Handling Order Fulfillment for an Online Retail Startup



Posted: Thursday, October 28, 2010

by Kenneth Kowal
http://www.shipstarter.com

If your company has a product it sells through normal retail distribution channels, it may be time to compliment that business with a direct to consumer approach. There is possibly a huge market segment out there located too far away from the traditional retail outlets that needs your products. Whether you are an established business or an online start up looking to build a new web store, setting up an operating an ecommerce online retail presence is easier than ever.

From a packing and shipping (order fulfillment) perspective there are a lot of considerations to creating the right order fulfillment process and making it profitable. Figuring out the best options for packaging the orders and most cost efficient ways to deliver the customer products while keeping costs low should be the first two priorities.

The shipping cartons can be expensive and range in cost by several dollars per piece depending on the size and quantity that are purchased at a time. So, stocking fewer sizes of boxes is better and more cost effective. Figuring out how to pack orders in the boxes as efficiently as possible allows shippers to minimize the box sizes they need to keep in stock. If you are shipping a frozen food product it gets even more complex.

Deciding how orders are shipped is another big cost factor for startup ecommerce fulfillment operations. FedEx, UPS, or the Post Office which is best? It depends on the service level you need, as in how quickly does it need to get there. Do your homework, because the Post Office may be cheaper but the service may be longer. Also, UPS and FedEx both service many points in 1 day with their least expensive Ground service, so there is no need to pay for the expensive Next Day Air Service.
Ken has been working in supply chain logistics for over 15 years and is the founder of 2 logistics companies in the e-commerce order fulfillment and transportation management software markets.

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