Order Fulfillment for Online Retailers

kkowal

New member
A significant expense for any online retailer is the order fulfillment process which includes the storing, packaging, and shipping of a customer’s orders. And of course this is beyond the cost of sourcing the merchandise, regardless of what the business sells, plus marketing and other cost of sales expenses. Taken in total, all these costs have to be managed effectively for a business to maintain profit margins. A positive margin is obviously vital to the success for any online retailer. The good news is making the right decisions regarding the storing, packaging, and shipping components could possibly be the easiest to influence on that list with the most substantial impact for the betterment of your business.
The following are three main cost considerations for online retailers when it comes to shipping.
1 – Supplies. These include the packaging material (or dunnage) to fill around and protect the merchandise as well as the carton itself.
2 – Direct Shipping Costs. Your selection of who ships the order (USPS, UPS, Fed Ex?) and at what service level (Ground, Next Day Air, etc.) impact costs tremendously.
3 – Your Time. Is packing boxes, dealing with storage, and printing shipping labels the best use of your time? As a small business owner you should be asking yourself constantly throughout the day – Is what I am doing right now helping to make my business more successful?
Supplies – Basic shipping cartons in a limited range of sizes are free from the USPS, Fed Ex, and UPS. That’s a good option if what you are shipping fits and is not either too big or too small. Shipping a lot of empty space in every box with your merchandise is not efficient and many businesses prefer to exert more control over the customer experience with custom or specialized packaging for shipping orders. The packing material used to protect the merchandise comes in a lot of options – with some even being eco-friendly (such as styrofoam “popcorn” and expandable foam made from soy). The additional expense of customized packing materials and cartons has to be considered.
Direct Shipping Costs – The 3 main options for shipping small packages in the US are the USPS, UPS, and Fed Ex. All three offer a form of Ground (slowest and cheapest service) as well as several expedited (overnight, 2 day, etc.) delivery services. Volume speaks when you ship with UPS and Fed Ex so talk to your rep about volume discounts that will kick in once you hit certain volume thresholds. Watch out for residential delivery charges with UPS and Fed Ex. USPS pricing is generally lower – but service time are also generally slower and there are less shipment tracking options for the order as well. There is a hybrid solution in which a company (could be UPS, or DHL Globalmail, or several others) acts as a “mail integrator”. These companies pick up on their own trucks but then take the packages to the USPS who takes care of the final delivery. This set up works best in a business to consumer model and requires a minimum daily quantity of packages (usually about 250 per day).
Your Time – Again, is printing shipping labels the best use of your time? The excitement and desire to grow a business is what motivates most online business owners. Focus on helping customers fill their shopping carts and not ecommerce order fulfillment.
 
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yfsindia

New member
Re: Order Fulfillment for Online Retailers

Nice thread that its really very important that proper order fulfillment not only for online retailers but also for eCommerce, vendors, Manufacturers and brands. Its possible with the top order fulfillment services provider company.
 

Corzhens

Member
Re: Order Fulfillment for Online Retailers

A great part of my experience in online shopping is with Lazada. That's for personal shopping though but it is a good measure since I can experience the pace of the transaction. That company has a good delivery system that they fulfill their schedule even ahead of time. And one time that I had a product returned, it was promptly acknowledged and the replacement was delivered in a week or two.
 

sbatz1972

New member
Re: Order Fulfillment for Online Retailers

This was an excellent post. I found it quite useful to read. I am about to get the money up to attempt an online retail store again. I am doing a little bit of homework as well as trying to learn from my previous mistakes. I am glad I have run across this thread. I would like to thank you for the assistance.
 

Oldwriter

New member
Re: Order Fulfillment for Online Retailers

Volume speaks when you ship with UPS and Fed Ex so talk to your rep about volume discounts that will kick in once you hit certain volume thresholds.
Certainly, any volume discount can make a difference. It's like tax deductions, it is money that is there to claim. Very good point of approaching a rep and ask for a volume discount. There's no difference between money saved and money earned: both are right there in your pocket.

http://www.bankrate.com/finance/taxes/overlooked-tax-breaks-1.aspx

There is a hybrid solution in which a company (could be UPS, or DHL Globalmail, or several others) acts as a “mail integrator”. These companies pick up on their own trucks but then take the packages to the USPS who takes care of the final delivery. This set up works best in a business to consumer model and requires a minimum daily quantity of packages (usually about 250 per day).
Good information. I think this can make a sweet midpoint when considering speed of delivery, saving in transportation costs at the final tram of delivery, and it can even add in terms of the convenience of receiving the package through the traditional postal system since it's all part of the shopping experience from your customer's set of eyes.

Thank you for mentioning it.
 

TheFunneler

New member
Re: Order Fulfillment for Online Retailers

This is exactly why drop shipping became so popular. There are so many internet millionaires entirely from drop shipping specifically because the biggest barrier to getting products sold is often order fulfillment - the first book I ever read on IM was focused on achieving drop shipping results. Making 80% on a sale is always so powerful, but running companies and being involved with business gets in most people's way.
 
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