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As businesses develop, management teams must continually
implement new strategies and ideas to help manage this growth.
In many instances this involves the outsourcing of the shipping
and fulfillment departments to third-party logistics (3PL)
provider. These providers typically offer a set of services
that cater to the needs of midsize and large companies that
require multiple packaging, shipping, and storage solutions.
When a multichannel merchant decides to shop for a 3PL
provider, it may figure that almost any fulfillment house
is qualified to provide a drop-shipping solution. In fact,
the real benefits of drop-shipping services lie in the provider’s
software and its ability to provide enhanced services to
a merchant’s consumer and business customers as well
as the ability to provide maximum integration into the merchant
inhouse enterprise resource planning (ERP) system.
Third-party logistics providers with well-designed drop-shipping
software can seamlessly offer enhanced services to a merchant’s
customers. The software allows drop-shippers to effortlessly
focus on providing value-added services that reach beyond
typical shipment-tracking capabilities. Many of these add-on
services focus on the customization of shipping labels:
gift messages imprinted directly on the label; client-designed
custom labels; providing customer identification information
directly on the label, which can be useful when communicating
with the merchant’s customer service department.
Many times 3PL providers can offer merchants the ability
to communicate directly with the merchants’ customers
using an e-mail alert system. This can lower a merchant’s
customer service costs by providing automatic notification
when items are packed, shipped, or backordered. Another
important feature that many 3PL providers’ software
can offer is the ability for a merchant’s customers
to choose a shipping method based on shipping rates and
delivery times.
Business-to-business merchants who are shipping to resellers
must often adhere to specific guidelines to avoid expensive
chargebacks and other related fines. Shipping compliance
can in fact become a significant issue for b-to-b merchants
deciding to outsource fulfillment. Fortunately, drop-shippers
with a well-designed shipping system can easily integrate
routing and labeling guides directly into the merchant’s
shipping profile. Third-party logistics providers that use
the most advanced shipping systems can even build shipping
profiles to follow very detailed and specific instructions
for each of its clients.
Before choosing a fulfillment house, you must understand
the 3PL provider’s ability to export data from its
shipping system into your ERP system. You should plan to
import as much data as possible. This will allow access
to accurate inventory levels and real-time shipping data,
which can then be passed through to your sales and customer
service departments for better customer service and the
opportunity for increased sales. Integrating a 3PL provider’s
shipping system with your inhouse ERP system also minimizes,
if not eliminates, duplicate data entry, which creates labor
savings and increased accuracy.
Kevin Faeger is president of OutBound Shipping System,
a St. Louis-based provider of customized multicarrier shipping
systems. |
