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.
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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.



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Kenneth Kowal  ecommerce order fulfillment.

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.

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.

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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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.