Want industry advice from “experts” on shipping and fulfillment?

Posted on May 17, 2011 by FillShip

Two websites you may want to check out if you have questions on shipping and fulfillment are Quora and Focus. Both give you the chance to post questions and get answers from industry “experts” that will hopefully be helpful. Here is a link to an example of a question from Quora.

http://www.quora.com/Whats-the-cheapest-shipping-method-for-businesses-shipping-high-volumes-of-small-boxes-within-the-U-S-where-the-box-weighs-more-than-13-ounces?__snids__=18166978#ans388442

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What are the costs components of offsite pallet storage?

Posted on May 17, 2011 by FillShip

If you are a manufacturer, or any business that has a need to warehouse and storage products then you may have considered outsourcing as an alternative to keeping the product in your own building. So, what are the costs that go into using a 3rd party warehouse for this service that you should be aware of.

Storage Costs (of course), which are typically charged by the month and on a per pallet or square foot basis.

In/ Out Charges are the handling charges for physically unloading the product off the trucks and putting them away in the warehouse, and then loading them on trucks again when they leave the facility.

Paperwork Fees are the cost for preparing shipping paperwork like the Bill of Lading Form.

Pallet Preparation Fees can include the cost of adding shrink wrap, re-palletizing boxes, or other labor costs involved in getting pallets ready to ship out of the warehouse.

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Ken Kowal is Director of New Business Development for Landis Logistics and FillShip.com, serving online retailers and manufacturers with order fulfillment and warehousing services in the PA, NJ, and NY area.

 

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When does it make sense to add additional warehouse locations, or do drop shipping?

Posted on May 17, 2011 by FillShip

One decision every growing manufacturer and distributor probably needs to make at some point is deciding when it makes sense to add additional warehouse space in other locations.

For instance, we often talk to food manufacturers and co-packers located in California or other places on the west coast interested in setting up an east coast order fulfillment warehouse that will put a distribution point closer to the large populations centers in the east. The reason is there are economies to be gained with transportation costs, as well as improved time to market by storing and shipping from a point closer to your customers.

As an example, if a food manufacturer in CA is shipping small partial truckload shipments (less than truckload, or LTL) to many customers in the Philadelphia, PA area it is typically more expensive than shipping full truckloads (TL) to a distribution point closer to the end customer (say in eastern Pennsylvania) and delivered from there.

When a business’s volume of small, LTL shipments to a certain geographic area become enough to fill a whole truckload is really the point at which the business should consider looking at options for drop shipping. At this level of activity, many trucking companies or logistics providers can offer solutions to create efficiencies with turning LTL into TL shipments. When the volume gets to the point of many trucks to the same region, then it is time to look at options for finding additional warehouse space (either owned or 3rd party) in the areas where your customers are.

The math is pretty straightforward: add up the cost of the individual LTL shipment and compare that to the cost of shipping full truckloads to a central location, and then shipping out to their final destinations. The break even point at which using a regional, 3rd party warehouse may come sooner than a business realizes is possible.

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Do you ship a large amount of a small number of products?

Posted on May 17, 2011 by FillShip

A great way to drive efficiencies within an order fulfillment operation is to, of course, be more efficient with the packing process.

One great opportunity to do that is if you have a certain number of unique sku’s that typically ship alone, and at a high volume. Instead of waiting for each customer order to come in for a product that will likely be shipping by itself, utilize some down time to pre-package the products in its shipping container so that when the customer orders do come in it is simply a matter of printing and applying the shipping label to the package.

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State Sales Tax and Online Retailers

Posted on May 17, 2011 by FillShip

Here is a good summary of the current situation, by state, with the internet retailer/ state tax issue.

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When an online retailer outsources order fulfillment, can a business supply its own boxes?

Posted on May 17, 2011 by FillShip

Some of the questions we often receive when talking to prospective clients are in regards to the shipping cartons used to package customer orders. As in, does the online retailer supply their own boxes or do we as the 3rd party fulfillment provide the cartons.

The answer is actually that it can work either way. Most order fulfillment centers will stock a variety of sizes to accommodate a range of product sizes. Because these specific sizes are being bought in bulk for several customers by the fulfillment warehouse, they are typically available to the clients at a lower cost than if the client were to purchase the cartons themselves. If a client requires a “non-standard” size that the order fulfillment center does not stock, they’ll  often buy them on behalf of the client and mark them up slightly to cover administrative/ carrying costs (10-20% is not unusual).

If a  client wants to supply their own cartons, or use free cartons, provided by a carrier (like USPS, FedEx, UPS) then the fulfillment center may charge an assembly fee ($.20 +/- per carton) to cover labor and dunnage costs to build the box and prepare it for shipping.

If you are shipping a food product then packaging become a bit more complicated and insulted cartons will easily run 3 to 4 times the cost of plain corrugate.

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Article: 7 Reasons to Consider Flat Rate Shipping

Posted on May 17, 2011 by FillShip

Here is a great, thorough article I found on the Practical Ecommerce website.

http://www.practicalecommerce.com/articles/2734-7-Reasons-to-Consider-USPS-Flat-Rate-Shipping-

This is a question that comes up a lot when we are talking to online retailers. I would add to the points in the article that regular priority mail can also be less expensive than the flat rate option so don’t just assume flat rate is always the better USPS Priority option.

It should also be noted that tracking visibility is a concern for some retailers as the USPS does not provide as detailed tracking capabilities as FedEx and UPS offer.

Many 3rd party fulfillment operations will offers a greater discount off of UPS/ FedEx shipping rates so if you are working with a 3rd party, the point at which the USPS is a more expensive option often happens a bit quicker than what is illustrated in the analysis.

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How Much Should Online Retailers Charge for Shipping?

Posted on May 17, 2011 by FillShip

One thing online retailers find challenging when operating an online store is deciding how, and how much to charge for shipping. Obviously covering the cost of shipping and handling is a must, but the latest trend for many retailers is to offer reduced or free shipping. It has gotten to the point that many consumers are starting to expect free shipping, even at the expense of paying more for the product (the cost has to go somewhere!). Being smart and efficient in how a company pays for the costs of order fulfillment and shipping is paramount as these costs often make up the largest % of a company’s operating budget.

I recently came across this article that nicely summarize the shipping costs and policies of many of the top retailers out there. It’s a good read if you are looking to create your own shipping rates for the products you sell.

http://www.savings.com/blog/post/Amazon-to-Zappos-Shipping-Rates-and-Free-Shipping-for-over-50-Online-Retailers.html

Click for an article Important Questions to Ask a Potential Order Fulfillment Company

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How Are Returns Handled at an Order Fulfillment Warehouse?

Posted on May 17, 2011 by FillShip
A frequent question we receive when talking to prospective order fulfillment online retail clients is in regards to the returns process. How does it work - Can you handle returns - Can you inspect the product - How do you report the returns – Etc?
In most cases, the answer is that a typical fulfillment service can handle returns however you, as a customer need them to. For our clients, the returns process most often will include the following steps:
- the returned product is delivered back to our fulfillment warehouse
- it is checked in and referenced by its original sales order
- the order and product information is recorded and emailed back to the online retailer
- based on the customer’s direction, the product is inspected and returned to inventory to be sent out again
- or, for some clients all returns are set aside and the client periodically comes on site to inspect the items
- or, some clients have all items (most often food fulfillment products) disposed of, or returned to the manufacturer
The returns process of course starts with the communication to the customer on how to go about returning the products they need to. This is often done with step by step instructions that may be listed on the packing list, or the website. A returns label may accompany the orders as well. FedEx and UPS offer simply ways to have a pre-paid shipping label sent with the order to facilitate the return.
When it comes to inspecting the returns, setting up specific guidelines regarding what to look for is key. Many products are commonly returned into inventory but many require a much closer examination. Setting clear expectations and procedures at the outset is very important to make sure the process runs smoothly.
The cost for managing returns is really dictated by the requirements so there is no “list” price for returns in most cases. Once the fulfillment center has a track record of the types of returns and the amount of work that goes in to inspecting the returns they can often put together a “per return” cost. Prior to that, most fulfillment centers will charge based on their warehouse hourly rate.

 

Ken Kowal is the Director of New Business Development at Landis Logistics, a pick and pack order fulfillment warehouse located in eastern PA, and serving clients in NY, NJ, and nationally.

 

Posted in Fulfillment, Logistics, Warehousing | 1 Comment

UPS Adds New Ground Residential Service

Posted on May 17, 2011 by FillShip

Here is an article on a new UPS delivery service:

http://www.logisticsmgmt.com/article/ups_rolls_out_new_economy_ground_service_for_delivery_to_residential_locati/

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