Forum Moderators: buckworks
I am creating my business plan for my ecommerce business. Would like some tips from those who have already done it, regarding the fullfillment part. I intend to sell lifestyle products like small handicrafts, rugs, carpets etc., which I plan to import directly from my contacts overseas. Target markets are the U.S, Canada & Europe, to be done in stages and using outsourced fulfillment.
Correspondence with fullfillment centres seems to be all about what they will charge, but no one is willing to take the time to tell or even point out resources to find out the following information:
1. Customs handling & transportation logistics to the fullfillment warehouse, process & costs.
2. What kind of shipping can be provided on a given package size & weight and delivery times and costs.
3. Returns logistics.
I know the product cost US/Canada/Europe landed...customs duties are published...so no problems..but transportation to the fullfillment center and mailing/courier charges for the products are something I am not able to find out. Without this component, I cant really find out where I stand in order to compete with brick & mortar.
Please do guide me with urls to resources whare I can find this information. Also, would not mind if someone can point out, if all this can be outsourced to one company in each country or something like that.
Also, would appreciate comments.
With best regards.
Sanjay.
Im afraid to say thats something youll going to have find for yourself. You need to know the average weight of packages and most likely carrier for it from the customers back to you. How many are going to use insurance etc etc.
Have you tried talking to a customs cleareance broker for customs dutys etc?
Oddly enough I was looking at books on this subject on Amazon last night, they have some good ones. or at least they look ok.
For outbound costs (from your fulfiller to customer) you can get zone and rate charts from the ups site. Fulfillment houses will charge you so much per order as well as storage costs. Are you planning on using the fulfillment house to take orders as well? They will charge for this too.
Return handling is dependent on your product and channel (b2b or b2c) - check out the terms at some competing sites.
All of this is important - we studied our costs and were surprised at how much our labor costs were to fulfil an order - we included everything; customer service, accounting, shipping, receiving, management, packing materials, it people etc. and came up north of $16 per order - I downloaded drugstore.com's financials and figured they are a bit less than $9, obviously volume helps - A lot of my smaller orders may not be profitable....
Thanks for your reply. I will look up Amazon. However, what I meant was that if the carriers who are being used most have sites where I can get information. If I have a chart of their prices & how they calculate ant the type of variations, I can spend time calculating for each product & different volume permutations.
The problem is that I do not know where to look. General searches in Google etc. lead to transporters etc. who are for bulk...mine is a BtoC app...I need to know which are the carriers which various sites use for their deliveries and some comments on pricing....I can take it from there.
Yes, I plan to talk to some customs people & transporters...which I have found through search engines but still would love any recommendations. The major portin is the customer leg...I cant really afford to mistakes in figuring out the retail delivery, return costs etc.
Best regards and thanks again.
Sanjay.
Thanks for the UPS link. Any other service providers that compete with UPS?
No, We can do order taking and upload to them in any format they require.
Regarding Returns Handling...we are to be BtoC. Can you give me some links? Dont companies who deliver handle returns too. What exactly is involved?
As far as labour costs that can be done offsite i.e. not at the fullfillment center...we have much lower costs out here in India. Thats why lots of companies who want to lower costs are outsourcing here. The problem areas for us are those which need to be done out there.
Accounting, Processing, Conversion, Order taking can be handled remotely. Actually we plan to expand on this and start procuring locally also and cross-pollinate products among the various countries we start operations in. As the back-office would be single, we would save lots of costs. Since Indian manufacturers are backing us...we will start with their products and add others from local areas slowly. I believe a lot of tie-ups with various eccomerce sites would be done to add our products to their sites.
That is why we are putting in lots of research before putting our value proposition to various ecommerce sites. The concept is very simple...Direct procurements from manufacturers...and direct sales to consumers...all middlemen eliminated...costs added by various service providers like fullfillment houses and delivery services etc. that need to be done locally...everything else handled remotely in India at a lower cost. The biggest requirement for success is availability at multiple ecommerce sites...small & big, which have the footfalls and established customerbase.
Thanks for your help.
With best regards.
Sanjay.
You should look into trucking companies that handle products by the container and/or pallet. Products such as long rugs or delicate items like porcelain may carry additional delivery charge due to dimensions or fragility. Also, some fulfillment houses will not accept products over a certain dimension, items that are fragile, or is a high-ticket item.
If you are shipping directly from India to consumers, delivery time will be longer than if you store your products in a fulfillment house in the mid-West (say Kansas) where it can reach most 48 states within 3 days by FedEx or UPS Ground. You can project how often you need replenish inventory at the fulfillment house to minimize pallet storage charges while maintaining enough inventory for quick delivery. Any fulfillment house you consider should be able to accept a data file via FTP or a XML feed.
Sorry, I've not done any research for Canada or Europe. I PM'ed you some links to review.
