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    1. Otter65 is offline

      Join Date
      Jun 2010
      United States
      United States
      32 Times in 9 Posts

      Essential Facts About Outsourcing Order-Fulfillment: The Doís And Doníts

      The time comes when shipping and packaging orders turn out to be a big challenge for growing e-commerce companies. During such times, outsourcing order fulfillment may be your best option. This enables smaller retailers to concentrate on marketing and product development instead of having to worry about shipping them. When you outsource your order fulfillment, you are actually being given the chance to compete with the big names in the business. You can store a much larger volume of inventory in such warehouses and with a web-based application; it is even possible to log in to view the status of your current inventory and every item’s history.

      Fulfillment houses are typically called warehouses or distribution centers that basically store inventory and ship parcels efficiently once they receive orders to do so. Shipping requests are accepted through web-based applications, whereby the invoices are mailed to the warehouse. As a customer, you can log in to view the status of any order and find your tracking number. The greatest advantage of such fulfillment centers is that you can create a vast warehouse distribution network making it possible for you to store your inventory in distant locations, take different orders from other nations, and then ship the ordered products to buyers from the warehouse that is closest. This will automatically ensure speedier deliveries at far lesser costs and hassles.

      Benefits Of Using A Fulfillment Network:

      1. Shipping has always been outsourced through courier services, but today it is easy for the customer to log onto an outsourced distribution center to check out inventory status.

      2. Outsourcing helps retailers to focus on marketing and sales activities and overall growth plans for the company without having to think about deliveries and shipping hassles. Use this free time to expand your product lines and websites and venture into new avenues.

      3. Maintaining a warehouse can be expensive because of security considerations, software developments needed to carry on the online transactions and labor issues during peak seasons. But outsourcing helps cut down on employee overhead and capital costs.

      4. Shipping costs also are lowered because with a vast distribution network, now you can store your products closer to your buyer. Although this means that you have to freight more inventories, the end costs are low because bulk shipping turns out to be less expensive than parcel shipping costs.

      5. Outsourcing allows you to reach out to foreign markets by giving your buyers local shipping rate advantages, local delivery times and returns. When the buyer cannot examine a product before he pays for it, there are bound to be cases of return or exchanges. These cases are then handled by the fulfillment centers, which review the items and either disposes them if they are damaged or return them back to the inventory if exchanges are needed.

      6. Outsourcing helps a business to grow without having to spend colossal funds on infrastructure or employees.

      Things To Consider When Selecting Warehouses:

      1. Always try something first before you actually start practicing it. You could get a free trial to send some inventory through shipping to see if it works.

      2. Select a warehouse that is closer to your customers than to your business.

      3. Search for warehouses in bigger markets because only a single warehouse is not going to help to cut down on costs or expand your business.

      4. Remember to read through long contracts and identify hidden commitments because you do not want hidden costs.

      5. Your fulfillment provider must have the technological ability to enable you to plug into services like eBay or Amazon; get a free trial beforehand to ensure you enjoy such access before you send out inventory.

      6. Ensure that your distribution center can offer you all shipping options that you are presently offering to your clients and even more.

      7. Choose a fulfillment center depending on your work patterns; it must be able to handle consistent orders on a daily basis and unprecedented orders during some parts of the year. Under no circumstances can the timeline be compromised.

      8. Keep note of turnaround time because every warehouse has its own policies regarding processing. While for some shipping is carried out for only those orders arriving before 1 pm, for some others, shipping is executed on the following day when a 1 pm deadline is missed. When a next-day order is placed when the deadline is skipped, there is a likely to be a delay of two shipping days and customers may get annoyed.

      9. Customer service must be outstanding and you need smart men working for you if you are to succeed. This is the key to retaining buyers and many fulfillment centers even have specialized staff to do this. Typically their work consists of tracking the order right from the moment they are added onto the shopping cart until the client’s doorstep. They must inform the customer about the order received and the expected time of delivery of the order. This department must look into special orders like packaging details, shipping preferences and cases of returns or delayed deliveries.

      10. Take note of order entry methods when selecting a fulfillment service provider. At times, they forward invoices directly to the warehouses, enter every order onto the web systems and email a spreadsheet showing all the orders to be delivered in a single day. Sometimes this manual entering of data into a spreadsheet may be very tedious especially when the numbers of orders are very high. It is advisable to spend more by shipping orders as they come because a same-day delivery may give you the extra edge over your business rivals. Therefore, always select a warehouse that gives you an order entry method suiting your needs and fitting your budget!

      11. Make sure you are able to contact the fulfillment center whenever a need arises‚ÄĒeither for cancelling an order or changing shipping addresses. They should be reachable by phone or via e-mails and the response must be prompt.

      12. If errors occur and the parcel gets delivered to an incorrect address or damaged goods are shipped, there should be remedial measures. Find out what the process for salvaging such errors are offered by the center.

      13. Payment schedules vary with distribution centers. While some charge prices per item minus contracts, others may have sliding scales and contracts. You must be aware of all charges applicable to you when you choose a warehouse.

      14. Before beginning your search, make a checklist of all features you want your warehouse to have. If possible, interview a member of the staff to get feedback to find out whether that warehouse can help your business to flourish.

      To increase your order volume really fast and expand your business by exploring secondary business opportunities, outsourcing may be a good idea. Opportunities for outsourcing are plenty, and there are several small retailers who are capable of handling the whole process. But at the same time, this needs a sufficient degree of expertise to be able to integrate back-end fulfillment with front-end sales systems, to take care of shipping and returns, and to establish a distribution center or a stockroom.

      When you do not have enough expertise or knowledge in this regard, you should ideally recruit a consultant for advice. When you are selling custom products like items carrying a logo, your products will need some extra finishing before they can be shipped. But non-perishable and easily stored ordinary items do not need such extra care and can be conveniently shipped. A competent and professional fulfillment centre can give status report regarding any order to anyone wanting that information.

      Even if you own a warehouse you could still consider outsourcing order fulfillment. The warehouse can get congested, and there may be the need for a bigger space to keep the additional inventory or during the peak season. Also, there may be the demand for storing some types of inventories elsewhere nearer to remote buyers. Outsourcing may be the best option for you when your business is growing rapidly and you have to handle large sales volumes. As a means of cutting down on overhead expenses and costs, this is an intelligent alternative.

      Expanding your market abroad becomes less risky and more lucrative. You can store the items closer to buyers and cut down on shipping expenses while at the same time making a ‚Äúfree shipping offer‚ÄĚ to lure buyers. The fulfillment system can be a great boon to small businesses, but at the same time it should be able to stop a sale in case that product is unavailable, or else customer satisfaction may suffer.

      For those dealing with huge volumes of non-perishables or only those with a small order capacity, fulfillment centers may be the right choice. Bringing the order to the buyer is as important as making the sale happen. During a time of recession, businesses need to intelligently deploy their funds into sales and inventories. Outsourcing gives them the chance to pay for shipping only when the items sell and is very beneficial in this sense for companies facing a downturn.
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    2. Thank you for this post:

      tommygodxx (08 Dec 2010), panosjapan (24 Nov 2013)

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