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Order Fulfillment |
What is the Best Way to Ship My Merchandise
to My Customers?
Before you decide on what service you'll use for shipping, you need to think
about the location from which your products are originating. Keep in mind that
your actual shipping location will have an impact not just on costs, but also
on your business' ability to handle timely fulfillment, inventory storage, and,
ultimately, returns.
For example, if your business is primarily a brick-and-mortar company and your Web site is just one component of the business, then you most likely will be shipping from your store's physical location or distribution center. If you're a pure ecommerce business, or have a hosted store on eBay, then most likely you will be shipping from a Web distribution center or your home.
Shipping fees depend on several factors, including the package weight, the origin and destination, preferred delivery time and the method of transportation. You don't want high shipping fees to stop your customers from buying from you, nor do you want eating the shipping fees to affect overall profitability if you offer free shipping as an incentive. So, it may make more sense to use several distribution centers, especially if you are selling outside the US and Canada.
Drop Shipping
First of all, what is drop shipping? Drop shipping methods are utilized by
business owners to send single unit orders for goods gathered on their web
sites to manufacturers, or major warehouses, who in turn "drop ship" the
products directly to the customers of the business owner. A growing number
of merchants are now using drop-shipping as a means of minimizing stock on
hand, decreasing overall shipping costs and cutting down on delivery times
to customers.
Drop Shipping Online Sales
Drop shipping makes perfect sense and it's a great business
model, yet it's still a difficult area when using traditional shopping
carts
to
gather
the
orders. The issue is shipping charges because many shopping cart plug-in
shipping calculators aren't compatible with drop-shipping because of
the varying point-of-origin zip codes. For example, I recently ordered
seven items from Amazon.com. They were shipped by five different merchants.
Each was treated as a separate order. That works just fine but your
shopping cart software has to be able to do that.
Usually, a special UPS plugin needs to be implemented in order to calculate live shipping rates based on different zip code origins of different products within a single order. So, if you are considering drop shipping online orders, be sure to check with different shopping cart providers for compatibility.
Who Do You Trust?
For small businesses, it's perfectly normal to choose a shipping service based
on cost and transit time. Although those are critical factors, they should
not be the sole factor you use for making shipping decisions. Despite a small
budget, small merchants need to be selective when choosing a delivery service.
The major players, UPS, DHL, FedEx Express, FedEx Ground, Airborne Express
and the US Postal Service, all have competitive rates and cater to small
businesses. My advice is to offer your customers several options and let
them choose.
Some shipping calculator software includes the ability to compare real-time shipping rates between the major players so be sure to check that they can provide your order fulfillment needs before committing to any shopping cart service or program.
The best and most readable book I've found on the subject of order fulfillment for an online business is Logistics & Fulfillment for E-Business : A Practical Guide to Mastering Back Office Functions for Online Commerce by Janice Reynolds. It is definitely worth reading.