1) The document discusses best practices for order fulfillment, including different fulfillment options like shipping from stock, drop shipping, outsourcing to 3PLs, and using Fulfilled by Amazon. 2) It addresses merchant pain points with inventory management, scaling operations, missed marketing opportunities, and returns management. 3) Tips are provided for selecting a fulfillment strategy based on products, market, orders, company capabilities, and cost considerations. Information technology is highlighted as key to better managing third party fulfillment.

1. SESSION TITLE
Presenter’s Name
Best Practices in Order
Fulfillment
Coby Erez, 4Psite

2. Overview
Order fulfillment is the complete
process from point of sale inquiries
to the delivery of a product to the
customer

3. Merchant Pain Points…
• How to better manage my inventory ?
• How to scale my fulfillment/operations ?
• I feel that I am missing out marketing
opportunities
• How to better manage my returns ?
• What is my true profitability and how to
protect it ?

4. Fulfillment Workflow

5. Fulfillment Options

6. Fulfillment Options
• In House
– Ship From Stock
– Cross-Dock
– You Are The Drop Shipper
• Outsourcing
– Drop Ship
– 3PL
– Fulfilled By Amazon (FBA)
• Combination (same item, by item)

7. Outsource Snapshot
• 50% of our customers are outsourcing
fulfillment
• 15% are using only one drop shipper
• 60% are using dozens of drop shippers
• 10% are using FBA for multi-channel
fulfillment
• About 70% are outsourcing fulfillment and
also shipping from in-house stock

8. Ship From Stock (In-House)
• Ship immediately
• Excellent customer support
• Build to order
• Warehouse & inventory infrastructure
• Operation oriented company

9. Carrier Landscape
• Single carrier – USPS, UPS, FedEx, DHL
• Hybrid solutions
• Wholesalers and consolidators
• Regional carriers
• International consolidators
• Channel specific shipping options
– eBay GSP
– Amazon FBA
• Amazon same day or one-hour delivery - shorten lead time

10. Cross-Dock
• Zero inventory
• Suppliers work in “Just In Time” mode
• Get products daily or even few times along
the day to your shipping dock

11. Benefits of Outsourcing
• Less or never worry about storage/receiving
• Pay an expense, not an employee
• Potentially keep logistics expenses low
• Take advantage of better shipping rates
• High quality work
• More time to grow your business

12. Challenges of Outsourcing
• Cost and financial control
• Order assignment (optimization, cost,
geography, availability, ship from local
warehouse if you have stock)
• Customer ownership, branding & customer
service (returns, expedite order, gifts)
• Information exchange (SKUs, shipping
methods, kits, ship confirm)

13. Drop Shipping
• No inventory management
• D/S can be transparent
• Time to market
• Cost of shipping & handling
• Lower margins
• Inconsistent customer service
• Compete on inventory

14. Fulfillment Centers (3PL)
• Similar to Drop/Shipping operations, but you
do need to deal with forecasting, products
purchasing and products shipping from
suppliers to your 3PL

15. FBA
• Amazon sales (Orders on Amazon.com)
• Non-Amazon sales (Multi-Channel Fulfillment
Orders)
• Advantageous shipping rates
• Orders fulfilled on Amazon.com are eligible for these
customer benefits:
– Prime Member Access
– Free shipping on orders over $35
– Featured Merchant Status for some categories
– Gift Wrap
• Managing shipping products to FBA

16. FBA Fees
• Core Fees
– Order Handling (per order)
– Pick & Pack per Unit
– Weight Handling
– Inventory Storage (per cubic feet)
– Inventory Shipping
• Optional services

17. Select Your Fulfillment Strategy
• Products
– Products and Product variety
• Market
– Demand analysis
– Lead time
– Branding
• Orders & customers
– Lines per order
– Markets and geography
• Company
– Your operations and your ERP infrastructure
– Personality and Management attention
– Control and customer service
• Hard to predict direct & indirect cost

18. Information Technology, the Key to Better
Manage Your 3rd Party Fulfillment
• Two-way transmission – orders, inventory, shipping, invoices
• Avoid transmission of fraudulent orders
• Use real time integration with major fulfillment centers like Amazon
• Use the pulled shipping information to close the fulfillment loop
• Enable the shipper to easily confirm orders were received

19. Tips & Tricks
• Direct cost saving factors
• Quality of shipping
• Revenue assurance and potential fraud

20. Direct Cost Saving Factors
• Address validation
• Residential or commercials
• Combine orders
• Real time rate comparison and rule based shipping
• Negotiated rates, commercial plus, Cubic, FedEx One-
rate
• Alternative insurance providers
• Handling voided labels
• Use the Pay-on-Use Returns Labels from Endicia

21. Quality of Shipping
• Product images on the pick-ticket
• Scan before you ship
• Integration with your CRM system
• Consider using integrated labels

22. Revenue Assurance and Potential
Fraud
• Auto capture funds as integral part of the shipping
or the transmission of orders to your shippers
• Identify and block potentially fraudulent orders from
shipping or drop/shipping
• Track employees activities to reduce theft
• Log cancelled shipments
• Scan labels to identify “double” shipments

23. Next Steps
• Set your fulfillment strategy and infrastructure
• Place an incognito order on your web site
• Improve real time inventory accuracy
• Close the order-to-ship-to-get paid loop

24. Questions ?
Thank you !
Coby Erez
coby@4psite.com
858.433.0403