Wednesday, May 25, 2011

Good Articles on Returns at an Order Fulfillment Warehouse

Also, here is a link to another post that talks about how a 3rd party order fulfillment operation handles returns.


What to talk about order fulfillment for your company? Click Here!

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.

Or, feel free to contact me at to talk about order fulfillment and logistics. Visit

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 - 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, 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: