There is no greater time then in this year of 2014 to jump on the e-commerce business trail. eMarketer recently announced that global B2C ecommerce sales will hit $1.5 Trillion this year and ecommerce sales will increase by 20.1%, a 2.1% rise from 2013.
Internet businesses can be faced with many challenges as the e-commerce arena broadens with more players and competition from traditional brick and mortar retailers, such as Kohl’s, enter the cyber market. Kohl’s have put their new store expansions, of about 60 stores annually, on hold to build its e-commerce platform this year. Many large retailers are closing stores this year and reverting time and money to the internet for sales. Small to midsize business will need an army of support behind them to keep up with the demand required to compete their business with the new large corporate competitors with deep pockets.
As you spread your time thinly with marketing, purchasing and developing your online presence, questions arise as what part of the business you can outsource without losing control, increasing expenses, and risking the integrity, you are working so hard to build. Many online retailers look to outsource the most labor-intensive role, the distribution and fulfillment.
What many business owners or managers do not realize, is that outsourcing your fulfillment and logistics may offer advantages to help take your business to an all-new level. Besides the obvious advantages of using a fulfillment house such as lower shipping costs, same day shipping, and reducing your workload, there are new advantages in collaborating with a fulfillment house. I will be expanding on the old and new reasons to use a fulfillment house in this three part series that focuses on three major advantages of using a fulfillment center.
Reduce and Control Operating Expenses
Business owners who plan on expanding regardless if at a slow or rapid pace should consider outsourcing to a fulfillment company. Fulfillment companies are equipped to handle the volume and typically share shipping discounts based on their total shipping volume with all customers they support. Make sure that when shopping for a fulfillment collaborate that you ask them if they are sharing shipping discounts and ask for shipping quotes to use as a comparison. When choosing the right partner for your business, you can typically save enough on shipping to absorb the majority if not all of the other fulfillment fees by outsourcing. Not only are you going to save money on the shipping but it is going to help your cash flow as well. FedEx and UPS have net 10- day payment terms, with stiff late fees if not paid timely. Most fulfillment houses bill you with better terms then the carriers to avoid the late fees and hassles.
While many small businesses start working out of a garage, basement or extra bedroom, growth will quickly squeeze you out of the residential environment. If you plan to receive products via freight, the residential delivery surcharges alone, which are typically $75.00-$150.00 per delivery, may be reason enough to have a commercial warehouse receive your shipments. When shopping for a fulfillment provider, make sure they share inbound and outbound freight discounts. A good partner will be able to schedule the inbound logistics of your products and bill them to their shipping account saving you hundreds of dollars in getting products to their warehouse for you.
After outgrowing your residential space, enough industrial storage space to accommodate your products can be costly, typically billed by square footage, with long-term leases, high rent and other overhead costs. E-commerce businesses can save all the overhead expenses while saving time and money involved with recruiting, hiring, and staffing the necessary employees to handle the warehouse packing and shipping process. When using a fulfillment partner you will only pay for packing and shipping assistance your orders need and you will not be paying staff for slow periods or extra staff for peak season rushes.
Break into new Markets
Simply having an e-commerce site is no longer enough to compete in the internet business. Regardless if you are a small to mid-size business, you need to look for efficient and easy ways to expand your presence and selling capabilities with various marketplaces.
There are so many online marketplaces available to help sell your products these days, and it may be difficult to manage the selling channels and keep orders streamlined. Whether it is Amazon, eBay, Buy.com/Rakuten Market Place or Sears.com, you want to get your products in front of as many buyers as you possibly can. That is where a fulfillment house can play a key role by offering software assistance and multi-level selling features. Most fulfillment centers offer tools to help you combine your own web store and multi-level marketplaces into one order-processing platform. In most cases, the use of the software is free and can help expand your marketing potential along with your shopping cart platform. The order data from all the avenues are combined into one system for viewing inventory levels, tracking details, shipping costs, order volume, and other important aspects of your business. Make sure when reviewing fulfillment providers that they offer multichannel order management and a dependable data system that you can access your order data through.
Remember that Global Business to Consumer e-commerce sales is going to hit $1.5 Trillion this year; Asia-Pacific will become the world’s largest regional e-commerce market according to eMarketer’s latest forecasts.
Look beyond the US borders and expand your market place to international customers. Fulfillment houses are able to ship your products all over the world, and since they do this on a regular basis, they get deeper shipping discounts and understand the regulations. Completing international paperwork alone can be a logistic nightmare, using a company that is familiar with this will save so much time and money and possibly legal bills if you do not do it correctly.
Value Added Services
While many fulfillment houses have automated machines and processes to speed up order packing and shipping, many are recognizing the need to have a diversified array of customized services to add value. Such services can include gift-wrapping, shrink-wrap, folding/ bagging clothes, and labeling and prepping items for retail packaging. These services are categorized as kitting and assembly and usually have a labor fee associated with them. Since fulfillment warehouses are equipped with machinery to help with these projects and extra labor, they can accomplish high volumes of kitted items quickly to meet your volume demands. Many even serve as a stepping-stone to prep items to meet the demands and requirements of Amazon before forwarding the shipment to Amazon.
Imagine a large marketing firm that has a marathon event-taking place in NY that has over 15,000 participants. The marketing company has several mailings that will be sent to each runner at different stages before race day. Each packet may contain 7-15 items including running gear, water bottles, branded shirts in various sizes and colors, bib numbers and various printed nametags and sponsored gift items. Most marketing companies are not equipped to receive large shipments of freight, print on-demand nor assemble large kits such as this, while coordinating the runner’s name badge with the size and color of shirt he or she prefers, with out taking weeks to do it. To a fulfillment house, this is small potatoes and done quickly for a fraction of the cost. Their client thinks they have completed a feat bigger then running the marathon, but actually a fulfillment house is behind the scenes putting the pieces together.
Regardless of your business, if you have a product that needs shipped, research your options with fulfillment houses to see what makes the most sense for your business. You will find that big savings are in order and you will build a partnership with a company that understands the distribution industry and can open doors in new areas that you may not have thought of or have time to do.
Do your homework when shopping for a fulfillment partner ask for references, sample shipping rates and questions to see how they can work for you and with you.
Your business structure should never have to fit their mold and the uniqueness of your business should never have to be altered.
The growth of your business will depend on the partner you choice, and the assistance of a dependable fulfillment provider will take your business to an all-new level in 2014, make it a great one!
By: Sandy Griffin
About the Author
Sandy Griffin in the owner of WeFulFillIT.com in ToledoOH a fulfillment provider and 3dcart partner. www.wefulfillit.com offers a complete array of fulfillment and value added services for small to mid-size businesses. If you have more questions about what to expect with a fulfillment provider feel free to call Sandy at 419-720-5380, or contact her via e-mail at sales@wefulfillit.com.