In the past decade the internet has allowed the marketplace to flourish…virtually! E-commerce companies are launching all over the web. The sound of the bell when a customer walks in has been replaced with the click of a mouse thousands of miles away. With millions of patrons in cyber space, shipping has become a rather large component to any successful e-commerce venture.
Some companies have their own warehouse and staff while others ship from their very own home. However, many companies have been increasingly outsourcing their order fulfillment in order to cut costs, alleviate the hassles and to allow more time to focus on marketing, management and growth.
A high-quality fulfillment company organizes, manages, warehouses and ships your inventory in a cost effective and reliable manner. But in order to successfully partner with a company and actually cut your shipping costs there are several factors to consider.
The proximity of the fulfillment house to your customers is more significant than your proximity. For instance, if your client base is predominantly in the Northeast then hiring a fulfillment company in California is not the best idea.
Statistics show that 70% of the US population is located in the Northeast, Southeast and Midwest while California maintains another 16%. If your orders are distributed evenly throughout the country then fulfillment companies in New York, Pennsylvania and Ohio would be your best options in order to minimize shipping costs.
Space is another issue that should be considered. You should choose a company that has a big enough warehouse to accommodate your needs and will accommodate your growth. Some companies yearn to see stock grow while others are content with a maximum and may not be prepared for an expanding business.
But you also don’t want to choose a company too large. Some larger companies have a minimum order amount and may penalize you if your numbers are too low. Even worse, low volume could lead you to get lost in the shuffle. That is why having a dedicated account manager is so important. Account managers are designated individuals that have the authority to act on your requests. Larger companies may have a call center or an account “team” to handle your requests which can lead to lengthy waits for your requests and confusion.
Your fulfillment company should be able to give you answers right away and help you stay completely informed. They should be able to provide you with your entire inventory and order information over the web.
Similar to FedEx guaranteed overnight delivery; a high-quality fulfillment company should guarantee order accuracy and shipping time. No company can ship all orders correctly but they should take full responsibility for their mistakes. Even the best company can make mistakes, but it’s how the mistakes are handled is what matters. The ideal company will provide a 100% accurate delivery or its free.
They should also have multiple shipping options. If they are experienced enough, they should know that labor strikes could arise at anytime and therefore, having several options like UPS, FedEx and DHL is imperative.
The longevity of a company shows that management is committed to the company. Ideally a business that is at least five years or older shows they know the business and can handle the unexpected. These companies will be able to provide references of satisfied customers. It’s vital to ask for at least three before hiring a company. If they hesitate then pass immediately.
Lastly, price and commitment are very important aspects when determining what company suits you best. Currently, there is no standard pricing in the fulfillment industry. However, you should be able to verify all charges without relying on your fulfillment company to provide a lengthy explanation. Over charging is a common practice so stay away from companies with hourly charges for receiving and assembly since it’s almost impossible to verify time spent.
Some companies try to lock you in a long term contract which can be a dilemma if their service isn’t as expected. Make sure there is a way out by choosing companies without a long term commitment.
Asking the right questions and looking for the right qualities in a fulfillment company is crucial when considering outsourcing. Hiring the best option can truly reduce and control your operating costs while providing you with more time to improve your company focus. Regardless of what company you choose, make sure they are as committed to your customers as you are. After all, no matter how web-happy we become customer service should always remain a top priority.
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