Your business is at the point where it is about to explode. How do you transition from a small shop (fulfilling orders from your basement) to fulfilling orders with major retailers too? What are the biggest pitfalls to watch for?
First of all, congratulations! This is an undeniably big moment, and while it comes with a lot of change, and a lot of hard work, so did getting to this point—that’s worth celebrating.
But OK, you’re here now, and you’re wondering about the hard work part of it.
There’s so many things that change when you go from fulfilling orders yourself, in your own little space, to selling to independent stores, to dealing with big box chains. And speaking of fulfilling orders, that’s the first thing you’ll need to get a handle on as you grow.
Managing your (new) fulfillment process
There’s a lot you need to know about working with big box stores, and working within their systems—but don’t worry, they’ll tell you about it. In detail.
All big box stores have vendor manuals, these things are like 200 pages of guidelines on how they want to receive the product, because these companies are getting the product in from hundreds, if not thousands, of different vendors
When they get a shipment in they want it to all look the same no matter who it’s from. They want the barcode printed and placed like one inch from the top right corner of every box so that when they get it they know exactly where the barcode is going to be
Working within that framework is going to be a major change (and challenge) for anyone who’s used to shipping and fulfilling orders themselves.
Start outsourcing
If you’re at the point of working with major retailers, it’s time to bring in some professional fulfillment support.
You don’t need to become the warehouse logistics expert as well. Found value in outsourcing this. Basically shipped all your goods to a logistics center and then gave them the instructions on where it’s to go, when it was supposed to go, who it was going to, and then they did all the preparation for that shipment properly, so you wouldn’t get any fees.”
Um, fees?! Yeah, large retailers take their fulfillment process seriously, to the point that it will cost you if you’re not compliant.
If you don’t meet their requirements you get dinged. You get fees taken off your invoice. Like, ‘Oh, you put the label in the wrong spot? That’s $200.
You’ll save yourself a lot of time if you focus on your strengths, and don’t try to become a logistics expert on top of everything you’re already doing. And how should you find a fulfillment partner? Dan says it’s all about the legwork.
It’s not hard to do a Google search to find warehouse and logistics or fulfillment centers. Then you just have to interview them and be like, ‘Do you deal with big box store X, Y, Z?’
Getting your legal stuff in order
It’s not just your fulfillment process that needs to change as you grow. You’ll also need to look into legal protections for yourself and your business that might not have been necessary as a smaller shop.
You had to incorporate it because you wanted to separate the business from your personal life now that you’re being exposed to way more customers. If anything goes wrong, you don’t want to be personally liable. Plus, once you realized you were getting way more exposure.
It’s not just your own protection you need to worry about anymore, either, so make sure you read the fine print.
A lot of larger vendors will have specific requirements on how much business insurance you have. You had to up your business insurance because they wanted a certain amount of coverage.”
Managing your cashflow
Cashflow is always going to be a cornerstone of running your business, but it changes pretty drastically when you go from a small shop to working with big businesses.
The other big thing to prepare for is the payment terms. A lot of these big box stores won’t pay you for 60 days after receiving the shipment. Meanwhile, you’ve probably put out all your money 60 days before you deliver the product to them, so you’re out that money for almost 120 days. Cashflow can be a challenge.
Plus, a big order is great for volume, but take cautions that you’ll need to take another look at your numbers when you’re handling large shipments.
Once you’re dealing with these big orders, they’re great, but you have to output so much more because the volume’s so much bigger. Your margins are smaller because you’re dealing with a big box store, and you’re not getting paid for longer. It’s a different game.
If you have difficulty with preparing your store to work with big-box retailers, AsiaCommerce has a service to help you. We can also help you to market and sell your products, both a retail product or a product that needs to be sold in a huge amount. We are making it possible for local business leaders to cooperate with the International global market. Besides export service, we can also help you to import, transport, search for foreign products and handle distribution issues of your company in southeast Asia.
A fulfillment warehouse can help automate and handle the shipping for you. When you choose to work with a fulfillment warehouse, you will store your inventory at one of their warehouses. Depending on their level of integration with your shopping cart, when an order comes in your fulfillment partner will automatically be forwarded the order to pick, pack, and ship the purchase order on your behalf.
There are a number of advantages to using a fulfillment warehouse including:
Cheaper shipping rates. Because fulfillment warehouses ship such large quantities for multiple vendors, they receive cheaper shipping rates. They’re also integrated (usually) with all of the major shipping logistics and 3PL companies, giving you easier access to the widest range of shipping options.
Shorter shipping times. Strategically choosing your fulfillment partner and the warehouse to store your inventory means you can store your inventory closer to the bulk of your customers.
Fulfillment warehouses aren’t for everyone, though. There are several disadvantages as well that you need to consider.
Branding experience. Generally, if you use your packaging presentation as part of your branding experience, like Trunk Club, you’ll be hard-pressed to find a fulfillment warehouse that will work with that level of dedication and customization for your brand.
Additional costs. Although you will likely receive better shipping rates working with a fulfillment partner, there are other rates that need to be paid including what is commonly referred to as ‘pick and pack fees’ as well as warehouse storage fees.
Shipping is a fundamental part of your ecommerce business
Shipping is definitely a challenging aspect for any ecommerce business. Every business will have their own unique challenges they need to work through and overcome to develop the best and most efficient shipping strategy. Like many aspects of building your new ecommerce site, it will take time and tweaking to determine what works best.
Understanding all the variables and evolving your shipping strategy with your growing business is vital to its long term health and success. So once you think you have it figured out, don’t let it go stale. Reevaluate every six months to make sure you’re delivering the absolute best possible service and experience for the best possible price to your customers.
As you can tell by now, shipping can be tough. Deciding what to charge for shipping, then figuring out how you get it to your customer. There are so many decisions to make along the way.
If you have difficulty with packaging and shipping, AsiaCommerce has a service to help you. We can also help you to market and sell your products, both a retail product or a product that needs to be sold in a huge amount. We are making it possible for local business leaders to cooperate with the International global market. Besides export service, we can also help you to import, transport, search for foreign products, and handle distribution issues of your company in southeast Asia.
As the world of ecommerce develops so do the expectations of customers who buy online. Years ago, packaging and shipping was simply a way to receive a product purchased online, but more and more people are looking for shipping, packaging and presentation as part of the ecommerce experience.
This expectation means that for many businesses, outside of selling commodities, competing effectively means going above and beyond to impress customers and exceed their expectations by delivering an experience, not just a product.
Packaging options
Before you can ship your products, you’ll need to package them for safe transport. So what options do you have? There are a few common options for packaging including boxes or envelopes (padded or unpadded). For many businesses and products, you’ll a box as well as some other packaging materials to safely ship your products.
You may also want to try thinking outside of the box (no pun intended) and look at other packaging options. For example, poly mailers can be a great way to mail products that don’t need a lot of structure or cushioning, like clothing.
Poly mailers offer multiple benefits. They’re lightweight, which reduces your shipping costs, and they can adjust to different volumes and weights depending on what’s included in the order. For example, the same size of poly mailer could accommodate one pair of socks, or five, and you wouldn’t be overpaying on packaging weight or dimensions for the single pair.
Keep it light and small
Because the cost of most shipping options is based on size and/or weight, do your best to keep your packaging as small as possible. This will not only help you save on your shipping costs and what your customer paid for shipping, but will also keep packaging costs from eating away your profit margin.
Depending on your business and product line, you may want to consider carrying a variety of package sizes and packaging materials.
Most people would consider the packaging for the product above to be excessive. This is exactly what you’re trying to avoid as it inflates shipping costs dramatically.
Insurance and tracking
Depending on what you’re selling and its value, shipping insurance and tracking can offer a great deal of security. With most carriers, insurance and tracking is relatively inexpensive and provides you recourse should one of your packages get lost or damaged. Some shipping services like UPS and USPS Priority Mail offer complimentary coverage for up to $100, and that coverage can be up to $200 in some cases.
Consider purchasing insurance on big-ticket items so that, in the rare cases when a package does get lost, you’ll be covered. Keep in mind that some shipping services have insurance already built into the price, so consider this when you are comparing various courier prices.
Customs declaration and forms
If you’re shipping outside of your own country, you’ll need to include the proper customs documentation. These are available online through Shopify or at your local post office or shipping retail location. These forms tell the customs officers at the country of import what is in the package, how much it costs, and whether it is a gift or merchandise.
Check with your country’s postal service to find out exactly which forms you’ll need to attach to your package. These forms should be completed honestly and clearly to prevent your package from getting held up in Customs.
Tariffs, taxes and duties
If there are any additional customs fees due when a package reaches its destination, your customer will be responsible for them at the time of delivery. It’s always a good idea to make sure to include this information in your shipping policy page so customers aren’t surprised by unexpected fees.
Here’s an example of how one store prominently displays information regarding additional charges on their shipping policy page to ensure customers are aware of possible charges:
Customs declaration information
For more information on customs declaration and the required forms and policies, please see the resources below:
USPS Customs Information
UPS
DHL Express
If you have difficulty with packaging and shipping, AsiaCommerce has a service to help you. We can also help you to market and sell your products, both a retail product or a product that needs to be sold in a huge amount. We are making it possible for local business leaders to cooperate with the International global market. Besides export service, we can also help you to import, transport, search for foreign products, and handle distribution issues of your company in southeast Asia.
You put a lot of effort into making sure your customers have a great experience. You approve the images, you tweak your store, and you write the emails, all with the goal of leaving your customers happy.
But when it comes to shipping, it can feel like you’re handing your brand over to a stranger.
All shipping couriers base shipping rates on a variety of factors including:
Package size
Package weight
Origin country
Destination country
Plus additional shipping options like tracking and insurance.
It can be difficult to compare services exactly as they all offer slightly different options, and every business will have their own unique variables.
Below we have compiled a list of shipping calculators to some of the largest and most popular shipping couriers so that you can begin comparing pricing and options. If you’re based in the US or Canada, you can pay for USPS, UPS, DHL Express, and Canada Post shipping and receive pre-negotiated rates.
Consider your margins
To be successful at ecommerce, you always need to keep an eye on your profit margins. Because shipping represents a significant expense for ecommerce merchants, if you don’t do your research, you could end up losing money on shipping.
Before you finalize your pricing and strategy for your ecommerce store, you should use a chart like the one below to map out all costs associated with getting your products into your customers’ hands. Many ecommerce entrepreneurs are shocked by how quickly the little charges add up. Don’t get caught in the same trap.
Here’s a quick example of how you could calculate your total price to include the cost of shipping.
Cost of product
$10
Packaging
$0.50
Shipping costs
$7.50
Customs/Duties (if you cover them)
$0.00
Credit card fee
$2.50
Profit margin
50%
Total price
$30.75
If you have difficulty with shipping, AsiaCommerce has a service to help you. We can also help you to market and sell your products, both a retail product or a product that needs to be sold in a huge amount. We are making it possible for local business leaders to cooperate with the International global market. Besides export service, we can also help you to import, transport, search for foreign products, and handle distribution issues of your company in southeast Asia.
COVID-19 has a huge impact on communities and on our economy. Since the quarantine, retailers have closed their locations and people stay home to social distance, there has been an increase in online shopping and package deliveries. In this new normal, businesses are adapting but still using online shopping and package deliveries.
While shipping carriers continue to operate as an essential service, there may be some changes that could temporarily impact the way you fulfill orders. To keep your business moving during these uncertain times, we’ve put together a list of strategies to help you ship orders and communicate with customers.
Optimizing your shipping strategy
Getting products to your customers
Communicating with your customers
1. Optimize your shipping strategy
Free packaging materials
Many carriers offer free packaging for use with a specific shipping rate. Although there is no cost for the materials, you might need to create a free account with the carrier in order for them to send it to you.
Shipping rates at checkout
Now more than ever, customers are expecting fast and affordable delivery options.
While shipping times can’t be controlled, you can consider pricing options like free or flat-rate shipping. If you choose to offer free shipping, you can include the fee in your product prices, or you can absorb the shipping costs. If you choose to offer flat-rate shipping, customers will pay one consistent rate depending on where they are located.
Save time buying shipping labels
Adding weights for your products and packages will ensure you get accurate label prices and save time when purchasing a label.
2. Get products to your customers
Due to COVID-19, some carriers have temporarily changed their shipping services and policies. Shipping delays should be expected due to canceled flights, governmental decisions, and staff reductions. Consider offering local delivery for customers who are located nearby.
3. Communicate with your customers
Stay in touch with your customers to communicate shipping delays and encourage engagement through updates and promotional offers.
Communicate shipping delays
Send an email to your subscribers and/or create an announcement bar to share shipping updates with customers on your site.
Leverage social media
With many people staying at home, now is a good time to communicate using social media. Let your customers know how they can continue to support your business, whether through online shopping, local pickups and deliveries, or with gift cards. You can also share promotional codes to boost sales and communicate safety measures your business is following.
For more resources to help you navigate your business during the COVID-19 health crisis, visit our blog and check out our Instagram account @asiacommerce, or you can join our membership so you can import products easily, just fill the form here: https://asiacommerce.net/import-export-request/
Most companies begin to fulfill their own orders, while some eventually use a third-party logistics solution as they grow. Thing is, sometimes it’s difficult to know when to switch, especially when you build your own company from the ground up with nothing but personal savings.
Businesses with various sizes can get benefit by using warehousing and fulfillment services. There are variety of companies that offer warehousing and fulfillment services, some of which specialize in smaller or larger-scale operations
However, there are clear signs that it’s time to switch to outsourced fulfillment.
Cyclical or uneven sales
If the number of orders you process fluctuates throughout the year, it’s probably difficult for you to handle to running and staffing your own warehouse. A logistics company will be able to adapt to your needs.
Besides, unexpected spikes in sales can interfere your delivery promise. An expert can handle times when your daily order volume peaks so you can focus on your delivery consistency and make efficient experience every time.
You’re too busy
Source: Freepik
If you’re too busy dealing with order fulfillment and thus distract your growth focus, it’s probably time to outsourcing it. As a business owner, you need to be able to devote time to sales and marketing, expanding to other e-commerce platforms, sourcing new products and ideas, and improving your business for the long term.
Lack of infrastructure
Source: Kit8
If you’re expanding your business geographically, you may outgrow your current infrastructure before you can adapt. Shipping to locations across the country or even the world comes with logistical challenges that increase expenses and shipping times. This can inhibit large-scale growth.
When you outsource to a global fulfillment partner, they’ll be better equipped to serve a growing customer base, leveraging multiple locations, and optimizing fulfillment accordingly.
Third-party warehousing and fulfillment isn’t right for everyone, but if you find yourself in one of these situations, it might be time to start calling around and chatting with logistics companies.
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