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Fulfillment Cost Cuts Made Simple
Instead, focus on first things first, keeping things simple if at all possible. Sometimes whats wrong with the machine is that its unplugged.
Reduce Shipping Costs
Saving five percent on shipping can add up quickly.
Smaller fulfillment centers simply may not do enough volume to attain the highest discount rates from mammoth companies like UPS and FedEx. In that case, it may be time to think about working with a larger fulfillment center that can get those bigger discounts.
If the smaller fulfillment company can do the job for less by some other means, such as combining shipments more effectively, then thats great.
But the point is, the job needs to be done for less--and can be.
Sell More Stuff
However, its important to know the fulfillment cost for each product ahead of time. Obviously the price-per-product fulfillment cost varies according to destination, but metrics can be developed that make these figures real.
By thinking of the fulfillment cost as part of the product, better pricing decisions can be made. Know that number, even if its not 100 percent accurate. Now consider evaluating competitor prices and beating them. Studies show that a price beat of five percent can result in up to ten times the sales volume versus higher-priced competitors.
With numbers like those, it may be possible to grow out of the economic slowdown.
But that conversation doesnt even begin until a per-product fulfillment cost
Especially if products can be bunched into large containers and shipped as one package, shopping around for the best rates can result in significant cost savings on each deal.
Of course, shopping around can go wrong if price is the only consideration. Dont forget that fulfillment centers have to make payroll, too, so any deal that sounds too good to be true probably is.