Discussion about fulfillment centres

Discussion in 'Ecommerce Forum' started by Ray272, Jun 21, 2019.

  1. Ray272

    Ray272 UKBF Regular Free Member

    184 23
    I am really interested in fulfillment centres. I see a lot of recommendations on this forum but I sometimes wonder why the Info is vague.

    I have been with my provider for close to 5 years now. I have had 1 price change of note during that time, it was one I proposed as a means of quashing any future attempts with price increases.

    We do business in 2 industries on a B2B basis and do a very small bit of retail through a market place.

    We ship a unit out which is metal boxed, so very sturdy packaged product . It's 12.5cm length x 7cm width x 2cm depth and weighs 150 grams.

    We ship it 2nd class signed.

    Here are my charges:

    Order fee - £1.50
    Picking fee - £1
    Packaging fee - £1.80
    Shipping fee - £5.45
    Total - £9.75

    Does the shipping cost seem excessive?

    I know it may seem like high pricing but this costing only causes a few pains with the b2c on 1-2 items, When it is a b2b style it works out pretty well and one b2b channel is half the pick cost of the above pick cost.

    So once the shoe is on the other foot a b2b order which is normally picked as a multiple is fairly competitive:

    Example

    100 units of a product in a master carton.

    Order fee £1.50
    Pick fee £0.50 that's for 1 pick of 1 box containing 100 units.
    Zero packaging fee as it can ship as is.
    Not always the case and 70% of time we are charged £1.80 per box.
    Shipping cost from FC - 0 we ship ourself.

    What would I do differently if I had a fulfillment centre?

    We have some real zombie stocks, stock that just does not move from time to time.

    If I saw this issue I'd offer to compact the stock and free up efficient space.

    I'd likely store it in an out of the way inaccessible location on the proviso that the company agrees the only movement on that stock in future is in it's entire quantity.

    Deadstocks sitting in efficient space prevent me from developing the range.

    I'd seek a lower storage cost for such products and lower my clients bill whilst allowing them to take another stab at getting new efficient products on the floor.

    I must have 6 pallets worth of dead stocks in my 38 pallets of stock, had them well over a year.

    I would engage my clients a lot. A fulfillment company in my eyes is like an extension of your own company. They are privvy to most of what you do. I would offer a whole host of individual services.

    A year ago a border check on a pallet of goods resulted in the border force insist on a relabel job. We contracted our FC for this and thought the deal was reasonable. We did not know such a service was even offered.

    My fulfillment company has never tried to quote me for any shipping besides royal mail small items.

    I do get good deals though.
    For example
    Pallet to Sweden/germany/France/denmark/italy/spain/ 450kg - £149 + VAT.


    I would definitely have cctv on the exit and entrance areas for deliveries and collections.

    I have often wondered about leaving but then the whole process needs to be done with all things in mind. Goods currently on the water, orders not yet left production. Moving goods from location old to new, ensuring all goods leave old to new and your stock counts and product state are not compromised.

    Scares the living daylights out of me and my nearly 5 year relationship would cease and I'd be back to square one with a new fulfillment house.

    I have contacted a lot of fulfillment companies just to learn of rates, get a feel for there approach.

    It makes me wonder if their could be a parcel2go of fulfillment. A one stop shop showing all costs facilities of the fulfillment centres their capabilities etc.

    As you can probably tell, I enjoy discussing fulfillment.
     
    Posted: Jun 21, 2019 By: Ray272 Member since: Jul 5, 2017
    #1
  2. Mr D

    Mr D UKBF Legend Free Member

    14,924 1,630
    Wow, we paid less than the first figures you give for shipping a bigger and heavier item via royal mail fulfilment. Your order and packing fees appear a little high to me too.

    A comparison site for fulfilment may be useful, if can class services together. A parcel2go type may be unsuitable as usually need to send stock in first, unlike the parcel booking site.
     
    Posted: Jun 21, 2019 By: Mr D Member since: Feb 12, 2017
    #2
  3. JamieM

    JamieM UKBF Ace Free Member

    2,280 343
    Yes, it does seem excessive. Surely that is a Large Letter size?

    Order fee/picking fee combined seems high too. Also what are you packaging it in?
     
    Posted: Jun 21, 2019 By: JamieM Member since: Mar 22, 2006
    #3
  4. Ray272

    Ray272 UKBF Regular Free Member

    184 23
    P2g is effectively a comparison site for a range of couriers so why not the same type of services for a range of fulfillment centres. The conversion method would not be the same but it could have multiple options besides typical fulfillment

    Could also be altered to offer one off services for clients needing a short time delivery point.

    Would also act as a safeguard for FC and their customers with pre agreed KPI and exit strategies etc.

    I know it's high but it's minimal versus the B2B and cannot justify a new fulfillment house solely for the retail orders.
     
    Posted: Jun 21, 2019 By: Ray272 Member since: Jul 5, 2017
    #4
  5. Ray272

    Ray272 UKBF Regular Free Member

    184 23
    I pay one cost for packaging irrelevant of size.

    So we do a majority of shipments using a 60x40x50cm double layer card board box for £1.80 a box. Ive never enqyired about the envelope but im pretty sure it is a bubble wrap envelope.
     
    Posted: Jun 21, 2019 By: Ray272 Member since: Jul 5, 2017
    #5
  6. Mr D

    Mr D UKBF Legend Free Member

    14,924 1,630
    What options besides typical fulfilment do fulfilment centres typically offer?
    Not following why you cannot justify a new fulfilment house - the quotes for low volume are higher?
     
    Posted: Jun 21, 2019 By: Mr D Member since: Feb 12, 2017
    #6
  7. Ray272

    Ray272 UKBF Regular Free Member

    184 23
    The bulk of what we do. 95% is b2b and my deal on that is decent. The service over 5 years has been very good. Had a few touch n go moments but nothing remotely major. This small aspect of what we do does not warrant changing it's too minimal. I'm saying it's less than 250 shipments a year and the majority of those shipments are making good returns even with this excessive cost. I could arrange the shipping myself and save £3 A shipment and increase mine and the fulfillment centres workload as a result of providing the labels to them for each order. Maybe I should just do that.
     
    Posted: Jun 21, 2019 By: Ray272 Member since: Jul 5, 2017
    #7
  8. Mr D

    Mr D UKBF Legend Free Member

    14,924 1,630
    I just sent a handful of items to a different company for fulfilment. In my case royal mail for stuff amazon were too expensive for or could not handle. Like cardboard.
     
    Posted: Jun 21, 2019 By: Mr D Member since: Feb 12, 2017
    #8
  9. AW Swindon

    AW Swindon UKBF Contributor Full Member

    45 5
    Hi Ray.
    The prices you have quoted are very high. It sounds like a simple pick pack so you should not be paying those sort of prices. The issue maybe that your volumes (250 pa) are too low for many companies, so you may be picking up premiums for these volumes. Every part of the price break down seems high. I would be happy to help and go through the various elements with you as a networking opportunity and give you indications of what you should be paying if it would help, If you would like help please message me and we can swap phone numbers. 5-10 minutes on the phone will save a handful of messages.
     
    Posted: Jun 27, 2019 By: AW Swindon Member since: Sep 20, 2017
    #9