Blog Month: May 2022

  • Choosing a Fulfillment Partner

    Short term – Long term

    The Importance of Fulfillment as a Service is widely known in the corporate world. Especially nowadays when talking about rising fuel prices, courier occupation, prolonged delivery times etc. Choosing a Fulfillment partner correctly may save you potential problems in the future. It is important to keep in mind that the partnership may last a significant amount of time if operations are conducted successfully, and results are met. This means that sometimes, the long-term element must be prioritized over the short-term elements. For instance, sacrificing slightly by increasing your investment costs and choosing a correct, experienced Fulfillment partner may lead to better results in the long run. In this article, we will be providing you with the 5 most important aspects to look out for when choosing a correct Fulfillment Partner.

    5 Key Elements to look out for

    • Experience and Reputation

    If you choose an inexperienced provider that’s new to the industry, you run the risk of delivering a poor brand experience to your customers. The impression on the end customer is often directly related to Fulfillment performance. This increases the need to partner with a well-established, reputable company. It is vital that you conduct business with a company that has years of proven experience and staff that is trained and knowledgeable in all areas of the business. You could also seek reviews from customers that have a similar business model to your business. This way you will have direct feedback that enables you to make a more accurate assessment on whether or not you should choose this Fulfillment partner. Lastly, meeting the Fulfillment partner in person might reinforce the relationship which could lead to potentially increased problem solving in the future. Don’t disregard your companies’ reputation, choose a respectable Fulfillment Partner.

    • Seamless Integration

    This element makes the initial set-up process much easier whilst also simplifying continuous communication by streamlining the information transfer procedures through, for instance, correct API (Advanced Platform Integration) integrations. Set-up should not be a hassle. An experiences professional Fulfillment partner usually has all types of integrations available that make your life easier. They sometimes offer real-time views in transport, inventory management, warehousing etc. Make sure to discuss this topic thoroughly before establishing your partnership to avoid the arise of potential issues in the future. When reviewing the integration possibilities, consider aspects such as Omnichannel Integration (price/delivery/transport/warehousing etc.), CRM/ERP platform Integration, Automated email communications etc.

    • Reverse Logistics and Performance

    Fulfillment service providers sometimes also provide you with the option to handle the complete returns process. This could save you a ton of resources and time, if done correctly. The latter should be stressed as poor handling of returns may influence your brand in a strong negative way. However, if the returns are managed correctly, your brand image receives strong positive reinforcement. Reverse Logistics is thus an important element to look out for and should always be considered due to the high brand impact potential. Make sure to review the performance metrics of the Fulfillment service provider on Reverse Logistics in detail to avoid surprises. Also make sure to consider switching your current Reverse Logistics process. Professional insight should be considered. Openness to change is recommended.

    • Warehouse Locations

    We currently live in an era that follows the golden rule of ‘the faster the better’. Of course, this is not always true, however, customers do expect their shipments to be delivered to them as fast as possible. 7+ days for delivery times is usually not acceptable anymore. The average delivery time within Europe is around 2-3 days. Experiences Fulfillment partners sometimes even offer same-day delivery, depending on your business model. Regardless, it is important to have knowledge on the Fulfillment partners’ infrastructure. Knowing where their Warehouses are located and even knowing traffic routes might validate the claims of delivery performance. If majority of your customer base resides in Spain it would be highly beneficial to choose a Fulfillment Partner that has a reliable transport framework allowing him to have high performance on deliveries to/from Spain. Future opportunities for market expansion should also be considered. If you are planning to ship worldwide for instance, it is important to discuss the possibilities with your potential Fulfillment Partner.

    • Brand reinforcement

    It is often the small things that make a difference. Another factor that should be taken into account is the possibility for brand reinforcement. Customization is an important element that should be considered when choosing a Fulfillment partner. Providing the customer with a strong personal brand experience can have high positive impacts on customer retention and continuous purchases. Of course, it also increases your brand awareness and recognition. Look out for Fulfillment partners that offer you customization options. An example could be personal packaging. Allowing you to use custom packaging options may make the difference and give you a competitive advantage by providing your customers with the brand experience they seek. Brand reinforcement should not trump performance metrics, however, it still stays a valid element to consider as increased brand awareness will almost always positively affect your company.

    These 5 key elements should be kept in mind when considering a Fulfillment partner to outsource your Fulfillment services. Would you like to know how more on how to choose a correct Fulfillment partner correctly? Talk to a ModusLink Expert today by clicking HERE!

    Bibliography

    Busby, A. (2019, 24 oktober). Fulfillment As A Service, Why The Future Of Delivery Is In The Clouds. Forbes. Geraadpleegd op 26 februari 2022, van https://www.forbes.com/sites/andrewbusby/2019/10/23/fulfillment-as-a-service-why-the-future-of-delivery-is-in-the-cloud/?sh=6b83309d4af1

    business.com editorial staff. (2014, 25 juni). Benefits of Using an Order Fulfillment Service. Business.Com. Geraadpleegd op 2 maart 2022, van https://www.business.com/articles/benefits-of-using-an-order-fulfillment-service/

    Roggio, A. (2011, 4 november). 5 Reasons to Consider Fulfillment Services. Practical Ecommerce. Geraadpleegd op 5 maart 2022, van https://www.practicalecommerce.com/5-Reasons-to-Consider-Fulfillment-Services

    Thill Inc. (2021, 21 oktober). Fulfillment Center Pros & Cons. Thill Inc. Geraadpleegd op 5 maart 2022, van https://thillinc.com/blog/fulfillment-center-pros-cons/

    3Pl, L. (z.d.).  7 tips for choosing a fulfillment partner. Logicos. Geraadpleegd op 5 maart 2022, van https://www.logicos3pl.com/en/blog/tips-for-choosing-a-fulfillment-partner

    Lab, T. F. (z.d.). 8 Essentials When Choosing a Fulfillment Company + 8 Best Companies for 2021. Thefulfillmentlab. Geraadpleegd op 7 maart 2022, van https://www.thefulfillmentlab.com/blog/choosing-fulfillment-company

    Roggio, A. (2011, 4 november). 5 Reasons to Consider Fulfillment Services. Practical Ecommerce. Geraadpleegd op 5 maart 2022, van https://www.practicalecommerce.com/5-Reasons-to-Consider-Fulfillment-Services

     

  • Cross-border e-Commerce is complex but is fastest growing

    What is Cross-border E-commerce?

    It is no secret that the world of E-commerce has been booming for a while. Experts forecast that the world of E-commerce will only continue to grow. According to Phaneuf (2022), US E-commerce sales are expected to cross 1$ trillion for the first time in 2022. This goal was not expected to be reached before the pandemic until 2024. The growth is forecasted to reach %1.06 trillion in 2022 (Phaneuf, 2022). See the graph below illustrating the leading countries based on retail E-commerce sales growth in 2022. Even large players such as the US and India Expect a high growth percentage in 2022 (Statista, 2022).

    Figure 1(Leading countries based on retail e-commerce sales growth in 2022 – (Statista, 2022))

    There are many factors playing into the growth of E-commerce amongst different countries and in General. A strong and continuous factor that contributed to this increase in growth is “Cross-border E-commerce”. What exactly is Cross-border E-commerce?

    Simply put, Cross-border E-commerce is the process when selling products online, ultimately crossing borders. For instance, a Dutch clothing store that sells and ships their products to foreign Spain (crossing borders) through their online website is conducting in Cross-border E-commerce. This sale can also be conducted through marketplace platforms such as Amazon or eBay. How prevalent is Cross-border E-commerce exactly? Cross-border E-commerce is increasing prominently within the E-commerce world as the benefits such as Supply Chain Resilience, payment flexibility, market expansion etc. are strongly present. This emphasis on importance can be seen in many countries. For instance, Dutch Cross-border E-commerce has shown to be increasing significantly.

    95% of Dutch consumers are shopping online nowadays (Emerce, 2022). The combined sales as a result accumulated to 14.8billion euros. Dutch E-commerce infrastructure has also proven to be increased in quality as they now hold approximately 67.000 online stores whilst maintaining a strong, developed logistical network.

    The investment and increase in contribution to cross border commerce amongst different countries over the last years clearly indicates the significance and importance of E-commerce businesses to adopt Cross-border commerce.

    Potential risks to look out for

    Most Business activity comes with risk. So does Cross-border E-commerce. The main three risks that potentially influence Cross-border E-commerce are listed below (Laubscher, 2021).

    • Risks that come with Cross-border Supply Chain/Logistics. Unfortunately, even a small number of negative events within the Supply Chain/Logistics elements can potentially lead to strong negative effects. Negative customer reviews have strong impacts on customer retention and prospect leads. Negative experiences such as delayed orders could form high negative impacts, especially for starting businesses as they have not yet built up their brand reputation. Many businesses that conduct in E-commerce and have gained momentum therefore make the smart decision to outsource their Supply Chain/Logistics to an experienced Fulfillment service provider. This allows them to relieve a strong portion of potential error and allows them to focus on their core business.
    • Different, changing regulations. In order to properly conduct Cross-border E-commerce your business has to comply with the regulations of the country within the transaction accordingly. Conducting Cross-border E-commerce with many different countries, especially outside of the EU, inherently brings many risks. Changing regulations requires constant, extensive knowledge of what you can and cannot do when selling products. Small mistakes may result in heavily delayed shipments that spiral into accumulating negative effects. Before conducting your Cross-border transaction, try to be sure of the appropriate knowledge needed. Again, scaling businesses make use of external parties such as consultancy parties to ensure the trade/transaction can be done correctly. Others completely outsource their Fulfillment procedures to completely minimize these risks.
    • Fraudulent behavior. Conducting business online unfortunately brings the risk of Fraudulent customer and third-party behavior. Bots (fake customers created by malware) might place tons of fraudulent orders that could offset your Business if you’re not paying attention. Also make sure to use well-established Payment Providers that allow complete transparency. Having multiple payments options, increasing your payment flexibility, and reducing the order threshold for your customers is a good strategy. However, make sure to only use reputable payment options as small payment providers also bring the risk of potentially disrupting your customers’ payments. This could lead to negative effects for your cash flow as you might need to refund several orders.

    Cross-border E-commerce should be considered for all scaling E-commerce businesses. Keep in mind the most occurring risks and adjust your strategy accordingly. Would you like to know how more on how to implement Cross-border E-commerce within your business correctly? Talk to a ModusLink Expert today by clicking here!

    Bibliography

    Cross border e-commerce: Alles over internationaal online ondernemen. (2021, 11 juni). BZTRS. Geraadpleegd op 14 maart 2022, van https://www.bztrs.nl/blog/cross-border-e-commerce-alles-over-internationaal-online-ondernemen/

    Day, B. (2019, 3 juli). Cross-border commerce, waar moet je aan denken? Bluebird Day. Geraadpleegd op 13 maart 2022, van https://www.bluebirdday.nl/blog/cross-border-commerce-waar-moet-je-aan-denken

    Ecommerce News Nederland. (z.d.). Crossborder ecommerce – Verkopen over de landsgrenzen. Ecommerce News. Geraadpleegd op 11 maart 2022, van https://www.ecommercenews.nl/tag/crossborder/

    Emerce. (2022, 24 januari). E-commerce voorbij de landsgrens? Hoe je met cross-border selling begint. Geraadpleegd op 13 maart 2022, van https://www.emerce.nl/achtergrond/e-commerce-voorbij-de-landsgrens-hoe-je-met-cross-border-selling-begint

    Keenan, M. (z.d.). Global Ecommerce: Stats and Trends to Watch to Succeed Internationally (2022). Shopify Plus. Geraadpleegd op 12 maart 2022, van https://www.shopify.com/enterprise/global-ecommerce-statistics

    Laubscher, H. (2021, 15 september). Why Cross Border Ecommerce is the Future of Ecommerce. Ecommerce Platforms. Geraadpleegd op 14 maart 2022, van https://ecommerce-platforms.com/articles/cross-border-ecommerce-future-ecommerce

    Phaneuf, A. (2022, 22 maart). eCommerce B2B Industry Statistics for 2022. Insider Intelligence. Geraadpleegd op 12 maart 2022, van https://www.insiderintelligence.com/insights/ecommerce-industry-statistics/

    Statista. (2022, 18 februari). Fastest-growing retail e-commerce countries 2022. Geraadpleegd op 11 maart 2022, van https://www.statista.com/statistics/266064/revenue-growth-in-e-commerce-for-selected-countries/