Fulfillment House - I can't keep up

too much to do in a day...

[sun818]

As my business grows, I'm having a difficult time having most of my day play the role of a shipping clerk. Packing, packing, packing... It seems that's what I do all day long. You get my point. Are any of outsourcing some of your labor outside services? I'm looking into fulfillment houses. You send them your stuff, they store it, and ship it for you on demand.

I figure this type of situation will scale better especially for the holidays and I can concentrate on advertising, marketing, and sales instead of being shipping clerk.

[Essex_boy]

Im lucky in that I can prepack items in ones in preparation of an order..

However I did late last year consider hirng a temp to help me out over xmas - very expensive but its the way im going to go this year.

Its the only way I know for sure that my customer are getting the service they deserve.

[mattglet]

What about just hiring one or two people to step in, rather than a whole shipping outfit? This could help keep your costs down. There are a few things to think about, other than just "can you please pack my boxes?" You have to get your product to the shipment house (shipping costs), possible inventory control on their part, reprocussions if they damage the products before shipment, etc.

[IanTurner]

There are many people out there who will happily take a fairly low paid part time job if you can give them flexibility of ours.

[sun818]

I work out of the home, so no visitors. I have considered part-time help in the past, but I live with other people who would not feel comfortable with the idea. My intention is to expand product line, increase business, work on technical infrastructure, etc. If I had time, I think I could double the business. But no matter how much I pre-pack or anticipate volume, I don't get the feeling business would scale well beyond 100 orders per day for one person.

[edited by: sun818 at 8:38 pm (utc) on Sep. 1, 2004]

[Rugles]

There are lots of fulfillment operations but keep in mind that it can be an expensive way to operate. It might be cheaper to hire someone in the end and you can keep control of what is happening.

[mattglet]

If you're going to spend the money, then it's time to move the business to an office space. You can also then hire some help, and still probably cost less than outsourcing your work.

[sun818]

San Francisco is where I live and the cost for business space is much higher than other locations. I'm not ready to commit to a separate office/warehouse space. But I do need help with scaling my business.

> You have to get your product to the shipment house (shipping costs)

The costs for shipping products to the fulfillment house and storage would add up quickly. I make less per piece, but it is my intention is to market the site and increase volume. If I pick a fulfillment house in the middle of the United States, I could save money in some situations. It would cost less to ship from midwest to East Coast versus of coast to coast.

Thanks for the input so far. Any other ideas?

[yowza]

How about hiring someone in the middle of the U.S. to fulfill shipments from home. They could work from home and handle the shipping. People love the idea of being able to work from home. There are plenty of responsible stay-at-home parents that would love to work, but can't get out of the house.

You might then be able to "move" your business to this shipping center and pay a lot less taxes than you would in San Francisco. Additionally if you found someone in a lightly populated state like Wyoming, you would have far fewer customers that would have to pay taxes on their orders. I know that whenever I shop online I try to shop out of state to avoid sales tax.

[sun818]

I found one that wants $2.40 per package, plus $0.30 for each additional item in the same package. Storage fee is $10 per month per pallet. Would that be considered "expensive"?

[lgn1]

Have you talked to your distributer, to see if they are interested in drop shipping for you. A lot of distributers are now offering this service. You cut down on the shipping time, and eliminate the need to carry inventory.

Since we are a major client for our distributer(manufactuer), they were more than happy to drop ship for a small fee, rather than seeing us take our buisness to the competition.

[sun818]

No, I have asked. They have limited staff and will only drop ship if I order pallets at a time. For the kind of volume I do, they are not interested in drop shipping for me. I have other distributors that drop ship for me so that is not an issue.

I'm actually trying to offload some my work, so I can start working in including about five pending drop shippers that I want to include on our web store.

[sun818]

Thanks anyway guys - I was hoping more alternatives than part-time help.

[JuniorOptimizer]

The fulfillment house is an excellent idea. The costs are not that bad, and you never have to think about shipping again, freeing you to do the things that really make money.

[lorax]

What about working out a deal with your local Fedex or UPS Store - formally known as Kinkos and MailBoxes Etc.?

[martyt]

Just be careful that your customer service level remains at or above its present level when you outsource your fulfillment - if you end up with poor or sloppy packing, delays in fulfillment, etc. it could be worse for your business than you're prepared to deal with.

[PayPalPB]

Also consider paring down your product line on the basis of: top sellers, highest profit margin, easiest to fulfill, etc.

[sun818]

That's a good idea PB - most bang for my buck.

> service levels

I actually would like to get back to same day shipping but because of the success I can't fill the orders quickly enough. So, by using a fulfillment house I'm hoping they can ship same day. Since you've mentioned, that will be a question I'll have to ask. I wouldn't want a service to ship 3 days the order is submitted came in...

[lgn1]

Most customers are willing to wait, as long as they know when the parcel is going to arrive.

We have take a page from DELL, 'Lie about the delivery time and deliver the shipment early'. All our shipments from dell has arrived 2 to 3 days before they are due.

Customers are happy when they think they are getting the package early, when in fact, you are just padding your fullfillment times.

Sure you may lose a few rush orders, but from my experince, people with rush orders are a big pain in the rear, and I can do without there business.

[moneymancn]

I see it like this.
As you say you have a talent to get the orders coming.
If you pay someone to do Packing etc a good wage I bet if you had the time spare now to market etc and get even more orders you would make more money.
Obvious ,I know ,but that is what has worked for us.
Maybe keep it in house until you are big enough not to be too bothered about the increased cost and remote problems that may be attached to fulfillment houses.

MM

[sun818]

> you have a talent to get the orders coming

You can thank WebmasterWorld for that "talent" - LOL. ;)

[tomld2]

Sun, your post has rejuvinated my interest in using a fulfillment house as well. Please let me know if you find any excellent fulfillment companies.

Thanks
Tom

[BroadLea]

We are nearing the end of being in the exact same situation. We "solved" it by opening a retail store and moving the storage/packaging operations to a back room there. So long as the store covers its rent and basic expenses, we are ahead.

Since real estate is high in your area, how about renting a self-storage space and doing packaging there?

[sun818]

> renting a self-storage space and doing packaging there?

I've thought about it - its a lot of wasted time going back and forth between printing invoices, packing boxes, and bringing the packages back for placing shipping labels. Space is not as much of an issue right now as time is.

If I did go the self-storage space, a colleague recommended I use pre-paid FedEx shipping labels. This would remove the requirement to bring the packages back to the house for label printing. Honestly, I have not looked into it much.

The issue is how to best use my time and not be shipping clerk the rest of my life. ;)

[jmbishop]

Is it possible any of your housemates would help out if you were to pay them a bit? This would take care of the strangers being in your house.

Have you talked to them about letting someone come into the house in the afternoons to help with shipping? Maybe if you hired a high school kid for 3-4 hours they wouldn't be as threatened because you're giving some kid real-world experience.

[iDKris]

using a fulfillment company is a great way to do things. i used to produce, package and ship all our orders. we got so busy this was taking most of my day. i hired a college kid to come in 3 days a week and handle everything and had a company making and boxing our product, then sending it to us and we sent them out. was in the process of moving out of state and needed to find a solution. i talked to the company producing everything and now they handle all of it. turns out it costs about $1.50 less per item than it did with hired help. plus, they keep track of everything for me. lot of weight off my shoulders.

[chuladi]

I went through the same thing. I was so overwhelmed with shipping orders that I couldn't sleep many nights. And this was in June, nowhere near the holiday shopping season.

I struggled with the concept. I talked to many fulfillment centers all over the country. Some were cheaper than the one I have now.

In the end I searched for a local company that is a 20 minute drive from my house, they have extensive expertise fulfilling the types of items I sell. This is a bigger issue than one might think because if you ship lightweight delicate items, you don't want a fulfillment center with dust, forklifts and big burly guys.

Now here were the issues:

I am homebased and legally prohibited from having employees in my home. beside that, I wouldn't want to. it's my home.

The cost of geting office space would have to be factored into the equation. I also have to look at the fact that shipping is not a full time job for someone dedicated to the task so it would be hard to find someone who wants that type of work.

Also, to legitimately employ someone in my state (like you, Sun818, I'm in northern california) would be extremely expensive in terms of taxes and workers comp and other responsibilities. I'm not doing it under the table because the last thing I need is to get caught or sued and I can't do it, ethically speaking.

So I bit the bullet and went to a fulfillment center.

People always raise questions, but here is the one thing I had to come to terms with:

inventory and shipping is not rocket science. Really. I would ask all sorts of questions about whether or not they could do it right, could they do this, could they do that. Other people aren't lemmings and having a fulfillment center is not much different than having to train somebody to work for you. EXCEPT the people at the fulfillment center do this all day every day for years.

Issues are resolved quickly. The "learning curve" is much lower than having to train someone because they are just adapting to "my way" of doing things that they already do.

All in all, it was the best decision I have made because my time is not well spent packing and shipping. I can grow my business and not have to worry about the staff to fill orders. I won't have as much stress during the holiday season. I don't have to deal with the complications of hiring people.

It's just like I have a shipping staff that's in another location. We are in touch constantly, we solve any issues quickly. There has been no delay in turnaround time (often, they are faster than me because this is ALL they do), and even though I am a small account for them, they sincerely wanted my business. Insurance, damage, theft and any other issues are automatically covered by a professional fulfillment center. My incoming inventory now goes directly to them. They open at 7AM I send the orders the previous night, they're out before 10. I send the rest of the orders the next morning to go out by 3, I send a last batch of orders that are for FedEx by 1 so they can go out that day.

I send over my own packing slips so they can be all pretty and graphically pleasing just like I would print them here. We have made it as seamless as possible.

I'm posting this for you because I had a hard time finding good information on making that jump. Because most info out there does not focus on the small business, they focus on the big guys. It took me 2 months to get the guts to make a move, but I finally did it and I have not looked back.

And I get the benefits of having shipments delivered to a business, they have a loading dock (which you can run into needing), have regular and steady multiple carrier pick ups and so on.

So, when you look at this, you have to understand that shipping is not rocket science and it's not as difficult for someone else to be as competent at it as you. As a business owner with limited resources (mainly time) you figure out what your strengths are and outsource the rest.

Sun818, you have plenty of very good fulfillment centers in your neck of the woods. I know. because if they had been closer, I might have used one. I would definitely suggest going with a place close that you can visit, meet the people, tour, interact with, be in the same time zone (so important).

[Essex_boy]

Site here offering a free ebook on on how to select a fullfillment house.

http://www.ifulfill.com/eBook/PickingTheRightFulfillmentHouse.htm

pretty good, Im not connected to teh site in anyway.

[edited by: DaveAtIFG at 9:11 pm (utc) on Sep. 14, 2004]
[edit reason] DeLinked URL [/edit]

[sun818]

Funny you mention them Essex_Boy - that's who I am using now. :) They are not local to me, but I figure them in the middle of the USA will help offset the cost of shipping since many of my east coast customers will be several zones closer.

[babushka99]

You can try posting for local help - in your local newspaper (you know the community based newspapers) or alternatively you can do what we did, we posted on Craig's List for local employment and found plenty of help who were willing to work. You woul dbe surprised at the number of people out there looking for part-time employment. During our Christmas rush when we are shipping physical goods, we always hire through the local newspapers, the rates for advertising is cheap, the shippers/packers are economical and its a Win-Win situation for both. We did have issues of pilferage with a couple of people, but since then we have learnt how to deal with it. Nothing major.

Hope this helps.

Babs