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Use a carrier when it's important that you be able to track orders. Carriers typically offer tracking services at no charge. Since consolidators inject shipments into the postal mail stream at the delivery destination unit, they are not able to provide tracking information, says Collins. You most likely will want to track expensive shipments, he adds, but some direct marketers are finding it a competitive advantage to make the shipping process transparent to the their customers via an online tracking interface. Customers can use this tool to check the progress of their order without the need to call a customer service line.
Another benefit of tracking: It offers direct marketers the ability to pinpoint delivery bottlenecks and establish average delivery windows, says Richard Walker, vice president of sales, The Corporate Communications Group, a full-service marketing communications support firm in West Caldwell, N.J. This information can be leveraged to determine the optimal kit assembly procedure or order picking/packing system that will offer right-time delivery at the lowest cost. For example, he explains, companies squeeze the delivery window with late materials and last-minute changes to fulfillment kits, resulting in excessive shipping costs for overnight or two-day delivery. By knowing delivery times for all regions, you can best determine which delivery method is needed for any fulfillment scenario.
6. Leverage your negotiation power with carriers. Large companies often can contract for better shipping rates with carriers who take into consideration the direct marketer's overall corporate shipping expenditures, Walker says. Then, their fulfillment partner will follow whatever carrier selection guidelines they set for specific shipping scenarios. On the other hand, Walker explains, small direct marketing companies will find more advantage in having their fulfillment firm negotiate their rates. Vendors can strike a better deal by leveraging the shipping volume conducted on behalf of numerous small clients.
7. When partnering with a fulfillment firm, consider the number of locations it offers and the placement of these facilities. If a significant percentage of your orders come from a few regions, you can offset multiple inventories with lower shipping costs based on shorter delivery distances, says Walker. Make sure the vendor provides you with one account person, he advises, no matter how many of its facilities you use.
8. Determine if you can use the carrier's free packaging. Taking advantage of a carrier's free boxes, tubes and mailers will put money back into your pocket, since the fulfillment firm won't have to charge you for supplying packing supplies. When you're talking about 20,000 cartons or more, says Walker, the savings really can add up. But remember that the package will feature the carrier's logo, a detraction for some companies that want to leverage the brand moment when a customer receives his order.
9. Be open to using different packaging materials. A padded envelope might provide adequate protection for your merchandise, plus it will weigh less and reduce your shipping costs, offers Jeff Ehrlich, president of Fulfillment Plus Inc., a full-service fulfillment company in Holtsville, N.Y. As mentioned before, consider the presentation value of each packaging type, since customers will consider it when evaluating your company's service.
10. Consider the impact dunnage has on shipping costs. When it comes to saving money, Klein hasn't found much difference in weight between paper, recyclable foam peanuts or inflatable bags. Overall, the labor costs for using peanut fill are lower than other types of filler, he says, but this material is not very consumer-friendly. The best way to cut costs on dunnage is to use a wide variety of shipping boxes, he advises, so you need less packing materials. Of course, this depends on the fragility of the product being shipped.
11. You might be able to save money by splitting a large order into smaller shipments. The rates for parcels weighing more than 1 pound can be triple that of packages that weigh less, says Ehrlich, so it can be cost-efficient to turn one package into two shipments. Even with the additional labor and packaging costs factored in, you save when you keep packages under 1 pound.
Hallie Mummert is editor in chief of Target Marketing magazine. She can be reached at (215) 238-5437.
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