Evaluating E-Fulfillment Companies

  • May 17, 2016
    The Impact of the Product Size and Weight on E-Fulfillment

    When looking at outsourced e-fulfillment options, merchants and manufacturers focus on key factors such as financial stability of the provider, accuracy of inventory, fulfillment and shipping, client retention, experience, technology, service, and costs, among other common factors. All of these metrics are extremely important, but they don’t cover every base. One important, but often overlooked area to consider is the physical characteristics of your product itself – namely the size and the weight of your product.

    e-fulfillment, fulfillment, ecommerce

    Why Some E-Fulfillment Providers Focus on Certain Sized Products

    Oftentimes, ecommerce fulfillment providers focus on certain types of products or physical characteristics of products in order to capitalize on synergies – becoming specialists in their respective niche. Tremendous value can be derived through specialization in a couple of key ways. First, through product specialization on a much narrower niche of product types, the fulfillment company becomes a far superior resource to your ecommerce company since they are knowledgeable of all facets of the narrower niche – from product packaging to specific shipping dynamics. In this capacity, they can offer far greater advice and act as a much more impactful partner in your logistics set up and management. Second, through specialization also comes the all-important benefit of reduced costs. Because product focus is more fixed on a specific set of product characteristics, systems, warehouse layout, staff training, freight carrier shipping discounts, and other factors help the fulfillment company to operate at a lower overall cost than more traditional non-specialist fulfillment companies. This translates into a lower fee structures offered to customers.

    Examples of Fulfillment Specialization by Product Size in ActionFulfillmentCompaniesLogo

    Some ecommerce fulfillment providers choose to focus on smaller and lighter weight products. One example is companies that focus on shipping vitamins and supplements. In this case, e-fulfillment providers can learn and master all of the potential licensing requirements (such as potential FDA approval), lowest cost packaging, most effective shipping services to use, and even other considerations outside of fulfillment that might benefit this niche, such as marketing considerations. Another example of companies that focus on smaller products are CD/DVD/Media fulfillment companies that are masters of USPS media mail and other factors that help book, CD, and DVD producers become more efficient and effective. Companies that focus on smaller products may operate out of a smaller sized warehouse to help reduce the impact of warehouse lease on overall fulfillment costs.

    On the other side of the coin, there are e-fulfillment companies that focus on larger, heavier, and bulkier products. These 3PL’s systems and equipment are specifically geared towards handling heavier and larger products because their facilities have the rack space, floor space, and dock space to handle larger products. Furthermore, by focusing on shipping a high volume of bulkier products, shipping discounts with these carriers are greater than companies that don’t have the specific volume and concentration in heavier/bulkier products.

    FitSmallBusiness.com recently awarded the 2016 Best Ecommerce Fulfillment Providers to ecommerce 3PL’s based on similar product focus niches.

    The Impact of Changes in Dimensional Weight

    DIM Weight Pricing has the greatest affect on businesses shipping lightweight, but bulky items such as bike helmets.

    DIM Weight Pricing has the greatest affect on businesses shipping lightweight, but bulky items such as bike helmets.

    Recently, the freight carriers have been moving to dimensional weight calculations for all shipments. This can have a negative impact on costs, increasing the shipping costs for packages that would not have hit higher dimensional weights before the changes. There are several guides that will help your business better understand DIM weight and the implications on your business model.

    As you can see, the specific physical characteristics of your product play an important role in which ecommerce fulfillment provider you end up choosing to run your logistics. By paying close attention to any potential company’s specialization in this area, you will benefit greatly in the end through enhanced service levels and lower overall costs.

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