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Posts Tagged ‘order fulfillment’

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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When Selecting an Order Fulfillment Warehouse, Location Matters!

When deciding which order fulfillment warehouse is the best fit, choosing a partner in the wrong location may mean an additional 4% in costs to you. Here’s how….

As the saying goes, it’s location, location, location that really counts. Your order fulfillment facility should be located near the hub (or center) of your client base. If you are selling primarily on the West Coast, then the facility you partner with should also be on the West Coast. And if you’re a regional publisher with customers in the Southeast, then you want to locate a facility in the Southeast. When you are national in scope, then finding a fulfillment partner located in the Midwest should be your focus.

Choosing the right location gives you three (3) major advantages:

  1. Saving money on transportation costs
  2. Increasing customer satisfaction with fast product delivery
  3. Reducing your carbon foot print

1. Saving Money On Transportation Costs

Have you noticed the higher prices at the gas pump lately? A gallon of regular is almost $5.00 per in Chicago it’s predicted to reach $6.00 before the end of summer! Every time I fill up, I can feel the pinch from the higher gas prices. If your order fulfillment facility is not in the right location, you are paying for extra fuel to have your merchandise delivered. These extra costs are being passed along to you by the carriers in the form of increased based rates and increased fuel surcharges.

The average publisher spends as much on transportation as they do on their warehousing services. If your business has a national reach and you are working with an order fulfillment facility that is located anywhere but the Midwest, you are paying almost 4% more for their services because of the transportation penalty. It costs between 5% and 7% more to ship to the U.S. population from the East Coast or West Coast than it does from the Midwest. And this will only increase as fuel prices continue to rise.

2. Less Transit Time Means Happier Customers

Another major benefit in choosing a fulfillment facility in the right location for your customer base is the amount of transit time merchandise to arrive at the customer. Today’s consumers want instant gratification. The days of people placing orders and waiting weeks for the product to arrive are over. Customers know what they want and they want it yesterday.

From a Midwest location, you can reach 58% of the U.S. population in 2 days and 99% within 4 days. However, when shipping from Los Angles you can only reach 21% of the U.S. population in 2 days and only 47% within 4 days. From the East Coast product will reach 48% of the U.S. population within 2 days and 81% in 4 days. A Midwest location provides the least amount of transit time and therefore, will increase your customers overall satisfaction.

3.    Reducing Carbon Footprint

Partnering with an order fulfillment warehouse that is centrally located means a reduced carbon footprint for your company. Shipping from a warehouse that is centrally located to your customers means a reduction in the miles that products will travel to reach them, and this reduces green house gases emitted. From another perspective, higher shipping costs and longer transit times are symptoms that you are burning more fossil fuels in delivering your product.

Selecting a fulfillment warehouse to partner with in the right location will make you more efficient and you will reap the benefits of saving money, increasing customer satisfaction, and reducing green house gases.

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

Additional factors to consider when choosing an order fulfillment service…

In today’s entry I’m going to discuss two additional factors that I believe should be considered when a publisher, large or small, is choosing an order fulfillment service. These factors are “Turn Around Time” and “Technology”.

Turn Around Time

Every warehouse has its own procedures for handling order processing and the amount of time that is acceptable. You need to be aware of what time files are accepted and when you can expect orders to be shipped. You have to take these deadline times into account and see if they fit your client’s needs in terms of shipping times.

A standard in the industry is 3 business days for shipping. You need to determine if this is a timeframe that your client can live with. There are fulfillment warehouses that ship within 2 business days and some are offering same day shipping. You must choose which level of service will help you grow your business.

Technology

When it comes to the various types of technology within an order fulfillment facility, you must explore your needs. In any fulfillment warehouse, technology takes on many forms. These may include:

  • Integrated business management systems for publishers
  • Warehouse management systems
  • RF technology
  • Automated picking systems
  • Mailing systems
  • EDI/ASN
  • Secured method for transferring data files
  • Customizable order interface
  • Push technology for business alerts
  • Customizable email alerts
  • Reports and Web based data reporting

There are still more important considerations when choosing an order fulfillment service that will be covered here. However, if you can’t wait to read them here, 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


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