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Sungistix: why we love E-commerce Fulfilment

There are many steps involved between receipt of an order and the final delivery of the product to the customer. Tracking inventory, repackaging, labelling, choosing a shipping service and tracking shipment are just few of key steps which need to be planned. These operations consume time and energy which are sparse in today’s business environment. Consider for example, choosing a shipping service. You have multiple shipping services providers with each one specializing in different aspect such as size of shipment, speed of delivery, location of delivery etc. You need to have tie ups with multiple shippers to be able to pick up the right one for each delivery. However, after having this tie up, someone in your organization needs to sit and choose the individual shipping provider for each individual delivery. You can imagine the kind of resources this activity can take. Now extrapolate to other fulfilment activities and you can perhaps visualize the scale and number of decisions that you need to take to ensure that your fulfilment operations are optimized. There is no need to elaborate that leakages in your fulfilment stream impact not only your bottom line, but also your brand perception. Imagine a holiday present reaching the customer after holidays because there was an error in choosing the right shipping provider. On top this, you need to do all this, while you continue to retain focus on marketing and managing your product/s.

 

This is where a Third-Party Logistics (and fulfilment) service provider such as Sungistix adds value to your e-commerce business. Fulfilment service providers, specialize in optimizing fulfilment processes. As this is their core area of operations, 3PL providers such as Sungistix derive the level of efficiencies that are seldom possible with in-house fulfilment services. Their extended relations with third parties (such as vendors and shippers) and in house capabilities provide e-commerce companies with Value added services which are at best costly to reproduce in house. Let’s quickly look at a few top benefits of partnering with 3PL’s like Sungistix.

 

Direct to customer, Drop – Ship fulfilment. Today retail customers are very demanding. They want a wide range of products to choose from, at lower costs and with faster delivery. One way to address these requirements is to make heavy investments in inventory and logistics. Another way is to opt for Direct to customer fulfilment, Here the vendor ships directly to your customer. This eliminates the retailers need to maintain inventory at the retailer’s end. It also reduces the transit time of the product and thus also reduces overall cost of the product. However, to work in this model, the retailer’s order must pass quickly to the right vendor, along with all the required packing and shipping details (including any promotional material that should be inserted in the packing) and then get the right shipper to pick up the product and deliver to the customer. This requires a high level of coordination and integration with multiple vendors, transporters and other suppliers in the chain. Managing these networks and integrations and keeping them updated can be a challenge in themselves. A 3PL provider such as Sungistix, provides Electronic data interface as a standard service and can integrate quickly with multiple vendors. Sungistix has existing relationships with multiple shipping providers which can be leveraged by the retailers to minimize their investments and maximize their reach. Sungistix operates on advanced and mature industry standard systems that not only integrate quickly with the systems of other suppliers, but also provide detailed tracking and reporting to the retailers about the status of their shipments and orders.

 

Multiple shipping service Providers. A good 3PL service provider should have network with multiple shipping service providers. The client should be able to choose the one which suits his needs best and the 3PL provider should then carry out transaction with the chosen shipper for that customer. An efficient 3PL provider would already be integrated with shippers and lets the client choose the shipper on the fly, as per his convenience. Sungistix has existing integrations with popular and well known shipping providers such as FedEx, USPS, UPS etc. It also has existing integration with foreign shippers such as Canadian Post. Retailers can leverage these existing relationships and integrations to choose the shipper that’s most effective for their needs.

 

Shopping Cart Integration. A 3PL provider should be able to pick up your order, right from where it originates, i.e. the shipping cart. Sungistix provides direct integration with most of the industry standard e-commerce shopping cart solutions. For other custom shopping cart solutions, Sungistix platform can be easily and quickly integrated with them for seamless flow of order details. From there the order is sent to the warehouse, which can also be the one operated by Sungistix, providing a seamless fulfilment experience. The order can also be broken down and sent directly to the vendors for fulfilment. Sungistix systems provide aggregated and detailed reporting for the status of every order received and processed. The systems are also integrated with the systems of shipping service providers to keep the track of the shipment.

 

Detailed Reporting. One of the issues that many retailers face with outsourcing fulfilment is the reduced visibility of the fulfilment operations. Since the operations are managed by third party, the information available is usually, at best, at the aggregate level. Sungistix provides detailed reporting that can be integrated with retailer’s systems. Information such as top selling SKUs, history of orders sorted by shipping method, shipping costs and other information is available to the clients. The granular data for each order is maintained in our systems and retailers have an interface to customize and aggregate the information as they prefer and that will be presented as a report at set periodic intervals. The retailer gets the maximum visibility into his fulfilment process, even though it is being managed by Sungistix. They can perform their own analytics, if they choose to, and derive the strategic information that’s most important to them.

 

For such and many other Value added services that Sungistix provides for e-commerce business, please Click here.

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Essentials of Packaging Design

You have created a superb product. No doubt it will serve the needs of the customer well but it still needs to reach the customer and it must reach him/her in top condition until it is time to use it. This is the primary function of packaging: To keep the product safe and intact until it is time for the customer to use it. However, it is just one of the functions that packaging serves. An effective packing should do a lot more than just keep the product safe. It plays the following roles to name a few.

 

Function – Packaging should be able to protect your product and keep it safe right from the point of manufacturing, throughout the transit, to your customer’s premises until he is ready to use the product.

Attraction – Packaging should be able to attract your potential customers into purchasing your product. The customer should be enticed to pick your product amongst the available options.

Promotion – The packaging should tell what is being offered and exactly what’s inside. Any information that will help the customer to make his purchase decision should be displayed clearly on the packaging.

Differentiation – The packaging should be unique amongst the comparable or similar products. It should be easily differentiable from the other competitive products.

 

Let’s look at some key points to bear in mind while designing the packaging.

 

Keep it Simple: The packaging should make the decision-making process of the customer easier and simple. The customer should be able to identify your product quickly and easily. If you are launching a new product, then the name, brand, description and other vital information should be easy to read and help in attracting customers.

 

Stand out from competition: You need to attract customers. For that your packaging should be different from your competitors. Scour the market and see how your competitor is packing its products. Figure out what innovation can you use in your packaging. The shape, colour, texture, anything can be used to differentiate your packaging from your competitor’s packaging.

 

Use good quality material: Show that you mean business when it comes to caring for your product. Good quality material conveys a premium image. It says that the product is so good that it deserves high quality packing. Besides this, a high quality material ensures that your product is not spoilt during transit or storage.

 

Enhance user convenience: Will it be better in a bottle or a plastic pouch? Hardcover or soft cover? Think from customer’s perspective. What would be easy for him. For example, if it’s ketchup that you are selling, should it be in glass bottle or plastic squeeze bottle? Remember Harpic? The nozzle design helps in reaching under the bowl’s rim. That’s a great design.

 

Describe the product use and abilities: But do not exaggerate. Never overstate the abilities of your product. If the product does not meet it stated capabilities, it will not only turn away existing customers, but will also turn away future customers. Just state the facts and promise the attainable results. If your product is good the word of mouth publicity will do its work and increase your sales.

 

The text should be legible: The text on the packaging should be large enough to be read clearly. It should be printed in contrast so that it’s easy on the eye. Choose the font, size, colour wisely. These not only help pass the information, but can be used to build a brand image. For food and medical products, the ingredients and expiry dates should be very easily locatable and clearly readable. If your product is packaged in a transparent packing and the product itself is carrying this information, the make sure the product is oriented properly so that the information in clearly visible.

 

Be target specific: Identify who is your customer. Who are you selling to? If your answer is everybody, then you need to do more research. Identify the segment of the market that is your target audience. Design the packaging keep that audience in mind. Just as one product does not work for every segment, same packaging will not work for every segment. It could be the material of packaging, the design, or even as simple as colour combination. So, identify your core audience and design your packaging for them.

 

Provide different packaging sizes: Some like to buy in bulk, others like to buy smaller quantities, because they won’t use it regularly, or like to shop frequently. Perhaps they are travelling and prefer carrying smaller packaging. Others don’t like to shop frequently or are cost conscious and like to buy large quantities. Provide various options of packing sizes to your customers. For example, in shampoos it’s always good idea to provide small 10-20 ml bottles up to 200 ml bottles, so that new customers can try your product and the regulars buy larger bottles.

 

Freshen up your packaging: There is no product that will continue to sell forever with same packaging. Customers are finicky. They get bored quickly. They like to see new things. Keep freshening up your product presentation. Use contemporary shapes, designs and colours. Try to freshen up your brand.

 

Packaging is the first touchpoint your customer has with your product or your brand. While its primary purpose is to protect the main product, it is also a great medium of marketing. There is no reason why you can’t be creative and entice the customer with your packaging. You just need to be creative and know what your customers like to see.

 

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Benefits of Eco-Conscious, Sustainable Packaging

As your business grows, so do your packaging requirements. More the products sell, the more packaging material is used. This gives you an opportunity to use your packaging wisely to your advantage as well as your consumer’s. A third very important view would be using your packaging for the benefit of the whole world. After it has served its purpose, which is, deliver the product to the customer, Packaging of a product generally becomes waste. As a responsible citizen of the word, everyone including your business should be looking to reduce waste. If you are not already, you should be looking for sustainable packaging solutions. They be called environmental friendly, Eco-friendly or sustainable packaging, but the basic principle is same, that is to reduce the consumption of resources used for packaging the product. PricewaterhouseCoopers conducted a study to understand the impact of sustainable packaging on the industry. Detailed report can be read here. As per the report, the pressure for sustainable packaging will continue to increase on the industry. There will be regulations that the industry will need to follow to ensure sustainability. The industry also needs to be more proactive to define what makes a packaging sustainable and how the sustainability should be measured.

 

So, what is sustainable packaging?

While there is no single definition or description that is accepted globally, sustainablepackaging.org has tried to describe what constitutes sustainable packaging. The key elements of sustainable packaging are

 

  • It is safe & healthy.
  • It meets market criteria for performance and cost.
  • It optimizes the use of renewable or recycled source materials and uses renewable energy.
  • It is physically designed to optimize materials and energy required for manufacturing the packaging.
  • It is effectively recovered and utilized in biological and/or industrial closed loop cycles.

 

Sustainable packaging is not only socially desirable but has business advantage as well. Let’s look at some of the benefits of adopting sustainable packaging.

 

Marketing Advantage/Reputation Boost. This is the one that has direct impact on your top line. Businesses that use environmental friendly practices generally have more favourable image in the market place. Increasing number of consumers are becoming environmentally conscious. When a brand makes an investment in environment friendly practices, it not only boosts its image amongst existing customers, but also gains new customers who are concerned about the environment. When customers, see a firm making a firm commitment to the environment, they want to support that brand. Most of the environment conscious consumers are very active on social media and social media, today, is a very important marketing platform. Imagine the kind of free advertising that you will get when these people talk about your brand. Moreover, many NGOs and Government agencies publish list of preferred companies or highlight the companies that have demonstrated the commitment to sustainability. The consumer activists are always looking at these sources and share their leanings on social media. Moreover, the newer sustainable materials increase the shelf life of many products, keeping them fresh for longer. (think cling film for vegetables) Many customers feel less guilty throwing away the packaging as it is now sustainable and doesn’t contribute to pollution (at least not to a very high extend).

 

Reduced resource consumption. Increasingly the companies that use recycled or sustainable options for packaging are discovering that it also comes with an added cost advantage. It is one of the known facts that sustainable packaging focuses on recycled material which leads to reduced consumption of precious, non-renewable resources. Redesigning the packaging to use lesser material and more compact shape helps in further reducing the use of that material. The key objective here is to reduce overall resource consumption, by reducing the amount of packaging used and reducing the energy used to produce them. Compact shapes translate into lesser space used for transporting, translating into more products being transported for same space and thus reducing the fuel or transportation cost. Given these facts, the investors and analysts have started loving the sustainable packaging options.

 

Reduced Storage. As discussed when using sustainable packaging, one the key objective is to reduce the amount of packaging used. Smaller packaging means reduced storage requirements leading to smaller bins and smaller warehousing requirement. This leads to savings in logistics not only for the supplier but also for the consumer. (Consumers need smaller space in their homes to store the product). Subsequently, the sustainability also helps by increasing warehouse productivity and reduces labour costs. Sustainable packaging also helps in disposing off the empty packaging/packaging. Smaller packaging is always easier to dispose and not to forget, it is easily processed (being sustainable). This reduces the overall disposal cost of packaging material.

 

Corporate Social Responsibility (CSR). Today, every business is required to do CSR activities. Be it reduced energy consumption in terms of heating, cooling or electricity, water, paper and other resources. Sustainable packaging furthers that cause and can be used to present the company as socially responsible one. You help reduce the carbon footprint of not only your company, but also that of your customers, your logistics providers and society at large.

 

Thus, sustainable packaging is a must that companies need to focus on; both for environment and their own benefit.

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What are various 3PL (Third Party Logistics) Services

Many companies are still not comfortable with the idea of outsourcing their logistics operations as they are still unsure of what exactly does a Third-Party Logistics (3PL) mean and what value do they provide. In all fairness, the 3PL companies don’t make it any easier either. There are so many 3PL providers with so much breadth and variety of service, that a new client is often confused on how to categorize and compare these various players. Let us try and understand what is a 3PL player and what kinds of 3PL players are there in the market.

 

Who is a Third-Party Logistics Provider? There is no one definition of third party logistics or 3PL as it is more colloquially called, that is applicable all around. Let’s take a quick look to understand the evolution of 3PL, so that one can understand from the context. Earlier, in around 70’s there were only trucking companies. The shipper provided and loaded the final packaged material to the transporter, who then transported to the destination. Then came the IMCs. These Intermodal Marketing Companies, plugged between the shipper and the carrier. They accepted the package from the shipper and managed all the retail transportation engagement. Going forward these companies started offering other value added services such as warehouse storage, Packaging, financial needs and other services. The key to understand there is that these companies only provide services to the shipper and value for shipping company in terms of handling their logistics requirement, at any point, in their supply chain. Today the council of supply chain management professionals defines 3PL as outsourcing all or much of a company’s logistics operations to a specialized company. A Federal legislation passed in 2008 legally defines a 3PL as “a person who solely receives, holds, or otherwise transports a consumer product in the ordinary course of business but who does not take title to the product.” Thus, we can assume that any company that provides a logistics service in any supply chain, can be called a 3PL company. A transporter, a warehouse space provider, a special storage provider, a packaging service provider, a booking, tracking, auditing based or financial based service provider, or information service provider for these services, or provider of any combination of these services can be termed as a third-party logistics service provider or 3PL provider.

 

Now that we understand what is a 3PL provider is, let’s look at various kinds of 3PL providers.

 

Transportation based: Here the primary service offered is transportation. Trucking in various segments, from wholesale to retail to individual deliveries. They own the physical transportation machines, specialized transportation vehicles (cold storage trucks) and networks and system specialized for fleet utilization and route optimization. Their aim is to optimize the transportation cost (as opposed to other kinds of costs in logistics). They usually club various shipments based on transportation cost optimization. While these companies may offer other services such as warehouse, they are typically in association with a partner who provides those services.

 

Warehouse Based: These companies own the storage space at the distribution points. They specialize in warehouse operations. They make significant investments in warehouse space, warehouse technologies (cranes, lifts), automation to quickly move the products inside warehouse, specialized warehouse needs such as cold storage and hazardous chemicals etc. They have their operations specialized for optimum use of space and their systems optimized for movement of inventory such as FIFO, maintaining minimum and maximum levels of inventory, close monitoring of expiry sensitive inventory such as food products. Apart from inside warehouse operation, they also specialize in locations of warehouse, at critical nodal points such as important ports, or close to big markets. Large players usually operate multiple warehouses spread geographically at important points, having these warehouses interconnected with dedicated transportation. The warehouse based providers usually tie-up with Transporters to provide the last mile delivery to the customer. They will usually have tie ups with various transporters to cater to different needs of the customers.

 

Freight Forwarder: These companies do not own any physical asset. They tie up with various other logistics service providers, manage the relationships and operation between them, for their clients and give their clients an end to end logistics service. To elaborate a little more Freight forwarders, specialize in arranging the storage and shipping of merchandize on behalf of the shippers. They usually provide a full range of service such as inward transportation tracking, documentation preparation, warehousing, cargo space booking, freight charges negotiations, insurance and claiming insurance claims. Freight forwarders are especially useful if you are planning to operate in international markets. i.e. Your business involves import and export of material or finished products.

 

Financial based Logistics services provider: These companies specialize in the financial aspects of the logistics. They provide freight payment and audit service along with accounting, control and tool for monitoring and management of inventory. They also provide small financial solutions for logistics (getting the LOC for freight loading or unloading)

 

While many companies provide these individual services, quite a few also provide various combinations or all of these services. It is up to the client to decide, which one is best suitable for his business requirements. Clients also need to keep in mind the that players not only differ in the kind of service, but level of partnership the 3PL firms provide. This depends on the nature of engagement that exists between the business and it’s 3PL provider.

  • These relationships are on per transaction basis. This is kind of Postal service. You pay for each transaction and that’s it.
  • These relationships are based on long term contracts. The rates are negotiated for bulk volumes and systems are integrated for easy flow of information between the two entities.
  • These are more like partnerships. The 3PL will make investments in their business and you will be committed to them. Both, the client and the 3PL grow together.

Businesses outsourcing for the first time, may and usually do start from the transactional model. As they gain experience and the volumes of shipments grows, they move to more mature models of engagement, forging partnerships with their suppliers.

 

Outsourcing to a 3PL player may seem confusing at the beginning. There are a lot of players with different value propositions and you will need to invest time to choose the one that is right for you. However, once you have the right partner, you do not have to worry about logistics and focus all your energies into your core business practices that result in growth of your business.

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Reasons why touring your potential 3PL Company is a good Idea

A 3PL provider is not just an outsourcing agency for your logistics requirement. They are more of a partner to your business. For manufacturing companies, you visit the manufacturing premises, meet and talk to the people working on your product and ensure that apart from your specifications, your core idea behind the product is understood by the manufacturing team, so that the spirit of the product along with the quality of manufacturing is maintained. Similarly, you should visit your logistics providers so that your logistics team understands your business values and helps you achieve them. You also need to be comfortable working with the logistics team of 3PL working on your project. Paying them a visit is a great way of achieving that mutual comfort. Let’s look at the objectives of visiting your 3PL provider in a little more detail.

 

Meeting the team: It is important to meet and understand the people who will be working on ground for your project. You might not meet every person on the team, but it is always a good idea to meet the key people, who will oversee your operations to understand how they work. Are they very formal or easy going? Are they relaxed and efficient or stressed and enjoying it? Are they laid back or stickler for the processes? While there is no right answer (you may not want someone to stick to the last letter of the process, when it is stuck, but just get the things moving), you may get a great understanding of their behaviour and see what works for you. Do you understand each other when you communicate i.e. In colloquial terms, do you speak the same language? Are they pro-active enough to spot the issues with incoming shipments and alert you before your shipment goes to the client?

The key here is to understand their personalities and build a rapport with them. You will be working with them every day. Knowing how they work and letting them know how you work, will make this relation more productive. Once back, you should be able to just pick up the phone and talk to them to get the problem sorted. Similarly, are you open to their suggestions? They might have some good ideas that you may have never thought of.

 

Understand the facility: You can’t put everything down on the paper. While you have read about their facilities, their equipment and verified that your needs are met, seeing the actual facility is something different. Especially so, if your product requires specific handling. For example, the ongoing cleanliness of the facility cannot be captured in a still photograph. For food products, how good is their cold storage? How do they arrange different SKUs in their cold storage? How is the meat and vegetable stored separately? (A well separated way of storing meat and vegetables could become another marketing plus for you). For fragile products, how sensitive is their handling equipment. Many times, packaging requirements of the product need to cater the requirement of storage as well. For example, if the warehouse does not stack your products one on top of other instead puts it on the shelves, then the packing material of your product can be a little less strong and thus save you some money. Similarly, a review of the loading facility may also help you optimize your packing needs.

 

Understanding their processes and procedures: During the contract, you stated your requirements and they are complaint with them. For example, if you are handling food items or medical supplies, they have the required certifications and thus will follow the strict procedures required for the continued certification. However, many well established 3PL players know that certifications ask for bare minimum. There’s a lot more than can be done, and some 3PL providers go beyond those minimal requirements, because they understand the benefits of doing so. Understanding their processes also gives you a chance to see if you can optimize any of your processes of packing and storage, during manufacturing. You can perhaps pick up a best practice that can be followed at your manufacturing processes (for product handling). How do they handle returns? How do they handle shipment of defective products back to manufacturer? You also need to know their systems capabilities and maturity. How deep or wide is their reporting capability? You can perhaps use some of the additional reports, that their systems offer, to your benefit. What will it take to integrate their systems with your systems, so that information can flow seamlessly. You are sure to get an understanding of such questions when you visit the facility.

 

Strategic fit: Every business has growth plans. They either want to grow rapidly in one vertical or one kind of product, or diversify to different products. Also, businesses usually set themselves a growth target i.e. how fast they want to grow. Personal visit will help you understand if your 3PL providers can support your growing needs. Are they large enough to handle your growing volumes? For seasonal business, can they handle the spikes in volumes? When you plan to diversify, do they have the storage facility for the different product lines that you are planning for, in future? What about transportation. Do they have tie ups with enough transporters to provide you with options (speed and cost)? What about backups transporters? How good is their service for your primary target market area/geography? What about your future market geography? Do they provide service in that region? You need to consider these questions if you are looking for long term partnership. Remember, these companies are also looking to grow and they too like to work with people who are moving ahead on their own growth path.

 

While choosing, a right logistical partner can be a critical element in your customer satisfaction, a right 3PL partner can also ease your own operations. Visiting the 3PL is important step not only to understand their facilities and operations, but it also ensures that you have done your due diligence, so that in an unlikely case, if things head south in future, you have your base covered. On the other hand, 3PL providers can be source of ideas that you might have not just thought of, but are good for your business.

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How to Effectively Handle Customer Returns: Making the Process Smooth

 

No business likes their products to be returned. However, it is a reality that every business, whether online or offline, must deal with. There may be nothing wrong with your product yet a few customers would want to return it for various reasons and get a refund. You should note that there’s nothing wrong with getting a few returns. No product is meant for all customers. In fact, you should anticipate a few returns and be well prepared in advance to handle them. A ready and smooth return process will not only make your job easier, it will also increase your brand image in customer’s mind. Let’s look at few things that will make it easier for you handle the returns.

 

Well defined return Policy:  Since you anticipate returns, you must be define your return policy for customers, have it clearly displayed on your website and make sure that you customers understand it. Make sure it is visible to customers while they are making the purchase (may be via a link). The package of your shipment should contain printed return policy along with any other documentation for the product. If they want to read it online, it should be easily accessible on your website. The language of the policy should be easy to read and understand. It is important that customers understand clearly, that when your return policy says 60 days from date of purchase it does not mean 60 days from date of receipt of product. Similarly, other requirements for returns must be in such a language that customer understands it in first reading. Especially for refund, ensure that your policy for refund amount, refund mode and time of refund is clearly mentioned. After ‘where do I return this’, the second question that the customer will ask is ‘My money?’ This will reduce the hassle for you later in the process.

You can use your return policy as a marketing tool as well. If you are offering free returns, make sure you highlight it. If you are offering any coupons or incentives or returns within specific period, ensure that these are highlighted. If you are asking for a reason to return, ensure that reason is well understood by your team and complimentary product if offered to the customer.

 

Return Process:  Make the return process easy for the customer. Include a postage paid return envelope or a return label with the product, if applicable. Hopefully not many people will use it, but most of them would give you the credit for giving them this option. Include a small note saying something such as if they are not 100% satisfied with the product, they can use the enclosed return label to return the product. Customers like these small gestures. If there are any forms that they need to filled in, Pre-fill the obvious sections (customer details and product details) for them, so that it is easy for them to fill just the relevant information such as reason for return quickly. Since they don’t need to spend any time filling mundane details, they may spend that time to fill in detailed feedback in the form.

 

If you are not providing the return label, make sure that return address is clearly indicated in the documentation (bill, invoice etc.) at the delivery, your website and any other touch point where customer might look for it (if you have a mobile app, include the section for returns with these details). Provide a phone number, if possible a free phone number, for customers to contact, if they have any query about their returns.

 

Receiving and processing Returns:  On your part, ensure your logistics team, warehouse or storage knows how to handle returns. They should know where do the returned goods need to be stored and how are they to be processed. If there are unopened boxes with products that are good to be sold again, then verify and put them back on the shelf, to be sold again and mark them so in the system (i.e. update the inventory). If they are damaged, then send them back to the manufacturer or your manufacturing unit. If it needs to be disposed, ensure how do they dispose it. Once you receive the product, how will your team process the refund (i.e. indicate the finance or accounts team to proceed with payment to customer)

 

Engage with the customer:  Remember, a customer is returning your product because he is not satisfied with it. This is a great opportunity to engage with the customer and get his feedback. Why did your product fail to meet his requirement? What could have been improved to provide him a better experience. Is he considering any other product? Make sure you thank him for the opportunity to serve him and hope to meet his expectations next time. The whole communication should show that you are interested in meeting his expectation with the product, and not just return the money and close the chapter. Engagingly positively over returns, with the customer will help to enhance your brand image.

 

Returns are a tricky business. Nobody likes them. They are not only lost revenue, but they add to the processing overheads. Yet, they are essential part of the business that cannot be done away it. Instead of looking at them as necessary evil, you can use them as an opportunity to build your brand and improve your product.

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9 Reasons to Outsource to 3PL

The economy today requires business to be efficient on every front. The competition is growing every day and a company must find new and efficient ways to retain its edge over its competitors, even in a growing market. That requires time, money and focus on activities other than area of company’s core competency. However, if a company diverts its energy from its core competency, it is bound to falter. Businesses cannot afford to divert their attention from their product and start paying more attention to logistics. Imagine if Apple started worrying more about shipping iPhones than creating a great phone, they would never reach the pinnacle of success that they enjoy. It is for this very reason that many businesses choose to outsource their logistics operations. In fact, over 85% of fortune 500 companies utilize 3PL providers. Here are some of the key reasons why you should also consider utilizing the services of a Third- Party Logistics Provider (3PL).

 

  1. Time and Money: When you use a 3PL provider, you don’t need to invest in the warehouse space, transportation, operations staff etc. You don’t need to worry about billing, wages, audits, training the staff, space optimization and other things that go with the warehouse management. A 3PL is skilled in these areas and will perform all these more efficiently. You save the time that is required to build up these capabilities and save on the upfront capital required to build these capabilities. You are ready the moment you engage the 3PL provider.

 

  1. Scalability and flexibility: As the business grows, the logistical needs of the company grow and these again take time and money to scale up. During slow times, when your logistics space and manpower is not fully utilized, it is eating into your capital. With a third-party provider, you can hire the additional space as your business grows. Additional manpower also can be added quickly. At low times, you simply hire less space and less manpower. This keeps your cost at optimum levels while providing the flexibility to scale up and down quickly.

 

  1. The core expertise of a 3PL provider is their logistics management skills: They know about the best practices in the industry. They have the skill and experience to manage it all, from a small to a very large scale, with high efficiency. They keep on investing in manpower, warehouse capabilities, warehouse technology and IT, amongst others. Their software is optimized and can provide with wide range of reports which provide strong visibility and monitoring capabilities so that their clients, in turn, can focus on their core business activity, assured that their logistic needs are being handled by seasoned professionals.

 

  1. Diverse Resource network: 3PL providers are constantly developing their network to improve upon their efficiencies. This vast network has definite advantages over in-house supply chains. This provides volume discounts to 3PL, which in turn result in lower overheads for their client along with fastest possible service. This may not be possible with in house supply chains or at best it will be costly to achieve.

 

  1. Continuous optimization: 3PL are experts in managing links in the supply chain. It is their bread and butter. They have the resources to adjust to changing, individual circumstances. They constantly monitor each link in the supply chain to ensure they get fastest, most efficient service, which in turn means the same for their clients.

 

  1. Latest technology: The technology is changing constantly. Upgrades to technology requires heavy investment. Individual businesses need to ensure that they get their ROI before moving onto the newer technology, which may be a hurdle to upgrade. With 3PL and their huge base, they are constantly on top of their technology game ensuring that latest and the best is available for their clients. By partnering with 3PL, the need to purchase and upgrade the technology is eliminated.

 

  1. 3PL providers are usually up to date with all the latest regulations: They also have carrier contracts and insurance which is better than what individual businesses can obtain, owing to the bulk that they provide. This means that their client can stay assured that their products are being handled in most secured way possible.

 

  1. Improved quality: 3PLs thrive on efficiencies. This in turn means that their clients can expect improvements in their own supply chain. The advanced technology, plethora of assets and expertise that comes with 3PL providers, ensures that client’s logistics needs are satisfied without any capital investment in the most efficient way.

 

  1. Maximized growth rate: 3PL providers have warehousing solutions setup at multiple locations across the country and many times across the world. The clients can quickly make use of these locations, as he grows and expands, without making any capital investment, saving his time and money. The delay and cost of setting up a logistics solution (operational warehousing) is virtually eliminated, without any compromise on quality of operations.

 

Logistics is often an add on activity for the business that lies outside their area of expertise. Continuously scouting for best options available for shipping and other logistical solutions takes up time and resources, not to mention the investment. Business should be spending their energy on their key value add, their product. However, logistics is a very important part of business operations that cannot be ignored. Poor logistics can often take away all the brand value that businesses work hard to create. This is precisely where a 3PL player fits in.

 

Providing logistics solution is the bread and butter of the 3PL provider. Consecutively they make investments in warehouse locations, technology and people to stay at the top of their game and negotiate bulk deals with various providers. This enables them to provide customized solutions to businesses, in turn passing off all these benefits to them. Whether large or small, all business benefit from engaging with 3PL providers. The benefit is not only the obvious savings in capital investment, but flexibility and efficiency can provide them the strategic edge to compete in the ever-changing marketplace.

Mobile marketing and online store

E-Commerce Shipping and Fulfilment: Learn the Basics!

         One of key difference between an e-commerce business and a brick and mortar business is the fulfilment. Many e-commerce  business  owners invest heavily in marketing and advertising to attract customers and build their brand. They also work hard in identifying the right suppliers to get the best product at lowest price. However, many times they miss giving fulfilment its due attention. In brick and  mortar business, the customer comes  to your shop and picks up the product. However, in an e-commerce model, you need to get the product to the customer. How your customer receives the product, becomes a key part of the customer experience. Having the right fulfilment model can become a key differentiator for your business.

So, let’s start from understanding what fulfilment is all about?

On a broad level, fulfilment includes everything, right from the time a customer places an order to the point where she/he receives the product in their hands. Fulfilment primarily includes:

• Warehousing
• Finding and picking the ordered item
• Packaging
• Shipping to customer

          Fulfilment can be done directly by the company or they may choose to partner with a Third-Party Logistics Company to cater to all their fulfilment needs. Of the above points, while warehousing facilities have a great impact on business, the two more crucial things that can impact eCommerce business are Packaging and Shipping. Thereby, making them key aspects for success of e-commerce fulfilment cycle.
Right packing and packaging is not only important to deliver the product safely and securely but it is also the first physical touchpoint for the customer with your brand. Similarly, the customer’s experience with the quality of shipping relates to his mental image of your brand. Let’s look at these two in a little more detail.

Packaging:

Packing of your product serves two functional purposes. It ensures that the product reaches the customer is right condition and it’s look and feel creates an impression about your brand. As expected, the packing of the product adds to the cost of operation, hence you need to be careful while selecting the packaging to optimize the impact and the cost. You should pay attention to following key elements of packaging.

• Size: The size of the packing should be appropriate to the size of the product. Too small and it may not protect the product as needed leading to degradation of the product. Too large and it will add to the cost of the shipment and give wrong impression to the customer. Imagine getting a USB key in packing which is the size of the hard disk. Customers usually generate a negative impression if the size of packing is disproportionate to the size of the of the product. However, it is important that adequate safety of the product is ensured. If that needs extra material, then so be it.

• Material: The packing material, along with safety also gives the impression of attention that you give to your product. A firm, good quality brown box gives a good premium impression as compared to a brown bag packing. It shows that you care about your product and the way it is received by the customer. It also provides you with a much better surface for your branding. Having a properly visible brand logo on the packing material creates a much better impression than a crumpled logo or just shipping label with no logo at all.

• Arrangement:  If your product has multiple components, such as wires, cords and manuals, the arrangement of these inside the box will make all the difference to the unpacking experience. A neatly arranged layout will save on your packing cost, ensure product safety and give a professional feel to the customer. Even if there is only one item in the packing, a well-arranged layout, which make the product easy to pick out of the packing, creates a better experience for the customer. The key to good packaging is the ease to pull out the product from it.

• Presentation: The external look and feel of the packaging, along with any paper (shipping bill etc.) that is pasted on the box along with the internal arrangement, gives the ‘unboxing’ experience to the customer. Your Brand logo on the external box, the feel of the material of the box, a well pasted shipping bill (with customer details) will give a good presentation. Many times, the businesses also add a sweet ‘thank you for choosing us’ card to the whole packaging. Such small additional gestures go a long way in establishing an emotional connect with the customer.

Packing of the product goes a long way in establishing a premium feel for the product. If it seems overwhelming to pay so much attention to the detail by yourself, you should outsource it to a third-party logistics provider (3PL). 3PL providers have experience in providing packing service and can design packaging and pack your product to your specifications at very reasonable costs.

Shipping:

How and when your product reaches the customer adds to the brand experience. It’s a no brainer that a Christmas present must reach before Christmas. But if the order is placed at last minute, this quick shipping will come at a price. The question here is: who bears the shipping cost. The key consideration for shipping are: how much to pay and who pays. For a true understanding of shipping, these two questions need to be looked at, together.

• Who pays: If you decide to pick up the tab on shipping, you have two options. One is to jack up the price of the product to include shipping costs. Customer can usually see through this one. They can easily compare the prices on other sites and may choose to shop there. Second is to absorb the cost of shipping. This will add to your cost of operations and reduce your profits. If the shipping charges for your product is low, the hit will be small but for large items, it will be significant. The decision really depends upon your business strategy, but one thing is clear. If you ask your customer to pay, you need to be clear upfront so that they can make informed decision. You could have marketing campaigns to absorb the shipping cost during certain periods to boost your sales. In any case, you need to be efficient, to keep the shipping costs low. Kind of packing you choose will also affect your shipping cost.

• How much to pay: The decision about what kind of shipping do you want to use, standard or fast, is important. This decision will decide the cost of shipping. This decision again depends upon number of factors. If it’s festive season, the shipping needs to be fast. But for white goods, customers may be willing to wait. At times, for many products quick shipping may not make sense either. Imagine providing a next day delivery for a refrigerator, say about 300 miles away. It’s possible, but is it worth the cost? Do you want to provide the tracking facility to the customer? If yes, to what detail? This facility will also come at a cost and someone must bear the cost for it. Remember, the customers purchase from online store to reduce the cost thus it should be lower than what’s available to him next door.

 

These two costs need to be looked together. You might be okay picking up the standard shipping cost, but could charge customer for quicker delivery. You might want to pick up the tab for smaller items, but might want the customer to pay the shipping cost for larger items. You will also need to consider the shipping distance while making this decision. Choosing a shipping company is also important. Each company has its strength area such as small items, large items, low cost, quick delivery, low cost over large distance etc. You might need to tie up with multiple shippers and use for their strengths.

The shipping cost is an important part of your business strategy. It can be daunting to choose the right option from the all available ones. Using a 3PL provider is advisable if you want to stay focused on your key area, i.e. the product. The 3PL providers usually have tie ups with multiple shipping providers and can help you achieve good deals for shipping. They also have the infrastructure to absorb the variation in volumes.

Fulfilment and shipping, often the easy looking part of the business, are key components of the customer experience. This is the first real world touch point you have with your customer, outside the virtual world, and it matters. With the number of decisions needed to be made to give a positive experience to the customer, it is better to outsource these to a third-party logistics service (3PL) provider. With a 3PL provider, you retain the control, while the implementation nitty gritty is taken care of by them. You also get your shipping done at the best rate.

Free shipping vs Fast shiping

Free Vs Fast Shipping, Which is more Important?

Retailers, across the spectrum, are pushing their supply chain to become more efficient and squeeze out every ounce of efficiency and speed. They are able to play with their costs and offer variety of deals to attract buyers. Choice of product, payment options, customer service and ease of delivery are primary differentiators that many of the e-commerce websites use. The last one, shipping, has high-impact potential on customer satisfaction. How soon can you get your merchandise to the customer, after he has confirmed it, and spend less and less money on doing so? I.e. Can you give instant gratification to your customer, for free?

The question often revolves around providing either a quick shipment which has higher cost or a free shipment which while has lower costs, but translates into longer time before your merchandise reaches your customer. Long delay leaves a lot of room for your customer to cancel the order. Let us evaluate the pros and cons of both.

Free shipping

This is by far one the most popular service to attract and retain customer. After the product price, shipping charges are the second most popular thing that customers look at. Depending on the shipping requirements of your product, the shipping charges might vary. it means that, usually, the customers won’t come to know of the additional charges until the very last step of the order placement. Customers don’t like that. Free shipping ensures there are no surprises (cost wise) throughout the buying process, for the customers. During slow business periods, free shipping can incentivize customers to make a purchase at your store and help you move the inventory. This could be used as marketing strategy to lure the customers away from the competition and earn profit from them, during the high season.

On the other hand, you need to account for shipping charges, somewhere. You can increase the base price of the product to include shipping charges. But customers can compare the product prices at other sites and see through it. Unless the product you are offering is unique and cannot be obtained at other stores, this strategy can fail. Not only that, it can earn you bad reputation. However, if you simply absorb the shipping charges without increasing your product price, it is a true value proposition for your customers. But this will mean an increase in your operating cost and will reduce your profits. To reduce your operating costs, you will choose a shipping vendor with lowest charges. This will usually mean longer delivery times, for your product to reach your customer. This is not a good situation, especially when a customer can simply log in and cancel his order. Even if he doesn’t cancel, his satisfaction level would be certainly lower when he gets his product after 2 weeks as against getting it after 2 days.

Fast Shipping

Many times, customers need their product to be delivered quickly. This could be for a special event, such as when your product is sent as a present to someone, during festivals, when delivery before exact date is essential, or during other situations. You want to fulfil this urgent need of the customers before the need for quick delivery itself vanishes. There is no point delivering a Christmas present after Christmas or the printer refill cartridge, after the customer’s meeting. Here the premium is on the speed of delivery and not the cost of delivery. Fast shipping comes at a premium and at an extra cost.

The question here is, who pays for this high cost of fast delivery service? If you keep it free for your customers and bear it yourself, your operating costs will increase drastically and your profits would go down. With proper marketing, you will get more customers. This should translate into more orders and inventory moving fast. Your profits percentage may be low, but the overall return on investment will be higher. If you offer this around peak season, ensure that you have enough inventory to fulfill the expected large volume of orders. Nothing breaks your reputation, like delayed orders, especially if you promised fast delivery.

You could ask your customers to pay for shipping cost for fast delivery. There is a large demographic out there who is ready to pay extra to receive its orders, quickly. However, you should be very clear and transparent about the extra charges, throughout the buying process. You need to be creative about the way you present the value proposition of fast shipping and the additional cost that your customer would be incurring. What is most important is that you need to ensure that your customers get their products on time, as promised.

Fast shipping, might not be suitable in following scenarios:

  1. For slow moving products
  2. During slow seasons
  3. When you need to reduce your costs
  4. When you wish to reduce the total price for the customer.

If there is no hurry, there is no need to incur extra changes. Having only the high cost shipping option, can push customers away from you, during slow periods. This will slow your inventory cycle even further.

There isn’t a single model that is suitable for all businesses, or for all products, at all times. The best model for your business strategy could be different from the standard delivery model of your industry (or product category). What works for you could be as simple as sticking to fast and paid shipping model, and investing on marketing and customer service to attract and retain the customers. Alternatively, your business may boost by offering free shipping as standard and letting the customer choose for fast delivery at extra charges if they so desire. Depending on your business strategy you may need to experiment and decide what is best for you. however, in all cases, the product must reach the customer within the promised time period.

Why Choose Sungistix for Your Kick-starter Fulfilment?

Today’s business environment is getting more and more complex with rapidly changing technologies, newer markets and varied sourcing locations. With highly extended supply chains, the demands from logistics professionals is also increasing. Quick and efficient decision making is the need of the hour from logistic partners.

However, the choice of 3PL partner, if not done carefully and with due diligence, can be a process full of pitfalls and can hamper growth. Considering that there are numerous 3PL players and their numbers are not diminishing anytime soon, choosing the right 3PL partner can be a daunting task. Important point to note is that the price of service of 3PL provider is rarely the only criteria. It is the overall supply chain cost that needs to be considered while choosing a 3PL service provider.

Here are a few critical essentials that should be weighed, analysed and considered carefully while choosing a 3PL partner.

Infrastructure. With increased globalization and ever improving new technologies, the 3PL provider should have large space which can be quickly, easily and seamlessly scaled up. They should be located near the ports or other distribution hubs. Not only the location, but the facility itself should be capable to cater to any special requirement for handling your products.

3 PL providers such as Sungistix have their warehouses in southern California, close to two of the largest ports in United states, the Los Angeles Port and Long Beach Port in California. Sungistix also has a large warehouse on east coast, in New jersey, which is the largest port by volume on east coast. This reduces your cost of landing, on-land shipping and leverages multiple advantages of being located in a major distribution hub.

As an example, Sungistix’s Temperature controlled warehouse, along with facilities for lot control, expiry date tracking, tracking and quarantine is well suited for perishable items. Facilities for sterilization and pathogen kill-step processes are available to treat sensitive food items. They also provide Quality Control Laboratory service to help you control and evaluate the quality of consignment right at the site. With certifications like NSF, AIB, Organic, Kosher and Halal, SpecRightProcessing (A sungistix Company)  facilities can handle any kind of food, which may require special handling. They can support repacking from bulk drums and bags into various smaller size packaging. Similarly, Sungistix’s facilities can cater to special needs of other industries such as Pharmaceutical and manufacturing.

Tools and IT capabilities. This goes hand in hand with infrastructure capabilities. The 3PL provider should be able to integrate their systems with shipper’s and other partner’s tools for seamless information flow between the supply chain partners. Today a company needs to know the level of inventory in the warehouse, status of the order, exact location of shipment, support for shipment documentation on real time basis. For e-commerce, the integration needs to be even tighter. Direct integration with order acceptance, integrated fulfilment process update, regular reporting of SKU’s, returns, integrated customer billing and integration with customer care of the store are just certain things that need to be in order.

Sungistix’s IT capabilities such as direct integration with client’s website’s shopping cart, subscription billing, enhanced inventory reporting on individual SKUs, detailed shipping costs along with host of other customized reports, integrate with client’s systems and provide real time data. The client is up to date with the information about their inventory and shipments, so that they can take quick and informed decision about their business.

Breadth of Services. As your business grows, and you grow into your business, you would want to outsource more and more of your non-core activities and focus on your key strengths. You need to tie up with a 3 PL partner who can take on more and more of your processes from you, and perform them efficiently and at a reasonable cost. You should choose a 3 PL partner not only for his basic logistics services, but also based on the value added services it provides. A 3PL partner who can help take more and more work off your hands and perform it efficiently as well as at reasonable costs, should be your choice. Having a single partner for all these services, provides advantages of managing single partner and get you overall better pricing.

3 PL providers such as Sungistix provide not only basic services such as distribution and warehousing, pick and pack fulfilment, cross docking, Port Drayage, real time reporting etc, but also, Value added services such as packaging and co-packaging, assembly support, e-commerce support, retail support, re-labelling, re packing, Documentation and regulatory compliance support and can take, more than just simple logistics, off your hands. They let you focus on more important aspects of your business such as marketing and procurement. Added services such as, Import & export services, custom brokerage, back end solutions, office space for remote staff, and handling return and reverse logistics make 3 PL service providers such as Sungistix your partner in a true sense.

Depth of Industries and suppliers. A 3 PL service provider who works with different industries, has depth of knowledge about processes and best practices followed in different industries. He would also have a ready setup to support these industries. There might be some practices from other industries that may suit your requirement better. A 3 PL service provider, who works with multiple industries is better positioned to understand them, make recommendations and quickly implement these processes for you. Having wide array of clients, makes it possible that you might find a supplier partner, who is already with them, thus making logistics simpler and cost effective. Moreover, for business such as e-commerce, a 3PL provider having existing tie ups with multiple shipping service providers, gives you multiple options to choose from and makes your life easier.

A 3PL service provider such as Sungistix, work with clients from Pharma industry and maintains high standards of hygiene and environment to cater to sensitive products. These experiences can be leveraged to cater to sensitive food items as well. Their experience from retail logistics can be leveraged to provide improved additional sorting services for e-commerce. Their tie ups with several shipping providers such as UPS, Fedex, US Post etc, give you the option to choose what is best suited for your needs.

Choosing a right 3 PL partner with all these dimensions can define how much time you spend on your logistics and subsequently on your core business. A flexible, experienced partner such as Sungistix, can take a lot of your process off your hands and fulfil them more efficiently, adding to the bottom line of your business.