Here you are, a seller who wants to expand their product line and bolster your business internationally.
It seems almost like an impossible endeavor, however we at Skubana had always felt that the most important thing to establish for your business is to get your workflow automated with 3PLs, advanced software and healthy best practices.
We are looking to have your champagne problems resolved. What are these champagne problems?
1. Do you have 3PLs in place that will further expand your business internationally?
2. Do you have the sufficient software in place that can handle and automate your warehouse to customer workflow?
3. And with the importation of Chinese products, can this process be as hands-free as possible for you?
As your business grows, these problems will become more prevalent, so let’s go through each one and understand the benefits and steps to take to have the perfect, automated workflow.
What is a 3PL?
A 3PL (or Third Party Logistics Provider) is an outsourced warehouse that provides you with most or all logistics services for your online business. They take over the warehouse tasks like: Picking, Packing, warehousing and Shipping.
With a 3PL, fulfillment and storage becomes a service provided for your business - So your business now has their own operation but follow the guidelines you give them.
Advantages of a 3PL:
• Reduction in long-term expenses that includes employee benefits, salaries, insurance, payroll expenses, warehouse rental/maintenance and transportation costs.
• You’ll get better negotiated shipping rates with shipping carriers than going at it alone since the 3PL aggregates volume (this is important since shipping costs take a huge chunk of the ecommerce profits).
• 3PLs have warehouses in strategic locations all over the USA and in some cases the world, further expanding your business’s fulfillment capabilities (so if you’re located on the east coast, you can get a 3PL located on the west coast decreasing your lead time by at least a week!)
• Expand and contract your allocated 3PL warehouse space according to your business needs – if seasonality plays a factor in your ecommerce you can easily adjust the space/services a 3PL provides.
• Since this is their dedicated business, you could expect the utmost professional and efficient service that has a more defined quality assurance for your ecommerce business and its success.
• Alleviate finances instead of tying up cash flow in infrastructure – redeploy and invest into your online products marketing and building your brand.
• Focus on your core competency – having a firm handle on your logistics frees up your time and resources to focus on other aspects of your business such as customer service, web development, listing optimization and marketing.
Disadvantages of a 3PL:
• Loss of control over the logistics function of your business. You become dependent on their services
• Loss of hands-on access on your inventory – sometimes it’s nice to see and touch the products you sell!
• The overall cost of the 3PL’s services. Initial costs of converting to a 3PL can be very pricey depending on your goods and logistical set up. The time involved could also take quite a while, which will cost your business money while transitioning. However after some time, you’ll find that after negotiations and dedication to your 3PLs, the costs can minimalize compared to expanding your warehouses.
With the elimination of a warehouse and utilizing 3PLs, not only could you focus your extra time and efforts in other aspects of your business, but it’s your 3PL’s goals to meet international demands as well. Depending on which 3PL firm you select, you can see if they have a strong international presence and at which locations.
The Software Behind the Workflow
Having the 3PLs support your business is just step one. Now you need the system to have everything connected.
Your software should be efficient, intuitive multi channel software that could not only connect your 3PLs all together but provide insightful analytics to make smarter decisions with your inventory.
As a shameless plug, we must say that Skubana is an exceptional option for your software needs that could help your business in this area.
Not only does Skubana include integrations with your 3PLs and warehouses but our analytics software can provide you incredible insight on your processes and inventory value.
The software you utilize should provide you with in-depth analytics you can do the following with your 3PL and Warehouse inventory:
• Seamlessly integrates all of your warehouses and 3PLs to reflect accurate inventory per SKU
• Establish minimum levels to automatically generate purchase orders and restock your inventory before you hit peak seasons
• Inventory allocation so you could focus on your more profitable channels
• Set false inventory count to create a sense of scarcity, while allowing your system to automatically refill at those levels
• And of course, more functionalities
Your inventory software can mean the difference in allowing you to sell with ease, so be sure to research and go for the best software for your budget!
While Importing Your Products, How Can You Make This Process Hands-Free?
To ensure everything runs smoothly from product import to reaching your customers here’s a major piece of advice to help make this process as hands-free as possible.
After you have found your perfect manufacturer in China you must absolutely make sure that your source provides you MUST ensure that the boxes have labels on the outside, and not just on the products on the inside. These labels must include the following information that should be easily obtained by scanning:
• UPC Code
• SKU Number
• Date of Production
With the date of production labeled on the outside of your box you can track your products efficiently without having the 3PL sift through the inventory or worse, advise to liquidate.
If you were to have a product with a defect, instead of allowing more defective products fall through and negatively impact your seller rating, you can track to the specific box which had the manufacturer defect.
While this makes it easier for your 3PL, you’ll be able to have an automated, stress free process that is tracked by your software.
Ultimately, You’ll Want to Automate
Researching and learning the best practices of your business isn’t the last thing you should be doing. Holding your business up with dozens of fragmented software is like building a house of cards. With one failing, the whole thing can come crashing down. We at Skubana believe in picking the right software, the right 3PL, and the right practice to sourcing your products. So if you’re thinking about expanding your product line and international presence, don’t forget to work smart.