Category: Fulfillment

15 Down & Dirty Ways to Get Green Now

Post author By Guest Contributor
Post date 06/19/2020

Ready to reduce your company’s carbon footprint and cut waste in the supply chain? These steps will help you plant the seeds.

Fending off climate change is an immense and complex project. But it’s easy to plant one tree. Dig a hole, lower the root ball, shovel back the dirt, add water, and voila! The world is that much greener. Like gardening, supply chain management offers many practical opportunities to improve the health of the earth. Here are some ideas.

Packaging

1. Shrink the dunnage. Sometimes you can’t help but leave a little space around a packaged product, especially if it’s fragile or irregular in shape. But creative shippers or their third-party logistics (3PL) providers can find ways to reduce the material needed to fill the void. For instance, when Boxzooka, a Secaucus, New Jersey-based firm that provides e-commerce and warehousing services, took over fulfillment for a customer, the packaging process the company requested called for about 30 feet of paper dunnage per order. “We implemented a new type of paper and a machine that crinkled up the paper in an automated format,” says chief executive officer Brendan Heegan. “This process ends up using about 12 feet of paper per order instead of 30.”

2. Skip the box. Rather than place the product in a branded package and then insert that in a shipping box, one of Boxzooka’s e-commerce merchants might design a small shipping box, or polyethylene envelope (poly mailer), printed with its own logo. The merchant ships its product to Boxzooka in bulk. “Then we ship it out the door to the end consumer in their branded shipping boxes or poly mailers,” says Heegan. A customer who decides not to keep the product can send it back in the same mailer.

Some e-commerce merchants use a different tactic to remove packaging from the returns process. “Offering a packageless dropoff solution is a good way to reduce cardboard boxes,” says Ann Starodaj, senior director of sustainability at Optoro, a Washington, D.C., firm that offers a technology platform for managing product returns. A customer takes the unwanted product to a retail store or other dropoff point, which consolidates numerous returns into one shipment.

3. Right-size your boxes. “Reducing the size and volume of packages is super important for an e-commerce retailer,” says Heegan. The smaller the box, the less cardboard it consumes, and the less space it takes up during transport. Shrink enough boxes, and you could cut the number of trucks your operation puts on the road. Boxzooka works with e-commerce merchants to help them ship in smaller packages.

French firm Quadient, with U.S. headquarters in Milford, Connecticut, provides automated systems that build shipping boxes tailored to the dimensions of each outbound item. “One customer eliminated 92 truckloads annually by implementing the solution,” says Sean Webb, business development executive for the Packaging by Quadient product line.

Warehousing

4. “Green up” your physical facility. Boxzooka has taken numerous steps to reduce emissions and waste in its two warehouses. For example, it uses LED lighting and motion sensors to reduce energy consumption. And the company recycles all the materials it can, including plastics, aluminum, and wooden pallets.

Trucks used to arrive at Boxzooka’s facilities once or twice weekly to pick up dumpster loads of cardboard for recycling. But new equipment that bales and compacts the cardboard has reduced those trips significantly.

“Now we fill the capacity of multiple dumpsters once monthly,” Heegan says.

5. Adjust your scheduling. The hours of operation in a warehouse can impact how much energy that facility consumes.

“We keep all our business consolidated into one shift, or sometimes we flex and do an extended shift,” says Heegan. The company finds that running, for example, one shift with 30 associates is more environmentally sustainable than running three shifts with 10 associates each.

“Or maybe we’ll do a 10-hour shift instead of two eight-hour shifts, with different people coming in and overlapping one another,” he adds.

Besides the number of hours a warehouse operates, choosing specific hours can also have an impact.

“If you have the right air conditioning and you’re a food vendor in the summer, you might want to do some of your work at night when it’s coolest,” says Kevin Beasley, chief information officer at VAI in Ronkonkoma, New York, which provides an enterprise resource planning solution and related software.

Strategy

6. Enlist a 3PL. Without incurring significant costs, a company can reduce its carbon emissions by operating more efficiently, says Mark Kunar, executive vice president at DHL Supply Chain North America in Westerville, Ohio.

In fact, by making better use of transportation and warehouse capacity, reducing the aggregate distance traveled by each transportation unit, and eliminating unnecessary use of resources, a company can reduce costs, move inventory faster, and become more responsive to customer demand, while also helping to green the planet, he says.

“Shippers can do this by evaluating the tools that can provide the biggest network and capacity benefits,” Kunar says. Or they can rely on tools deployed by supply chain partners.

“DHL Supply Chain, for example, deploys services such as an optimization tool, network design consulting, and the ability to broker loads for backhauls to match capacity,” he adds.

Companies that use 3PLs would do best, environmentally and otherwise, to rely mainly on one partner rather than spread their business across several, says Andrew Lynch, president of Zipline Logistics, a 3PL based in Columbus, Ohio.

That 3PL can then take a big-picture approach to making your operation more efficient.

“Allow your partner to work with you in a strategic way, and you’ll be surprised at what kind of sustainability initiatives come about,” Lynch says.

7. Measure your current state. “Take a look at your business and understand its impact from a sustainability standpoint,” says Webb of Packaging by Quadient. “How many trees are being impacted? How much plastic are you using in your solution?”

Experts in the field, such as companies that manufacture packaging materials, can help with those calculations. With a clear picture of your current impact on the environment, you can set goals for improvement.

Transportation

8. Get smart about routing. Trucks that lose less time in peak-hour traffic burn less fuel. So do trucks that seize backhaul opportunities rather than pull empty trailers. “Many supply chain applications incorporate artificial intelligence (AI) to quickly analyze backhaul and truck routing options,” says VAI’s Beasley.

9. Choose a primary LTL carrier. A company that ships even moderate volumes of less-than-truckload (LTL) freight might use six LTL carriers to send its freight to different markets, says Lynch. Each of those companies sends a truck to pick up one or two pallets, returns that freight to its terminal, and then sends it back out again.

Zipline can work with a customer to identify one LTL carrier that provides good service to perhaps 85% of its markets. Based on that volume, Zipline negotiates an attractive rate for the freight.

“Then we can bring in one trailer and pick up all the LTL shipments in one day, as opposed to having multiple trucks driving in and out,” Lynch says. “That’s a great way to take four or five trucks off the road for that individual shipper. And that has a significant impact on their overall carbon footprint.”

10. Join SmartWay. Run by the U.S. Environmental Protection Agency (EPA), the SmartWay program helps carriers, 3PLs, and shippers adopt transportation practices that reduce their carbon footprint. A registered company reports its transportation-related carbon emissions to the EPA, which ranks its performance against other companies in its business sector.

“Asset-based capacity providers give the EPA their carbon footprint scores based on miles run, waste, and diesel usage,” says Zipline’s Lynch. “Then, as a third-party participant, we do our best to funnel business toward the more efficient carriers.”

Shippers in the program maintain their scores by working directly with SmartWay carriers or with 3PLs that use those carriers.

Participation in SmartWay is one tactic shippers can use to understand the emissions generated by their operations and by their suppliers. “Shippers should challenge suppliers to specify reduction benefits from solutions posed or delivered (baseline versus improvement), and to incorporate visibility on emissions tracking and reduction as a standard within their warehousing and transportation management systems,” says DHL’s Kunar.

11. Urge carriers to do the right thing. “By adding alternative fuel and drive-train solutions to your transportation requests for proposals, for example, and rewarding providers who are prepared to offer them, shippers can help to drive the market and to make these solutions more accessible, economically viable, and appealing in the future,” says Kunar.

Large shippers might encourage smaller carriers, or the 3PLs that use those carriers, to invest in tools such as SmartWay-certified or electric vehicles and alternative fuels. Then they could reward these green efforts with volumes on key routes. Such tactics might cost more in the short term but could pay off in the future.

12. Consolidate freight. Rather than fulfill small to mid-sized orders with separate LTL shipments, a shipper can put all the freight bound for a single market on one truck, which then delivers orders to multiple customers.

“We saved our customers about 1.2 million miles in 2018 through operating this way,” Lynch says.

Reverse Logistics

13. Minimize transportation. When a customer returns an item to a brick-and-mortar store, Optoro’s technology helps the merchant decide immediately how to dispose of that product.

“If it’s not worth shipping back to the return center, and it’s best to donate it from the store, then donate it from the store,” says Starodaj.

That decision, high in the reverse supply chain, can reduce the use of truck transportation. It may also cut waste by averting accidents that can occur when shipping miscellaneous products to a returns center. “Say a bottle of detergent leaks over everything,” Starodaj says. “That all needs to be thrown out.”

14. Rescue returned product. For most retail goods, the part of the life cycle that harms the environment most is manufacturing. “The best thing you can do is try to extend the life of that product,” says Starodaj.

If the first buyer doesn’t want it, get it to a secondary consumer. Then no one needs to make a second product to satisfy the second person’s need. “From a waste and carbon footprint perspective, reuse is huge,” she says.

Along with its returns platform, Optoro operates two “re-commerce” channels. One sells returned merchandise to consumers, and the other to businesses. Also, merchants often donate returned items, Starodaj adds.

Advanced-Data Science

15. Use cognitive automation. Traditional forecasting tools aren’t accurate or agile enough to match manufacturing to customer demand in today’s highly volatile markets, says Ram Krishnan, chief marketing officer at Aera Technology. Based in Mountain View, California, Aera provides solutions based on AI to enhance supply chain management.

When a company doesn’t understand true customer demand, it may order more materials than it needs, and manufacture and ship more products than customers will buy—wasting resources and increasing its carbon footprint, Krishnan says.

AI, or cognitive automation, can help a company quickly assemble and analyze large volumes of data from diverse sources to get a true picture of customer demand. Then, as supply chain systems execute on that forecast, the AI system provides advice about course corrections to make in real-time to account for demand fluctuations.

“You produce and ship the right amount of product, constantly optimizing and improving,” Krishnan says.

VAI offers predictive analytics software that reduces waste by determining how much product to buy and when to buy it, based on future needs. “If you’re bulk buying and that product sits in your warehouse for a year, that has a carbon footprint effect,” says Beasley.

“That space is being used, heated, and cooled.”

On the other hand, if you order products only as you need them, you put more trucks on the road. Predictive analytics software can help a company strike the optimal balance.

“Instead of getting a delivery from a vendor two or three times a week, maybe I can get it every 10 days or every two weeks if I can predict what my product turnover will be,” he says.

Article written by Merrill Douglas

Read article on Inbound Logistics here.

eCommerce Fulfillment

Demand Forecasting: From the Slinky to Artificial Intelligence

Post author By Boxzooka
Post date 05/23/2019

Way back in 1943, mechanical engineer Richard James was working to devise springs that could keep sensitive ship equipment steady at sea. He accidentally knocked some of the spring samples off a shelf and watched in amazement as they gracefully “walked” down instead of falling. Along with his wife Betty, James came up with a machine to coil 80-feet of wire into a two-inch spiral and Betty came up with the name “Slinky.” Initially, the sales were sluggish. By December 1945, Mr. and Mrs. James made 400 Slinkys for Gimbels Department Store in Philadelphia. The story did a demonstration for Christmas sales, and all 400 Slinkys sold within minutes.

Neither the James husband and wife nor Gimbels had access to high-tech artificial intelligence forecasting applications and had no way of predicting the immediate popularity of the simple toy. The Slinky is a good reminder that forecasting has always been difficult. Historically, forecasting relied on significant trial and error. With so many factors being uncertain, demand forecasting is not easy. It is also an inexact science and is short on hard and fast rules. No one’s got a crystal ball.

Knowing how many people will shop next month, if one popular product will suddenly fall out of favor and an obscure one will become the it-item that everyone is clamoring to buy is almost impossible. However, e-retailers can use various parameters to make informed decisions backed by extensive data analysis. While risk and uncertainty are part of every business, researching and making the best effort to properly determine the future demand or sales prospects for specific products will lessen problems down the line.

Understanding the geographical and seasonal demands of inventory and where to allocate advertising expenditure is important when making warehouse and shipping decisions. Factors like climate, for example, can shift regional demands for a product, especially for apparel retailers.

Swimwear likely sells steadily year-round in California and Florida but gets a strong bump in early summer in other parts of the country. Although a fulfillment center in one of these geographies might meet the retailer’s needs most of the year, having a sole distribution center in the Northeast might actually be the better option to be closer to the aggregate customer base over the course of a full calendar year, thus reducing overall shipping expenditures. At the end of the day — unforeseen circumstances notwithstanding – the best measure for forecasting future demand is sales history.

Data collection is key to demand forecasting. All business decisions should have basis in some analysis of numbers, especially data gathered over the long term. Having at least a year of sales tracked can provide a solid foundation for predicting how an eCommerce site will behave in the future, even as it grows.

Keeping track of customer information — from demographics to behavioral data — capturing and analyzing shopper data will help refine a business model. The better understanding of the customer, the easier to decide if an urban fulfillment center is a good investment.

According to the McKinsey Global Institute, “Artificial Intelligence technologies could eliminate many levels of manual activities in areas such as promotions, assortments, and supply chain. AI will enable retailers to increase both the number of customers and the average amount they spend by creating personal and convenient shopping experiences.”

Determining which type of forecasting to use depends on the size of the business and the goal of the forecast. The specific need of the business should guide formation of a custom Demand Forecasting model, which will likely evolve with the business.

Passive demand forecasting – which supplies limited information for conservative growth goals – may be adequate for small and local businesses. Companies competing for expansion, however, require a more active approach, which includes knowledge of the external economic environment and a potential updated marketing strategy. Internal business level demand forecasting of each division of the company is often important for large companies, while many businesses are interested in forecasting at the external macro level to strategize for expansion, customer segments and risk mitigation. Many companies carry out a short-term demand forecast throughout the year, but effective planning and budgeting also obliges a long-term forecast for more than twelve to 24 months in advance.

The assortment of products available for an online business creates a hierarchy. Consequently, calculating demand relationships becomes more complex than observing a simple correlation. E-commerce businesses can benefit from a dynamic model of demand forecasting. Such a model has proven superior to a linear approach that does not account for multiple correlating sales patterns.

Although it might seem counterintuitive, having a limited number of SKUs will likely help a business grow, and successful forecasting eliminates as much excess inventory as possible.

Having too many choices can be confusing for customers — and increase costs for order fulfillment. More SKU’s increase cost to pick orders and more inventory means more storage space required. Having excess inventory on hand is never good for the bottom line. Every item sitting on a shelf in a warehouse is money invested with no current return.

A general rule is that 80 percent of sales comes from just 20 percent of SKUs. The more products available, the more capital needed to maintain stock — especially if it is spread out over multiple warehouses. Efficient urban fulfillment centers rely on businesses with a limited number of SKUs. Think niche rather than supermarket.

Regardless of the means used to create accurate demand forecasting, few products reach the success that Richard James’ accidental creation from the 1940s has reached, going on to sell more than 250 million units by the turn of the next century.

Article written by Brendan Heegan

Featured in Retail Minded.

https://retailminded.com/demand-forecasting-from-the-slinky-to-artificial-intelligence/#.XwjrH5NKjeo

eCommerce Fulfillment

Getting Up on the Right Side of the Bedding

Post author By Guest Contributor
Post date 03/04/2019

Direct-to-consumer bedding e-retailer Buffy Inc. woke up in a logistics world where quick-turn, no-hassle deliveries and returns have become routine.

THE CUSTOMER

Buffy Inc., a direct-to-consumer e-tailer offering the Cloud Comforter product. Free shipping, a 30-day trial program, and free returns created logistics challenges.

THE PROVIDER

Boxzooka, an e-commerce order fulfillment, WMS, and global selling partner.

In December 2017, Buffy launched with a single product, its Cloud Comforter, offered in three sizes. As orders increased, the company realized early on that it needed a better way to optimize warehouse and order fulfilment operations. Buffy wanted a logistics solution that would meet its business requirements and help it grow in the unpredictable business-to-consumer space. It found what it was looking for with Boxzooka, a third-party logistics (3PL) and warehouse management system provider.

“Our model is different from other B2C companies because we offer a free 30-day trial for customers,” says Jordan Bloom, Buffy’s director of operations. “That means we had to figure out both the outbound shipping and the returns process. Customers have the option of testing our product, and sending it back if they don’t want it.

“Luckily, most of them keep it, but it’s critical that we have a good return platform in place,” she adds.

Buffy’s try-before-buying direct-to-consumer (DTC) model aims to create a personal relationship with bedding customers looking for an eco-conscious comforter. But that concept presented the New York City-based startup with several logistics challenges—most notably its ability to compete and scale in a business environment growing ever more comfortable with the Amazon Prime model of hyper-fast delivery.

“Our main logistics worry is that we need to compete in an Amazon Prime world,” says Bloom. “Our customers expect to get their product in two days. We try to optimize for customers getting their product as soon as possible while ensuring that they have a great unboxing experience.” She notes that the company’s initial shipments arrived two to four days after order placement.

Meeting customer expectations sparked the search for a 3PL partner and a strong technology-based warehouse management system (WMS) solution.

THE STARTUP CRUNCH

Like other young DTC e-retailers, Buffy had to face the unknowns associated with securing supply and manufacturing capacity, managing inventory, processing and fulfilling orders, satisfying customers, handling returns, and developing brand recognition.

On the supply planning and manufacturing side, Buffy had an advantage. One of its founders, Leo Wang, comes from a family that has been in the bedding industry for more than 30 years. His family makes pillows, sheets, and comforters for big box retailers, and has strong relationships with Chinese manufacturing companies. Buffy was able to tap into this industry expertise and build on that tradition as a way to carve out its own niche in the luxury bedding product segment.

The overall bed linen and bedspread industry is projected to reach approximately $61 billion by 2020, according to Statista. However, the global luxury bedding market, a smaller part of the pie, was valued at $2.02 billion in 2017, and revenue is expected to expand at a compounded annual growth rate of 2.6 percent between between 2018 and 2025, according to Coherent Market Insights.

The tougher piece was getting comforters out the door as quickly as possible during the first Christmas holiday and winter season Buffy was in business. The company, which started in San Francisco before the founders moved and launched the business in New York, used a small Bay Area 3PL for a short time to get things going.

Simultaneously, Buffy had to set up an easy returns process, and then do something with the returned comforters; discarding them in a landfill was not an option for a company marketing itself as an Earth-friendly business.

GIVING BACK

Buffy opted not to refurbish its comforters; a host of hygiene-related bedding-specific regulations that vary from state to state made refurbishment unfeasible. Instead, it set up a donation program that distributes returned comforters to homeless shelters and food banks via a partner community organization.

Although Buffy’s returns rate runs about five to six percent, lower than the standard direct-to-consumer volume of around nine to 10 percent, this part of the equation required attention, strategic insight, and an experienced logistics partner who could accept and reroute returns to the appropriate recipients.

Post-launch, Buffy’s branding and marketing position as a high-quality comforter maker generated social media buzz, and orders began to grow. Buffy now averages between 12,000 to 14,000 orders monthly.

OFF THE START LINE

A few months after launch, Buffy’s sales volume outgrew its 3PL’s order management and fulfillment capabilities. As a small operation, the 3PL struggled to get orders out quickly, on the same day they were placed. These delays caused Buffy to fall short on its delivery commitments to end customers.

Buffy also wanted to set up bicoastal fulfillment capabilities, holding inventory on both the West and East coasts to ensure speedy delivery almost anywhere in the United States, but the initial 3PL set-up was unable to manage that kind of expansion.

Bloom, who joined the company around the time it launched, was charged with finding a 3PL that could handle Buffy’s increasing order volumes.

To start, Bloom asked for recommendations from others working in the B2C space and researched companies online. Working off a list of 40 3PLs, Buffy narrowed the choice down to two or three providers, ultimately selecting Secaucus, New Jersey-based Boxzooka as its 3PL fulfillment and WMS provider.

“We picked Boxzooka for a few reasons,” Bloom says. “First, after visiting its facility, I felt they could help maintain our high-quality standards for product packing. Our branding and unboxing experience is a big part of how customers get to know us.

“Second, I felt Boxzooka could help us grow, and that we could go to them with any challenge and they would help us solve it,” she adds. “We are a young company and needed an experienced logistics partner.

“The third aspect was its WMS solution,” Bloom notes. “Boxzooka’s software was the most user-friendly, and allowed us to easily do what we needed to. It was also the most technology-focused solution for us as a business-to-consumer startup. Our whole business runs online, so it was important to work with a 3PL that was technology-focused.”

The two companies teamed up in July 2018, with Boxzooka taking over a portion of Buffy’s fulfillment distribution and running it through its New Jersey warehouse. Boxzooka also deployed its enterprise cloud-based WMS for Buffy’s San Francisco operations.

ROLLING IT OUT

The WMS rollout at the San Francisco facility happened over a weekend and was “very easy,” Bloom says. The system was easy to use and provided instant access to inventory and order information.

By January 2019, Boxzooka moved Buffy’s business to its Los Angeles hub, allowing Buffy and Boxzooka to more efficiently coordinate inventory, orders, shipping, and returns without any downtime.

“We have a strong connection with the e-commerce sales platform Shopify, as more than half of our customers, including Buffy, are on it,” says Brendan Heegan, founder of Boxzooka. “Orders are placed on Buffy’s website, and then drop into our WMS in real time. We begin fulfilling the orders as they come in and then quickly send them out.”

The decision to use Boxzooka’s 3PL and WMS solutions has shortened Buffy’s shipping times, allowing the company to more consistently hit its promised two-, maximum three-day delivery window for U.S. customers.

“We started with Boxzooka on the East Coast for a few months to see how things would go. Now, moving into Boxzooka’s center on the West Coast has streamlined our whole process,” Bloom says. “Having inventory with one company instead of spread across two companies has been great.

“Also, because Boxzooka has two fulfillment centers, we can manage the shipping based on what makes the most sense from a fulfillment standpoint,” she adds. “We don’t need to draw a line down the middle of the country and say the East Coast fulfills these orders and the West Coast fulfills the others. Fulfillment is thoughtfully split up so we can optimize shipments by location.”

Boxzooka also helps Buffy on the returns side by receiving and storing the returned comforters, checking the quality of the returned items, and redistributing them in bulk to the appropriate local organizations.

This level of service has helped the relationship evolve.

“When we were developing the WMS, we focused on making it user-intuitive and user-friendly,” say Heegan. “We wanted our clients to be able to run their business on it. They can see orders in real time. They can see inbound freight coming into the facility and being put away. Basically, they can look over our shoulders, and feel empowered about what’s happening with their business while being able to streamline their communications flow.”

A SOLID BASE

Creating a good user experience and shipping one main product in limited size formats has given Buffy a solid base to build on.

One short-term goal is to expand its top-of-bed product lines and offer items such as sheets and duvet covers, Bloom says, adding that she expects Boxzooka’s WMS and fulfillment solutions will help Buffy reach its next growth level.

Specifically for logistics, Buffy wants a two-day order-to-delivery turnaround to be the company’s competitive norm. Achieving that goal will likely require setting up a third facility somewhere in the middle of the country to ensure that every customer is within a two-day reach of Buffy’s inventory.

Serving international customers is also on the radar, says Bloom. The company currently can send items to Canada, but is looking to grow beyond North America over the next few years.

Will Boxzooka be part of those plans?

“We have had a good experience with Boxzooka so far,” Bloom says. “The easiest path is to have one company that we have a very good relationship with own everything.”

It’s that kind of confidence that ensures a good night’s sleep.

Article written by: Jennifer Baljko

Click here to read the full article.

Fulfillment Guides

4 Factors to Consider When Deciding on a Fulfillment Warehouse

Post author By Brendan Heegan
Post date 03/01/2019

Expanding a successful online business often requires outsourcing order fulfillment, which can be a big step for startup business owners who have built a company through hands-on management. A third-party fulfillment center, or 3PL, can eliminate the burdens and risks of costly operational overhead. However, finding the right order fulfillment warehouse partner is a challenging business decision that can make or break a company’s future. According to a recent study by the Georgia Institute of Technology, fewer than 30 percent of the warehouses in the United States operate efficiently.

Four key factors can help online entrepreneurs decide if a 3PL will be a good fit for the next chapter in their company’s success.

Competency

The 3PL process starts long before actual order fulfillment. The warehouse fulfillment center will need to receive goods from the manufacturer, store the merchandise, and prepare it for delivery to customers. Is the warehouse capable of handling the work the business model entails? Does it do similar processing for other companies? Business owners should discuss the entire order fulfillment cycle — from receiving through shipping — with the 3PL management.

Ask if the fulfillment warehouse can handle split pallets and smaller shipments. According to a 2017 Supply Chain Warehouse & Distribution Center Operations Survey, more than half of all U.S. distribution centers cannot handle a mixture of pallets, cases, and split cases. Asking the 3PL for examples of how the order fulfillment process works with similar retailers can provide keen insight into whether the warehouse will provide the right level of service desired.

Beyond order fulfillment and shipping, consider returns. A 2017 Statista report found nearly 28 percent of businesses take approximately two weeks to add a returned item back into inventory. (Not a great statistic considering that around 30 percent of e-commerce purchases are returned, and 81 percent of shoppers want simple, fast, and easy returns, according to ComScore research.) Entrepreneurs should have the 3PL do a walk-through of the return process, including how it handles customer errors like missing shipping labels, merchandise tags, or packing slips.

A little homework can go a long way. In addition to checking references, business owners might want to consider purchasing a product from one of the 3PL’s current clients to test the buying and delivery experience firsthand.

IT

In today’s e-commerce environment, every process is dependent on seamless data flow and a solid IT infrastructure. Learning whether a 3PL can easily adapt to a company as it evolves and grows is important.

A recent Statista survey found that only 55 percent of businesses were satisfied with their 3PLs’ IT capabilities. Businesses should find a warehouse that’s operating on the latest technology, and then make sure that technology supports the company’s required workflow.

Find out if the IT is outsourced through a third-party warehouse management system (WMS). Fulfillment warehouses that operate on old platforms or outsourced technology are risky. Older technology might be hard to adapt to new e-commerce platforms and integrate with third-party marketplaces down the road. Outsourced technology can mean higher costs for integrations, and the adaptations often are passed on to the retailer and can cause longer lead times to launch initiatives.

Trust and Chemistry

Even in the most competent and sophisticated warehouses with advanced IT or high-tech automation, success is dependent on the people who operate it. Entrepreneurs should consider whether they trust the warehouse team to do everything needed on a daily basis and to be responsive to unexpected problems.

A UPS survey reports that more than 65 percent of returned products are the result of incorrect order fulfillment. Accurate order fulfillment can save retailers unnecessary expenses.

Looking for a 3PL with the lowest rate might cost a business more money in the long run. Entrepreneurs should make sure prospective 3PLs have security systems and a protocol for checking in their staff and temporary employees. Cargo theft alone costs retailers up to $30 billion each year in the United States, according to conservative estimates. Business owners should think about the big-picture relationship with a 3PL and look for a facility that seems to be led by a group of reasonable and competent people.

Pricing

While cost is an important factor, the price is moot if the warehouse falls short on any of the aforementioned points. For example, if a fulfillment warehouse isn’t keeping accurate track of your inventory, any perceived savings will be lost in missing merchandise. On average, retail inventory is accurate only 63 percent of the time, according to recent GS1 Standards data.

Competent fulfillment warehouses will ask a laundry list of questions to identify all the potential costs of servicing your business. Understanding your business and effectively communicating all the variables is critical, including how products will come into the warehouse, how much the retailer will store, and how the retailer wants the presentation to go out the door.

Order fulfillment warehouses also need to make money. If a fulfillment partner doesn’t properly price expenses and is losing money by servicing a retailer, it will likely be less focused on service. A menu-based pricing model can give expanding retailers more knowledge of what to expect as business grows. Startups and businesses with unknown profiles should expect to pay more until they get data that can be properly analyzed. If requirements change, expect the price to change as well.

Choosing the right order fulfillment center is never an easy decision. Entrepreneurs who do some background research and ask the right questions can alleviate costly expenses and setbacks down the road.

Written by Brendan Heegan.

Article featured on Total Retail. https://www.mytotalretail.com/article/4-factors-to-consider-when-deciding-on-a-fulfillment-warehouse/

eCommerce Fulfillment

Boxzooka Goes the Extra Mile for Ernest Alexander

Post author By Guest Contributor
Post date 11/30/2018

Ernest Alexander was looking for a third-party logistics (3PL) company that would meet all of his business needs. He says that he found that and more when he partnered with Boxzooka in 2017.

“Boxzooka has been a great resource,” said Alexander. “The setup process is easy. The integration was smooth. We get help with our website – all for a competitive rate.”

Alexander started his company in 2009. His vision was to create beautiful accessories for everyday life. He recognized the beauty in functional items with thoughtful designs crafted from quality materials.

Alexander recognizes that he is not just creating a product but also an experience — a perspective that led him to Boxzooka. Unlike other 3PLs he had worked with, Boxzooka stood out because of its attention to detail for all customers – even the smaller brands. He says he was pleasantly surprised to find that Boxzooka would go above and beyond to help give his customers the experience they pay for and deserve.

“Many 3PLs obtain 80 percent of their revenue from the top 20 percent of their clients. They often fall short on servicing everyone else. We believe that each and every one of our clients deserve the same level of service and support,” said Brendan Heegan, founder/CEO of Boxzooka.

Boxzooka’s extra effort and above-and-beyond service were especially evident in a time of crisis for a popular product last year during the holidays when Alexander started receiving an unusual number of returns for a particular bag.

“Unbeknownst to us, every single one of an overseas shipment of 3,000 units had an issue with the zipper,” Alexander said. “The manufacturer agreed to repair them, but that would have taken months.”

Instead, Boxzooka stepped in. Heegan and his team created a solution.

“We’re constantly surprised to hear the stories of how a lot of fulfillment warehouse 3PLs won’t execute anything beyond simple picking and packing,” Heegan said. “We’ll do anything outside of the box when asked to help make our brands successful. If they’re successful then we’re successful.”

The Boxzooka team got the special tools needed to repair the zipper, unpacked every single unit, and repaired each item.

“They fixed everything in a matter of three days,” said Alexander. “Every single bag was opened, repaired and replaced perfectly. That level of attention and customer service speaks to Boxzooka’s willingness to go the extra mile and partner with a business to just get it done.”

Alexander says his vision of creating a quality product, as well as exhibiting top-of-the-line packaging and customer service, is carried out with style by the Boxzooka team.

“I feel like I don’t have to worry about them, and that frees up my time to be able to focus on important things like product design, marketing, and sales. I don’t have to worry about the logistics because I know they have it covered.”

Ernest Alexander is based in New York City. Its design studio now manufactures items all over the world and has expanded its vision to clothing and other accessories — with the goal of helping customers create a look that reflects who they are in all that they do.

Article written by Shiftkey

Case Studies eCommerce Fulfillment

Brooke Atwood: ‘I couldn’t do it without’ Boxzooka

Post author By Guest Contributor
Post date 11/01/2018

Brooke Atwood says the day she shipped her product line to Boxzooka was a great day.

“The transition from doing my own distribution to having Boxzooka do it has been so seamless for me,” said Atwood. “It’s been so stress-free. I couldn’t do it without them.”

Atwood, with offices in Savannah and NYC, launched her first leather t-shirt line in 2013, after she had graduated from Savannah College of Design in 2010.

Following the theme of disruption, after several years of following the traditional design business model, she decided to keep her prices down by cutting out the middle man and launched a new website. She doesn’t do full collections anymore but focuses on individual pieces and recently launched a Blues t-shirt line, combining her love of Mississippi Blues with an edge. All of her pieces are made in New York City.

“I had been researching to find the right order fulfillment company to work with. When I talked to Brendan, he seemed like a normal person. I talked to four other companies — truthfully, they seemed a lot like robots. They didn’t ask about my brands, but Brendan seemed cool and cared about my line,” Atwood said. “Plus, budget-wise, Boxzooka was a fit.”

Brendan Heegan, founder, and owner/CEO of Boxzooka, says Atwood is representative of the company’s diverse client base.

“Brooke shares a few things in common with others we represent. They are all unique, brand conscious, and focused on selling on their own platform versus a marketplace,” Heegan said. “To be successful they all need the tailored behind the scenes operational support we can provide and Brooke Atwood fits our client culture like a glove.”

Atwood says the Boxzooka team has been great to work with to ensure the “unboxing experience” she has created for customers, including using her signature duct tape in the packaging process. She promises same day shipping to her customers — and since she started working with Boxzooka, she says she doesn’t have to worry about keeping that promise. Working with a fulfillment warehouse that delivers on promises is key to her success.

“I know it’s being taken care of. In the past, I did it all myself,” she said. “Now, I use Shopify. Boxzooka links up with my Shopify account. I can go into their system and see everything I want to see. It’s super easy. If I have a question, they get me an answer within ten minutes.”

Written by: Jan Risher

Fulfillment

When Does an Urban Fulfillment Center Model Make Sense?

Post author By Brendan Heegan
Post date 10/31/2018

As consumers demand more convenience and faster delivery from online retailers, multi-origin urban warehouse fulfillment centers are the next big trend in business. Amazon Prime, with its two-day shipping guarantee, and the proliferation of retailers like Target and Walmart offering same-day delivery in key cities are driving customer expectations for all e-commerce merchants.

In 2017, American consumers spent $453.5 billion on the web for retail purchases, according to the U.S. Commerce Department, a 16% increase from $391 billion in 2016. And this year is on track to be even higher. By 2025, projections call for 60% of all U.S. residents to live in urban areas, putting more pressure on retailers for urban-specific quick delivery.

The shift toward speedier delivery is causing growing pains for e-commerce giants. Amazon has more than 100 million paid Prime members but was blasted during the 2017 holiday season by disgruntled customers based on shipping performance. The complaints, however, may be more indicative of rising consumer expectations than legitimate delivery issues; Rakuten Intelligence found Amazon’s shipping speeds actually improved in 2017.

While Amazon can spend $21.7 billion on shipping as it did in 2017 to meet growing customer expectations, most e-commerce sellers can’t afford to lose money and need to develop a well-thought-out strategy to address evolving demands.

Even Fulfillment by Amazon, which allows third-party sellers to expand their reach, has its drawbacks. Brands may find that they lose control of their pricing and quality control amid the sea of similar retailers.

E-commerce entrepreneurs should consider these four factors before investing in the urban fulfillment warehouse center trend.

Startup and Inventory Costs

The thought of skipping a brick-and-mortar storefront to save money seems logical in the age of online shopping, but basic business costs still add up exponentially when considering multiple warehousing fulfillment origins. The e-commerce warehouse world shadows the long history of small businesses, with many starting strong and then failing due to diminishing resources.

Carefully calculating the range of startup costs, budgeting properly not only for website design and creation but also a solid runway of marketing expenses for the first year, and not going overboard with too much inventory out of the gate can pave the road for success. Often, new companies are pressured into minimum order quantities. While the cost per unit might be higher for lower quantities, having that cash in the bank or directing it toward marketing – and not paying 3PL storage while waiting for sell-through – will pay off in the long run.

Demand and Customer Acquisition

For even the largest businesses, demand forecasting is an inexact science with no hard-and-fast rules and lots of risk and uncertainty. Knowing where customers will be and choosing an urban fulfillment warehouse center in close proximity will save shipping time and expenditure. If the startup is based in San Francisco, having fulfillment in Oakland may seem reasonable. However, demand might be higher in New York, so choosing an FC in New Jersey might make more sense.

Researching competitors and understanding their spending on customer acquisition while properly determining future demand or sales prospects can also lessen problems down the line. Having a sufficient budget on pay-per-click, social media, and influencers relative to competitors and knowing where to spend it geographically is key to success. “If you build a site, they will come” doesn’t work in 2018.

Understanding the geographical and seasonal demands of inventory and where to allocate advertising expenditure is important. Other factors like climate can shift regional demand, especially for apparel retailers carrying seasonal items. Swimwear likely sells steadily year-round in California and Florida but gets a strong bump in early summer in other parts of the country. Although a fulfillment center in one of those areas might meet your needs most of the year, having a sole FC in the Northeast will get you closer to the overall customer base year-round, reducing shipping expenses. At the end of the day, the best measure for forecasting future demand is sales history.

Data Analysis

Data collection is key to demand forecasting. All business decisions should be made with some analysis, especially of historical data. Having at least a year of tracked sales can give a solid foundation for predicting how a growing e-commerce site will behave in the future.

Keeping track of demographic and behavioral customer data is essential. Capturing and analyzing it will help refine your business model.

Inventory Control

In the age of Amazon, having an infinite number of choices seems like the key to capturing online shoppers. Although it might seem counter-intuitive, a limited number of SKUs will likely help a business grow.

Offering too many choices can be confusing for customers and create order fulfillment headaches. More inventory means more storage space, and carrying excess inventory is never good for the bottom line. Every item sitting on an FC shelf is money invested with no current return.

A general rule of thumb is that 80% of sales come from 20% of your SKUs. The more products, the more capital is needed to maintain stock, especially if it’s spread out over multiple FCs. An efficient urban fulfillment center relies on businesses with a limited number of SKUs. Think niche rather than supermarket.

Doing the homework on product demand, who the customer is, where they are, what traction competitors are getting, and what it’s costing them to acquire customers will pay off in the long run.

The big question is, “How well do you really know your business?” Making the leap to using an urban warehouse fulfillment center needs to be well-thought-out. Multi-location fulfillment warehouses require an investment of resources, including capital and inventory.

Powerhouses like Amazon, Walmart, and Target have defined the e-commerce landscape, including the urban FC center model. Multi-origin fulfillment has created new challenges for startup e-commerce sellers and small businesses alike. The decision to invest in an urban fulfillment center model is one that should not be made overnight.

By Brendan Heegan

eCommerce Fulfillment

6 Benefits Of Outsourcing Your Order Fulfillment

Post author By Guest Contributor
Post date 07/17/2018

Part of running a business is learning how to delegate. Because let’s be honest: We can’t do it all — even if we try.

Letting go of certain tasks is important. It frees up your valuable time and allows you to focus on building your retail business. It may be hard to trust other people to work on your “baby” with the same passion as you. Or, you may have budget constraints. However, if you can afford to, there are certain tasks that are easier to let go of — and one of those is order fulfillment.

What is an Order Fulfillment Service Provider?

Order fulfillment providers essentially warehouse your goods (i.e. your products) and fulfill orders on your behalf (they could come from in-store shoppers or online customers).

To accomplish this, fulfillment services typically integrate their software with your e-commerce store to streamline the entire fulfillment process. Once they receive an order, they pick, pack, and prepare the product for shipment.

Fulfillment providers also coordinate and schedule shipment pickups with carriers such as FedEx, UPS, and USPS.

Fulfillment providers typically charge a flat monthly storage fee. The flat fee is determined by the number of bins/palettes you warehouse in their facility. Then, once they ship an order, they charge additional fees.

The Why Behind Fulfillment Services: The Benefits of Outsourcing Order Fulfillment

Outsourcing order fulfillment has many benefits, such as lower shipping rates, reduced operating costs, and a broader reach to help you grow into new markets. And working with a fulfillment service provider allows you to focus on other aspects of your business and continue to grow.

“Fulfillment is an area of business that requires a team with a different set of skills,” says Brendan Heegan from Boxzooka.

Heegan recommends that retailers focus on their strengths and to consider delegating tasks that don’t fall within their skill sets.

“Retailers should outsource anything that is not their core competency,” he says. “Their core competency could be designing, sourcing, marketing, and selling of their product(s). Wasting overqualified resources to keep order fulfillment in-house becomes more expensive than outsourcing, in some cases.”

Your success does not only depend on the quality of your product — it also depends on the quality of your order fulfillment service. While you may offer a high-quality product, order fulfillment plays a crucial role in whether your business excels. Delayed, missing, or incorrect shipments are all surefire ways to alienate your customers — which is why it’s important to get order fulfillment right.

To help retailers better understand how fulfillment services can be advantageous for your business, we’ll look at six benefits of outsourcing order fulfillment that can help you offer a better customer service experience while you focus on growing your business.

1. Lower Your Shipping Costs

Many order fulfillment providers have facilities all over the country and overseas. This creates a solid foundation to offer lower shipping rates — resulting in bulk delivery discounts that you can take advantage of.

While it depends on the order fulfillment provider you choose, on average, you can save around 15% to 35% off published shipping rates. Fulfillment providers also have software that allows them to browse shipping rates from various carriers and select the most cost-effective rate.

For example, if you pay $6.00 per shipment that you fulfill in-house and you ship 100 orders per month, that’s $600 per month, or $7,200 spent on shipping in a year.

- $6.00 (per shipment) X 100 (orders per month) = $600 (monthly shipping costs)

- $600 (monthly shipment costs) X 12 (months per year) = $7,200 (annual shipping costs)

Based on the example above, if you take advantage of bulk delivery discounts from your order fulfillment provider — even if it’s only 15% — you will save $90 per month or $.90 per shipment. If you continue to ship 100 orders per month, you will save $1,080 on shipping over one year.

- $600 (monthly shipping costs) X .15 (15% discount) = $90 (monthly savings)

- $90 (monthly savings) X 12 (months per year) = $1,080 (annual savings)

- $7,200 (annual shipping costs before discount) – $1,080 (annual savings after discount) = $6,120 (annual shipping costs after discount)

2. Reduce Your Operating Costs

According to IBISWorld’s Public Storage & Warehousing market research report, the warehousing and storage industry in the U.S. alone is valued at $22 billion and employs more than 600,000 people. Warehousing and fulfillment is a thriving industry partially because more businesses recognize the potential cost-savings.

With fulfillment services, you only pay for what you use. Fulfillment services usually charge a flat storage fee for your products that are being warehoused. After that, you’re only charged for picked, packed, and shipped orders.

And while you may experience a seasonal increase or decrease in sales, that won’t affect your base costs. Your storage expenses only change when the number of units you warehouse changes.

3. Extend Your Reach

Go global. Whether you receive an order from another state or from another country, with the right order fulfillment provider, you’ll be ready to take your business to the next level.

Many fulfillment companies have the framework in place to ship and deliver orders to any part of the world. You can use their global platform to extend your reach and grow into new markets.

4. Improve Your Customer Service

Reliable customer service support is an essential part of running a business. Many order fulfillment providers offer 24/7 support through email or phone. This includes executing easy returns, exchanges, and refunds.

Fulfillment services can also help retailers meet evolving customer expectations. According to recent data, about half (49%) of shoppers say same-day delivery options are enticing enough to get them to shop online from a specific retailer. Almost two-thirds (63%) want estimated or guaranteed delivery dates, and companies with same-day delivery tend to gain an advantage over 85% of their competitors.

And same-day delivery is just the tip of the fulfillment iceberg. Customers also demand a breadth of other delivery options such as buy online, pick up in-store (also known as click and collect); reserve online, pick up in-store; and buy online then ship from store. And more retailers are offering these options to keep their customers happy.

But offering all these delivery services can turn into a logistics nightmare for retailers. The good news is that order fulfillment providers can help. Fulfillment services can help retailers offer these delivery and pickup options for retailers to meet those evolving demands and keep customers satisfied.

5. Using Technology to Streamline Order Fulfillment

Many warehouse fulfillment companies use the latest technology to process and ship your products. Their systems integrate with your e-commerce store, and the result is a streamlined order fulfillment process that often includes the below services:

- Inventory management

- Item tracking

- Security

- Shipping and handling

- Carrier selection

- Payment processing

6. You Can Focus On Selling (And More)

Another advantage of outsourcing your order fulfillment is the efficiencies it creates for your retail business. While order fulfillment is more manageable for smaller businesses, this task can become difficult as you scale your business. As you receive an increasing number of orders from various sales channels (in-store, online, sales events), order fulfillment can significantly eat into your working hours.

But you can leave the heavy lifting to your order fulfillment center and spend more time doing what you love — growing your business. Focus your time and effort on design, marketing, and selling your product.

Moving Forward with Outsourcing Order Fulfillment

Now that you know the benefits of outsourcing order fulfillment, it’s a good idea to get a better understanding of the costs involved. Ultimately, you need to do what is best for you and your business.

Do you already outsource your order fulfillment? What benefits have you experienced? Share your experiences in the comments.

Article written by Alexis Damen.

Read the article here featured on Shopify.