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,, and 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