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Posts Tagged ‘fulfillment center’

Pick, Pack and Ship Services Help Publishers Reduce Fulfillment Costs

Due to the nature of the publishing industry, publishers have multiple layers of costs associated with fulfillment (the process of picking, packing and shipping books). In its simplest form, fulfillment is the act of getting books out the warehouse door and delivered to customers in a fast, efficient and economical manner. Any additional costs incurred in fulfillment means a reduced bottom line profit for the publishing house.

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Discounts on Domestic Residential Deliveries & High Quality Service?

As every fulfillment center knows, a residential address is one of the most difficult places to get a parcel delivered cost effectively. Recently, Ware-Pak has gained a number of accounts with heavy shipping volumes going directly to consumers. In order to respond to their needs, we have been researching this issue and we believe we have a solution.

The normal shipping methods to residential addresses are: USPS Media Mail (for bound printed matter only), Priority Mail, and UPS. Each of these methods have certain restrictions.

USPS Media Mail is the most cost effective. However, it has limitations.

  • It is restricted to bound printed matter only.
  • It does not have tracking capabilities.
  • There is slow transit time – 7 to 12 business days.

Priority Mail is significantly more expensive than media mail. On the other hand, it does offer limited tracking capabilities. Transit time to major metropolitan areas is 2 to 3 days and to outlying areas it is 3 to 5 business days.

UPS is considered to be the highest quality service, but costs are 10% to 15% more than priority mail. It does offer the best tracking and transit times of any of the three options. However, the normal UPS discount does not apply to residential deliveries. UPS only offers a 1% to 2% discount on this service, making it the most expensive option.

In our search we found a new method of shipping small parcels at a cost effective rate, with improved transit times:

Mail Innovations, a division of UPS, is a small parcel service that marries the best of UPS and the Post Office. Mail Innovations can offer UPS speed and tracking capabilities at rates that rival the USPS. Parcels are picked up by UPS, sorted and transported to the closest USPS office for final delivery by the postal system. The total transit time, 4 to 8 days, is close to half the time of media mail. The cost, however, is just a few cents more than USPS Media Mail.

The shippers who will benefit most are those who ship UPS Ground residential. They can save up to 60% off the UPS rate without having to worry about residential chargebacks and other fees. Small parcels weighing less than one pound can ship for as little as $1.17, which makes Mail Innovations an effective method for residential deliveries.

As of March 8th, this service is now being offered to all Ware-Pak clients.

When it comes to fulfillment… control inventory to control costs!

Regardless of a fulfillment center’s methodology, you are paying for two things – space and activity. Each 3 PL or order fulfillment operation has its own methodology and payment schedule. Some fulfillment warehouses charge fees to store your books and fees to pick-and-pack and ship the books from the warehouse. Others will charge based upon percentage of sales. One of the best ways to control cost is by controlling your inventory. Whatever the fee structure, you must clearly understand the rates, terms and conditions of the contract.

Looking at pricing proposals from different warehousing and fulfillment vendors can be difficult because each one uses a different methodology for computing their rates. For this reason, reviewing the pricing proposals of warehousing and fulfillment companies should be done with great care and diligence. Here are tips to help avoid some of the challenges of warehousing and fulfillment pricing:

  • Make sure the warehousing and fulfillment vendor has listed ALL costs
  • Beware of monthly minimum charges
  • Determine all monthly fixed recurring charges
  • Ask if the vendor makes margin on freight charges and UPS discounts
  • Double check move-out charges – some warehouse operations add huge penalties for move-out fees
  • Ask for referrals from current customers to ensure that costs don’t change after signup
  • Check the vendor’s BBB rating
  • Make sure that everything is documented in a contract

Want to know additional important considerations when choosing an order fulfillment service? They are now available in a Whitepaper on our website. If you have additional questions, or are interested in receiving this white paper by email, please feel free to contact me directly. I can be reached at (708) 587-4116 or kshay@ware-pak.com

Open Communication & Financial Stability are Essential in a Fulfillment Partner

When choosing a third party fulfillment center, two additional and important issues to consider are the quality of communication and the financial stability of the warehouse.

On the surface, all order fulfillment services may look alike and offer similar services. However, when you take a closer look at their individual methods of delivering those services, there can be large differences. As you investigate the process of outsourcing to an order fulfillment service, you need to really think about what you want and what you need in a business partner to help grow your business.

I’ve discussed several things that I feel are crucial to choosing the right operation. Today, I’d like to discuss two more – “Communication” and “Financial Stability”.

Communication

Communication is always mission critical. There will always be times that require changes in the customer’s address, cancellation of an order or checking specific stock. The fulfillment center that you select must be available by phone, email and fax. You should never have to wait more than an hour or two for any request.

Financial Stability

Your fulfillment center must be financially sound – especially during the current economic environment. You will want to question how much debt the fulfillment center is carrying, if they look and act like a profitable company, their Dunn & Bradstreet rating and whether or not they are willing to give bank references.

There are several other important considerations when choosing an order fulfillment service. They are now available in a Whitepaper on our website. If you have additional questions, or are interested in receiving this white paper by email, please feel free to contact me directly. I can be reached at (708) 587-4116 or kshay@ware-pak.com

Choosing an Order Fulfillment Service

As you investigate the process of outsourcing to an order fulfillment service, you should begin by thinking about what you really need and want in a business partner to help grow your business. After all, the main goal is to increase sales and grow the organization both organically and externally.

On the surface, all order fulfillment services may look alike and offer similar services. However, when you take a closer look at their individual methods of delivering those services, you will find large differences. Remember that not all warehouses are created equal and the goal is to choose one that is appropriate for you and your business.

It is essential to develop a list of criteria that will enhance your companies operation. The ultimate question is what is important to your clients. Over the next few weeks, I will be discussing these important items – beginning with location.

Remember – these are only suggestions and it is crucial that you spend time developing a list of your specific needs.

1. Location

Location is one of the single most important factors to consider. While order fulfillment warehouses can be found in every state, it is essential to select a fulfillment warehouse that is close to your clients, rather than your place of business. By doing this, you will accomplish three critical actions:

  • Shipping costs will be lower
  • Transit time will be reduced
  • You will operate in a more eco-friendly manner

Did you know that shipping costs are almost equal to the fulfillment warehouse fees? If you are strictly a West coast publisher, then your warehouse needs to be located on the West coast. If your scope is national, then a Midwest location makes the most sense. With a Midwest location the savings are substantial. For example, when shipping nationally from the Midwest, you can save as much as 7% over an East coast or West coast operation.

In today’s world, when you’re competing with companies such as Amazon, clients expect quick delivery of their orders (especially internet orders). Your fulfillment center should be located in an area that can provide 1 to 3 business day transit times to the majority of your recipients.

When your warehouse operation is located centrally to your clients, you can operate in a more environmental friendly manner. Not only will you be saving money, you will also be reducing the amount of greenhouse gasses required to deliver your product to the customer.

Over the next few weeks I will be discussing other important items to consider when choosing an order fulfillment service, such as size and volume, percentage of error, technology and more. These will also be available in a Whitepaper on our website later this week. If you have additional questions, or are interested in receiving this white paper by email, please feel free to contact me directly. I can be reached at (708) 587-4116 or kshay@ware-pak.com


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