Ten ways to boost an online business with the right Order Management and Shipping Partner

There are hundreds of shipping and fulfillment centers clamoring for your business and claiming to have the best shipping rates and the best price for handling.

Like any other business sector, there are better and worse choices even though on the outside they make look quite similar -- a warehouse with lots of boxes, friendly sales people and good prices, at first glance. When it comes to shipping, warehousing and order management services, what counts is ultimately how the shipping and operations fits into your business, rather than being external to your business.

The operations company you choose will ultimately be the glue that can hold your business together in terms of data coordination and feedback, customer satisfaction and cost/revenue relationship. The operations side coordinates all the various vendors (manufacturers, vendors, distributors) and data partners (website shopping, affiliates, merchant processing, call centers). The flow of data is critical to PCI compliance, inventory control, customer service, order tracking, and ultimately, customer satisfaction and loyalty.

Your Operations Management is driven by the need for accuracy, speed and ability to analyze data. You need a sophisticated, intelligent Operations Company that has years of experience and yet are totally current with the burgeoning on line business and utilize information and data handling technology to help their clients create success online.

So what does that look like and what are the 10 important factors to look for in an Operations Management Company for an online business?

1. Set the right shipping charges or help you determine when it makes sense for you to offer free shipping … so that your clients don’t decide to buy the same fishing rod or fly set on your competitor’s website. The Company you work with should!

Fact: There is so much price parity on products across the internet that consumers will decide to buy because you provide additional tipping points - fast delivery, low shipping, great company philosophy, customer service....in other words, beyond price, you’ve got much to consider.

2. Create tight scripts for your customer service calls and better yet, help you set up your order system to generate fewer calls. Great customer service not only resolves potential problems, but turns those problems into opportunities for upsells and customer loyalty. Give them a chance to tell you positive feedback, and you can use that too! The more you plan and prepare for your customer’s questions and provide them with clear and easy information, the better they will feel about doing business with your company. Customer loyalty is golden.
   
   
3. Credit Card processing - Maximize cash flow – Minimize risk. Getting sales may be the most important step, but retaining the sale follows a close second. Canceled orders can be a big drain on sales, and even worse are charge backs that cut deep into your margins and putyoru mechant account at risk. Do you have an effective communications program in place to confirm your orders have been received and are shipping soon? Do you notify your customers of backorder situations? Having effective notifications backed up by live customer service will go a long way towards reducing cancellations, returns and charge-backs. Declined Credit cards are another opportunity to resell someone who already made the decision to buy; are you capturing this opportunity with a reach out effort? . -- Keeping your customer informed of the order status, giving them multiple channels for asking questions can all go a long way towards reducing canceled orders and charge-backs.Fact: There is so much price parity on products across the internet that consumers will decide to buy because you provide additional tipping points - fast delivery, low shipping, great company philosophy, customer service....in other words, beyond price, you’ve got to be GREAT at delivering product and taking care of your customers.

Fact: Just providing tracking information for an order in any easy one-click link on an email will prevent frustration and customer phone calls. A good operations partner provides that service to your customer at no extra charge.

Fact: Visa and MasterCard watch D2C programs closely because some types of sales account for a disproportional amount of their consumer complaints and charge-back activity. Too many charge-back challenges may cause you to lose your merchant account even if you “win” your cases. You can help minimize charge-backs by using email notifications of the order status, shipping promptly, and providing email and telephone customer service when your customers have questions.

4. Get you the best possible mix of price, delivery time and reliability for the type of product you are sending out as shipping costs continue to rise. If you are a company with a variety of sized products and the weights of your orders are variable, an excellent operations partner will make sure you are always optimized and not provide you with a single shipping solution. There are many ways to ship small packages, different ones for odd-shaped packages that provide insurance coverage and the best choice is sometimes counter intuitive.

Fact: Operations managers analyze weight to determine shipping methods. Sometimes just a fraction of an ounce can push the package into higher priced shipping category that can increase your shipping costs.

5. Your shipping company should be able to give you bulk pricing on all the various sizes of shipping cartons you will need, and beyond that they will be concerned with weight margins on your most common shipments. Buying direct from the manufacturer means they pass the savings along to you, another advantage of working with an operations management service versus trying to ship out from your own warehouse.

Fact: There are many choices in shipping packaging from box strengths to degree of recycled materials to the ability to imprint on the outside and prices vary according to volume. The cost of your box or envelope can be a variable which adds significantly to shipping costs if purchasing isn’t researched.

Fact: Operations managers analyze weight to determine shipping methods. Sometimes just a fraction of an ounce can push the package into higher priced shipping category that can increase your shipping cost.

Fact: There are many choices in shipping packaging from box strengths to degree of recycled materials to the ability to imprint on the outside and prices vary according to volume. The cost of your box or envelope can be a variable which adds significantly to shipping costs if purchasing isn’t researched.

7. Does your Operations Center provide you the ability to connect to International Markets? Receiving goods from international producers is only half of the equation. In a global economy where internet marketing can reach consumers everywhere is only as good as your ability to receive payment and deliver the goods. A good operations management company will know how to work with shipping consolidators to get individual orders bulk delivered to local post offices in foreign countries for example. You can’t take orders without receiving payment, and that needs to be coordinated with your shipping manager too. Strategic partnerships for data handling from international payment services and your shipping company will ensure that the transaction is valid, the product is not shipped unless paid for and the address verified. International payment coordination is key and comprises methods outside credit card systems that extend to bank drafts, transfers and more.
   
   
8. You need to be able as a business manager to project costs and manage budgets. With a cost per order price, you can tie the revenue to the cost of operations. If your Operations Management company is presenting you with a price for shipping then giving you a long list of surcharges, then you are not being well served. Your shipping partner should work with you to come up with the true cost of sending your direct to consumer as well as channel orders. All the services which your company requires from your operations partner should be looked at carefully and presented by them to you as a single cost per order. This can be called “bundled pricing” and eliminates surcharges, fees, add-ons and extras. Your operations costs can then be predictably tied to your revenue and support your budget not create holes in your budget.

Fact: a shipping container coming to port from Asia is associated with customs forms, manifests and quality control documents. There are more than 26 steps and stages to getting those items into inventory and onto the shelves at your warehouse ready for shipping.

Fact: Each country has highly specific customs regulations as to what can be received and the associated duties. Businesses who are shipping direct to consumer overseas can benefit from the experience of shippers who know how to prepare the documents to reflect the information requirements so that the orders go through customs. For supplements or ingestibles, for example, ingredients lists must be provided and checked against prohibited items lists.

9. Does your shipping company have strategic locations for your marketplace of customers? It is more important that your shipping company is positioned to serve your customers than it is to be close to where your product is sourced. Many companies make the mistake of finding a warehouse that is close to their manufacturer. However, the cost of shipping pallets or truckloads of product from a port or manufacturer to a shipping facility is much less than the aggregated cost of shipments to your customer. If your customer base is California, for example, and your product is manufactured in Wisconsin, it makes much more sense to have an operations facility in Arizona where costs are low and you can explore the sales tax advantages of not having a place of business in the same state where most of your customer reside. If your client base is national and your product weighs more than a pound (that’s when destination zip codes starts to impact shipping price), then bi-coastal operations with a split inventory may make sense for your company.
   
   If you are seeking international markets, then also having a foothold into the EU will be helpful in terms of importing your product one time and shipping out individual orders from a location within the EU. However, the main thing for your growing company to keep in mind is that data flow must be centralized and inventories coordinated in order for your shipping partner to truly perform their duties and support your ability to analyze data and respond with marketing initiatives accordingly.
   
   With centralized data processing, a good shipping partner can analyze the benefit of a split inventory and will optimize shipping methods and locations for orders as they come in. This is not only true for direct to consumer orders, but also for channel orders going to retailers. Your operations company with bi-coastal operations can send full truckloads to their facilities to be broken out to LTL loads (less than truckload) for considerable savings over those same pallets being shipped across the country.

Fact: Many shipping companies provide you with a low cost per piece for handling but will add on surcharges for receiving, palletizing, international orders, returns, backorders, address corrections, and the list goes on. These costs are actually statistically predictable and can be factored into one overall price which will of course be slightly higher than the base handling price, but long term, will be far less expensive than the aggregated surcharges.

10. Working with your operations management company should be thought of as a partnership with a high degree of trust and transparency. Doing business is more about the people involved than the merit of the plan they are executing. Your operations partner is just that -- a partner who is on your side, not a just another vendor whose services you are purchasing. From the start, good communication and depth of experience must be evident as you develop your initial proposal and program plan. An operations partner should be judged on value more than price, and more on their ability to handle information than their ability to put your product into a box. Assess your operations management partner for the depth of the experience of their core management team as well as the strength of the data handling systems that have been built up as a result of many transactions.

Fact: Bi-coastal shipping can save on average 50% per order on shipping expense on items over one pound. For a five pound item being shipped from Massachusetts to California for example, the cost averages $12.00, while shipping from Arizona to that same California customer, the cost averages $5.50. On 10,000 orders, that’s $55,000 in savings, and inventory should be sent West to serve that region. In a recent analysis, LTL from Arizona to California for example. was found to be 66% less expensive than LTL pallet shipping from Minnesota. For 500 pallets going West per month from a Western location over a Minnesota location, the savings are in the millions of dollars annually, yet surprisingly, many companies are unaware of the price differentials and maintain their current operations.

Fact: References are very important. Three or four references for companies of your scale and or industry should provide you with a good picture of your operations partner. Ask for these references in the initial phase of discussion and exploring your operations.

Call PMA Fulfillment Today at 888.638.8762 to
Boost your online business with the right
Order Management and Shipping Partner