Easy Ways to Thank Customers

9 Easy Ways to Thank Customers

9 Easy Ways to Thank Customers

Every business owner is thankful for their customers. Without them, the company ceases to exist. Businesses that actively thank their customers and show appreciation build loyal customers and stand to be more profitable than those that consider gratefulness an afterthought. Research shows that 68% of customers change brands because of “perceived indifference.” Having a quality product isn’t enough to build a loyal customer base. Businesses need to show a little love and care for the people responsible for keeping the company running! It is important to understand the benefits of thanking customers and selecting a few appreciation strategies to implement if you haven’t already! Here are 9 easy ways to thank customers.

Why thanking customers is essential!

Going above and beyond to thank customers cannot be undervalued. Here are the main reasons a business should implement a customer appreciation strategy.

  • It helps build strong customer relationships and trust
  • Increases retention
  • Creates brand advocates
  • Boosts long-term customer value

Easy Ways to Thank Customers

Offer expertise and education for free

Companies that readily share their expertise show their customers they want them to get the most out of their purchases. Sharing articles, posts, and videos with customers that help educate and equip them is customer appreciation gold! For example, if your business sells hand-poured candles. Share articles explaining how to get the most-even burn, reuse the candle container, or which scents are best for which moods. These things help customers love your product more and show that you don’t stop at the point of sale. Another excellent customer appreciation idea for a company that sells small appliances would be sending out reminders and informative emails to maintain the product, i.e., cleaning the filters.

Give back to the community

Nothing says you care more than supporting and getting involved in your community. Investing your time or resources to cause(s) your customers love shows you aren’t just out to get their money. The most successful example where this idea works is when the cause relates to the product or service the business offers. For example, a pet company that sells dog toys and gear donates 10% of its annual revenue to a local rescue shelter.

Create a personalized "thank you" video

With new AI technology, you could create a general thank you video with a code-based moment(s) where someone’s name is inserted. Before you think this is entirely unrealistic, consider the “Elf Yourself” videos! Here’s a sample script:

“Hey {Name},
Thank you so much for your recent {Brand name} purchase. We love what we do and know you will love your {product name}. You are the reason we do what we do. We would love to see you in action. Post a pic or video {wearing, using, etc.} and make sure to tag us!”

 

While this could take a little upfront design and planning, it makes the thank you more personal and fun! Customers love both.

Create a memorable unboxing experience

When a branded box arrives, it has a greater impact on consumer brand awareness. The customer gets the sense that your business cares deeply about your products arriving safely. Creating a memorable unboxing experience helps your brand tell its story in a way that drives customer loyalty.

Send thoughtful gifts

The key here is to ensure the gifts are thoughtful. Sending a branded pen is not an ideal representation of your business unless you sell paper goods. If that is the case, make sure the pen is extraordinary. The main idea around sending a thoughtful gift is to include something that is either personalized or practical. Some good examples of thoughtful gifts would be a travel-size hand cream included with the purchase of other skin care products. How about adding a glasses repair kit with a sunglass purchase? How about leather conditioner included when someone purchases a new handbag? Make sure to let your customers know they are a “bonus” so they don’t assume they came as part of the package.

Create a customer loyalty program

Rewarding your most loyal customers is always a good idea. The consumers who love your brand will share it even more, when they are recognized or rewarded for coming back repeatedly. According to Shopify,  as many as 84% of consumers say they’re more apt to stick with a brand that offers a loyalty program. And 66% of consumers say the ability to earn rewards changes their spending behavior. A million ways exist to develop a loyalty program, but the main idea is to keep your customers happy and engaged. Try a few different strategies and see what works well.

Handwritten notes

Handwritten notes are one of the easiest ways to show appreciation to customers. It isn’t expensive, and it doesn’t take a lot of effort to throw in a handwritten note. It might be challenging at scale, but creating thoughtful notes that rotate within orders can make a difference. You can even pay to have a robot handwrite your thoughts and send the cards! Check these 25 examples of thank you note messages that can be easily modified for your business.

Host Giveaways

Everyone loves a good giveaway. Create a giveaway for previous customers and potential new customers. These are especially effective when they involve new product releases or high-value items. Allowing previous customers to have extra entries is another way to say thank you. Just be aware of “giveaway rules” that vary by state, so you don’t inadvertently get yourself in legal hot water.

Showcase a customer of the month

An easy way to thank your customers is to showcase them. Whether you share a remarkable story via email marketing or on your social channels, highlighting why you appreciate a customer is special. Not only will the customer being featured love it, but others will also see that you notice when a customer is exceptionally loyal, patient, or kind. You can use any criteria relevant to your industry to select your customer. Keep in mind that some may not want to participate because of privacy. You can use an alias for your uber private consumers.

There are many easy ways to thank your customers, but the most important thing is to do it! No matter how you decide to show appreciation, keep the customer at the center of your gratitude. Create a strategy that is personalized and practical. By implementing thankfulness, you will build stronger relationships and trust and increase long-term customer value. Ultimately, being a grateful company will translate to a healthier bottom line.

Falcon Fulfillment is in the business of helping companies get products into their customer's hands, but to do it with the highest level of excellence. We can help include personalized notes with our kitting services, and we specialize in branded packaging options. Get in touch with one of our specialists today, and thank you for being here. We are grateful to have the chance to serve your company!

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80/20 Inventory Management Rule

80/20 Inventory Management Rule

Determining how to prioritize inventory for maximum profits can take some trial and error. However, a mathematical theory has been successfully applied to multiple industries. It is known as the 80/20 rule. The rule suggests that 80% of results come from 20% of causes. In the case of inventory, it typically shows that 80% of profits come from 20% of products sold. The primary purpose of implementing the 80/20 inventory management rule is to maximize profits. Let’s understand what it is, its advantages and drawbacks, and how to implement it. 

80/20 Rule Definition and History

Italian economist Vilfredo Pareto first discovered the Pareto Principle in the early 1900s. He observed that 80% of the land was owned by 20% of the population. The principle states that 80% of effects are derived from 20% of causes. Pareto originally applied the principle in the area of economics. The nature of the 80/20 rule is a power distribution law that can be used in many circumstances. It’s super cool, consistent, and profit-boosting math. The rule demonstrates that 80% of sales come from 20% of clients.

Advantages of using the 80/20 inventory management rule

When the principle is effectively applied to inventory management, it can help maximize profitability and increase inventory efficiency. You'll increase sales when you accurately identify top performers and emphasize them over slower sellers. If you further sort to favor higher-margin products within that 20%, you optimize your inventory for both volume and profitability.

Drawbacks of the 80/20 inventory management rule

The main drawback of using the 80/20 inventory management rule is that it can obscure up-and-coming products that haven’t YET broken into the top 20% category. This is why it is essential to evaluate items against trend reports. Reviewing the products gaining traction will help keep future best sellers in the system long enough to prove their value.

Steps to implement the 80/20 inventory management rule

Integrate and utilize an inventory management system

A system of tracking inventory and sales is required to generate accurate reports of top sellers. The more high-tech your system, the more detail you can generate. Small business owners can run manual inventory reports so long as it is consistent in the type and timeframe. As SKUs and sales increase, implementing an automated inventory management system becomes crucial to success. Here are 7 types of inventory reports that can help implement the 80/20 inventory management rule.

  • Inventory performance report - includes sales performance hierarchy as well as year-over-year growth.
  • Inventory profitability report - includes SKU profitability, listing profitability, and trending profitability. 
  • Inventory value report - a quick snapshot of the value of goods stored in your warehouse; this report's modifications can determine product performance, sitting age, and inventory turnover ratios. 
  • Stock level report - includes critical levels to determine reordering patterns and prevent stockouts.
  • Inventory forecasting report - includes estimates of future sales based on historical data within a set timeframe.
  • Sales report - includes a holistic approach to revenue generated from each sales channel, customer, and product vertical.
  • Cost of goods sold (COGS) report - helps determine the bottom line on each product, necessary to identify the most profitable products.

Identify 20% of top sellers

To determine the top sellers in your inventory, you must decide what to track and which reports will give you the most accurate picture. At a minimum, it is necessary to consider the following data points:

ABC is a popular method to categorize inventory. Simply put, it is a way to prioritize product performance into three distinct buckets. Using the ABC method helps determine your top sellers' popularity and profitability.  

  • A items: Top 20% of your products that result in 70% of sales
  • B items: Middle 30% of your products that result in 20% of sales
  • C items: Bottom 50% of your products that result in 10% of sales

Refine mid-level performers

Once you discover your top performers, some products will be in the mid-level range. These are your “B category products” and can include your trending products. This information highlights an opportunity to explore how to make them profitable and change marketing efforts. If modifications don’t move them forward, it might be time to sunset.

Sunset slow or underperforming products

Once you have tiered your inventory according to profitability and performance, it is time to sunset or liquidate deadstock. Products that are taking up valuable storage space and are slow-moving despite efforts to modify marketing or sales efforts should be liquidated to free up capital for more profitable products. Letting go of slow-moving or deadstock can be difficult, but keeping a healthy bottom line is essential.

Retail and eCommerce business owners implementing data-driven methodologies like the 80/20 inventory management rule stand a better chance of success. Their decisions are not based on gut instinct, reacting to customer demand, or marketing trends but on statistical analysis, and the numbers don’t lie. If you want to learn more about how Falcon Fulfillment can help boost profitability and implement the 80/20 rule, get in touch with one of our specialists today. 

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dunnage what it is and why you need it

Dunnage - What it is and why you need it.

Dunnage - What it is and why you need it.

Protecting items during shipping is crucial to ensure they arrive undamaged. Statistics show that 20% of consumers return items because they received damaged products. Use the right mix of dunnage to satisfy consumers' growing expectations and safeguard your financial investment. Working with a fulfillment partner expert in shipping, packing, and returns will help determine what types to use. Let's uncover what dunnage is and why you need it. 

What is dunnage?

Dunnage is the packing material that protects items during shipping and handling. Dunnage isn’t a common word known to consumers, but it is an integral part of fulfillment. Companies spend a lot of money and time deciding what type and quantity of materials are needed for products to arrive safely at their intended destination. Dunnage can include packing peanuts, bubble wrap, paper, and even wooden crates affixed to large items and appliances.

Why is dunnage used in shipping?

  • To prevent damage - the main reason is to avoid damaging the shipped item. Imagine sending an antique vase from Europe in a box without bubble wrap, paper fill, or packing peanuts. It is not likely that the vase would arrive in one piece. 
  • To keep items dry - another reason dunnage is used in shipping is to keep the product from getting wet. Packages moving from shipping containers, warehouses, and trucks are often exposed to the elements. Therefore, dunnage ensures that the product doesn’t arrive in a soggy mess, even if the outer box gets wet. 
  • Shock absorption - parcels get dropped, pushed, bounced, and pressed during transport. Dunnage helps to absorb the vibration and minimize the jostling of the product in the package.

What types of dunnage are there?

Solid dunnage materials.

Solid dunnage materials are used for heavy, highly valuable, or oversized items. The type or combinations of materials used depends on the product material, shape, size, and shipping container. However, there are a few common solid materials used in shipping.

Wood

Wood is a heavyweight material. It is readily available, and it is a renewable resource. However, many ports and countries impose additional customs duties on wood dunnage, and others will not allow it all because of foreign pest concerns.

Solid Plastics

Solid plastic dunnage is one of the best materials for high-value goods, heavy items, or oddly shaped products. It can be formed into any shape and is made of high-density polyethylene (HDPE). This type of material is expensive compared to other options but is worth the investment when considering the replacement costs of high-value items and large machinery.

Steel

Steel is another solid option used for heavy goods or partitioning items within a single container. Steel dunnage is expensive, so it is typically used for high-value goods.

Soft Dunnage Materials

Soft dunnage is used when shipping lightweight and smaller items. A combination of solid and soft are often used when shipping freight. For example, a supplier might send a pallet of electronics using solid plastic pallets, containing each item in corrugated cardboard, bubble wrap, and shrink-wrapped. Consider the size, shape, material, and value of the products shipped when deciding which type of dunnage best safeguards them in transit.

Bubble Wrap

Bubble wrap isn’t just your child’s favorite popping toy but also a favorite in the shipping industry. Bubble wrap is inexpensive and does a great job protecting fragile items like glass and china. Bubble wrap can also be reused many times, provided the bubbles haven’t been popped!

Air Pillows

Air pillows are an excellent solution, especially to fill gaps in a package. Air pillows are primarily used to create barriers to keep a product from shifting or sliding during transport. They are lightweight, so they don’t add much to the shipping costs.

Foam

Foam is often used to safeguard electronics or other items that have sharp edges. It also pads sharp, fragile, or sensitive things like medical supplies.

Kraft Paper

Kraft paper is a great option because it is a renewable resource, cheap, and works. Items that require strength and durability are often found packed in kraft paper. If you have ever received an item packed in crinkled paper, this was kraft paper packaging.

Corrugated Paper

Corrugated paper is one of the best and most commonly used forms of dunnage. Its high-tech construction allows it to carry a variety of weights, and it is excellent for keeping items dry and wicking away moisture.

Custom Dunnage

Some products require a custom solution. Working with a dunnage provider for a custom solution might be necessary. Alternatively, you want a custom packaging solution that includes branded packaging and creates a memorable unboxing experience. Falcon Fulfillment specializes in this. 

3PL fulfillment companies are experts in protecting items during shipping. No matter whether you are shipping forklifts or champagne flutes, dunnage will be used to protect those items. If you want to learn more about how partnering with Falcon Fulfillment can help you select the best packaging options for your business, get in touch today.

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Basics of Demand Forecasting

The Basics of Demand Forecasting

Basics of Demand Forecasting

Demand forecasting involves predicting future sales data using historical data, market research, and other influential factors. It allows businesses to create more precise sales predictions. There are many types and methods of creating a demand forecast for your business. Determining which will work best for your eCommerce business is challenging, but it is well worth the investment. Creating a demand forecast is not 100% accurate but will inform better business decisions, strategy, and cash flow. Let’s get into the basics of demand forecasting; the types, benefits, and steps to create one.

Demand Forecasting - What Is It?

In eCommerce, demand forecasting is a collection of techniques and the collation of multiple data points to help make educated guesses on future sales. The data typically includes; market research, historical sales, market trends, both historical and predicted, and internal and external factors. Creating an internal demand forecasting model is unique to each eCommerce business. Furthermore, different demand forecasting models will be required for various purposes. For example, you might use a micro-demand forecast to determine future sales for a specific seasonal item and a more extensive Delphi method when you launch a new product.

Benefits of Demand Forecasting

Why should eCommerce owners create and consistently refine their demand forecasts? To strike the right inventory balance and ordering cadence. To stabilize and plan for cash flow fluctuations, among others.

Optimize Inventory

Planning supply chain fluctuations through demand forecasting will help you order appropriate amounts of inventory to avoid out-of-stock situations and limit overstock. Both conditions create suboptimal profitability.

Optimize Pricing Strategy

Reviewing historical sales data will reveal seasonal spikes and dips in sales. This will allow you to make modifications to the pricing accordingly. For example, if you see a drop in sales every year after Labor Day, that might be a good time to offer a promotional discount to keep customers engaged.

Higher Customer Satisfaction Scores

A quick way to lose a customer is to run out of inventory. Reduce stockouts and maintain trust and reliability with proper demand forecasting.

Rationalize Cash Flow

A solid demand forecast model will help determine when and how much cash will be available to order new inventory, manage seasonal operating costs, scale the business, or launch a new product.

Required to Secure Business Funding

Every eCommerce business needs capital to expand. Whether that finance comes from existing profits or outside investment, accurate demand forecasting will allow key stakeholders to estimate the ROI and timeframe for success.

Types of Demand Forecasting

Passive

Passive forecasting is a review of objective historical facts and data. It uses past year’s sales data to predict future sales. (Great for companies that have solid sales data) Passive forecasting works well for companies looking to maintain stability. Many eCommerce brands will include this data in their overall demand forecast strategy.

Active

Active forecasting is a more objective strategy. This type of demand forecasting includes market research, focus group outcomes, global trends, and even emerging technologies or events to determine the sales potential of future products. Both startups and veteran eCommerce brands can utilize this type of forecast. It is an excellent choice for companies looking to grow or with very little historical sales data.

Micro

Micro-demand forecasting investigates a subset of data within an industry or customer segment. For example, you might evaluate the sales of a skincare product as a whole and benchmark it against sales tied to a celebrity influencer. This can help an organization make decisions about verticals within their product line, marketing effort expectations, etc.

Macro

Macro-demand forecasting looks at external elements that influence eCommerce sales. This can include economic trends, consumer trends, supply chain delays, and global events that impact market stability or growth. Understanding these external forces can help a business prepare for shifts in product availability, financial challenges, and vendor diversification.

Short-term

Short-term forecasting includes the next 3-12 months of potential sales. This is beneficial for companies with products that change frequently. A longer timeline is needed when considering growth potential, launching new markets, and entering new partnerships.

Long-term

Long-term forecasting makes predictions one to four years into the future. This aspirational model determines growth potential, marketing efforts, capital investment, and supply chain adjustments. Businesses that have expansion goals should consider using this type of model.

The Basic Steps of Demand Forecasting

Set Goals and Objectives

A demand forecast predicts product demand and sales in future cycles. The first thing to determine is the objectives of creating the estimates. Next, decide what data should be included to ensure the report will help accomplish the goal.

Collect and Record Data

It sounds obvious, but once you determine the goals of your demand forecast, you must then populate it with data. Because demand forecasting is customized, data collection is pulled from disparate sources. Having a software program or data hub can be helpful if you don’t have extensive forecast modeling in excel.

Analyze the Data

It is crucial to create and copy a standard analysis for predictive forecasting. The data in its raw form is unhelpful. Year-over-year reporting cannot be trusted if the way the model is interpreted changes. That is not to say adaptations shouldn’t be made (in fact, they should be made to improve accuracy), but it is vital to maintain an awareness of data sets and changes as you grow.

Set New Business Goals and Budget

Once you have a reliable demand forecast, it is time to consider new business goals, and choices are possible based on the evidence. Create a budget to meet or exceed past sales goals and determine growth trajectories for new products and sales channels. 

A reliable demand forecast helps eCommerce brands make educated decisions that affect everything from inventory planning to supply chain optimization. It is a crucial aspect of running a profitable eCommerce. While understanding the basics of demand forecasting is simple enough, creating them is more challenging. If you need a fulfillment partner to help you improve demand forecasting, learn more about how Falcon Fulfillment can improve inventory management, reduce stockouts, and even help manage returns. Get in touch with one of our helpful agents today.

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Minimizing the Risk of Lost and Stolen Packages

Minimizing the Risk of Lost and Stolen Packages

Minimizing the risk of lost and stolen packages

If you order many household goods online, you probably have experienced a lost or stolen package. 1.7 million lost or stolen packages are reported each day in the United States. About $5.4 billion in lost revenue is attributed to theft alone. A significant amount of money is being misplaced or taken from eCommerce businesses and consumers. There are a few things both the shipper and receiver can do to minimize the risk of lost and stolen packages.

eCommerce tips to minimize the risk of lost and stolen packages

Over Communicate

Ensuring the highest probability of successful package delivery requires over-communicating. At a minimum, consumers expect clear communication about the status of their deliveries. Nothing is more anxiety-inducing than waiting until the end of a two-hour delivery window only to receive no updates or package. When possible, automate the following delivery notifications:

  • The package leaves the warehouse 
  • Time updates on ETA for delivery
  • Pictures of where the package was left. 

These communication strategies will help thwart porch pirates and improve recovery efforts if a package is lost somewhere in between. 

Accurate Shipping Labels

Ensuring every package has an accurate shipping label is the first step in minimizing the risk of lost packages. It is too easy to miss a tiny detail that makes the parcel undeliverable. While each carrier has its specific label design and criteria, a label should contain the following information:

  • The package tracking number with a corresponding barcode
  • Destination address and return address, including postal code, street, city, state, or county, and any suite or apartment number
  • The shipping class
  • The package’s weight

Getting the information 100% accurate is the first part of compliant shipping labels. The second thing to make sure of is to print the labels with non-smear, weatherproof ink. The weather is not always sunny, and 70*, so make sure your packages end up in customers' hands in a downpour to ensure the label will remain clear if it gets wet.

Additionally, use high-quality adhesive on the back of your shipping labels to prevent them from getting ripped or torn off the package. When the carrier can't identify the package's destination, they'll send it to "over goods," essentially a shipping lost-and-found. The box will be photographed and opened, and the contents will be meticulously cataloged there. Adding an “in case found” document within the package can help in these situations.  This will allow a carrier to open a box if it has lost a label and have the necessary information to complete the delivery or return it to the supplier.

Address Verification

It is essential to double-check the delivery address to ensure the shipping label has all the necessary information to reach its final destination. Humans are prone to errors. Typos, missing numbers, and zip code errors are responsible for many packages being returned to the vendor. These returns cost eCommerce businesses money, and customer satisfaction scores can suffer even when the customer is responsible for the error. The USPS developed the Coding Accuracy Support System (CASS) to gauge the accuracy of addresses in the United States. This easily implemented software can minimize errors and maximize successful delivery completions.

Plain Packaging

Porch pirates are even more tempted by a brightly colored branded box. Even though a memorial unboxing experience can boost customer satisfaction, it can also be a beacon for thieves. If you want to maintain a fully branded experience, enclose your product in a plain outer box. Plain packaging helps parcels blend in with other packages and protects customer privacy.

Parcel Insurance

Parcel insurance can protect your business and consumer from replacement costs. When selecting insurance, consider whether free options will cover the value of your goods. Carriers like UPS and FedEx offer free insurance on goods valued up to $100. It increases modestly up to the $300 value. High-value products should have adequate parcel insurance purchased.

Partner with a Fulfillment Company

Partnering with a logistics expert can ease the burden of ensuring your packages are delivered quickly and accurately. If your business struggles to establish dependable delivery protocols, it might help to partner with a 3PL fulfillment partner. These companies are experts in final mile delivery, accurate address, and labeling; some even can manage returns. 

Consumer tips to minimize the risk of lost or stolen packages

Minimizing the risk of lost and stolen packages doesn’t lie solely with the shipping carrier. Consumers can take extra precautions to help thwart thieves and get their products on time.

Use a digital locker

A trend in eCommerce fulfillment is the use of digital lockers. Amazon lockers are popping up in convenience and grocery stores and traditional shipping locations. UPS has also implemented a digital locker system in some consumer stores. You can install one outside your home if a digital locker is unavailable through your carrier. Bench sentry has a few package lockers that are aesthetically pleasing and deter even the most motivated porch pirates.

Have packages delivered to your workplace

If you know that you are at your office nine times out of ten when deliveries occur, have them delivered where you will be. Most employers don’t mind receiving packages on behalf of staff. Check with your upline that this is acceptable. Also, ensure that whoever is receiving your delivery knows you are expecting it.

Install a security camera at your front door

Submitting a theft claim is far easier when you have footage of a package taken from your front door. Having documentation can also help authorities catch and prosecute perpetrators.

Require a signature on delivery

When a person has to receive a package personally, it is far less likely to be stolen. Adding the extra protection of a signature helps to ensure successful delivery.

Schedule delivery or reschedule if you will not be home

It is difficult to steal if you are home to receive your package. If you are notified that a package will arrive hours before you get home, contact the carrier to reschedule delivery. Sitting packages are easy pickings.

Purchase extra insurance

Purchase the additional protection of insurance, especially when purchasing high-value items. This is crucially important if you live in an area where package theft is high. Even though you might have to go through the hassle of submitting a claim, you won’t be out of money or the product if you purchase the additional insurance. Many carriers don’t have a policy that will replace stolen goods, which is why insurance can protect your purchase. 


Minimizing the risk of lost or stolen packages is a partnership between product shippers and consumers. When eCommerce businesses are intentional about taking steps to ensure successful delivery and consumers do what they can to reduce the likelihood of theft, everyone is happy-clappy. If you run an eCommerce business and want to learn more about how partnering with Falcon can help ensure delivery consistency, get in touch today.

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types of fulfillment costs

10 Types of Fulfillment Costs

Types of Fulfillment Costs

Fulfillment costs are any fees associated with storing inventory, processing orders, and delivering products to the end consumer. They include reverse logistics (returns processing), restocking fees, pick and pack, kitting, and receiving costs. Furthermore, fulfillment costs vary based on the company and the products being sold. Managing fulfillment in-house can be costly and time-consuming. It is crucial to be completely aware of all costs to maximize profitability and accurately calculate ROI. This article will focus on the ten types of fulfillment costs typically charged when working with a 3PL.

Initial Setup

The first step in working with a 3PL is the initial setup. This includes integrating your point-of-sale systems with their fulfillment software, inventory tracking, and order tracking programs. Most 3PL companies charge a flat fee for this service and provide initial training. Falcon Fulfillment includes a designated account manager to assist with the initial setup and throughout the relationship.

Account Management 

The account management fees cover the administrative costs of handling your order fulfillment. This can include customer service fees, technical support, and other ancillary activities to serve your business and clients.  

Inbound Shipping 

Inbound shipping is the cost of shipping your product to the fulfillment warehouse. Products can ship via land, air, sea, or a combination, depending on the location of the supplier or manufacturer. 

Receiving Cost

Receiving costs, also sometimes called intake fees, include every aspect of processing your product when it arrives. 3PL companies charge by the hour or flat rate (by the unit/item quantity). When your shipment arrives at the warehouse, the staff will review your order for accuracy in quantity and check for damages. Lastly, the receiving crew will scan your inventory into the system, so they are available to be sold.

Inventory Storage

Whether you fulfill in-house or you partner with a 3PL, there is a cost associated with storing inventory. Paying for warehouse space is calculated based on the size and quantity of the products being stored. Most fulfillment companies charge additional fees for large, irregular, or bulky items that require special equipment. The benefit of working with a 3PL for your inventory storage needs is that, typically, you have flexibility in how much storage you use. You can scale up or down based on your storage needs for seasonal sales or one-off promotions without being held to a long-term lease.

Pick-n-Pack

Picking and packing orders is another service that many 3PL fulfillment companies provide. After an order is placed, the notification is sent to your fulfillment partner, and a staff member selects the items from inventory storage and packages them for shipping. Typically costs are connected to the type and number of items and whether any special care is required for shipping.


Packaging 

Inbound shipping arrives in bulk. Therefore individual products are repackaged for individual resale. The total packaging cost is determined by size, the number of items, box dimensions, dunnage required, and whether standard or custom packaging is used. 

 

Kitting and Item Assembly

Some orders require light assembly or what is known as kitting. Kitting is a process where individual but related products are packaged and shipped together as a single product. This is where a product may contain several components to complete a set. Think about things like furniture or small appliances. While they arrive in a flat shipping box, they must be put together at home to function properly. Another example of things requiring kitting or assembly would be product bundles or subscription boxes.

Outbound Shipping

Outbound shipping is typically one of the highest types of fulfillment costs. Most 3PL companies offer some of the most cost-effective shipping options because they can extend their high-volume discounts to their clients. However, outbound shipping costs constantly fluctuate with fuel costs, seasons, and supply chain delays. Calculating shipping costs is complex. It includes variations based on dimensions, weight, speed of delivery, distance from the distribution center, and special instructions. Partnering with a multi-site 3PL can help minimize shipping costs and maximize shipping speed. 

Return Management Costs

Only some fulfillment companies offer a returns management service, but it is a valuable and desirable amenity. Managing your customer's unwanted or damaged goods requires good customer support. In addition, return management costs handle restocking inventory and adding it back into the inventory management system.

There is not a one size fits all pricing model for order fulfillment. There are several crucial types of fulfillment costs, such as inbound shipping, storage, inventory management, and outbound shipping. No matter how you plan to fulfill orders, these will be costs accrued. Calculating fulfillment costs can be confusing and complex, and not every 3PL is created equal. Falcon Fulfillment offers a high-quality “White-glove Fulfillment” experience. If you want to learn more about our pricing structure and how we can help your business scale, get in touch with one of our agents today.

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Dealing with eCommerce Inflation

Dealing with eCommerce Inflation

Dealing with eCommerce Inflation

Prices are going up on almost everything. This pattern began during the COVID-19 pandemic and has continued without many indications that the tides will turn soon. According to the Adobe Digital Economy Index, eCommerce prices as of July 2021 were up 3.1% year-over-year. Before this, eCommerce consumers enjoyed a deflationary environment, with prices declining at 3.9% YoY. eCommerce retailers have to pivot their strategies, pricing, and fulfillment to help minimize the impacts of inflation; as consumers’ discretionary spending dries up, the competition for the remaining dollars increases. Dealing strategically with eCommerce inflation is necessary to ensure survival.

What is causing eCommerce inflation?

The COVID-19 pandemic triggered an imbalance in supply and demand. As consumers were quarantined and unable to spend money on experiences, they turned to physical products online. Demand for gym equipment, entertainment centers, and furniture soared as people were stuck at home—this overburdened suppliers.

The pandemic caused a massive shortage in the number of shipping containers. This was caused by the increased demand for goods and the lack of port staff, ships, and containers to transport products. Sea freight continues to cost more than pre-pandemic prices.

Lastly, Chinese suppliers are still struggling to meet production demand. Lockdowns and restrictive policies have led to significant delays in getting raw materials and manufactured goods out of the country. Many savvy eCommerce brands have diversified their supply chain by partnering with more local vendors. However, China is still the world’s largest manufacturing producer, responsible for just over 28% of the global output.

Effects of Inflation

An inflationary period is marked by an increase in the cost of goods and services that decreases the purchasing power of consumers and companies alike. In other words, a dollar doesn’t get you what it did yesterday. What specific price increases and reductions in spending are we experiencing?

Price Increases

Consumer Spending Changes

  • Overall spending reduction
  • Drop in discretionary spending 
  • Shift to generic brands
  • 75% of consumers are spending less due to inflation
  • The top three industries experiencing a drop in sales - Women’s apparel, Men’s apparel, and Electronics
  • Increase in recommerce

Solutions to deal with eCommerce Inflation

Raise prices

As prices rise for goods, services, labor, and shipping, one of the quickest and most obvious solutions is to pass the price increases to customers. It is vital to decide how and when to implement a price increase strategically. Consumers are not heartless, and most expect a fair price for their product and a reasonable profit for the seller. If you must increase your prices to maintain profitability, make sure you:

  • Communicate openly and honestly - let them know why your pricing needs to increase.
  • Determine fair pricing by researching competitors and checking for underpricing in existing price models
  • Cut costs where possible.
  • Consider offering a smaller amount for the same price. Some customers would rather have fewer products than have to pay more.

Keep a safety stock

Avoid stockouts and extended supply chain delays by overordering products that are consistent sellers. Work on building up safety stock and keep a six-month supply of goods. The quantities you can purchase today might be more than what you can get for the same price next year.

Manage cash flow

Small businesses with the most working capital at the end of an economic downturn end up on top. Prioritize revenue generating while cutting costs. Now is the time to apply for financing. Having a business line of credit available before you NEED it can make the difference between growing or drowning.

Diversify your supply chain with local vendors

Because Asia is still struggling with production and fulfillment, now is the time to find local vendors and suppliers. The closer a supplier is to your customer base, the less you will need to spend on shipping. Local manufacturers who were cost-prohibitive might be more competitive in this environment. Inflation has hit shipping carriers hard, and they are passing along the fees to customers through fuel surcharges and labor charges. When dealing with eCommerce inflation, every penny counts.

Partner with a 3PL

While it might not be an obvious strategy to deal with inflation, partnering with a 3PL can help. 3PLs can help negotiate better shipping costs and options due to their high-volume discounts with major carriers. Furthermore, if they are like Falcon Fulfillment, they can help implement an automated inventory management process to avoid stockouts. Lastly, with flexible warehousing available, you can store safety stock with ease. 

Inflation isn’t going to return to “normal” anytime soon. According to Business Insider, inflation is expected to improve in 2023, although gradually, and the first indicator of a more steady supply chain will be shipping prices. Traditionally, eCommerce businesses were immune to inflationary environments, but that isn’t the case anymore. To deal with eCommerce inflation well, implement the strategies listed in this article and consider partnering with Falcon Fulfillment. Contact one of our agents today if you’d like to learn more about how we can help you position your eCommerce well in this inflationary environment.

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Strategies for eco-friendly fulfillment

5 Strategies for Eco-friendly Fulfillment

5 Strategies for Eco-friendly Fulfillment

As the eCommerce industry continues to expand, so have consumer concerns around environmental impact. eCommerce waste is becoming a serious problem. In 2018, the EPA estimated that packaging accounts for about 30% of all household waste. Increased social awareness has magnified the importance of minimizing our carbon footprint. Today, nearly 90% of Gen X consumers said they would be willing to spend an extra 10% or more for sustainable products or services, compared to just over 34% two years ago. Brands that reduce their carbon footprint have a unique advantage in the marketplace. You can build strategies for eco-friendly fulfillment even if you don’t sell “eco-friendly” products. Every decision made toward a more sustainable future benefits us all.

Sustainable Packaging

Sustainable packaging is packaging that produces the least amount of pollution regarding manufacturing, production, and disposal. Making a switch to more eco-friendly packaging instantly reduces environmental impact. The myriad of biodegradable, recycled, and compostable packaging options can be dizzying to select the best choice for your brand. Download our “Sustainable Packaging Guide” for more detailed insight on determining what is suitable for your company

There are three main types of eco-friendly fulfillment packaging.

  • Compostable packaging - made from renewable plant-based materials and or biopolymers and must break down within 90-180 days in commercial composting conditions.
  • Reusable packaging - can be used multiple times and intertwines with sustainable packaging design.
  • Recycled packaging - typically sourced from plastics that have been reprocessed at a recycling facility and given a second life.

Optimized Transportation

Another area to boost eco-friendly fulfillment is to optimize transportation. Transportation contributes significantly to growing greenhouse gas emissions. Ways to streamline transportation include reducing trips, ensuring a high fill rate on shipments, and utilizing local distribution centers. A 3PL partner can provide strategic transportation solutions to build a sustainable eCommerce business. They can boost the fill rate per transport vehicle, which reduces overall gasoline consumption and CO2 emissions. Furthermore, a 3PL can eliminate stages of the transportation journey by leveraging multi-site distributions and optimized route planning.

Inventory Costs ExplainedStreamlined Inventory Management

Streamlining inventory management might not be an obvious strategy for eco-friendly fulfillment, but errors can be costly in time and resources and create inefficiencies. Every improperly labeled, categorized, or shipped product must be returned, restocked, or discarded. Ensuring your fulfillment team has a streamlined inventory management system will reduce errors, time inefficiencies, and returns or exchanges. A fulfillment team that implements the following inventory management protocols will be more effective and, as a result, more eco-friendly.

  • Automated processes 
  • Single SKU (QR coding/barcoding etc.)
  • Accurate and real-time reporting
  • Integrated technology 
  • Open communication within supply chain partners

Developing an inventory management process that incorporates as much automation and digitization as possible helps reduce human error, but it isn’t 100% necessary. Businesses managing inventory manually can still be eco-friendly if they create processes that are mindful of reducing waste and include checks and balances to ensure accuracy. 

Domestic or Localized Supply Chain

A hyper-local supply chain is a way to create a more eco-friendly fulfillment strategy. If the raw goods you sell can be sourced from suppliers closer to your customer base, it reduces your carbon footprint. It takes a lot of energy and money to ship goods from overseas. Furthermore, issues with supply chain delays and gridlocks are mitigated more easily with domestic vendors.

FALCON FulfillmentFalcon FulfillmentEco-friendly Fulfillment Partner

Choosing an environmentally-minded fulfillment partner can instantly increase your company’s eco-friendly score. One of the most straightforward strategies for eco-friendly fulfillment is partnering with a 3PL that already has processes to encourage sustainability. Falcon Fulfillment offers optimized transportation, sustainable packaging options, multi-site distribution, and automated inventory management.

Consumers are willing to pay a little bit more to know that their purchase is going to a company committed to sustainability. Implementing strategies for eco-friendly fulfillment is a process. Start by choosing a few ways to create a sustainable business, like swapping traditional packaging materials for sustainable options. As your business grows, your sustainability strategy can as well. If you want to learn more about eco-friendly fulfillment, get in touch with one of our agents today. 

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7 necessary ecommerce integrations when getting started

7 Necessary eCommerce Integrations When Getting Started

7 Necessary eCommerce integrations when getting started

There are many things to consider when setting up your online store. There are a few basic integrations that every eCommerce business needs. Here are 7 necessary eCommerce integrations when getting started.

Website Builder

Your website is your storefront. Utilizing a website builder integration allows you to create a professional-looking website without hiring a custom developer and designer. Many website builders come with various applications, features, and integrations that help streamline sales and fulfillment. Some of eCommerce's most popular website builders include Shopify, BigCommerce, Square, and Wix.

Payment Gateway

Making sales online requires a way to receive and refund money. Your payment gateway is a necessary eCommerce integration when getting started. There are many to choose from, and your website builder probably has a few preferred payment gateway options. To decide on which payment gateway integration is right for you, consider the following:

  • What payment methods do you need
  • Best ways to accept money
  • Available payment options (the more, the merrier)
  • Integrations available for your website
  • Customer data security
  • Cost-effectiveness
  • How chargebacks are handled
  • Customer support resources

Accounting Software

Every eCommerce CEO loves counting their cash from sales but loathes crunching numbers, especially when taxes are involved. A vital eCommerce integration when getting started is accounting software. Things to consider when selecting an accounting solution are the number of users, regularly updated (to stay current with best practices), easy-to-use format, and getting started training, as well as automated billing, payments, and cash forecasting. Ensure that your software can either provide your accountant with essential reporting or be easily accessed by them or their team. Lastly, your accounting software must integrate easily with your eCommerce platform and payment processing systems.

Customer Support Software

When you start selling online, you must deal with unhappy or confused consumers. A robust customer support system will ensure customers get help and support immediately. Here are some of the best customer support software implementations in 2022, according to Snov.io.

  • Hubspot
  • Zendesk
  • Gorgias
  • Help Scout
  • LiveAgent

Inventory Management

If you have a product, you need a way to manage your inventory. Inventory management systems integrate seamlessly with your sales systems. Ensuring your stock is updated-to-date, accurate, and tracked in real-time will prevent stockouts, missed sales opportunities, and optimal ordering. A fulfillment service provider typically offers this type of software integration. Make sure they can integrate with your POS systems or they are willing to build custom APIs.

Shipping and Fulfillment Software

Customers want to know where their orders are at all times. The “Amazon Prime Effect” has led to consumers expecting orders delivered in 2-days or less. This isn’t always possible but keeping a consumer informed when their package will be delivered minimizes frustration when things take a bit longer. You can only offer this “satisfaction” boosting information if you have detailed, real-time shipping and fulfillment integrations. Your carrier can offer some level of insight, and if you work with a white-glove fulfillment team, they can provide this detail, and many will have a system that can notify customers on your behalf.

The world of eCommerce is moving toward a full-service omnichannel experience. Ensure that you have the best chance for success by implementing a few of 7 the necessary eCommerce integrations when getting started. While setting up these integrations can feel overwhelming, many website builders offer pre-built integrations. Furthermore, when you partner with a 3PL like Falcon Fulfillment, they can offer top-of-the-line proprietary software to their clients that streamline order fulfillment, including returns and exchanges. That means you can focus on what matters most in your business. If you want to learn more about the technologies and integrations, Falcon offers, get in touch with one of our agents today.

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Ecommerce Order Fulfillment

ECommerce Order Fulfillment 101 - What you need to know

eCommerce Order Fulfillment 101 - What you need to know

A solid eCommerce order fulfillment strategy is the center of your business success. After all, getting orders into the hands of consumers quickly, effectively, and with a high customer satisfaction rate is fuel for growth. A company that doesn’t fulfill orders well will fail fast. It is essential to understand what fulfillment is, the elements involved in the process, and what types of fulfillment offer the best benefits for my company. This article will outline what eCommerce order fulfillment involves, the different kinds of fulfillment, and the key indicators it is time to outsource fulfillment.

What is eCommerce order fulfillment?

Fulfillment is the process of getting a product delivered once an order is placed. It involves receiving, inventory storage, order processing, picking, packaging, shipping, and returns management. Order fulfillment consists of every aspect of the product journey, from receiving to final-mile delivery.

Basic Steps of eCommerce Order Fulfillment

Inventory Receiving

Products are received, counted, and checked for quality when they arrive from the vendor or manufacturer. This can occur at any location but typically happens at a warehouse, distribution center, or fulfillment center. Some small eCommerce businesses manage this aspect of fulfillment out of their own homes. However, once orders hit a threshold that overwhelms your living room, basement, and garage, it is probably time to outsource fulfillment. Regardless of where receiving occurs, it is vital to ensure the correct quantities, quality, and type of products being received before they are added to the inventory management system.

Inventory Storage

Once products are received and input into the inventory management system, they are ready to be stored. Items are stocked and shelved to minimize the time necessary to fulfill an order. The key is having a well-organized warehouse. Optimize your fulfillment process by implementing inventory management best practices.

Order Processing

Order processing begins when a customer places an order. The order details are sent to the inventory management system that triggers product selection from the warehouse or storage area. Once the product(s) are selected they are then packaged for shipment. 

Shipping

The package is loaded onto a shipping carrier transport and begins the journey to the customer's address. This part of the journey can involve multiple types of transportation and carriers depending on the size, shape, and requirements of the final-mile delivery.

Returns Processing

Order fulfillment doesn’t end when the customer receives their package; it ends when a customer is satisfied with their purchase. This is why returns are the final aspect of eCommerce order fulfillment. When your business grows to a size where returns become a time-soak, it is probably time to outsource fulfillment and returns management to a larger expert team.

What are the different types of eCommerce order fulfillment?

There are generally three main types of order fulfillment. They include; in-house, dropshipping, and 3PL fulfillment. A fourth type, a hybrid, can involve a cross-section of all three types depending on volume and product types.

In-house fulfillment

In-house or in-store fulfillment is when a company fulfills its orders from its facilities, labor, and resources without the assistance of a third-party provider. Most companies begin by fulfilling orders in-house because it is the most cost-effective fulfillment option that allows for the highest level of control.

Dropshipping

Dropshipping is another popular fulfillment option, where orders are fulfilled directly from the manufacturer or vendor without going through the typical fulfillment channels. Dropshipping is convenient and affordable but offers limited control over the quality and quantity of inventory. Understanding the pros and cons of dropshipping can help you decide if this is the right fit for your eCommerce brand.

3PL Fulfillment

3PL Fulfillment is where the entire order fulfillment process is outsourced to a third party. 3PL teams specialize in every aspect of eCommerce order fulfillment. They have flexible warehousing, labor, and resources to ensure your business can scale quickly. If you want to maintain tight control of every aspect of order fulfillment, a 3PL may not be suitable for you. However, if you have outgrown your warehouse space or your team is overwhelmed with demand, it might be time to outsource fulfillment.

What is the difference between 1PL, 2PL, 3PL, 4PL, and 5PL Fulfillment?

There are slight differences between the different “PL” providers. 1PL fulfillment involves a supplier fulfilling their orders directly, whereas a 2PL consists of a transportation partner like FedEx, UPS, or USPS. A 3PL is a more extensive operation that alleviates more of the order fulfillment journey. 4PL and 5PL companies take on a more significant role as order fulfillment concierges. The following image illustrates the difference between the different logistics providers.

When should you partner with an eCommerce order fulfillment service provider?

  • You no longer have the time to focus on your core competencies
  • You have outgrown your warehouse space
  • Your team is overwhelmed by the demand
  • Order errors and returns are increasing
  • You know you are paying too much for shipping
  • You want to expand into a new market or location (International)

This post about eCommerce order fulfillment is just the tip of the iceberg. There is a whole industry that handles the logistics surrounding order fulfillment. When you first launch an eCommerce business, it can be daunting to know how to get your orders to your customers quickly and effectively. Keeping your customers in mind is the most important aspect of building your business. If satisfying your customer is your top priority, it will guide every decision, including what is the best fulfillment option. If you want to learn more about how Falcon Fulfillment can help alleviate the burden of getting orders delivered in a timely fashion, speak with one of our knowledgeable agents today.

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