Calculate Safety Stock Levels

How to Calculate Safety Stock for Optimal Inventory Levels

Calculate Safety Stock Levels for Efficient Inventory Levels

Inventory management is an important part of running a successful business. A key goal of inventory management is having enough stock to meet customer demand while avoiding excessive inventory buildup. Revenue lost due to stockouts from customers purchasing from competitors and the knock-on effect of reduced supply chain efficiency cannot be underestimated. To help manage your inventory levels correctly managed, it’s vital to calculate safety stock for optimal inventory levels. While common, even desirable, to run low on supply due to increased sales, it is also vitally important to calculate accurate safety stock and reorder cadence to ensure the appropriate amounts of product to keep on hand. In this post we will explore how to calculate safety stock for optimal inventory levels.

Calculate Safety Stock Levels

What is safety stock?

Safety stock is a buffer of inventory kept on hand as an insurance policy to protect against unexpected disruptions in supply or demand. It is essential because it ensures that the company can always fulfill customer orders, even when there are unforeseen delays in receiving goods or a sudden spike in demand. Safety stock also reduces the likelihood of stockouts, which can lead to a loss of sales and customer dissatisfaction. Stockouts result in $984 billion worth of lost sales worldwide, with North American companies alone losing $144.9 billion, according to a study by IHL Group. In addition to preventing stockouts, having safety stock on hand can help a business stay competitive by allowing them to respond quickly to changes in the market and leverage last-minute sales promotions.

Calculate Safety Stock Levels

Remember that this formula doesn’t consider dramatic fluctuations in lead time or supply chain bottlenecks. Furthermore, it doesn’t account for customer demand fluctuations or seasonal changes. If you need a more accurate safety stock calculation considering these variables, please check out the following methods.

  1. Heizer and Render’s Formula – this method is best if you have significantly varied lead times.
  2. Greasley’s Formula – this method takes into account both lead time and demand fluctuations.

For an extensive deep dive into more techniques to calculate safety stock for optimal inventory levels, check out this post by ABC Supply Chain. They even offer an excel based safety stock calculator.

Safety stock is an integral part of inventory management and ensures optimal inventory levels when regularly monitored. By calculating safety stock levels for each product, you can ensure that your inventory management is effective and that customer demand is met without excessive inventory buildup. Whether you choose the basic method or a more complex formula, having adequate safety stock is good for business.

How working with a 3PL can improve safety stock management.

Working with a 3PL can help with safety stock by allowing the 3PL to manage the inventory levels and identify potential future needs. 3PLs are experts in inventory management and can ensure businesses always have the right amount of stock on hand. A quality 3PL can also help with quality control, supply chain management, and flexible storage options. Furthermore, they can provide real-time inventory tracking and reporting so businesses can monitor their safety stock levels and make adjustments as necessary.

If your business needs a partner to manage inventory, improve safety stock levels, or streamline your supply chain. Get in touch with Falcon Fulfillment. We have the experience and connections to help your business maintain the right amount of product at all times. Talk to one of our friendly agents today to find out more.

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Reasons Business Needs Fulfillment

3 Reasons Why Your Business Needs a Fulfillment Warehouse

Reasons Business Needs a Fulfillment Warehouse

As a business grows, delegating tasks and making wise investments that improve efficiency and productivity becomes vital. Inventory storage and staging areas are critical to effective order fulfillment. Not only that, but staffing must also increase to meet the growing demand of a thriving business. An efficient fulfillment warehouse is essential to any business, regardless of size. It enables companies to streamline the order process, improve customer service, and ultimately increase profits. Here are 3 reasons why your business needs a fulfillment warehouse:

Reasons Business Needs Fulfillment

Streamlined Order Process

Streamlining the order process is one of the most significant benefits of using a fulfillment warehouse because it allows a business to process orders quickly and efficiently. By housing your inventory with a fulfillment warehouse, you can easily keep track of stock levels and promptly fulfill customer orders. This reduces the time it takes to process orders, leading to improved customer satisfaction and a more efficient order process. Look for a provider that has invested in modern integrated technologies. Here are a few of the simple ways working with a fulfillment warehouse will streamline the order process:

  • Orders are fulfilled using integrated technology.
  • Leverage shipping automation, selection, and tracking software.
  • Barcode and single SKU scanning for accurate inventory tracking.
  • Real-time inventory levels are available 24/7.
  • Standardize reorders and restocking cadence.
  • Organized warehouse workflows.
  • Detailed receiving to ensure precise order quantity and quality.
  • Shipping synchronization.

Reasons Business Needs Fulfillment

Improved Customer Service

With a fulfillment warehouse, businesses can provide customers with faster delivery times and a better overall experience. From streamlining the order process to improving picking and packing accuracy, customers will get what they ordered faster and more consistently. Orders are packed in such a way as to minimize damage in transit, which means fewer returns and exchanges. In addition, a fulfillment warehouse can provide additional services such as order tracking, returns and exchanges, and customer support. Companies can use these services to ensure customers have a positive experience and increase customer satisfaction.

Reasons Business Needs Fulfillment

Increased Profit

Businesses can increase profits by streamlining the order process and improving customer service. Faster delivery times mean customers are more likely to purchase from your company, leading to increased sales. Additionally, working with a fulfillment warehouse increases profit margins by reducing overhead costs, such as those associated with inventory management and shipping. Warehouses are able to store, package, and ship goods more efficiently than a business can handle on its own, resulting in lower costs and increased profits. Furthermore, companies can reduce labor and material costs associated with stocking and managing inventory with better organization and space utilization. This cost savings and efficiency can increase profitability for businesses that partner with a fulfillment warehouse.

Overall, having a fulfillment warehouse is essential for any product-based business. It streamlines the order process, improves customer service, and ultimately increases profitability. If your business needs help finding the space, human resources, or time to deliver your goods consistently and efficiently, it is time to evaluate your warehousing and fulfillment options. Considering the 3 reasons why your business needs a fulfillment warehouse why not partner with Falcon? Let us help your business go to the next level.

If you are still trying to figure out where to begin, talk to one of our agents today.

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Returns Outsourcing vs. In-House

Returns Management - Outsourcing vs. In-House

Returns Management – Outsourcing vs. In-House

It is essential for product-based businesses to handle returns management effectively. In fact, according to a recent consumer report, 96% of consumers say they would return to a retailer with an “easy” return policy and process. Outsourcing returns management can be a great option to help streamline the returns process and reduce overhead costs. In-House returns management can work for smaller businesses that are not processing a significant amount of returns. This post will discuss good returns management outsourcing vs. in-house.

Returns Outsourcing vs. In-House


Elements of Great Returns Management

A good returns management strategy aims to create the most cost-effective and efficient process for both the company and the consumer. Returns management is the process of returning products to the retailer that are defective, no longer needed, or require an exchange. Not only does returns management involve getting goods back to the seller, but it also includes reducing the need for returns altogether.

Essential elements of great returns management include:

  • Customer Service – A great returns management process begins with excellent customer service. This includes several key elements, like a clear and easy-to-understand return policy, transparent and prompt communication, as well as various resolution strategies. In addition, if a customer runs into a snag in their return teams or chatbots are readily available to solve more complex return needs.
  • Reverse Logistics – Reverse logistics involves every aspect of shipping, tracking, and receiving unwanted products and then processing them accordingly. This includes evaluating the product for damage or repair potential, restocking items, reselling, refurbishing, and shipping out an exchange when required. There are a fair amount of touchpoints during this cycle of the returns management process.
  • Inventory Management – Another crucial element of great returns management is inventory management. A recent consumer trend is that customers will buy multiple sizes and colors of a product with the intention of returning them. Therefore, businesses are seeing en masse returns that can affect their bottom line. Every item that can be salvaged must be appropriately repackaged, labeled, and returned to sellable inventory. Alternatively, the stock must be disposed of through the proper channels.

Returns Outsourcing vs. In-House

In-House Returns Management

Managing returns in-house can be a blessing and a curse. It can be an excellent fit for new or smaller businesses that are not dealing with a significant amount of returns or exchanges. However, managing returns in-house can become exponentially complicated as a business scales.

Pros of In-House Returns

The main benefits of managing returns in-house involve insight and control over the process. Because teams are completing the returns process directly, the company has full awareness of the efficiencies (or inefficiencies), customer satisfaction levels, and operational impact within the business. Here are a few reasons to consider managing returns in-house:

  • Increased control over the returns process
  • Improved customer service experience
  • Lower costs associated with outsourcing
  • Increased insight into customer satisfaction
  • Ability to leverage returns data to understand customer preferences and trends better
  • Ability to track returns in real-time
  • Full transparency into the process
  • Improved customer loyalty and retention

Cons of In-House Returns

Complications with in-house returns management start to occur as the number of returns increases. More returns require more staff, customer service hours, and more attention to restocking and inventory levels. Some business owners can get overwhelmed by volume, resulting in a poor customer experience. Here are some of the main drawbacks:

  • High labor costs associated with processing returns
  • Potential issues with tracking and managing customer data
  • Difficulty managing customer expectations
  • Difficulty managing inventory and restocking
  • Difficulty organizing and tracking shipments
  • Increased customer service costs
  • Increased risk of customer dissatisfaction

Returns Outsourcing vs. In-House

Outsourcing Returns Management

Many businesses find that outsourcing is the best solution to provide high-quality service for their customers. Outsourcing returns management is an excellent way for companies to improve customer service and minimize costs, especially as they grow. In addition, outsourcing can help free up internal resources to focus on the business’s core competencies.

Pros of Outsourcing

Outsourcing releases vital staffing resources for more essential business operations. As a business scales, outsourcing can offset the increased focus that returns management requires. Here are some of the main benefits of outsourcing returns management:

  • Cost savings: Outsourcing returns management can reduce labor costs, freeing up resources for other aspects of the business.
  • Time savings: By outsourcing returns management, companies can reduce the time spent processing and managing returns. This can significantly improve overall efficiency.
  • Automation Technology: Outsourcing returns management can provide companies with improved automation technology. Rather than having to log in to multiple customer management portals, a single point of reference can manage the entire reverse logistics process.
  • Improved customer service: Outsourcing returns management can improve customer service by providing customers with a fast and efficient returns process.
  • Reduced risk: Outsourcing returns management can help reduce the risk of handling returns internally, such as product damage or lost items.
  • Greater expertise: Outsourcing returns management can provide companies with access to greater expertise and knowledge about best practices for returns processing.

Cons of Outsourcing

One of the main things companies worry about when considering outsourcing their returns process is the loss of oversight and control. A genuine concern is losing touch with customers and partnering with a team that will not represent the brand well. Here are some of the drawbacks of outsourcing returns management:

  • Increased Cost: Outsourcing returns management can be more expensive than managing returns in-house due to the service provider’s cost./li>
  • Loss of Control: By outsourcing returns management, companies lose control over the process and can’t ensure the same level of quality as if the process was managed in-house.
  • Loss of Flexibility: Outsourcing returns management can limit companies’ ability to adjust quickly to changes in returns policies or processes.
  • Increased Risk: Companies that outsource returns management are at risk of entrusting sensitive customer information to an outside party, which can lead to data breaches or other security issues.
  • Lack of Transparency: Companies that outsource returns management may need more visibility into the process and may be unable to track and monitor returns in real-time.

In closing, the returns management process is complicated. Whether you decide to outsource or manage returns in-house, understanding each method’s pros and cons is vital. Evaluate your business needs against the time, resources, and staff you have available to create a seamless returns management process. If your team is overwhelmed, you have received negative feedback, or you cannot restock inventory promptly, it could be time to outsource returns management to a company that specializes in it. Falcon Fulfillment is an expert in eCommerce returns management and can implement brand-specific strategies to meet your growing business needs.

Talk to our agents today if you want to learn more about how we can help you recoup as much of your returns as possible.

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3PL support omnichannel growth

10 ways a 3PL Can Support Your Omnichannel Growth.

10 ways a 3PL Can Support Your Omnichannel Growth

According to CB Insights, the rise of e-commerce, changing consumer behaviors, and stiff retail competition has made omnichannel retail increasingly relevant. With the rise of omnichannel retailing, businesses increasingly rely on third-party logistics (3PL) companies to support their growth. 3PLs offer various services and solutions to help companies to optimize their operations, reduce costs, and improve customer experience. Here are 10 ways a 3PL can support your omnichannel growth:

Order Fulfillment

3PLs provide comprehensive order fulfillment services to streamline your operations and increase efficiency. They assist with warehousing, inventory management, and distribution services. 3PLs can offer various services, from basic order fulfillment to more complex order management and tracking. By leveraging their expertise and capabilities, 3PLs help streamline the fulfillment process, maximize efficiency, and improve customer service. 3PLs can help reduce costs associated with order fulfillment, provide real-time inventory visibility, and provide seamless tracking and delivery of orders.

Inventory Management

3PLs help manage your inventory by providing real-time visibility into your stock levels. This lets you make informed decisions about inventory allocation, reorder cycles, and stockout prevention. Partnering with a 3PL to help manage inventory is a way they support omnichannel growth because you have a singular system managing inventory while leveraging multiple distribution warehouses.

3PL support omnichannel growth

Warehouse Management

3PLs can help you manage your warehouse operations, including receiving and storing inventory, picking and packing orders, and shipping orders. Allowing a 3PL to assist with warehouse management alleviates the burden of managing warehouse operations, logistics, and staffing. Expanding warehouse capacity is one of the largest investment costs for a business branching into omnichannel sales. When you partner with a 3PL, this is a more seamless and affordable option.

Logistics Optimization

3PLs can help you optimize your logistics operations by providing cost-effective shipping solutions and tracking tools. They manage the supply chain process, from warehousing and inventory management to order fulfillment and shipping services. They provide the resources and expertise necessary to ensure smooth and efficient operations. 3PLs can offer value-added services such as order tracking, product customization, and reverse logistics. In addition, 3PLs are often accustomed to managing international shipping. They can provide expertise in customs clearance, foreign exchange, and other international shipping factors. By outsourcing these services to a 3PL, companies can free up resources to focus on their core business operations.

Customer Service

3PLs can provide customer support on your behalf, including handling inquiries, returns, and complaints. Utilizing a 3PL can improve customer satisfaction by offering faster delivery times and improving returns management processes. This helps you maintain a positive customer experience and build customer loyalty.

Technology Integration

One of the main ways a 3PL can support your omnichannel growth is by integrating all order fulfillment and logistics technologies into a single platform or point of reference. 3PLs assist with integrating your eCommerce warehouse management systems, inventory programs, and transportation software with your retail sales platforms. Integrating all of the necessary systems allows you to manage orders and inventory more efficiently. As a result, you can offer a seamless omnichannel experience.

3PL support omnichannel growth


3PL support of omnichannel growth can help ensure your operations comply with applicable laws and regulations. Governing all the moving parts to ensure compliance is complex and expensive if improperly handled. 3PL companies have extensive experience with compliance standards. This can help you avoid costly fines and penalties.

Supply Chain Visibility

A 3PL helps with supply chain visibility by providing access to various digital tools and services that enable organizations to track, manage and analyze their supply chain operations. This visibility helps businesses stay informed of the progress of their goods throughout the supply chain, from the point of origin to the point of delivery. Additionally, 3PLs often provide real-time shipment tracking and analytics, helping businesses to plan their supply chain operations better and identify areas of inefficiency. Finally, 3PLs can provide visibility into the entire supply chain, from production and procurement to order fulfillment and delivery, giving businesses greater control over their supply chain operations.


3PLs support your omnichannel growth by allowing your business to scale up and down as needed. Partnering with a 3PL for all your logistics needs enables your business to try new promotions and ideas and even launch new markets without the significant overhead investment it would require doing it alone. The flexibility and support to scale are one of the most important benefits of partnering with a reliable 3PL provider.

Reporting and Analytics

Every business owner recognizes that good decisions are made from good data. In order to grow your omnichannel sales, it is vital to have a clear picture of products and customers throughout the supply chain. 3PLs provide detailed reporting and analytics to help you better understand your operations and make data-driven decisions.

As you can see, there are many ways that a 3PL partnership can improve your business operations. You will see improvements across your organization by leveraging just a few of the 10 ways a 3PL can support your omnichannel growth. A solid 3PL is committed to your evolution as a retailer. After all, when you win, they win.

If you want to learn more about how Falcon Fulfillment can support your omnichannel growth, contact one of our friendly agents today.

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Fulfillment Mistakes That Are Costing

5 Fulfillment Mistakes That Are Costing You

5 Fulfillment Mistakes That Are Costing You

Running an e-commerce business is challenging. From customer service to product fulfillment, there are a lot of moving parts that can make or break the success of your venture. One essential element of e-commerce is fulfillment — getting orders to customers promptly and cost-effectively. Unfortunately, many businesses make costly mistakes when it comes to fulfillment. Here are 5 fulfillment mistakes that are costing you:

Fulfillment Mistakes That Are Costing

1. Not Offering Multiple Fulfillment Options

Not offering multiple fulfillment options can significantly reduce your customer base. Not everyone lives near a store and wants to pay for expensive shipping. Offering multiple fulfillment options such as in-store pickup, curbside pickup, BOPIS and free shipping can help you reach a broader customer base and increase revenue.

Fulfillment Mistakes That Are Costing

2. Not Automating Fulfillment Processes

Automating your fulfillment processes can streamline business operations and save time and money. To begin automating your fulfillment processes, define your current fulfillment processes and evaluate which ones can be automated. Once you have identified the functions that can be automated, decide which software solutions or applications to use.

This can include an Order Management System (OMS), a Warehouse Management System (WMS), or a Customer Relationship Management (CRM) system. Once you have identified the solutions, implement them and train your staff. You should also ensure that the automation solutions you choose have the necessary features to help streamline your fulfillment processes. Finally, track the performance of the automation solutions and make changes as needed to optimize them. The beauty of automating your fulfillment processes is it reduces manual errors and makes it easier to track inventory and shipments.

Fulfillment Mistakes That Are Costing

3. Not Utilizing a Warehouse

If you’re not utilizing a warehouse for your fulfillment needs, you’re likely spending more money than necessary. Investing in a warehouse for fulfillment can save you money in the long run. They are more efficient than home-based fulfillment because they provide more space and specialized equipment. This increased efficiency saves you on labor and shipping costs and reduces the time it takes to fulfill orders. In addition, warehousing allows you to take advantage of bulk discounts, which can help you reduce costs further. Lastly, the warehouse can also help you reduce the risk of damage and loss from improper storage of products. Overall, if you are still fulfilling out of your garage, this could cost you time and money.

Fulfillment Mistakes That Are Costing

4. Not Investing in Inventory Management Software

Inventory management software can help you keep track of your inventory, reduce stockouts, and ensure you always have popular items. It allows you to track incoming and outgoing inventory, set reorder points, and manage inventory levels. Investing in this type of software can save you money by allowing you to control your inventory and inventory costs better.

When you can accurately predict inventory needs, you can avoid overstocking or understocking, saving you the cost of excess or lost sales due to a lack of inventory. Additionally, inventory management software can help you better track the cost of goods, allowing you to optimize your supplier relationships and take advantage of cost savings. Finally, inventory management software can help you better manage warehouse and staffing costs, ensuring that you are efficiently utilizing your resources and maximizing your savings.

Fulfillment Mistakes That Are Costing

5. Not Utilizing Fulfillment Service Providers

Fulfillment service providers can help you save time and money by managing your fulfillment needs. Working with a fulfillment service provider can save you money in several ways. By outsourcing fulfillment services, you can avoid expensive overhead costs associated with warehousing, shipping, and order fulfillment.

Additionally, fulfillment service providers have access to discounted rates with shipping carriers, allowing you to reduce the cost of shipping orders. Furthermore, fulfillment service providers are experienced in packing orders efficiently, which can help you reduce the cost of packing materials. Finally, working with a fulfillment service provider can help you save money on labor costs by eliminating the need for in-house staff to manage the fulfillment process.

Investing in the right tools and services can make all the difference when it comes to the success of your business. Being aware of these common fulfillment mistakes can help you save time and money when running your eCommerce business. If you want to learn more about how Falcon Fulfillment can help you avoid these 5 fulfillment mistakes costing you, talk to one of our agents today.

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Make e-commerce more sustainable

7 Tips to Make Your E-commerce Business More Sustainable

Make Your E-commerce Business More Sustainable

Making an e-commerce business more sustainable is a great way to reduce your environmental footprint and create a more positive shopping experience for your customers. In a 2020 consumer survey conducted by McKinsey, 60% of respondents said they would pay more for brands that utilize sustainable packaging. The sustainability trend continues to gain momentum with younger buyers.

According to Insight, nearly 90% of Gen X consumers said they would be willing to spend an extra 10% or more on sustainable products, compared to just over 34% two years ago. Fortunately, you can take plenty of simple steps to make your e-commerce business more sustainable and eco-friendly, accordingly here are 7 tips to make your e-commerce business more sustainable:

Make e-commerce more sustainable

1. Choose eco-friendly packaging

Use eco-friendly packaging materials like cardboard boxes, recycled paper, and biodegradable packing peanuts. This reduces the amount of plastic and other non-recyclable materials used in eCommerce packaging. Here are some of the most popular eco-friendly packaging alternatives:

  • Compostable materials – any packaging that will decompose naturally in under 180 days in an at-home composting environment is considered compostable. One of the most popular varieties is compostable mailers.
  • Recycled materials – make good use of plastics already in circulation by reusing mailers or selecting products made out of existing resources.
  • Corrugated packaging – good old-fashioned cardboard boxes made of corrugated materials are durable, reusable, strong, and biodegradable.
  • Cellulose packaging – Cellulose packaging is made from natural sources like hemp, wood, and cotton. The material is biodegradable and compostable, making it a sustainable alternative to plastic.
  • Green cell foamGreen Cell Foam is made from US-grown corn, is certified compostable in the backyard and industrial facilities, and can even be dissolved in a sink for safe and easy disposal.

Make e-commerce more sustainable

2. Offer eco-friendly or carbon-neutral shipping

Carbon-neutral shipping is where the carbon dioxide produced throughout the shipping process nets zero. Carbon dioxide is still likely produced, but the emissions are reduced or offset. Look for shipping services that offer carbon-neutral shipping and other eco-friendly options. This will reduce your carbon footprint and make your business more sustainable.

Make e-commerce more sustainable

3. Use energy-efficient technology

Invest in energy-efficient computers, servers, and other technology to reduce energy consumption. Many warehouse management technologies minimize energy usage and improve efficiency. A few energy-efficient technologies include motion-censored lighting, AI-powered conveyor systems, and vertical retrieval machines. Implementing energy-efficient technology will reduce your carbon footprint and save money in the long run.

Make e-commerce more sustainable

4. Invest in carbon offset programs

A carbon offset refers to a reduction in GHG emissions – or an increase in carbon storage used to compensate for emissions occurring elsewhere. Not all offset programs are created equal. Companies that do not have the means to be completely carbon-neutral with their existing protocols may consider investing in reforesting, solar farms, etc., to offset their carbon dioxide contributions. According to, these are some of the top carbon-offset programs to partner with in becoming sustainable.

Make e-commerce more sustainable

5. Reuse and recycle materials

Whenever possible, reuse and recycle materials instead of throwing them away. This includes sourcing recycled materials when possible and using packing materials that can be reused or recycled. This will help reduce your waste and save you money in the long run.

Make e-commerce more sustainable

6. Choose sustainable suppliers

Research and look for suppliers that use sustainable materials and processes. It can feel overwhelming to sort through the myriad of vendors and suppliers available but consider the following steps when initiating your search for sustainable partners:

  • Define what sustainability means to you and your company
  • Ask tough questions. i.e., where do your raw materials come from, what management firms determine their eco-friendly status, do they offer carbon-offset programs, etc.
  • Look for sustainability credentials
  • Use a sourcing tool like – Common Objective.

Also, consider checking out the US Chamber’s post about “How to find a sustainable partner.” Partnering with a sustainable supplier will help ensure your products are made with the environment in mind.

Make e-commerce more sustainable

7. Educate your customers

Make sure your customers are aware of your sustainability efforts. This includes informing them of how they can reuse or recycle packaging materials. Many customers don’t realize they can use their packaging to make a return (even plastic mailers), so educating them to improve your eco-friendly efforts is vital. Additionally, educating customers about your sustainable progress will help them understand why they should choose your business over others.

These 7 tips to make your e-commerce more sustainable are not exhaustive. However, by implementing a few of these tips, your brand can capitalize on the sustainability trend and protect the environment for years. This will not only benefit the planet, but it will also help create a better shopping experience for your customers. Talk to one of our agents today to learn how Falcon Fulfillment can help your e-commerce become more sustainable.

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Difference between B2B B2C

The Difference Between B2B and B2C Order Fulfillment

The Difference Between B2B and B2C Order Fulfillment

As businesses shift more of their operations online, understanding the differences between B2B (Business-to-Business) fulfillment and B2C (Business-to-Consumer) fulfillment is essential for any company looking to succeed. Whether you’re selling products or services, understanding the unique nuances of each type of fulfillment can help ensure that your customers get the best possible experience. This post will discuss the differences, similarities, and crucial elements in B2B and B2C fulfillment.

Difference between B2B B2C

B2B and B2C serve different customers.

The customer is the most apparent difference between B2B and B2C fulfillment. B2B fulfillment involves selling products or services to another business, while B2C fulfillment involves selling to individual consumers. This difference affects how companies approach fulfillment, as their customers have different needs.

If you are a B2B company, your customers are larger organizations that will make larger purchases that typically have a regular ordering pattern. They are partnerships that require stronger relationships, communication, and ongoing negotiations. Typically, B2B companies have fewer customers but order far more products.

On the other hand, if you are a B2C company, you serve far more individual customers who make small purchases. Organizations that focus on direct-to-consumer operations have thousands of individual customers. The relationship is primarily transactional and requires little, if any, connection.

Difference between B2B B2C

B2B and B2C have different order quantities.

Regarding B2B fulfillment, the focus is less on individual orders and more on larger, complex orders. Businesses typically purchase in bulk, which means that B2B fulfillment must be able to handle larger orders and accommodate customized packaging and labeling. B2B businesses may also have strict deadlines for delivery and require specialized shipping options, such as freight services.

In contrast, B2C fulfillment is all about individual orders. Consumers order smaller quantities and expect to receive their orders quickly and with minimal fuss. B2C fulfillment must be able to promptly process and ship individual orders, and companies must be prepared to handle the influx of demands during peak times, such as the holiday season.

Difference between B2B B2C

B2B and B2C have different shipping methods.

B2B fulfillment utilizes various shipping methods, depending on product size and type. Standard shipping methods include palletized truckload, less-than-truckload (LTL), freight, and parcel delivery services. These are optimized for cost and time savings while providing reliable and safe delivery. They typically have longer delivery times and require specialized equipment.

On the other hand, B2C fulfillment uses parcel delivery services, such as USPS, UPS, and FedEx. These services are often less expensive and faster than B2B shipping methods, making them the preferred choice for B2C fulfillment. Additionally, these services offer various customization and tracking options, allowing customers to track their packages and ensure their orders are delivered quickly and safely.

Difference between B2B B2C

B2B and B2C fulfillment costs vary.

Obviously, the larger and bulkier orders placed by B2B companies will cost more. The orders’ sheer volume, weight, and size directly affect the shipping cost. Furthermore, fulfilling these orders requires special equipment and handling, which adds to the fees. Many B2B vendors and manufacturers are far away from the distribution center. This adds to the cost.

B2C fulfillment has relatively low costs compared to B2B. This is due to the smaller packages, distances to delivery, and weight of the items. More shipments require fulfillment but are lighter, smaller, and travel less distance, so they have lower costs associated.

Overall, the key difference between B2B and B2C fulfillment is the customer. Whomever the customer is, determines the needs, costs, and processes to fulfill. B2B fulfillment is about accommodating large, complex orders, while B2C fulfillment focuses on individual orders. Understanding these differences can help companies ensure they meet their customers’ needs, no matter what type of fulfillment they’re dealing with. Falcon Fulfillment is an expert in the B2C space regarding direct-to-consumer fulfillment.

Talk to one of our agents today to see how we can help manage the sizeable work required to fulfill orders for all of your customers.

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seamlessly switch 3PL providers

How to Seamlessly Switch 3PL Providers

How to Seamlessly Switch 3PL Providers

Switching third-party logistics (3PL), providers can be daunting, but it is sometimes necessary for companies looking to optimize their supply chain. You may have begun to notice your existing provider is unable to meet your growing business needs. This indicates that it might be time to consider an alternative logistics partner. However, switching 3PL providers involves several factors, from cost-effectiveness to service quality, so it is important to take the time to find the right provider for your business. It is necessary to thoroughly investigate your new 3PL partner and confirm the transition to a new partner won’t cause significant business delays. You can ensure a seamless switch to your new 3PL provider by following the steps outlined below.

seamlessly switch 3PL providers

When is the right time to switch 3PLs?

While there is a truckload of reasons you may decide to switch providers, there are a few common red flags that will indicate it is time to begin switching 3PL providers. They are as follows and in no particular order:

  • Consistent mistakes – Mistakes are bound to happen, so the issue is more about the consistency of errors. If your provider gives excellent service 99% of the time with an occasional mistake, that is life. However, if the pattern of incorrect orders, mislabeled addresses, damaged products, missed delivery deadlines, or lost products happens regularly, it’s time to switch.
  • Reactive vs. Proactive – The logistics industry changes rapidly, and your provider should consistently improve. A reactive company makes improvements once there is a problem and is slow to adopt new technologies and processes. A proactive logistics provider invests in new strategies and products that streamline fulfillment and improve customer service before they become problematic. If your provider hasn’t improved their infrastructure or customer experience lately, it is likely a reactive organization.
  • Old or Segregated Technology – Whether the technology your provider is using is old or simply unable to integrate with your modern sales system, it is time to find a new provider. Having obsolete technology will slow down not only the growth of your business but also the speed at which you can solve fulfillment problems.
  • Struggling to Scale – Businesses can often easily handle fulfillment in-house when launching. However, once they hit a pivotal threshold where they need to outsource orders, using a smaller fulfillment company can be tempting. It is crucial to evaluate your growth plans because you can quickly outgrow your 3PLs capacity and have to make another jump. If your existing provider struggles to scale with your growth, it is time to consider alternatives.

Besides the red flags triggering a switch, selecting a slower season in your sales cycle is equally essential. In other words, you don’t want to attempt to switch 3PL providers during your busiest season. The process to switch providers can take as long as several months and as short as a few weeks. Falcon Fulfillment provides our clients with dedicated account managers and onboarding specialists, so switching 3PL providers is as seamless as possible.

Following these steps ensures your switch to a new 3PL provider goes as smoothly as possible. Researching potential providers, comparing them side-by-side, negotiating your contract, and creating a transition plan will ensure that your switch to a new 3PL provider is seamless and successful.

Following these steps ensures your switch to a new 3PL provider goes as smoothly as possible. Researching potential providers, comparing them side-by-side, negotiating your contract, and creating a transition plan will ensure that your switch to a new 3PL provider is seamless and successful.

Steps to complete before switching 3PL providers

Clarify your business needs

In order to find the best 3PL partner, it is vital to be clear on your current and future business needs. Spend some time evaluating how your existing provider is falling short and what services, communication cadence, scalability, and costs are needed for your success. This is the first step because it will lead your investigation and evaluation of new 3PL providers.

Review your existing contract

Unquestionably, the best time to switch providers without additional hassle is at the end of your contract. However, sometimes the service is subpar so dramatically that it is worth the headache. Regardless, it is important to review the terms of your existing contract as you search for a new 3PL partner. The contract should outline cancellation procedures, fees associated with canceling, and if any current breaches of service would nullify the agreement. Furthermore, reviewing your contract will highlight issues you want to be addressed or remedied with your new fulfillment partner. Be informed and prepared to negotiate a favorable new contract when the time comes.

Interview potential partners

Interviewing potential 3PL partners is crucial to finding the best match because they become an extension of your brand. The best 3PL companies look at their relationships with their clients like business partners rather than clients. When their customers succeed, they succeed and when sales increase, their invoicing increases. When interviewing, there are a few key questions to determine if they are the right fit.

  • How are you different from our existing provider? Have a clear idea of what your expectations are when switching fulfillment companies. In other words, know what you are looking for and be direct in asking if the new fulfillment team has the capabilities to meet your needs. Most fulfillment service providers do the basics of distributing products, but how do they go above and beyond the basics? How flexible are they as you scale up and down seasonally? Do they manage returns and customer service? What is the structure of their pick and pack fees? How clear and transparent is invoicing? These are just a few ideas to get you started.
  • How easy is it for your technology to integrate with their platforms? One of the benefits of partnering with a 3PL is using their software. Often you can utilize modern shipping, inventory, and returns management programs without additional investment. That being said, it is crucial to determine if your existing technology is compatible with the systems they currently use. Beware of 3PL companies that say, “Oh, I am sure we will be able to have them integrated.” This is a red flag. If they have never heard of the systems you use or vice versa, running tests before you sign a contract is essential.
  • Where are their distribution centers located, and are there expansion plans? One of the greatest benefits of partnering with a solid 3PL is due to leveraging multiple shipping sites. This allows your business to lower shipping costs and improve delivery speeds. Depending on where your primary customer base is or where you plan to launch can determine which 3PL company will best suit your needs.

seamlessly switch 3PL providers

Review your supply chain.

Once you have interviewed new 3PL providers, it is time to review your supply chain and determine new transit times. Depending on where the new centers are located will impact order and delivery timelines. In addition, make sure to fully understand and follow your new providers receiving protocols to minimize delays or complications. Most customer-focused 3PL providers can assist in reviewing your supply chain and guide you on making further order adjustments.

Slowly begin the transition to the new provider.

While it might be tempting to cut ties with your existing provider and ship all your inventory to the new 3PL immediately, that could be a recipe for disaster. The prudent way to transition is a slow progression whereby you move all new orders to your new provider and continue to fulfill orders through your existing provider until you have adequate stock levels and processes to make the switch. This gradual transition helps to prevent stockouts and backorders.

Keep your customers informed.

No transition is without its complications. This is why it is vital to keep your customers informed of the changes and any new processes they should be aware of, including shipping charges, delivery times, and liquidation of old products. After all, making an order fulfillment change can also allow you to make some product changes as well. Share the good news with your customers not only to keep them informed but to get them excited! Switching 3PL providers will likely give your business more options for your customers, like international shipping or 2-day delivery, etc.

Seamlessly switch 3PL providers with Falcon Fulfillment

Falcon Fulfillment specializes in customer-first logistics service. Every one of our clients have a dedicated account manager to help with onboarding, implementation, and ongoing customer support. We offer additional value-added services such as; kitting, returns management service, supply chain management, custom packaging, and more. Our in-house tech teams ensure that software programs can integrate seamlessly and provide a smooth customer experience. Furthermore, Falcon has the industry experience and relationships to provide a personalized experience without losing national level scalability.

Seamlessly switching 3PL providers can be daunting, but it doesn’t have to be disruptive. By carefully reviewing your business needs, interviewing new partners thoroughly, and taking gradual steps, you can transition your order fulfillment to a new partner efficiently and effectively. Learn more about how Falcon Fulfillment can help make your transition effortless, talk to one of our agents today.

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Essential E-commerce KPIs

Essential E-commerce KPIs

Essential E-commerce KPIs: What they are and how to calculate them.

In the increasingly competitive landscape of e-commerce, successful businesses aren’t leaving crucial business decisions up to chance. They are committed to tracking and evaluating key performance indicators (KPIs) to measure the progress and profitability of vital business operations. Simply put, KPIs are metrics that help measure the performance of a specific area or activity within your business. By tracking a few essential e-commerce KPIs, you can gain valuable insights into your e-commerce business’s performance and identify areas that need improvement. This post will take a closer look at the essential e-commerce KPIs and why they are important.

Customer Acquisition Cost (CAC)

The customer acquisition cost KPI measures the amount of money you need to spend to acquire a single customer. The CAC metric evaluates the total sales, marketing, and overhead costs required to gain a new buyer during a specific time period. By tracking CAC, you can gain insight into how much you spend to attract new customers. How to calculate CAC:

Essential E-commerce KPIs

Average Order Value (AOV)

AOV measures the average amount of money your customers spend when purchasing from your store. You can gain insight into how your pricing and promotions impact customer spending by tracking this KPI. You can also use this KPI to identify which products are most popular and which ones are not. How to calculate AOV:

Essential E-commerce KPIs

Customer Lifetime Value (CLV)

CLV measures the total amount of money a customer will spend at your store throughout their lifetime. By tracking this KPI, you can gain insight into how valuable each customer is to your business. This can help you identify opportunities to increase customer loyalty and which customers are most valuable to your business. How to calculate CLV:

Essential E-commerce KPIs

Conversion Rate

The e-commerce conversion rate is a metric used to measure the percentage of visitors to an online store that makes a purchase. This is an essential metric for any online business to track as it indicates how successful their website is in turning visitors into customers. The higher the conversion rate, the more effective the website is at converting visitors into customers.

To track the e-commerce conversion rate, you will need to set up a tracking system such as Google Analytics or use a third-party service such as HotJar or Crazy Egg. These tools will allow you to see valuable data such as the number of visitors, purchases, and the overall conversion rate. By tracking the e-commerce conversion rate, you can identify potential improvement areas and optimize your website to increase your sales. How to calculate conversion rate:

Essential E-commerce KPIs

Net Profit

Net profit is one of the essential e-commerce KPIs to track and consists of the amount left over after all expenses are paid. It is the amount of money that a business has earned after all costs have been deducted from the total revenue. Net profit is one of the most critical metrics for a company to track, as it is the ultimate indicator of a business’s overall financial health. Businesses that track their net profits over time better understand their overall financial performance. It is calculated by subtracting the total expenses from the total revenue to get the net profit.

Essential E-commerce KPIs

Cost of Goods Sold (COGS)

The Cost of Goods Sold (COGS) is the total cost of inventory a business sells over a period of time. It includes the cost of materials, labor, and overhead associated with producing goods and services. Tracking COGS is important for businesses to accurately measure the profitability of their products or services. Companies should track COGS regularly to identify areas of improvement, such as reducing production costs or optimizing inventory levels. Additionally, tracking COGS can help businesses estimate their future expenses, such as anticipating future inventory needs or calculating expected profit margins. Check out this post by Investopedia for more information about how to calculate COGS.

Shopping Cart Abandonment Rate (SCAR)

The shopping cart abandonment rate (SCAR) is the percentage of users who add items to their shopping cart but fail to complete their purchase. This happens for various reasons, including slow loading times, a complicated checkout process, or a lack of trust in the website. Tracking SCAR is vital to understand customer behavior and finding ways to increase conversions. In any case, you can measure it using analytics tools like Google Analytics or setting up conversion pixels on the checkout page.

The Shopping Cart Abandonment Rate is calculated by dividing the total number of completed purchases by the number of shopping carts created. Subtract the result from one and then multiply by 100 for the abandonment rate. Analyzing the data and understanding the reasons behind the abandonment can help businesses identify the areas that need improvement and optimize their checkout process.

Essential E-commerce KPIs

Customer Engagement

Customer engagement measures how engaged customers are with your store. You can measure it through metrics such as page views, time spent on site, and social media engagement. By tracking this KPI, you can gain insight into your marketing campaigns and how effective your customer service is. Calculating your customer engagement score includes many factors, so it will be a bit of trial and error but check out this post from Salesforce to get started.

How working with a 3PL can improve essential e-commerce KPIs

Working with a quality 3PL logistics company can improve several essential e-commerce KPIs. Specifically, a 3PL helps drive down margins, improving overall profits. While this directly affects net profit, it indirectly affects customer lifetime value, engagement, and cost of goods sold. Thus, working with a 3PL can lower your transportation costs, improve customer satisfaction, and gain time to focus on your business’s core competencies. There are many benefits associated with working with a 3PL.

Summing up, it is vital to track a few essential e-commerce KPIs. Regardless of the KPIs you use, monitoring and reviewing the data helps you gain valuable insights into how your e-commerce business is performing. This allows you to make informed decisions about optimizing your business for success. Talk to one of our agents today to learn more about how Falcon Fulfillment can improve your essential KPIs.

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6 Tips to Increasing Average Order Value (AOV)

6 Tips to Increasing Average Order Value

Increasing average order values is an essential component of success for e-commerce businesses as it can significantly boost profitability. Not only does increasing the average order size mean more income for the company, but it also increases customer loyalty and satisfaction. Additionally, when customers spend more on one order, the shipping cost is spread out across more items, leading to reduced costs for the business. Accurately forecasting sales and revenue based on average order values improves inventory management and provides insight into crucial investment decisions. This post will discuss average order value (AOV), how to calculate it, and 6 tips to increase it.

Average Order Value (AOV) Definition

Average order value (AOV) is the average dollar amount spent each time a customer places an order. In other words, it is the average amount of money a consumer spends each time they visit the store.

Average Order Value Calculation
To calculate your company’s average order value, divide total revenue by the number of orders.

increasing average order value

AOV is a key performance metric that helps determine consumer purchasing habits. Knowing the AOV is important because it allows you to evaluate your sales and marketing efforts. For example, let’s say that in March, your web store’s sales were 20k, and you had a total of 1k orders. 20k divided by 1k = $20, so March’s monthly AOV was $20. Because of the high cost per acquisition for customers, it is in your best interest to generate the maximum revenue from the consumers visiting your store. This is why profitable businesses implement strategies to increase the AOV as much as possible.

increasing average order value

Tips to Increase AOV

There are several strategies to increase AOV and compel your customer to buy more products or more expensive products. Increasing the average order value occurs across the entire sales and marketing funnel. Any idea or promotion encouraging a higher dollar amount at checkout will increase AOV. Here are a few common tips to increase AOV.

  • Offer Discounts for Larger Orders: By offering customers discounts for larger orders, customers are more likely to purchase more items at once to take advantage of the savings.
  • Cross-Selling: promote additional product add-ons that are common with a specific purchase. For example, promote buying replacement bulbs for LED flashlights, batteries, etc.
  • Upsell Items: Suggest more expensive items related to the primary items customers purchase. Highlighting best-selling items that are slightly more expensive is a great strategy to increase AOV.
  • Bundle Items: Create packages of related products and offer them at a discounted rate. This encourages customers to purchase more items, providing value for their money. To implement this strategy, determine what products work together and create a bundle. Working with a quality 3PL can help you pick and pack effectively.
  • Offering Loyalty Discounts: If you have a rewards or loyalty program, offer those repeat customers better discounts for higher purchase amounts.
  • Offer Free Shipping Thresholds: Offer free shipping for customers who meet a minimum spending threshold. This is one of the most effective strategies for increasing AOV. You might think offering free shipping will cut your profit margins, which is possible if you don’t carefully calculate. Here is a formula to help bake the shipping costs into your product pricing, so you don’t lose money!

increasing average order value

How working with a 3PL can help increase AOV

Your shipping strategy will play a massive part in the success of increasing your AOV. Working with a quality 3PL can ensure your company offers the expedited shipping options that consumers desire. Additionally, you benefit from lower shipping costs due to their relationships with multiple carriers and high-volume discounts. Lastly, working with a 3PL with multiple distribution warehouses will allow your company to lower shipping costs because products travel shorter distances to customers. Talk to one of our agents today if you want to learn more about how Falcon Fulfillment can help your business grow.

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