The real drama for Online Sellers will come in the days following the mega sales and fist fights, as consumers return a potentially incapacitating volume of purchases for retailers to deal with.
Logistics is a term used to define the process of moving goods from point of origin to point of use, notwithstanding the process of reverse logistics, which describes the process in which finished goods get put back into the Supply Chain to create added value.
The definition of Logistics has been a constant for many years, with origins going back to the Military, the term Logistics simply represents moving product from Point A to Point B in the fastest and most cost effective way possible.
Although answering the question, “What is Logistics?” is relatively simple, the processes are far more complex.
- Tightening of the economy, currency fluctuations, increased competition and reduced margins have been catalysts for companies to take a closer look at their cost centres.
- Manufacturing, Warehouse Space, Inventory, Technology, Shipping Costs, Packaging, Staff and Material Handling Equipment, all represent a significant cost to a company; but yet are necessary to operate an effective Supply Chain.
Although many companies continue to manage their own supply chain, more and more companies choose to outsource their supply chain to specialist organizations; these organizations are called 3PL providers.
3PL providers manage inventory, storage and distribution of product. 4PL providers take it a step further; not only do they run inventory, storage and distribution; they also manage Customer Services, Reverse Logistics and other value added services.
Although this is not a new concept, we are starting to see more small to medium sized businesses adopting these options. Whilst it is beneficial for SMEs’ to invest into product development rather then capital expenses; it is also beneficial for SMEs’ to concentrate on sales and marketing rather than storage and distribution.
A Word of Warning
Freight companies are not 3PL providers, holding inventory does not make a freight company a 3P provider, when looking for a 3PL or 4PL provider do your due diligence, take a look at their current clients, take a look at their technology and finally make sure they can scale as your Business scales.
So, the original question “What is Logistics”
What is logistics? Logistics is a term, Supply Chain is the process, whatever you do make sure you can get your product from point A to point B as quickly and efficiently as possible. Here at 3PL we can guarantee the use of a third party will add value to your business.
As the online industry continues to grow at an ever-increasing pace, the demand for outsourced fulfilment companies has never been higher. After all, sellers don’t set out to become warehouse keepers when their main aims should be to source and sell great products.
Deciding to outsource your order fulfilment is all about timing, and centres around three essential trigger points:
1: Sufficient demand
2: Sufficient margin
3: The need to employ people or take on a warehouse
What is Outsourced Order Fulfilment?
To summarise, Order Fulfilment is defined as asking someone else to pick pack & ship your orders, so you don’t have to. Any leading third party fulfilment house would house numerous retailers under one roof, providing them with a range of additional support services. Such services could include anything from web photography and listing support through to enquiries handling and inbound telesales.
For a nominal cost per order, outsourcing you fulfilment frees you up to take care of the more virtual aspects of sourcing goods and marketing.
How Would I Know When to Outsource?
Running a successful online business will normally result in various growing pains along the way. A lack of space, time, expertise and cash are common stumbling blocks normally associated with business growth.
Some sellers that have a clear business plan decide to outsource from day 1 and spend their time in other key areas of the business. Other sellers decide to keep things in-house until they have established “proven demand”. With outsourced fulfilment you only “pay for what you use” hence when orders are low your costs remain low.
A minimum of 100 orders per week, or around 15 orders per day is a useful threshold at which some of the above constraints should be evident and sufficient benefit can be obtained from outsourcing.
Can I Afford to Outsource?
The more pressing question is can you afford not to?
If space, time and know-how are holding you back, then outsourcing to a reliable fulfilment house is a sure-fire way to regain control of your business. If you intend to sell on line for a bit of “pocket money” then fine – You should stay as you are, enjoy it and treat it as hobby.
If you have greater ambition to be a sizeable seller, then sourcing great products at the right price and taking them to market will require dedication. Employing staff, taking on an industrial unit etc, all contribute to your fixed costs. Meanwhile your cost per order equivalent is more likely to exceed that of any flexible “pay as you use” alternative.
More often than not, fulfilment houses are able to pool their throughput with the major carriers to obtain lower delivery tariffs. In tapping into such buying power, savings can be realised and often offset the cost of picking your orders.
How can I expect to benefit from letting someone else pick & pack my orders?
There are numerous benefits to be realised as result of “letting go” of the physical aspects, and these include:
- More time to source & sell
- Space is no longer a concern
- A better work/life balance
- A scalable business (complete flexibility)
- Steal a march on the competition
- Tap into existing industry expertise, and knowledge of “best practice”
- Potential to lower your operating costs
- Potential to grow your sales through channel expansion
Demand for outsourced order fulfilment is growing as quick if not quicker than the online world itself as more and more sellers realise the advantages of working with a third party fulfilment company.
You can get more information on picking and packing orders from our other blog posts.
A brief re-cap
If you value your time and are serious about growing your online business then outsourcing should be a viable option for your business. Employing warehouse staff and taking on industrial or self-store units merely adds to your fixed costs, reduces flexibility and increases risk. Alternatively, you could consider moving some of your lines to a fulfilment centre, like 3P Logistics as an initial move. Instead of taking on more staff or space, examine the possibility of moving stock that takes up an appropriate percentage of your orders into fulfilment and study the cost and time benefits incurred. It can offset your expansion costs, and open up your eyes to the benefits.
For those who don’t know that Black Friday is this Friday, where have you been? Yes, Black Friday is this Friday, the 27th of November.
Certain analysts predict British shoppers alone will spend up to £1bn on tech, games, clothes and other goods in 24 hours, whereas Visa Europe believes that shoppers will spend up to £1.9bn during the consumer holiday. The consumer holiday being the whole weekend, which ends with Cyber Monday on November 30.
Third party logistics businesses and order fulfilment providers are ready for the sales weekend that starts with Black Friday and ends with Cyber Monday. Here at 3P Logistics, as an E-commerce fulfilment provider, we are in close contact with our partners, especially over this period. The warehouse will be full of products ready to be sold online at discount prices. Stock has been moved to premium locations for ease of packing, in order to cope with the high demand that comes with the largest sales event of the year.
Of course, we’ve all heard of boomerang Thursday also. No? Well, boomerang Thursday is given its name due to the amount of returns of products from customers that businesses like 3PL have to deal with. It’s just as important to be able to process these returns smoothly and efficiently, as it is to get orders out on Black Friday itself.
Amazon have decided to take the sting out of Black Friday and list certain products at marked down prices all week on the run up to Black Friday. 7,000 deals were available from yesterday – five days earlier than the official sale day falls. Customers will be able to get their hands on new offers every 10 minutes for the entire week, with items ranging from the Amazon Kindles to a Withings smart-watch. Retailer’s lightening deals are back. Limited items are available for a short period of time with Prime members having the ability to see these deals before other shoppers.
In the US, expenditure is set to be far higher than that of the UK because of how much it is established as a big sales event. For America Black Friday marks the beginning of the Christmas shopping period, and takes place strategically on the first shopping day after Thanksgiving.
It is clear for everyone to see what the rewards of online retailing actually are, but having to deal with customer demand during the spike that is Black Friday, during the increasingly demanding period that Q4 is, can make it a minefield. Luckily enough, 3P Logistics Ltd are the perfect fit for you online retailers.
Nonetheless, the one big question surrounding Black Friday is whether or not your business can afford not to take into account every essence of making a Black Friday sale. There really is no accounting for the way in which shoppers adapt their spending habits for retail events like this so it’s really important that retailers have every box ticked. Therefore it is good that retailers have grown up recently, most specifically in terms of managing customer expectations.
Tesco are a great example of this. They have taken a completely proactive approach to Black Friday this year and released a message online that warns Black Friday and Christmas shoppers that there will be delays with their next-day click-and-collect services, as one can imagine. It’s not just the smaller online sellers, big supermarkets and other multi-channel retailers have to set expectations within their customers. This is what gives you an edge on the lesser prepared retailers, can you really afford to give THEM the edge?
We will see, this Friday, the 27th November.
3P Logistics secures contract win with Splash About International
3P Logistics Limited, a leading provider of value-added logistics solutions and e-fulfilment to the retail sector is pleased to announce that it has signed an 18 month contract with Splash About International Limited.
Splash About International Limited is the leading manufacturer of baby swimming products worldwide. Best known for its multi award winning Happy Nappy range of products which are insisted upon by 99% of swim schools, Splash About has over 25 years of experience in designing and inventing swimming products now taken for granted and used every day in swimming pools all over the world. Splash About Happy Nappies cover over 150’000 baby bottoms in the UK each week and delivers it’s swimming products to trade and consumer customers all over the world.
3P Logistics will provide operational support for Splash About brand from its 75,000 sq ft ecommerce and retail facility in Wigan. The operation will include the e fulfilment of online consumer and trade orders and subsequent worldwide distribution.
Ian Walker – Managing Director 3P Logistics commented:
“Splash About is an aspirational brand and the market leader in its field. Following an initial 12 month introductory association we worked closely with Splash About to fine tune certain processes and provide a logistics solution that would aid continued expansion. Some 12 months on it is fitting testimony to all involved that we have now cemented a longer term association and we look forward to supporting Splash About on its journey”.
Bernadette Spofforth – Managing Director Splash About International Limited:
“Splash About is a fast growing business and we needed an agile logistics provider that understands the growth journey we are on and the logistical challenges associated with global expansion. 3P Logistics took the time to get to know our people and in doing so they got to know our business. In awarding the contract to 3P Logistics we now have the supply chain stability and expertise alongside us and see 3PL has an essential extension to our business”.
You can check out Splash About products on their website at http://www.splashabout.com/
Brands look to fulfilment houses for distribution of goods to consumers.
As e-commerce is becoming a viable platform for most businesses, an increasing number of brands are looking to fulfilment houses to support the distribution of their goods to consumers according to leading UK fulfilment house 3P Logistics.
Brands are discovering that utilising outsourced warehousing for fulfilment and distribution can increase their profit margins and likely to increase sales.
E-fulfilment, by definition, is what happens between the time the customer buys the product from a webstore and the moment they receive the goods. From a customer perspective, this process reflects how the brand performs. By using specialist fulfilment warehouses, brands can focus on their core business activities, such as planning, marketing, developing product and consumer relations.
Using e-fulfilment can level the playing field for smaller companies and marketplace sellers allowing them to compete with big-named brands.
John Scully – Development Manager at 3P Logistics says
“Using outsourced warehousing and fulfilment, sellers effectively lower their operating costs and scale the business. Brands can leverage our resources without having to directly invest in property, technology, personnel and the time required to set up warehouse. Cash is key in any business and should be used to source goods and take them to market as opposed to taking on a whole range of overheads associated with an in-house solution.”
WOW! – How time flies?
Yes It`s been a whole year since we entered our shiny new order fulfilment depot in the North West – and my what a whirlwind of a year it’s been!
In the space of just 12 months, our 75,000 square foot warehouse and call centre facility carries over 30,000 unique product lines and over 3.5 million units and the extra space has certainly been put to good use.
In keeping with the growing demand for outsourced logistics services the depot has seen a wave of investment over the past 12 months which has enabled both existing clients to grow and for new business to join us. Since relocation, three additional phases of racking have been installed catering for over 3000 pallets of storage. In addition, a 3,000 sq ft mezzanine floor was installed and is now in full flow with phase 2 imminent. With an ever increasing demand for pick and pack services our packing stations appear to be breeding and at the last count some 15 workstations were in action.
Our 5,000 sq ft of head office space has also undergone some exciting changes, too. In addition to the 8 seat call centre, a web photography studio and staff shop is now housed within and adds real value for our clients.
If 2014 was great then 2015 promises to be a landmark year for everyone associated with 3P Logistics.
If you`ve ever considered outsourcing your warehousing and logistics to a third party then now could be the ideal time.
To find out how an association with 3PL can help support your business on the journey of “good to great”…
Chat to us: 01942 720 077
Email us: firstname.lastname@example.org
If you sell on Amazon, I am sure that you are aware of the ‘Buy Box’ – the holy grail for online sellers. For each product that is being sold on Amazon, there is an area on the product page which only one seller can obtain at a time, a.k.a the Buy Box. It’s a game changer, since obtaining the Buy Box can significantly increase your sales.
1. Become a highly rated seller
This is the most important factor since Amazon will only give the buy box to highly rated sellers. This special status is awarded by Amazon based on different categories. In order to achieve such status you need a low order defect rate, which means the standard of your order fulfilment plays an important role here. Make sure you ship the right product out efficiently to keep your cancellation and late shipment rate as low as possible.
2. Offer a low total price
Keeping your price low is another key to achieving the Buy Box. Make sure you consider both the product price and the shipping price. You should always check out your competitors’ pricing when pricing your own products.
3. Maintain your quantity levels
Make sure your products are always available. For example, our warehouse inventory is directly synchronised with various marketplaces/webstores, which helps our clients maintain a consistent quantity threshold.
4. Achieve sales volume
Just like eBay, conversion rate is rather important here. You need to be a successful seller in order to obtain the Buy Box. Try to offer excellent customer service as this can help retaining customers effectively.
5. Minimize refund
Sales error is a big no, no for an Amazon seller, hence you should ensure your order fulfilment time is as fast as it can be. Consider outsourcing your order fulfilment so that your product can be shipped right first time, every time.
As your business grows, you will expect an increase in customer demand. This means that your distribution center has to work harder, faster and even smarter to meet the demand. In order to stay competitive, you should really look into your order picking system to make sure you can ship faster, and store new products faster than your competitors. It’s all about efficiency, and you should also look into reducing your operating and labour costs at the same time if possible.
Usually, an online seller would start off with the most basic picking method – discrete order picking. When an order is received, the picker will go and pick one order at a time. The picker will then have to move around the whole warehouse to retrieve the products to finish the first order, then move onto the second order. This method is accurate but it is very time consuming. Imagine if you have 50 orders – you would have to walk around your warehouse 50 times!
This is why people outsource their order fulfilment. Basically, we increase efficiency by picking orders in batch. After receiving the orders, our automated system will categorize the orders into type and pick location. The picker will then retrieve the products according to the pick list, handling multiple orders at the same time. This can greatly reduce the travelling time between different locations and make things more productive. According to Fastpick, nearly 70% of time is wasted on travelling between product locations!
However, batch picking can be rather confusing and more mistakes can be made compared to discrete picking. This is why we have invested in technology and applied a bar-coding system. Each product types, sizes, colours, and any other variation, has its own unique bar code. After the picker has picked the products, the packer will scan the products and make sure everything is correct before packing and dispatching. Upon recognizing the order, the system will also print the corresponding address label. This can ensure a near 100% accuracy.
Improving your order picking can save you time, money and also improve customer satisfaction (imagine how many customers you could lose with picking errors!). Alternatively, consider outsourcing to us – with our bulk buying power we will certainly be the cheaper option!