5 Strategies for Order Fulfillment
Fulfillment is simple at a brick and mortar store.
The customer pays for the merchandise and carries
it away. However, fulfillment is more complicated
for a mail order business or a business that is
selling via the Internet.
Fulfillment includes taking the order, packing,
shipping and processing the financial transaction.
It could also include customer service, technical
support, inventory management, and processing
refunds, returns and warranty claims.
Fulfillment is a vital but costly aspect of operating
a business. Your situation determines which approach
works best for you.
1. Drop Shipping
Drop shipping is an arrangement in which a wholesaler
or manufacturer agrees to fulfil orders from items in
their warehouse. You make the sale, conduct the
financial transaction, and send relevant data to the
company to process. Since the company ships the
merchandise, you do not have to arrange warehousing
or inventory management.
Many businesses will not agree to drop shipping, as
they find it more profitable to process large orders
instead of individual orders. However, there are
exceptions. Find a company that produces merchandise
that you would like to sell then contact them and see
if they will negotiate.
Alternatively, look for a company that promotes drop
shipping. Run a Net search or a Yahoo search for "drop
shipping." Before signing a drop shipping agreement,
ask for references from satisfied merchants.
2. Set Up Your Own Mail Room
Micro businesses might set up a "mailroom" in the
basement. It's cost effective, but labor intensive.
You will need a means of processing payment (i.e. credit
card capabilities) and a means of keeping track of
inventory, orders, refunds, etc. Yahoo's Small Business
category lists numerous companies selling software for
small business management.
Larger small businesses might opt to set up a mailroom
in the workplace and assign employees to handle order
fulfillment. This allows the most control over fulfillment
as everything is done on site. You can ensure that
knowledgeable people handle customer service, that
packaging is appropriate, and that refunds, warranties
and are processed in a timely manner.
3. Integrated Fulfillment for the Web
Businesses that are adding online sales to their
regular operations require software that integrates
with the existing system, manages inventory, facilitates
customer service and generally handles all aspects
of fulfillment.
If you're too large for the basement mailroom and too
small to outsource, you might consider using one of the
companies that are catering to small business. Check
out Yantra, Manugistics and EXE Technologies.
4. Fulfilling Digital Products
Businesses selling only digital products (computer
documents, software, music, video, etc.) have the
easiest time with fulfillment. You will need a web
site, shopping cart software to take the order, and
a means of processing payment. The most automated
businesses use technology that serves automatic
download information to the customer upon processing
a transaction.
Online businesses might opt to purchase web storage,
shopping carts, encryption for secure ordering, and a
credit card processing service individually. Alternatively,
they might look for a "one stop shop" that handles
the entire thing for a fee. The former is likely
to be lower cost but labor intensive; the latter could
be more costly but simpler to set up and manage.
To find ecommerce providers, run a Net search for
"ecommerce billing fulfillment service".
5. Out-Source to a Fulfillment Firm
If your sales justify it, you could outsource
the entire process to a fulfillment company.
This may or may not be more expensive than doing
your own fulfillment. Calculate the cost of on-site
fulfillment and compare the price.
Out-sourcing reduces your control over fulfillment,
as well as the amount of contact you have with your
customers. If customer contact is very important
to your operations, or if you need to explain your
product to customers before making a sale, outsourcing
might not be your best choice.
Before signing a contract, consider these issues:
1.Will the company package your merchandise
appropriately? Can they handle your perishable
products quickly? You want to avoid returns of
damaged goods.
2. Does the firm process orders quickly enough
to accommodate your turn-around time?
3. Is the company strategically located? Shipping
costs and transit times will be reduced if your
fulfillment company is located close to the majority
of shipping addresses. For example, 74% of the U.S.
population lives close to or in UPS zone five. A
company situated in that region might be a good
choice for businesses that sell primarily to the
US public.
4. Are sales reps assigned to your orders and are
you permitted to train them?
5. Can the firm provide references from customers
running similar operations to yours?
As the comedian said, "Delivery is everything."
About the Author
June Campbell
How to Write Business Plans, Business Proposals,
JV Contracts,Human Resource Package, More!
No-cost ebook "Beginners Guide to Ecommerce".
Business Writing by Nightcats Multimedia Productions
http://www.nightcats.com