Managing costs is a critical aspect of any eCommerce business, and optimizing your fulfillment operations is one of the best ways to do so. By reducing costs in your fulfillment relationship, you can free up resources to invest in other areas of your business. In this blog post, we will discuss five ways to take cost out of your fulfillment relationship and how Capabl can help you optimize your fulfillment operations.
One of the best ways to take cost out of your fulfillment relationship is by streamlining your order fulfillment process. This involves optimizing your warehouse operations to ensure that you can fulfill orders as quickly and efficiently as possible. By reducing the time it takes to fulfill orders, you can save on labor costs and increase the number of orders you can fulfill each day. If you make things easier for your provider, you should expect to share in those savings. Things such as ensuring items are barcoded, kitting ahead of time, or reducing excess packaging or presentation can make a big difference from a cost perspective.
Capabl’s scorecarding and analytics suite can help you pinpoint problem areas, days, or skus in order to begin a meaningful conversation with your provider before the problem impacts a large number of consumers.
Shipping costs can be a significant expense for eCommerce businesses, but there are ways to reduce these costs. Most brands start out using their providers rates which is a large source of revenue for them. However most brands may not be aware that they may be able to negotiate better rates directly with their shipping carriers once they hit $500k of annual spend. More sophisticated shippers can optimize their shipping strategy by using tools like zone skipping, which involves shipping orders in bulk to distribution centers closer to the end customer.
Capabl can help you reduce shipping costs by providing insights into carrier performance and helping you optimize your shipping strategy. By leveraging Capabl's analytics and recommendations, you can identify areas where you can save on shipping costs and improve your overall fulfillment operations.
Inventory management is another critical aspect of fulfillment operations that can have a significant impact on costs. 3PLs typically don’t make that much money storing goods and may penalize you for inventory that doesn’t turn quickly or for discontinued or returned items that are awaiting disposition. If you need long term storage, it’s usually more cost effective for you to find a separate location to hold your excess inventory.
Capabl can help you pinpoint your fastest turning and slowest turning SKUs in order to create a more effective inventory policy.
Returns can be a significant cost for eCommerce businesses, but there are ways to minimize the number of returns you receive. Usually returns are the result of something having gone wrong in the sales process. This could mean inaccurate descriptions, ambiguous sizing, or a mispicked order. Working on correcting some of the root causes of returns as well as evaluating a discounting policy for consumers to waive their right to a return can help increase customer loyalty and reduce the cost of returns.
Finally, having a very well documented and clear standard operating procedure (SOP) with your 3PL can eliminate guesswork and the judgment making on the pack out line. This will allow your provider to utilize cheaper labor who will require less training to be successful. Having simple things like a step by step guide of the pack out process with pictures and clear criteria for what good product and bad product looks like will go a long way in avoiding some of the most common types of complaints a consumer may have.
Capabl can help you improve customer support by providing insights into customer satisfaction levels. With Capabl, you can track customer complaints and fulfillment errors in order to have a more robust discussion on root causes with your 3PL.
Capabl offers automated scorecards and analytics for eCommerce fulfillment, providing insights into the performance of your fulfillment operations. With Capabl, you can track key metrics such as on time fulfillment & order accuracy. Capabl provides you with actionable insights and recommendations that you can use to optimize your fulfillment operations and reduce costs.