If e-commerce is your business why get involved in fulfilment & distribution?

[Grant Ashley]

Here at ILG we do everything we can to ensure you have the best possible chance of being successful - in turn we are more successful.

We have a huge vested interest in making sure you retain your clients and grow your business - part of that involves good honest reliable service and a major part of it is giving you back a lot of time to focus on your business rather than sorting out stock or delivery issues or handling returns!

For quite a few years now ILG has supported either the new start or expanding e-commerce company. We currently work with over 40 e-commerce organisations and they vary enormously, some have 2-3 orders per day and others over 500 per day.

In order for us to ensure we keep up to speed with the changing requirements of these and future clients we need to make sure we listen to what people need. We know what our clients need as they tell us but what do you need?

What stops you out-sourcing this part of your business and focusing on your core activity of purchasing, marketing and selling products?

Do you understand how it works, how simple it is and the costs involved?

Apart from the opportuntiy of offloading fixed costs, making savings on carriage and of course having more time to do what you do best there are many other benefits.


If you would like to share your thoughts, ideas or concerns with me I will happily give you as much advice/support as I can.

I look forward to hearing from you

Thanks

Grant

Go to ilguk.com

[Steve2507]

If e-commerce is your business why get involved in fulfilment & distribution?Sorry, but because I like to see the stock in my warehouse not someone elses.

[||MARK||]

I can see this being advantageous if a business is only sending out a few items a day or so. If you are more cost effective, such as with courier costs, then this could be a good idea, however, i think it takes away an element of 'your own' business.

Also agree with Steve2507.

[Grant Ashley]

Mark & Steve

Thanks for your comments which are very much appreciated as I want to learn what does and doesn't work in other peoples opinion.

Looking at Steve's products I can see why he wants to keep them in his warehouse - I'm joking.

We have individual clients who shipped in excess of 10,000 orders during December and could have never have geared up for such peaks with their own tried and tested team of people - (their words not mine). Yes there are undoubtedly savings to be made on carriage but the main gain is offloading fixed costs and have an activity based cost model that can be scaled up or down for peaks & troughs. I can see why some people would feel nervous of "losing control" but that is something that only goes away in time and when you work with the right partner.

Keeping it to yourslef to a ponit is fine but if you take it to the extreme you would have your own van and hand deliver every order to your clients!

If I was involved in E-Commerce I would want to be able to outsource everything except the core activity - as presumably that is my field of expertise?

Thanks again for the feedback and most importantly good luck with your business.

Grant

[Cromulent]

If I was involved in E-Commerce I would want to be able to outsource everything except the core activity - as presumably that is my field of expertise?

Not at all. I want to be 100% in control of everything.

The one thing that sets my site apart from anyone else's is customer service. Therefore if I need to rely on external companies to deal with parts of my business I therefore can only offer the same level of customer service as they offer. This I find unacceptable.

[cycloneuk]

Sorry, but because I like to see the stock in my warehouse not someone elses.


I'm with Steve, i like to see my stock and would not trust another company to handle and ship orders.

[Mister B]

I'm with Steve on this one as well...retain control and management of destiny:)
Out of curiosity, I assume that with your fulfillment service, you accept all responsibility for stock control and loss?

Mister B

[Steve2507]

In all fairness to the op, I can see where they are coming from, it just isn't for me or my business.

If you have a few dozen products and plan to sell 000s I can see how it would be benficial to out source such a small range of products. Also if you have a high seasonal variation, so you need a small warehouse most of the year but then for 2 or 3 months you would need a massive warehouse then outsourcing may be beneficial.

In our situation with over 30K skus I just couldn't entrust it to someone else.

[Mister B]

In our situation with over 30K skus I just couldn't entrust it to someone else.

Flippety flip Steve, how do you manage all of them? It must be an absolute nightmare to control, never mind the accountancy issues:eek:

Mister B

[Jonesy]

I'm with Steve, i like to see my stock and would not trust another company to handle and ship orders.

I think that's a bit short sighted. You wouldn't trust, Amazon say?

[Steve2507]

Flippety flip Steve, how do you manage all of them? It must be an absolute nightmare to control, never mind the accountancy issues:eek:

Mister BOrganisation is the key. In the warehouse everything is in perfect order. So someone with a basic knowledge of the layout (or a map:D) should be able to find any item given the code only.

For accounting we don't enter each order in our accounting package individualy. Instead we accumulate the figures and enter them as 1 sale at the end of the month. The individual orders are available and in the main database, but accumulating them means it is a lot quicker.

But I will admit it can be a nightmare when we bring in a new range.:D We've just brought in 4 new ranges, took me a while to find space for them all. But they are all selling so it was worth it.

[quikshop]

In our situation with over 30K skus I just couldn't entrust it to someone else.

Talking about outsourcing, I tried using a call centre to handle customer enquiries and orders for an earlier business and it was a complete disaster.

Despite two days on-site training of their staff on the products and business, it soon fell apart and became very apparent that those taking the calls (and those meant to be supervising them) just did not have the emotional or financial motivation to offer even the most basic quality of service.

In the end it was actually creating more work for me, not less, through a constant stream of customer service issues to resolve.

Your warehouse staff have no motivation to ensure that the fulfillment side of my business would be handled in the same way as those with an actual interest in seeing the business survive and flourish.

As far as I am concerned, any contract with a fulfillment service would have to contain serious financial penalties on them for failing to deliver on accuracy, speed, quality of service and other agreed KPIs.

[edmondscommerce]

Well said Dave

One thing that nearly every ecommerce business outsources though is it's hosting. This is especially critical for an ecommerce business because if the hosting goes down then you can't do any more business.

For those businesses that also operate their back office procedures from their web server as well <self promotion>which I can help you with - a whole new level of efficiency</self promotion> then its especially critical as downtime means that everything grinds to a halt.

Thankfully there are plenty of really good hosting companies who offer excellent service and respond quickly and efficiently to any errors. Furthermore they offer SLA's etc that guarantee a minimum level of service.

OP take note - I think if you want to attract ecommerce clients (and I could recommend some if you did deliver this) then you would need to become almost fanatical about offering excellent service, maintaining a very high agreed minimum level of service and generally making sure that for the ecommerce enterpreneur the side of the operation you are looking after is working even better than they could do it themselves.

I see no reason why this could not be the case, but I think it would take something extra special to really deliver this. If you did get it nailed though and you managed to persuade a few brave early adpoters to offer references and praise for your excellent service then I think you could be on to a winner!

[Steve2507]

I think that's a bit short sighted. You wouldn't trust, Amazon say?
To buy from yes, to hold my stock no!

[Cromulent]

Well said Dave

One thing that nearly every ecommerce business outsources though is it's hosting. This is especially critical for an ecommerce business because if the hosting goes down then you can't do any more business.

That is why I decided to go with a clustered hosting provider. If a server crashes, no worries my site still keeps on going.

[Grant Ashley]

Dave

Thanks for the feedback its all really useful.

I can't comment on your call centre experience as its not my area of expertise - I guess like every walk of life there are some good, indifferent and really p*ss poor companies out there!

So in the same way when people have a nightmare experience buying online would it be fair to say that buying online is not the right thing to do? I think there are people in e-commerce that give it a really bad name similarly there are fulfilment houses that give our industry a bad name - I know because 6 of our 35 clients came from other fulfilment companies that had really let them down. My company has been around since 1990 doing this and has grown year on year based on retaining clients through good servce and good value - one of our biggest clients spends £1.5M p.a. with us and has been with us for over 15 years!

I question your comment on warehouse staff motivation - why would you staff be any more or less motivated than ours? They ether feel a part of what we are building or they don't and they know they have a direct effect on the company's success or failure. We have 35+ warehouse staff many of them have been with us for over 10 years. We have SLA's & KPI's but the real litmus test is how many clients renew their contracts. We have just handled a new contract on a 3 month trial during the Oct/Nov/Dec crazy period and shipped 10,000 order in December alone and on the back of the success they have given us a 2 year contract!

All said and done customers and results are the only thing that is a true reflection of your business and I am happy on both counts.

Good luck

Grant



Talking about outsourcing, I tried using a call centre to handle customer enquiries and orders for an earlier business and it was a complete disaster.

Despite two days on-site training of their staff on the products and business, it soon fell apart and became very apparent that those taking the calls (and those meant to be supervising them) just did not have the emotional or financial motivation to offer even the most basic quality of service.

In the end it was actually creating more work for me, not less, through a constant stream of customer service issues to resolve.

Your warehouse staff have no motivation to ensure that the fulfillment side of my business would be handled in the same way as those with an actual interest in seeing the business survive and flourish.

As far as I am concerned, any contract with a fulfillment service would have to contain serious financial penalties on them for failing to deliver on accuracy, speed, quality of service and other agreed KPIs.

[Steve2507]

So in the same way when people have a nightmare experience buying online would it be fair to say that buying online is not the right thing to do? I think there are people in e-commerce that give it a really bad name similarly there are fulfilment houses that give our industry a bad nameI believe buying online is the right thing to do, for convenience, cost etc. However I agree that there are e-commerce businesses that give the industry a bad name how we get around that I don't know.

[quikshop]

So in the same way when people have a nightmare experience buying online would it be fair to say that buying online is not the right thing to do?

Its one thing getting ripped off for £35 by a dodgy online retailer, its another having your business collapse around you because of a dodgy 3rd party service. You can't sensibly equate a singular act of consumerism with paying and trusting a 3rd party to handle a massively important part of a distance selling retail business.

I do accept your general point that there are good and bad operators in every industry but that comment only goes to reinforce my original post about ensuring that there are watertight KPI's that ensure the business is financially recompensed if the fulfillment service fail to meet the agreed standards of service.

I'm not for one moment suggesting that your service is anything other than very good, but I suspect I could talk to 15 of your competitors, good and bad, and they'll all say the same thing.

Just as a matter of interest, how do you approach fulfillment jobs for retailers that sell products without an sku?

btw I will respond to your email shortly :D

[Grant Ashley]

Dave

I totally agree its a major decision and needs through research as is selecting a system provider, call centre etc and therefore its about making an informed decision. It means speaking to several companies, speaking to several of their clients, visiting the potential suppliers on more than one occasion, meeting the warehouse staff who will look after your stock and pick your orders. Having a very clear SLA that both parties have contributed to, having a monthly or bi-monthly review, having an issues log system etc. There are many major bluechip retailers and etailers out- sourcing many elements of their supply chain.

You are right you could talk to 15 competitors and they may say the same or similar things BUT I think if you went through all of the above processes before making a decision you would very soon sort the good from the also rans. I think the minute you establish how long clients have worked with a supplier this will tell you an awful lot about a potential partner.

E-Commerce will continue to grow and so will GOOD companies working around and in E-Commerce and bit by bit the also rans will fall by the way.

Cheers

Grant


Its one thing getting ripped off for £35 by a dodgy online retailer, its another having your business collapse around you because of a dodgy 3rd party service. You can't sensibly equate a singular act of consumerism with paying and trusting a 3rd party to handle a massively important part of a distance selling retail business.

I do accept your general point that there are good and bad operators in every industry but that comment only goes to reinforce my original post about ensuring that there are watertight KPI's that ensure the business is financially recompensed if the fulfillment service fail to meet the agreed standards of service.

I'm not for one moment suggesting that your service is anything other than very good, but I suspect I could talk to 15 of your competitors, good and bad, and they'll all say the same thing.

Just as a matter of interest, how do you approach fulfillment jobs for retailers that sell products without an sku?

btw I will respond to your email shortly :D