Question: I am the operations manager of a large multichannel hardgoods and apparel merchant. My rough shipping and processing calculations for our company in Q4 this year would have been: 1) $70 million - $72 million gross revenue collected from shipping and processing, 2) $52 million - $54 million outbound shipping expenses, and 3) $18 million - $20 million net profit attributed to shipping and processing.
Recent Posts
Promises, promises. All businesses make them, but the best actually deliver what Marketing promises. Now is the time to conduct a post mortem of how well your multichannel business performed this past Holiday and to develop plans for improvement for the coming Holiday Season. Some fourth quarter businesses experience a 10:1 peak to average daily volume in the call and fulfillment centers; that sheer volume means you must be well organized and efficient to stay current.
In the first part of our series on preparing for the holiday, we listed the information that should be gathered for taking your operational pulse.
Many companies see turnover as a necessary cost of doing business, especially in managing a call center or a fulfillment center. However, have you taken a good look recently at your staff turnover levels and the actual dollars this costs your company? Whether it is in fulfillment or in the contact center, the costs are high. Industry turnover averages are hovering around 40%-50%. In many call centers it may unfortunately be as high as 90%-100%. Industry experience is that turnover costs range from $3,000 to $10,000 in people time, training, testing and the ramp-up to full production. This does not include expenses for agencies, ads, etc. which must be added on.
Question: My outbound freight to ship packages now exceeds my direct labor costs. I can’t seem to control the expense. What can I do to reduce it?
Q: I need a local fulfillment operation in Canada to effectively grow my business there. How would I proceed to develop an external fulfillment operation in Canada?
A: First and foremost, you have to develop a business model for the designated selling area. This is a three- to five-year strategic plan comprised of historical data and a projected forecast. A few pieces to the model are:
The Increasing Importance Of Integrated, Multi-carrier Shipping And Transportation Management For Direct and Multi-Channel Merchants
September 2007
Q: If you were asked to choose the one operational area in the distribution center that could generate the greatest improvement in performance, which would it be?
The following case study has been prepared by F. Curtis Barry & Company to show how a Christmas post season operational assessment can be used to significantly improve operations.
Analyze this: In deciding whether to shop direct or retail, 81% of consumers state that “ease of returns” as an important to their decision, according to a survey by Harris Interactive for Newgistics. The numbers are even more telling after a return is made- Harris Interactive found that 95% of customers are likely to shop with an online merchant again if the return process is convenient. What that says to marketers is that even if a customer returns a purchase, the experience can still be a positive one in terms of instilling loyalty.
