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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.

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

Ship Internationally Without Breaking the Bank

As a third party logistics provider (3 PL), and order fulfillment warehouse shipping books globally, Ware-Pak is often asked how to save money on international shipping. When dealing with international orders, the price for transportation can often be higher than the cost of the book. It can be difficult for the publisher to justify to their customers why they should be paying more for shipping charges than for the book itself.

The most economical method we have found for international shipments is the United States Postal Service (USPS). Over the last several years, the USPS has dramatically improved service levels and tracking ability, while remaining very price competitive. When you consider the fact that the USPS does not add surcharges, they provide great value in terms of price. Many other carriers use surcharges to offset their costs. These surcharges are never discounted and can be very difficult to predict.

USPS International shipping services fall into four different categories:

  1. Global Express Guaranteed
  2. Express Mail International
  3. Priority Mail International
  4. First-Class Mail International

Global Express is the USPS’s fastest (and most expensive) service, with 1 to 3 day delivery guaranteed. The final delivery is completed by FedEx Express. Rates begin at $31.95 with a maximum weight of 70 pounds. The biggest drawback with this service is that the package must be hand delivered to the Post Office, there is no pickup service available.

Express Mail is fast – with a delivery time to select countries of 3 to 5 business days. For this service, rates begin at $22.95 and like Global Express, there is a maximum weight of 70 pounds. Express Mail includes flat rate envelope, which can be beneficial if you have a large number of documents to send.

Priority Mail International Parcels is a service publishers can take advantage of to save a substantial amount on their international shipments. These rates, beginning at $19.00, are unbeatable by other carriers, and delivery service is 6 to 10 business days. With this service, flat rate boxes offer the potential for bargains in two ways. First, the Post Office gives you the outer shipper and second, you can put as much stuff in the carton as it will hold. There are two flat rate boxes – the medium box, with a rate of $25.95, and the large box, with a rate of $32.95.

First Class Mail is the most economical shipping method for a single title or orders weighing less than 4 pounds. For this service, registered mail is available and rates are very competitive. The main downside to this service is the transit time, which varies by destination.

Maybe it’s time for your publishing house to re-evaluate its list of carriers and add USPS to that list.

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