TOO MANY ORDERS? WHAT A GREAT PROBLEM TO HAVE!

Drop Shipping:

Problem Solver or Just Another Expense ?

Many soon-to-be, on-line entrepreneurs create business plans that assume that these fledging, commercial sites will handle order fulfillment in-house. That means the Chairman of the Board and CEO will not only empty the waste baskets, she’ll also pack up orders and make a daily trip to the post office.

With any start up, “cash is king.” You need it for everything from hosting fees to site development to postage stamps. Oh, then there’s inventory – 2000 basketballs stored in the spare room. Most start-ups handle every chore, and for some that’s fine. For others, that daily trip to the post office is the least productive chore of the day.

Drop Shippers

These companies are in the business of order fulfillment and there are two kinds in this broad category. The first ships only products it manufactures or distributes. You’ll often see these companies in affiliate programs wherein your site captures the order, it’s sent automatically to the company warehouse from where the product is shipped. You receive a commission and/or flat rate on each affiliate sale you make. That’s drop shipper type one.

The second is the drop shipper for hire. They’ll store your inventory in their warehouse (usually for a fee) then pack and ship as orders are received from you. Some of these businesses are also called fulfillment houses. In addition, most fulfillment houses will assemble, pack and ship items so if “some assembly is required,” look for an active fulfillment house. By the way, it doesn’t have to be close by as long as they have an email address so, if cost is a factor, consider outsourcing assembly and shipping overseas.

In any case, shop around and do some comparison shopping for your shipping. This is a highly-competitive niche sector so you can find good value for your money. And haggling is allowed most times so engage in some negotiation before accepting the drop shippers “standard” S&H fees.

Do I Need One?

Well, obviously if your product is information (data) then no, you don’t need one. But, if you plan to sell a product, or lots of products, consider hiring a drop shipper. Here’s why.

Let’s say you sell aquarium supplies on line and on a typical day you receive 30 new orders. (Good going, btw). Okay, first you need the room to store your inventory. It must be dry and secure. The garage may not be the best place to store aquarium supplies.

Then, you have to pull the 30 orders. Some will include multiple items. Once pulled, you must review the paperwork to determine which customer receives which item(s). Then, there’s the actual packing with bubble wrap or popcorn, taping and securing. An address label must be affixed. The package must be weighed and proper postage glued in place.

Next, load the packages (some are heavy), drive to the post office, wait in line, off-load 30 packages, go back to the office and finally get to work. You can see how much of each day is taken up with shipping and handling. And even if you put the kids to work handling orders, how long do you think that’s going to last?

Lots of start-ups begin as part-time jobs. Come home each day from your 9-to-5 job and start working on your digital dream. In this case, you could find yourself wrapping orders at midnight when that dream starts to look more like a nightmare.

There’s no doubt that drop shipping should be included in many on-line business plans. If you’ve got the time and patience to do it yourself, great. Save the money. But remember, you’re giving up business-building time to handle administrative chores.

How much?

Of course, it depends on how long it takes the drop shipper to wrap an order, its weight, postal zone and other unpredictable factors – another good reason to shop around. The lowest per unit price may not be the lowest total cost if the package is being shipped from half-way around the world.

With affiliate programs, all shipping and handling is managed by the mother company so you don’t have to worry about it. It’s already figured into your commission or fee.

The key is to figure what your time is worth and how it should best be spent - packing orders or building your business to increase the number of orders that need processing each day.

If you're getting too many orders to handle, you've got the best problem in the world.

Part of the success of any web-based business is a procedures model that works. Right products, right tone for the web site, convenienece, trust - all have to be a part of the procedures you employ in order to build a stable base of clients or customers.

Drop me a line. Web success requires planning for growth and, on line, growth can come in the blink of an eye.

Webwordslinger.com

Problems With Order Fulfillment? What A Great Problem To Have.

HOW MANY ORDERS WILL YOU SHIP TODAY AND HOW LONG WILL IT TAKE YOU TO PROCESS THOSE ORDERS?

You tumble out of bed, grab a cup of last night’s coffee, log on to your website and see you had a good night. 20 orders. That’s the great thing about the web. Somebody’s always buying somewhere – even when you’re sleeping.

So, how you going to spend your day? Filling orders and running down to the UPS pick-up before the last brown truck leaves for the coast? And what about inventory? How many silver-plated nut bowls can you stack in the spare room?

Success comes fast on the web, especially when word of mouth gets out there, on a global scale, that your nut bowls are the best. So, are you prepared for success when it smacks you with 250 orders in a single day? This is definitely one of those “be-careful-what-you-wish-for” things.

Order Fulfillment: Fast and Right

I can go to the big box store up the road and buy a computer. And I walk out of the store with my new laptop play thing and start to download games as soon as I get home. So, in buying from you, 12 time zones away, I actually make a trade-off. Okay, I’ll buy from your online outlet, put off the buyer’s rush and wait “3 to 5 business days” for delivery. (Longest three days ever!) In exchange, you save me a few dollars over the box store’s price and deliver my goodie quickly and in perfect working order.

When you’re competing against the real world, where the buyer receives instant gratification from the purchase, you better make sure you deliver each order you get quickly and correctly – right product, in mint condition, within the delivery window. So, are ready for site success? Do you have a Plan B to follow when your product catches fire and becomes the next “must have?”

The long-term growth of your web-based business depends on repeat buyers. It costs you six times as much to add a new customer to the roster than it does to maintain a good relationship with an existing, satisfied buyer. So, S&H should be more than an item on your “to-do” list.

What Are the Options?

It depends on how to best use your time.

If you’re a one-man band operating out of your house, you do it all – shipping and handling included. And, if you’re only shipping 10 orders a day you can probably handle that.

First, open a business account with one of the big shipping companies – UPS, FedEx or some other carrier. These companies have accounts for small businesses that offer plenty of time-saving benefits- like free pick-up on your front porch.

Maintain meticulous order tracking records. You should be able to track all packages through your carrier account and address delays before they become a problem. Stay on top of each order throughout the purchase cycle.

Create a dedicated packing space – the place you keep all packing materials. Create a system that employs as much automation as possible: computer-generated shipping labels, database automation, automated pick-up notifications, auto-responders and other solutions. In fact, if you’re using a quality web host, give their “business solutions” professional a call to see how you can sync up your database with your order-processing procedures.

The other option is to use an order fulfillment house – a company that does nothing but fill orders for lots of different clients. Some of these businesses provide turnkey client care, providing telephone reps to take orders, packing, shipping, inventory storage and so on. In other words, you sign off on order fulfillment and put the time you spend each day tearing sheets of bubble wrap to more productive use – like marketing.

If you’ve got a good product that’s selling well, you should be spending more time on finding new products, marketing the site and integrating all promotional activities if you maintain a real word retail outlet.

Shipping and Handling: Best Practices

• It’s tempting, but don’t use shipping and handling to extend your margins on sales. There are lots of sellers charging $5.95 for shipping and handling when the actual cost is $2.50. Nobody’s fooling nobody.

• You aren’t in the shipping and handling business. You’re in retail. You sell products. Secure your margins on the product line and keep shipping costs low in the red-hot web marketplace.

• Reassure the buyer with regular, automated emails: order received (with order number and tracking info) should be in the buyer’s inbox almost immediately, shipping date, order shipped and a follow-up customer satisfaction request.

• Don’t back order. This infuriates many buyers and will certainly lead to a lot of order cancellations, costing you money and time. If you don’t have the product in the warehouse or garage, remove the item from the site until you receive product from the wholesaler. Or, at least notify the buyer that the item is on back order. Then, if they still want to order you won’t be dashing buyer expectations.

• Immediately notify the customer of any shipping delays and provide an opt-out link that makes it easy for the buyer to cancel the order. Remember, customer good will goes a long, long way toward business success and a customer who can return items quickly and easily, or a buyer who can cancel an order before it’s shipped, is a happy buyer. Even if you don’t make the sale this time, you’ve created invaluable good will. And that creates word of mouth success.

• Don’t make promises you can’t keep. A disappointed customer is a lost opportunity, and one you’re unlikely to recover. Exceed buyer expectations. You develop a client base that grows your site to real profitability and financial freedom faster. You also create positive webuzz – WOM marketing on a global scale.

Good client care keeps your business moving forward. You see the progress in the form of repeat buyers and buyers who recommend your site to their friends because they got it fast and right from you.

Look, if order fulfillment has become a headache, you know what to do. Drop me a line or give me a call and let's go over your options. What a great problem to have!

Webwordslinger.com

DOES ANYONE HAVE RECEIPT #21398?

Tracking Orders: All Part of the Job

If the plan is to sell products online, take a long, hard look at order fulfillment – how orders are delivered to those buying customers that make up your clientele. Online retailers, for the most part are mail order shippers, though with the growing popularity of local search, buyers may stop by your shop downtown, and in this case, order fulfillment is no problem. It takes place at POP.

The Space Factor

Where are you going to store 3,000 festive sombreros or 100 queen-sized mattresses? If you don’t have the room (or the desire) to store inventory in a spare room, you’ll need to rent storage space. And that costs money.

In calculating your operating expenses, determine how much space you’ll need. Then call one of those “U-Store-It” places and start adding up the numbers.

The Time Factor

Let’s say you hit a home run right out of the box and you’re shipping 150 different orders worldwide each day. How much time each day will it take to prepare the paperwork on those 150 shipments, wrap and box each order so it arrives safely and drive those 150 orders to the local shipper – UPS, the USPS, FedEx or other shipper?

If it’s taking you and your kids all day to manage order fulfillment, that doesn’t leave much time for marketing, site revisions and other online business chores.

The Cost Factor

There are order fulfillment companies that do nothing but take orders and oversee all handling and shipping for their clients. But this service costs money – sometimes a great deal of money, money you don’t have. May be a problem, may be not.

Kind of depends on what and how much you’re selling and shipping. If you’re selling dozens of extension ladders each day, you need order fulfillment help. No way you’re going to be able to handle shipping all on your own – and your spouse will be none-too-happy with 118 extension ladders stacked in the spare bedroom.

On the other hand, if you’re shipping 10 or 15 small items – figurines, for instance – order tracking software is relatively inexpensive and a must-have for the small, online business owner and retailer.

It’s all about taking good care of your customers.

Customer Care

Even the best run mail order business makes mistakes. We’ve all received the wrong order at one point. This is where client care becomes critical.

How quickly can you fix the problem and make that unhappy buyer a happy camper? No one says a thing about correct orders that are delivered on time. No problem. It’s expected. But, if you want that dissatisfied buyer who just received 12 pair of purple PJs to ever shop with you again, time to get busy.

The importance of resolving shipping errors can’t be overstated. Companies like LL Bean and Amazon have reached the heights of success through the quality of their customer care.

When you call LL Bean’s with a problem, someone in Maine (home of the company) answers the phone and stays with you until the problem is solved. Oh, and no automated routing system. An actual human being answers when a customer has a problem and the customer gets the satisfaction s/he requires.

If It Weren’t For Humans…

Most fulfillment mistakes are caused during the manual phases of order processing. The stock picker grabs the wrong item, the wrong label is affixed to the wrong box – most errors are human errors so, whether it’s just you at the dining room table, or a warehouse full of order pickers on Segues, remember that human error is the cause of most problems so a quality control system is always a good idea – a final check before the order ships.

Order Fulfillment Houses

These companies manage order fulfillment and store your inventory. They capture the online order at the same time you do. They do all the packing and haul the orders down to the shipper. They provide you with complete fulfillment information including names, dates, back-orders, returns and other s&h activity.

These companies work on a flat rate plus postage system or percentage of order system. Ask around. There’s likely an order fulfillment company in your area and it’s always nice to stop by to check inventory stats in person.

Order Fulfillment Software

If you are going to handle order fulfillment out of your home or work space, you’ll need order fulfillment software, sometimes called inventory management software. Basically the same tool.

This software automatically captures online orders or equips telephone service reps to enter orders manually. Each order is assigned a number and entered into the order database. From here, you can track the stage of each order and identify problems before they become problems.

These tools keep a running total of inventory on hand so you can re-order before running out of a hot seller.

These software tools also print out shipping labels and invoices. The invoice is placed in the shipping box, the box is sealed, labeled affixed – next! It streamlines the process so instead of taking hours out of your day, order fulfillment software cuts this critical chore down to size.

Further, it tracks the status of problem resolution. As the business owner, you can quickly see that something has been back-ordered and get an auto-responder out to all buyers of that item. All done with a few clicks.

The More Orders the Better

Of course. Why else are you working so hard to build an online business? However, there are other important aspects of your job as webmaster, business owner, order shipper, marketer and custodial engineer. Order fulfillment is simply one aspect of your business, albeit a critical factor.

So, as you put together the big plan and start making sales projections for the next five years, don’t forget order fulfillment costs in addition to postage and handling. It’s going to cost time or money, but it has to be a cost factored into the operation of your business.

So where do you want your business to be in five years? And how many orders a day is that?

Need some help getting orders under control? Webwordslinger is on top of it. Drop me a line or give me a call when you have a sec.