Fulfillment Services News and Information

Quick – how many hands in your retail fulfillment operation touch an order from the time your customer clicks on the “Buy” button until it lands on his doorstep? In today’s complex retail world, “half a dozen or so” is the right answer. In our experience as an outsourced fulfillment provider for almost 3 decades, our customer’s order goes through a strict and stringent process that involves multiple teams working with the warehouse management system, the pick and pack process, and the freight carrier before it heads out. Once the order arrives to its intended recipient, our contact center kicks in to handle customer issues and use the opportunity to up-sell and cross-sell.

So now that you know how complicated the fulfillment process can be, we return to the question I asked earlier. How many hands in your fulfillment services department touch your products? Even more importantly, should you outsource it? While every online retailer has different capabilities and focus areas, the bottom line is the same for all of them: Ecommerce retailers need to operate at peak operational efficiency. We have said it before, and we say it again – all your hard work to build your business can be for naught if your order does not arrive at your customer’s doorstep correctly and on time. Apart from being a complex process, order fulfillment requires a large amount of flexibility – especially given the seasonality of ecommerce retail. Labor and inventory management, system maintenance, and cash flow are just some of the many factors you need to plan for at all times. If you’re a multichannel retailer, you also have to operate seamlessly via multiple channels without missing a beat.  Do you have the in-house expertise to handle the highs and the lows and scale accordingly? If not, then it may be time to consider trusting a professional with your fulfillment needs.

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The world’s largest online retailers, Amazon and eBay, are steadily putting together the building blocks of their operations in India, potentially making this country a battleground for their contrasting business models.

While worldwide market leader Amazon, with 2011 sales of $48 billion, is building out an expansive logistics and supply chain that will support its operations once launched, eBay is signing on new merchants for its site, in line with its strategy of being a facilitator of transactions.

While it awaits a policy change that will allow foreign investment in multi-brand retail, Amazon has opened a front through price comparison site Junglee.com, which it acquired more than a decade ago. It has already secured permissions to set up large warehouses across the country for stocking thirdparty merchandise, as well as to start a logistics arm to ship products, more or less like its US model.

eBay, whose revenues last year were $11.6 billion, is aiming to score with its marketplace model, where it does not stock products but provides an online platform for third-party merchants to sell to registered users. eBay, which entered India in 2004, has 23,000 sellers and about 3 million registered users in the country. “Investing in fulfillment centres and holding inventory negatively impact gross margins, prevent fast scaling and pose significant challenges …

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Consumer-fashion is hands down one of the most difficult industries that I have ever worked in. It’s a bare knuckle, knock ‘em down, drag ‘em out brawl that challenges every skill and ounce of your being, which makes it the one of the most interesting and addicting industries.  Being a finance guy, the world makes sense to me through the numbers and the insanely ambiguous and obfuscated operating environment surrounding the horrendously complex brand development, diffusion, and consumption processes in consumer fashion.

The scope of the business and the market’s complexity requires two specialized partners, brands and retailers, to effectively and profitably deliver product / market fit.  Brands focus on designing, producing, and delivering great products to the marketplace that engage their target demographic while retailers focus on optimizing their brand assortment, inventory quantities, and demand generation that works best for each retail location.

GAP’s terrible financial performance throughout most of the aughts is probably the best example of the risks and challenges when a vertically integrated retailer loses one of these two divisions (in GAP’s case it was that they lost their product-mojo and are only just starting to get it back).  At a basic level, specialized focus of these two partners has governed the strategy for consumer-fashion & retail for the better part of the last 20 years – the core reasons that consumer-fashion has been successful with the business model:

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How many brand managers do you have? Now, how about channel managers? I’m willing to bet that for most of you retailers out there, the answer might be one – if you even have one at all. As the number of direct-to-consumer channels increases by the hour, it becomes increasingly difficult for a retailer to preserve and enhance brand identity across the many ways that consumers find them.

Why should the brand matter? To customers, your “brand” goes far beyond your logo, your color scheme, or your site – it represents the company as a whole, its ideology and values, and most importantly, the way you attract new customers and retain the ones you already have. So while you’re busy synchronizing your order fulfillment and customer service processes as I suggested in a previous blog,  you can also put a few of these ideas into practice to ensure that your brand comes through crystal clear in every channel you use.

• Your brand should guide your marketing strategy: As you plan your marketing activities for your various channels, let your brand’s strategy be your guide. If your brand stands for cool and trendy, are your marketing campaigns saying staid and stodgy?  Are you busy writing up content-heavy case studies when your customers prefer to interact via social media? It’s easy to get caught up in what you “should” do from a marketing perspective – make sure that you’re walking the walk AND talking the talk when it comes to what your brand means.

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If you are an e-commerce business or retailer, it’s a no-brainer to be doing videos of the products you want consumers to buy.  Many businesses today recognize that product videos are a great way to get online visibility in search engines and social media, as well as engage with consumers on a level that static photos and text can’t.

Product videos are also big with the younger generation, the GenY’s or Millenials. The folks over at EXPOTV.com shared with me their research confirming that the 16-34 age group are even more interested in product video than other age groups.

However the big challenge facing a lot of e-commerce businesses is, how do I produce quality web video? Since the foundation for a compelling product video is engaging the audience, your videos firstly need to be of an acceptable technical quality. How many times have you been exposed to a video of a product where the audio was lousy, or the lighting was terrible, or it looked grainy? Without giving strong consideration to your technical quality and pre-production planning, you could end up wasting an entire shoot and making your business look bad at the same time.

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Whatever venture you are going to kick-off, you must surely take the help of efficient fulfillment service. It not only works best for organizations that run land-based businesses but proves equally effective for all online businesses too. In order to tackle both land-based and online businesses, an in-house management of product fulfillment services is a must. Product fulfillment helps in cutting down cost figures and accumulating the initial capital. However, if you are the business owner, it’s your sole responsibility to ensure whether the entire processing is done with perfection. If it’s entirely new to you, its better you contact an online fulfillment professional and know everything about the procedure.

For every entrepreneur, it’s essential to ensure whether you are able to maximize your profit and at the same time minimize your cost. Therefore, product fulfillment is mandatory for every business organization. However, it can also be done without hiring any third party. In fact, if it could be done personally, the company cost can be reduced to a good extent. However, is has been often found that business owners cannot handle pressures and instead neglect the basic strategies thereby affecting business standards and ending up in losses. Therefore, business owners can always contact an agency who might provide you guidelines on how to sharpen the product fulfillment services of a company.

Well, there is no harm in contacting a third party for seeking product fulfillment services. It’s certainly a big step for every business undertaking and therefore one should follow specific measures. Various websites bring information and contact details of product fulfillment dealers. So, you can get in touch with one of them through their given email ids. Don’t fix any deal via online but try to talk face to face and clear out their terms and conditions. Some product fulfillment dealers fix rates according to your business status and popularity. Therefore, you must try to get your business standards higher to bag cheap deals from them.

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While one-size-fits-all works well for many of our most popular consumer items, in the business world uniqueness is a highly sought after differentiator that often provides an important competitive advantage for the company. This is especially true in warehousing and distribution operations where the basic functions of receiving, storage, picking, and shipping are essential and common practices to all.

In this environment, how individual DCs approach such things as Returns Processing, Value Added Services, and Material Handling Automation can make a significant competitive difference while adding to the sophistication and complexity of their operations.

In addition to the range of services being offered the physical size of the DC along with the daily range and volume of products being picked and shipped matters when it comes to developing and successfully managing a robust order fulfillment operation.

The following attempts to explain how small, mid-size, and large DCs deploy different order fulfillment strategies while striving for a competitive advantage.

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In October, Amazon.com moved to a split-shipment policy for some merchants who use its Fulfillment by Amazon (FBA) service, and on Monday, additional sellers received notice that they too would be impacted by the policy, which will increase their cost of sending inventory to Amazon’s fulfillment centers.

Amazon began requiring some sellers to split inventory between multiple warehouses last fall. Sellers impacted by the policy see increased costs, since they have to send more than one shipment of goods, and are more likely to end up shipping to warehouses farther away from their location.

Amazon acknowledged that the change would affect sellers costs, but said, “This change allows us to continue to offer the benefits of FBA at low rates, and we believe both you and your customers can benefit from product placement in multiple regions.” However, that part of October’s message was missing from the letter Amazon FBA customers received this week.

One seller said he believes Amazon wants to discourage merchants from sending large quantities of the same product.

Several sellers forwarded the email they received from Amazon FBA, which says the new policy will go into effect for them next month.

Dear FBA Seller,
Effective February 25, 2012, inventory may be assigned to multiple fulfillment centers at the ASIN level during the shipment creation process to help better position it to reach customers at the delivery speeds they choose. We anticipate that both you and customers who purchase your products will benefit from this change, including for the following reasons.

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he embattled U.S. Postal Service (USPS) faces a host of new challenges, several of which threaten to directly impact marketers. However, many who rely on direct mail say that in spite of the tumult, they’ll wait and see how things pan out before altering marketing strategy.

Prices on shipping services are expected to increase 4.6% — an average of 3.1% for Priority Mail, 3.3% for Express Mail and 3.7% for First-Class Package Service — starting Jan. 22, pending approval by the Postal Regulatory Commission. David Partenheimer, a spokesperson for the USPS, said that the service will still be a competitive choice for business shippers.

At the same time it’s raising rates, the U.S. Postal Service is considering cutting services, although the agency agreed Dec. 13 to a five-month moratorium on post office and facility closures that will end May 15, 2012. USPS Postmaster General Patrick Donohoe told the National Press Club in December that the agency needs to achieve $20 billion in savings by 2015, which may require closing as many as 3,500 low-performing post offices and ending Saturday delivery.

The U.S. Postal Service also hired the investment firm Evercore Partners to assist it in the restructuring that it hopes will staunch its losses and achieve the prescribed $20 billion in savings.

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E-commerce platform and online marketing provider Shopatron Inc. says same-store online sales for its clients increased 25.5% in November and 4.5% during the first 25 days of December compared with the same periods last year. Total holiday sales volume also increased 16.5% from a year ago.

The company says the 25.5% increase in November and the smaller increase in December indicates that e-retailers have become more aggressive with marketing and discounts early in the season and then offer fewer promotions as Christmas nears, a strategy that can protect margins. “The holiday season felt more healthy,” says Mark Grondin, senior vice president of marketing for Shopatron. “We did not see the kind of intense discounting that we saw last year. As a result, we believe deeper analysis will show higher profits this season.”

Shopatron provides e-commerce sales platforms and fulfillment services primarily to consumer goods manufacturers that wish to sell directly to consumers. Clients include Hillerich & Bradsby Co., the parent company to bat-maker Louisville Slugger, which sells via Slugger.com, and plush doll maker Gund.

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