How important is shipping to an online retailer?

Getting orders delivered is the last, but perhaps most important step in the online retail process. As an online seller, a whole lot has to go right just to get to the point of shipping the product. So there is a lot riding on the performance of your shipping company – whether you choose USPS, FedEx, UPS, or DHL.

The customer has to find your site – think of all the effort of building a site that converts, and not to mention a lot of SEO and PPC costs.

You have to have a product the customer wants to buy – and it has to be in inventory.

The right products need to be put in the right box by your fulfillment operation – and we all know that doesn’t always happen

…and the shipping company needs to get it delivered on-time.

The first three steps are easiest to manage, because they are most under your control. But once the package is handed off to the carrier all control is lost. If you are shipping dozens, hundreds, or thousands of shipments then it can be impossible to know about problems until the customer tells you about them. To really control the customer experience and be proactive managing problems that can come up during step 4 – you need a tool to give you real time delivery visibility into what is going on with your deliveries. 

How to find the best order fulfillment vendor for your online store

Perhaps the most important thing to look at when evaluating ecommerce order fulfillment centers is to find one that has experience working with online retailers that sell products like yours.

Here are some reasons why:

- the fulfillment center will know how to package the products for shipping in a way to minimize damages and minimize the amount of packing materials needed

- they'll already have boxes in that size which will help keep costs down because they can buy them in greater volumes

- their shelving and racks will be set up to accommodate the size and shapes of your products which makes their operation more efficient and lowers their cost to store your products

Must Follow Twitter Accounts for Logistics and Supply Chain Professionals

Here is a list of @Twitter handles with information regarding logistics:

@kennethkowal to be added to the list!

Individuals/ Information:

@3plnews

@womenintrucking

@truckerdesiree

@peterpetch

@kennethkowal

@eroutingguide

@innovativelog

@shipstarter

@logisticsmgmt

@logisticsviewpt

@logisticsmanagr

@3plnews

@logisticslist

@logisticsmatter

@scdigest

@supplychainmgt

@logitweets

@aboutlogistics

@transportopics

@ilmagazine

@supplychaind

@cscmp

@supplychainblog

@scm_enterprise2

@logisticsforums

@sclblog

@glm_group

@scmr

@logisticsonline

@knichellogistic

@smc3_inc

@transporttopics

@kinaxis

@beckyjboyd

@uship

Jobs:

@logjobs

@getlogisticjobs

@transjobsnet

@jobsdirectusa

@ryderjobs

@logisticsjobs

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

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.

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.

Good Videos for Online Retailers from IRCE 2011

http://images.internetretailer.com/IR/IRCE-2011_E-Commerce-Tech-Theater-Details.html#agilone?cid=IRT


Check out the last video from UPS for Shipping Information.
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For Online Retailers looking to outsource order fulfillment.