How do you arrange your logistics fulfilment as a start-up webshop? Many webshops face the same considerations and challenges. Therefore: 10 tips for a successful approach.
1. Keep your product range limited
A mistake many start-up webshops make is that they want to offer too wide a product range. But customers do not expect to be able to buy everything from you. With too wide a product range, you make it unnecessarily expensive and complex for yourself. It starts with higher purchasing and the capital you tie up in it. You also face high administration and storage costs, as each item is usually in its own grab box. A handy rule of thumb: make sure the ‘orders per month/number of items’ ratio is no lower than 1. With 1,000 SKUs (Stock Keeping Units) and 100 orders per month, you end up with a ratio of 0.1. That’s hard to get profitable. The other way around is much better: with 100 SKUs, generate 1,000 orders per month.
2. Provide structure
Make sure all SKUs have their own article code and preferably their own barcode. It does not matter whether you do the logistics yourself or outsource it to a fulfilment party. Even if you have a small warehouse yourself, it is useful to put each SKU in its own numbered location. That way, you avoid mistakes and save time. Also make sure your webshop lists the unique article code with each item.
3. Think ahead
If you think ahead, you avoid logistical problems and unnecessary costs. Does your supplier not put standard article codes on the products? Then consider having them do so. This may cost extra at first, but will save costs later in the logistics process (e.g. loading costs and costs for correcting errors). When choosing a web shop platform, it is also smart to consider whether it has a good cms (content management system) at the back, with decent logistics capabilities and stock functions. With Magento, for example, this is the case.
4. Consider your options
Outsourcing fulfilment is certainly not always the best option. If you have a very specific process, it is better to keep doing the logistics yourself. Think about printing products or producing them yourself. And if you already have your logistics well organised, the same applies. But in other cases, it is worth exploring outsourcing options, as it can be very attractive both in terms of process and costs.
5. Choose the right moment
As a start-up webshop, it is not always smart to outsource your fulfilment right away. First go live with a good product range and generate traffic and conversion. If you are in a quiet start-up period and are receiving few orders, it is a waste to incur high costs and arrange fulfilment to perfection. So do it yourself first and move to outsourcing when you have some volume, say 100 orders a month. But of course, this varies from situation to situation. Do you have a lot of budget, manpower and ambition? Then outsourcing before going live is definitely possible!
6. Go for the right match
As a smaller shop, you will probably not want to and cannot go to a large fulfilment party like docdata, the partner of bol. Consider what is important to you. Do you prefer to do business with a partner that is just around the corner, or does the location not matter? Do you go for the cheapest party or do you prefer a partner that invests in IT and process optimisation? Also consider your ambitions for the future. In short, choose a partner that fits your webshop best, both now and in the future.
7. Make an honest assessment
If you ask for quotes from fulfilment parties, weigh them against the costs of doing it yourself. Some webshop owners say: ‘If I do it myself, it’s free’. But remember that your own time also costs money, especially if you take your webshop seriously and don’t see it as a hobby that got out of hand.
8. Compare offers well
Quotes from fulfilment parties are often full of technical terms like inbound, handling, SKUs, grab box, project management and NMG surcharge. This can make it difficult to compare them properly.
Then try to allocate the quotations to a total amount per month, for example with an order volume of 200 orders and 1,000 orders. Also include shipping costs and costs for shipping materials. If you expect to expand rapidly (soon), include shipping costs to Belgium and Germany in your calculation.
9. Look beyond price alone
Of course, a price comparison is useful, but it is at least as important to look at what you get for that price. What is the quality of service? Visit a few parties and take a good look at the products and how the processes are organised.
Make a checklist in advance with questions like:
- Are product items in separate grab trays or are they still being searched during picking?
- Until what time are incoming orders still being processed?
- What was the error rate in the past three months?
- How are returns handled?
- How and how often is the order checked before shipment?
- Is the administrative process well organised?
10. Check whether ICT is well organized
Especially if you have a growing webshop, it is smart to arrange everything properly from the start. Also consider ICT connections. Some parties (including eWarehousing) have linked their logistics system directly to e-commerce platform Magento. This has many advantages: orders are processed quickly, few mistakes are made and as a seller you get a lot of insight into the process.
