Fulfillment Solutions for E-Commerce Merchants

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By Maureen Alley, Managing Editor

For e-commerce business owners, product and marketing are typically core competencies while managing inventory and shipping solutions often are not. But not focusing on these parts of a business can often result in a poor consumer experience. This is where fulfillment companies step in as partners with expertise to allow merchants time to focus on their bigger business goals.

SpeedFC and Dotcom Distribution are two fulfillment companies that work closely with e-commerce merchants. SpeedFC offers an end-toend solution providing customers with website development, hosting, fulfillment and call center solutions. Dotcom Distribution offers customer service and fulfillment management. However, it does not offer website development.

Inventory Management
Utilizing an up-to-date inventory management system is vital because it tells merchants when to send more inventory to the fulfillment company, and where their inventory is located. It also ensures customers are purchasing product that is available.

Dotcom uses radio frequency scanning to manage inventory. “It’s important to scan products when you receive them and scan them as they move from receiving to storage, and scan again when they are being packed into a shipping carton. The scanning controls the accuracy of shipping and quantity of items you’re reporting in the inventory system,” says Doug Sternberg, vice president of client relations, Dotcom Distribution.

SpeedFC’s inventory system, SpeedOrder also allocates orders against available inventory. “SpeedOrder checks the order, releases the order to the distribution center to pick, pack and ship. SpeedOrder will then put information on tracking orders and e-mail customers with shipping confirmation. Then we update all the associated inventory and orders related to those shipments,” says Jeff Zisk, president and CEO, SpeedFC.

Order management systems are typically integrated with the merchant’s website to guarantee accurate information and order processing. If SpeedFC operates the merchant’s site, they receive the order directly from the site. Otherwise, they receive the order in an XML or FTP file.

Preparing for the Holidays
The holiday commerce season is a big part of any retail business requiring planning and forethought to meet consumer demands. And this is no exception for e-commerce merchants. “Merchants need to be able to forecast their business to the extent where they can order and send merchandise to a vendor’s facility as much before the holiday season as possible,” Sternberg says.

Fulfillment companies typically start planning for the holiday season in April and May. Starting the conversation with these partners early in the year guarantees everyone is up-to-date, inventory is filled, promotions are ready and packaging is in stock.

Some merchants provide gift wrapping and gift boxes as part of their customer service. If this is something you plan to offer, it’s important to note that these items often need to be ordered well in advance — as well as notify your fulfillment partner that this is part of your program. “If you’re going from no gift wrapping to 80 percent gift wrapping, it’s a huge difference for the warehouse and that can negatively affect shipping dates,” Sternberg says.

Website functionality also needs to be considered when planning for the holiday season. “Focus on consumers so they can use gift cards and promotions, which are more appropriate gift opportunities,” says Beth Roy, vice president of consumer magazines and media, CDS Global. CDS Global is a fulfillment company focused on the publishing media industry, consumer products, nonprofit and financial markets.

Choosing the Right Partner
Partnering with a fulfillment company that will represent your brand in a positive light falls heavily on customer service. When considering a fulfillment company, it’s important to look at how it will work with your customers prior to purchase as well as after purchase.

Before-purchase customer service includes accurate, available inventory so customers purchase product that is in stock. It’s also important to make sure product description is accurate.

After-purchase customer service relies on providing contact information if customers have questions or concerns, as well mitigating the wait time before they receive a response. “We need to execute flawless customer service — looking at how we’re treating the customer. Are we giving them opportunities if they have questions; are we giving them choices,” Roy adds.

Another factor that can influence customer experience is shipping time. SpeedFC has been updating its daily shipping times over the last few months and now will ship the same day as order placement if the order was placed by 3 p.m.

Benefits
One of the enticing aspects of partnering with a fulfillment company is it eliminates the need for the e-commerce merchant to house product. This eliminates the investment on a building that may only be used during the holiday season, Sternberg says.

The other advantages of outsourcing inventory management range from low overhead, assistance in areas of low expertise and increased brand reputation. “[Merchants] can look to us who have the expertise in these areas and they can focus on their business to drive it forward,” Roy adds.

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5 comments

eSolutions Interactive 10-12-2009 8:52 PM

I think it's imperative to research and find trustworthy fulfillment houses for your eCommerce clients.  Many times clients contact us to get a Shopping Cart site, then they don't know what they want to sell.  Having an arsenal of fulfillment companies, drop shippers, and similar companies will aid you in assisting your clients with ideas for them to make money.  This helps with customer retention as well.

TonyC 10-13-2009 8:56 AM

Is this an article or a paid "adveditorial" for the companies being promoted in this story?

MaureenA 10-13-2009 9:22 AM

Hi Tony -

This is an article with first-hand information from companies that offer fulfillment solutions for e-commerce merchants - and not a paid advertorial. The goal of the article is to show the options different fulfillment companies offer.

-Maureen

Shipwire Product Fulfillment 10-13-2009 2:09 PM

Maureen,

Thank you for highlighting the importance that order fulfillment plays in the order process and some of the benefits that can be gained by outsourcing order fulfillment.

I was hoping to highlight a couple thoughts.

1)  Make sure your order fulfillment company is located close to major population centers or has multiple warehouses.  Storing goods closer to buyers is the best way to cut shipping costs.

2)  Price shop and watch for hidden costs.  Ask for a free trial before you commit to a contract.  Get the pricing up front and make sure you understand it.  http://www.shipwire.com/pricing">www.shipwire.com/pricing

3)  If you have a lot of product SKU's or have invested in a big warehouse recently, you may think that outsourced product fulfillment is not right for you.  Rethink that.  Consider focusing on your best sellers.  Optimize these products by storing them in multiple locations and then you can ship from the location closest to the buyer.  By focusing on best sellers you can ensure that the best part of your business can scale.

4)  Right at the end you mentioned that outsourcing can save you from investing in a warehouse. THIS IS HUGE today.  This means that you can plow cash into inventory, sales and marketing.  This also means that you can expand overseas or to the other coast of the U.S. without the costs or labor hassles by outsourcing your international fulfillment.

Lots of great stuff here.  Thank you Maureen for highlighting this.  Wish you had covered http://www.shipwire.com  Maybe next time :-)

Nate Gilmore

Shipwire product fulfillment

http://www.shipwire.com/trial (free trial)

Website mag member details:  www.websitemagazine.com/.../default.aspx

JohnL 10-19-2009 11:00 AM

There are several online sources of information that may prove helpful to your readers...

1. The Yahoo directory has a good list of Internet based order fulfillment companies posted at:

dir.yahoo.com/.../Fulfillment_Services

2. The mailing and fulfillment service association posts an example contract at:

www.mfsanet.org/.../index.cfm

3. The US post office provides rates as down loadable files at:

www.usps.com/.../downloadable-pricing-files.htm

4. UPS also provides ship rates as files at:

www.ups.com/.../daily_rates.html

John Lindberg - President

EFULFILLMENT SERVICE

www.efulfillmentservice.com

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