcing decision: 10 reasons to take to your management team

1. Access Best-in-Class Capabilities
Third party order fulfillment service companies provide you access to expertise that is typically not readily available internally.
2. Enhance Core Business Focus
Outsourcing Pick and Pack lets you spend more time marketing and growing your business and enhancing your products and services. Supply chain operations are taken off your plate and put in the hands of a proven expert.
3. Achieve Operational Excellence
Your fulfillment partner will seamlessly add operational expertise to your organization, enhancing your overall efficiency.
4. Enhance Customer Satisfaction
Fulfillment is a critical connection to the marketplace and your customers. A smooth running supply chain will improve your reputation for quality and reliability, while building long term customer loyalty.
5. Preserve Capital
Why invest in warehouse space, technology, and additional operations staff if you don’t have to. Outsourcing lets you redirect your capital to growing your business.
6. Reduce Operating Costs
Outsourcing helps lower or eliminate costs that would be necessary to manage an internal fulfillment program: staff, training, facilities, freight, and on-going administration. Further, fulfillment outsourcers have the resources and relationships to achieve critical economies in areas such as freight consolidation and pass on the savings to their customers.
7. Speed Time to Market
Outsourcers are equipped to get your products into the hands of your customer quicker and cheaper. This is particularly for those order fulfillment companies who are strategically located near the highly populated Eastern United States.
8. Leverage Technology
Leading fulfillment companies understand the critical role of technology in the order fulfillment process and have invested in systems and infrastructure to support their service delivery. Through outsourcing, your business gains access to the benefits of this technology without having to make the investment yourself.
9. Support Multiple Channels
Many ecommerce order fulfillment providers have diverse services to support product distribution across multiple channels’ B2B, B2C, Direct-to-Store shipments, and more.
10. Adapt to Change
Similarly, as market forces and buyer behavior drives changes in your product lines and service offerings, your outsourcer is well positioned to grow right with you, leveraging its investment in people, facilities, and technology.
___________________________

Kenneth Kowal is Director of New Business Development at Landis Logistics and can be found talking about ecommerce order fulfillment for startups on LinkedIn and Twitter.

Selling online and thinking of outsourcing your shipping and order fulfillment?

If you have an online store and are finding it tough to keep up with packing and shipping your customer orders, it may be time to think about working with a 3rd party order fulfillment center. But like all the other difficult business decisions a growing company has to make, it is important to understand all the costs associated with outsourcing your shipping operation to an outside company. The following is a breakdown of the general areas of cost a typical business will face when bringing on an order fulfillment service resource. Each company's needs and situation are different, but understanding these costs is vital to making the best business decision possible to position your company for maximum future growth.




Storage Costs: Fulfillment centers will charge storage or "rent" for the space a retailer’s products take up in the warehouse. This is generally done on a per square foot basis or by the pallet.



Inventory Inspection and Receipt: Since most online retailers are having their suppliers ship the products directly to an order fulfillment warehouse, the online retailer is not able to inspect the shipments to make sure the products are the correct quantity and in good condition. A fulfillment center becomes that extra check to make sure the supplier is sending the right products and will report any discrepancies to the client.



Order Charges: Packing orders is the main part of the whole order fulfillment service, although not necessarily the largest cost. These are the labor costs for preparing and boxing up orders. The rates are generally based on a flat per order fee, plus a cost for each additional item included in the order. The more orders a retailer ships with a fulfillment company the lower the per order cost will be for the most part. The order cost is intended to cover the systems and time to receive the order, prep the pick ticket and other paperwork, as well as the time to physically build the carton, locate and pick the items on the order.



Material Costs: Simply stated, material costs include the cost of cartons and packing materials. Most fulfillment centers are buying boxes in bulk so this is one area a 3rd party fulfillment center can help reduce costs.



Shipping Costs: These costs will make up the majority of the expense of getting products to customers. Here's a link to reference useful information on calculating costs for shipping small packages. Many fulfillment operations will allow their customers to ship on their account numbers with FedEx and UPS, thus providing better shipping rates than most customers could negotiate on their own.



Returns: As some products are inevitably returned from a retailer’s customers, the fulfillment center can help inspect items and report to the retailer details on the returns.



Initial Move: There is often an initial inventory move of products from the online retailer to the fulfillment warehouse. This means there are potential costs for the shipping and receipt of the products as they are brought into the fulfillment center.







System Integration: The process for integrating an online retailer’s ecommerce shopping cart software may require some customized programming expense. How orders get communicated to the fulfillment warehouse can happen in a variety of ways (EDI, API, Email, or even fax).



Some fulfillment centers will offer bundled pricing that includes a certain amount of storage space and a certain number of orders shipped in a period of time. Or, the fulfillment charges may be calculated as a percentage of sales. There is nothing wrong with either method of pricing, just be certain the rates accurately reflect your true activity levels.



_________________________________

Kenneth Kowal  ecommerce order fulfillment.

Monday, March 14, 2011

Ecommerce Order Fulfillment Services for Startups and Online Retailers

Whether you are a startup looking to launch a new website, or a small online retailer just starting to grow, ShipStarter has the expertise to drive results with the most cost-effective product fulfillment services. We understand the unique challenges you face to ensure products get to your end-customer on time and at the lowest cost, and we work to deliver fast, accurate and money-saving services through strategic logistics solutions.

We have complete turnkey capabilities for an array of startup and small online retailer’s order fulfillment needs, including:

• Straightforward Shopping Cart Integration
Ecommerce Order Fulfillment Service for Startups Packaging and Shipping
• Small Parcel Shipping Expertise and Volume Discounts
• Direct-to-Consumer and Business-to-Business Order Fulfillment Services
• Expertise in a Range of Consumer Products including; Nurtriceuticals, Cosmeceuticals, and Food Fulfillment
• Logistics for New Product Line Introductions: from supplier to final delivery

When you partner with ShipStarter, you gain a team dedicated to helping you drive growth for your ecommerce startup or online retailing endeavors, providing full logistics solutions that positively impact your bottom line.

Order Fulfillment Service in the New York and New Jersey Area

Are you looking for warehousing and fulfillment services in the New York or New Jersey area? Make sure you evaluate Landis Logistics as a cost effective partner. Located only 2 hours drive from New York City in eastern PA, Landis provides order fulfillment service to many NY and NJ based retail and manufacturing businesses. Many of whom find the lower storage and labor costs can reduce their warehousing and fulfillment cost by 30% to 50% or more. Whether you are an online retailing looking to outsource product fulfillment, a startup looking to launch a new website, or large manufacturer needing outside warehousing, Landis has the expertise to drive results with the most cost-effective product fulfillment solutions. We understand the unique challenges you face to ensure products get to your end-customer on time and at the lowest cost, and we work to deliver fast, accurate and money-saving services through strategic logistics solutions.


We have complete turnkey capabilities for an array of retailer and manufacturer’s order fulfillment needs, including:

• Location in eastern Pennsylvania (Reading), about an hour NW of Philadelphia

• Lower Storage and Labor Costs Compared to the NY Metro Area

• Lower Overall Shipping Costs Across the US

• Client list which include several Fortune 100 companies, as well as smaller sized ecommerce online retailers and startups

Ecommerce Order Fulfillment Best Practices for Packaging and Shipping

• FDA Approved – Warehousing and Food Fulfillment Operation

• Small Parcel Shipping Expertise and Volume Discounts

• Next Day Guaranteed Ground Delivery to New York City Metro Area With FedEx

Direct-to-Consumer and Business-to-Business Order Fulfillment

• Logistics for New Product Line Introductions: from supplier to final delivery

When you partner with Landis, you gain a team dedicated to helping you drive growth for your ecommerce startup or online retailing endeavors, providing full logistics solutions that positively impact your bottom line.

Sunday, March 6, 2011

6 Sites to Bookmark: Shipping Information for Online Retailers

Here are links for comparing rates from the 3 main options for shipping small packages:

FedEx:
https://www.fedex.com/ratefinder/home?cc=US&language=en&locId=express

UPS:
https://wwwapps.ups.com/ctc/request?loc=en_US&WT.svl=PNRO_L1

US Postal Service:
http://postcalc.usps.gov/

Carton and Packing Material Costs:
A quick and easy method for getting costs for a variety of packing materials: http://www.uline.com/. If you plan to buy in bulk (>100 units) it may be worth talking to a local supplier for better rates.

Shipping something larger than 100 or so lbs.? Check out http://www.freightquote.com/ to get a shipping rate and http://www.eroutingguide.com/ to help with the shipping paperwork.

Sunday, February 13, 2011

ShipStart: Ecommerce Order Fulfillment for Start Ups

FillShip is proud to annouce it has been brought into the Landis Logistics family and will now operate as a division of Landis.

FillShip will continue to provide turnkey ecommerce order fulfillment services for small and medium size online retailers, including consumer goods and food products.

Landis Logistics provides pick pack services for medium and large manufacturers and ecommerce companies.
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Saturday, February 5, 2011

DIM charges - Big Changes with FedEx and UPS

If you ship with FedEx or UPS, there was a big with rates you should be aware of – and this is not just the usual annual rate increase.

The DIM factor FedEx and UPS use is changing, from 194 to 166 for U.S. Domestic air and ground packages (applies to ground packages 3 cubic feet or larger) and from 166 to 139 for many international services.

THIS IS A SIGNIFIGANT INCREASE THAT WILL AFFECT MANY SHIPPERS.

The concept of Dimensional Weight is widely used as a uniform way to establish a minimum charge for the cubic space a package occupies.

Dimensional weight, also called “DIM” weight, is used because the space a package takes up on a delivery vehicle may cost more than the shipping charges for the package’s actual weight. You should calculate dimensional weight for every shipment, compare that to its actual weight, and use the greater of the two to determine your shipping cost. Using the carrier’s free packaging is one way to make sure DIM charges are kept in check.

For domestic air services, the package’s billable weight is either the actual or dimensional weight of the package—whichever is greater. For ground packages, the greater of actual or dimensional weight applies to packages measuring 5,184 cubic inches (three cubic feet) or greater.

If you ship larger packages, near the DIM threshold it is likely your overall shipping costs will increase. The amount of the cost increase will depend on the number and weight of your shipments.

Here’s a note we received from a local “small package expert” that explains the change in more detail.

The DIM calculation did change this year.

It went from 194 down to 166.

Here is how it works… Express packages are always affected by Dimensions. If the size (dimensions) are greater than actual weight you will be affected by DIM and will be charged the higher of the 2 rates, actual vs. DIMed rate.

Ground shipments are only affected by DIM if they are over 3 cubic feet in size or 5,184 cu inches. Then the same thing happens, you are charged the higher of the 2 rates.

Here’s the calculation:

Length x Height x width = x

Then take x and divide by the DIM divisor of 166 = equals the DIM weight

If the Dim weight is higher than the actual you get rated on the higher of the 2 rates.

Here’s an example: 15lb actual weight, zone 4 shipment with measurements of 25x22x20

If billed at 15lb rate is $8.52list rates

When you factor the dims, it comes out to 11,000/166 = 67lbs and the rate is $23.36

With the old 194 factor it would have been lighter therefore cheaper at 57lbs for $21.22

The DIM change really affects you if you have lightweight large items… plastic parts, lightweight parts with a lot of overpackaging…etc

What to do about it? Talk to you local Fed Ex or UPS sales reps – they may be willing to discuss developing a customized DIM calculation formula that may ease the pain of the change.

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Provider of ecommerce order fulfillment and pick pack distribution services for startups.