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Ecommerce Shipping and FulfillmentIf you inventory products for your ecommerce site finding a good solution for shippingand storing your products can always be challenging. Most warehouse the items yourself and spend lots of time “touching” your products. So what is “touching” and how does itcost you money?The typical scenarioYou bring in goods from overseas and they get off a boat and are trucked to your location.You (the receiver) unload and move them into a warehouse. Generally you will spendsome time inspecting your inventory and organizing it so that you can pick your itemsand ship in an effective manner. Sometimes if the packaging is not complete, you manyfind yourself repacking or re boxing items for final shipping. So here is how the“touching” is applied
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Unloading it off the truck, you have to do this
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Into the warehouse
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Organizing in the warehouse
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Possible repacking
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Final pick for shipment to the customer who ordered itThis is five times that the item is touched, moved, processed or handled. If you smart,you most likely have an employee do this work, which means you pay the employee andmanage the process. Not counted here is the managing of the items coming from portand getting to your ware house that is a separate discussion. The warehouse cost is alsonot included in the cost at this particular point.
Fulfillment
So how do you touch your items less and spend less money? Fulfillment is a differentway of looking at the physical process of moving your items and touching them lessHere is a break down of things you do NOT do, but still gets done by someone else.
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Items unloaded from ship, trucked to warehouse near port
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Shipping container stripped out (unloaded) and put on pallets
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Items labeled and shipped to your customers when ordered.So how do you save money? Most of the money you save is in time. Most online business owners today get sucked into a vortex of time wasting activities, not realizinghow much time they give away working “in” their businesses when they should beworking “on” their businesses. Here is a sample breakdown of how the fulfillment process can save you money. Substitute your own money amounts into the examples.
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Unloading the truck and moving into warehouse. Most likely a full day’s work  plus hiring or employing some help. Generally you can figure 3 people to unloadthe typical twenty foot container. (the reason you need help is that typical
 
trucking vendors allow you two hours to unload, you cannot unload this all byyourself in two hours)
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You will need a forklift and pallet jack unless you have a loading bay. (most donot)
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Items will have to be stacked in some particular order according to stock numbersto keep the inventory organized. This can take a good chunk of time dependingon what you are receiving. Personally we remove all the items from the truck andspread them out before we move them inside. When overseas manufacturers loadyour containers, they do not do it with any particular order, so things can bemixed and matched to load maximum volume into the container.
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Product may need to be reboxed or combined for final product assembly.
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Product then needs to be “picked” or selected, when the customer orders it. Theshipping label, packing invoices are printed and then it somehow makes it way toUPS or Fed Ex for shipping. All of this takes time. If you hire someone or employ someone, this can be many hours of their job functions.
Time management
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So when your product ships from overseas you basically do not touch them or handle them at all when you use fulfillment. You pay a monthly fee per pallet thatcovers the storage and a freight charge for shipping the product out. Mostfulfillment businesses ship a lot of packages and are willing to pass some of thesavings on to you.
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So basically you do not handle your product at all from the time it leaves themanufacturer to the time it arrives to the customer. This in itself is much better for most business owners in the long run.
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You have to individually crunch your own numbers to see if it will work for you.You also need to take into account that your product needs to be a complete unitfor the fulfillment scenario to work best. If you have to combine products or doany type of assembly, it takes away from the profit scenario and increases costs.
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Typical storage charges can be from $8 per pallet to $20 per pallet, depending onwhere they are stored.
Shipping costs
Another factor is shipping costs. You do not want to pay full retail shipping to your fulfillment company that is just wrong. A 20% discount to new customers is not unheardof with a decent volume of shipping. If you have a fulfillment center centrally located inthe country, then you can ship to either the west coast or the east cost with reasonablecosts. If your center is on either cost, you have higher costs when sending to the oppositecoast. For example, if your fulfillment is in California, and you ship to New York, thenthat is going to cost you more to send a box than it would to Arizona. Having an officecentrally located is a good advantage over time.SummaryPersonally I have done both types of shipping discussed in this article. I may haveswitched to fulfillment sooner, had I known some of the details discussed here.
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