TAGG Logistics

With the economy sluggishly moving along, we are always looking for ways to improve efficiency and pass along savings to our clients.  There are three main buckets of costs when delivering products to your customers; (1) shipping i.e. USPS, FedEx, UPS etc… (2) fulfillment fees; and (3) packaging fees.  Shipping costs tend to run 60-75% of your total fulfillment expenses.  The direct fulfillment fees, this is how TAGG makes it’s money, usually makeup another 20-30% of these expenses with packaging being the smallest, final portion.  Therefore, a reduction is shipping expenses will have biggest direct impact on your bottom line and this is an area we are always looking at ways to improve.  Recently we added two new services to our shipping portfolio to act as lower cost alternatives to the USPS.  For packages under a pound, we are able to beat the cost of a normal first class mail rate using UPS Mail Innovations.  For packages over a pound and less than 10 pounds, we are able to significantly reduce the cost of a regular Priority Mail shipments using a FedEx product called Smart Post.

There are an endless variety of shipping methods.  With these 2 new alternatives to the Post Office, TAGG can effectively ship your product for you the exact way you want….or let us shop it around a bit.  Our bet is we will come up with a creative way to save you money!!!

I remember a commercial in which a group of people are huddle around a computer watching the launch of a new e-commerce site.  With the first sale they all break out in cheers; with 10 sales they are all giving each other high fives; when sales hit 100, then 500, then 1,000 they all look at each other with panic.  We are seeing this right now with one of our fulfillment clients.  Sales are through the roof and the salesforce continues to pour it on….but the supply chain is being stretched.

It pays to have flexibility in your fulfillment and distribution system.  By outsourcing some or all of your supply chain, you create flexible warehousing and storage for your raw materials and/or finished goods, plus you acquire flexibility in your workforce to process and fulfill orders or perform kitting and assembly work.  Contracting to a third party logistics company provides you the ultimate flexibility to handle varying capacity requirements, and being able to adjust and adapt to growing (or shrinking) demands is the key to reducing supply chain pain.

If you have a 3PL like TAGG handling your fulfillment-it will be all high fives when order volume grows!

We recently returned from the Natural Products Expo in Anaheim, CA. It is by far the largest trade show for companies in the natural and organic marketplace and it represents the largest concentration of TAGG clients at any single industry trade show. It was great to see some familiar faces and dine and visit with clients. It was also great to meet many new people who are in the industry and are looking to establish or grow a product line. Since our new West Coast warehouse just recently got up and running, we had the chance to brag about both our Midwest fulfillment presence and our Reno fulfillment center. Overall it was a great experience being able to spread the word about TAGG Logistics and meet some exciting companies

This week marks the 50th birthday of bubble wrap.  While most of you didn’t take any time out of your day to celebrate, it did give reason for those of us in the fulfillment business to pause and think of all the advancements in packaging that have been made.  At TAGG, the biggest change over the last several years has been the move for more environmentally responsible void fill.  We have a significant presence in the natural and organic product market, distributing and fulfilling packages daily going to environmentally conscious consumers.  For that reason, we have moved to provide a line of biodegradable and reusable bubble.  We also provide bubble wrap that is made from recycled material.   These types of bubble wrap were not available 3 years ago and offer a great alternative for our clients.  Fulfillment means we are delivering our client’s product to their customers.  We take great pride in understanding our client’s markets and presenting products to their customers in a matter that is consistent with their overall marketing message.

Happy birthday bubble wrap!  It is great that we can offer our clients options regarding their fulfillment packaging.

January 4, 2010, both FedEx and UPS will increase their ground rates 4.9%.   All other service level rates will increase as well.  I have been telling clients now is a great time to evaluate your shipping.

First, are you shipping from the best location?  If you have clients nationwide, locate your distribution center in the Midwest.  If you have a large California customer-base, a West Coast fulfillment center makes sense.  The best way to reduce your small package shipping costs is to reduce your zones traveled.  Plot your customers on a map and take a look.  That’s what TAGG did, and that is why we fulfill product out of both St. Louis, Missouri and Reno, Nevada.

Second, shop your rates around.  Have your logistics provider quote out rates if you were to ship on their account.  Maybe they get better rates than you.  If you do not outsource your fulfillment, get quotes from some providers on shipping and handling fees.  Often our small package rates are so much lower that the difference more than pays for the fulfillment fees.

It won’t cost you anything to do some research but as prices keep going up, it will be worth it!

We continue to progress towards a January opening of a TAGG West Coast facility. Combined with our St. Louis operations, having a fulfillment and distribution hub on the West Coast offers our clients faster and more affordable shipping to all points west of the Rockies.  We have targeted Reno, NV as the location in order to provide one-day truckload and less than truckload service to the entire West Coast, as well as one-day small pack service using UPS or FedEx.  Now, those clients who wish to have multiple distribution points will have the optimal locations to have product shipped to their customers!

TAGG Logistics recently attended the Natural Products Expo East in Boston. It was great to see many of our clients, meet their sales teams and explore the floor exhibits. The Expo is a good representation of one of our largest market segments which includes, neutraceuticals, vitamins, supplements and other natural products.

Efficiently passing information back and forth is one of the more important aspects of a establishing a successful fulfillment partnership, and it becomes even more critical with the addition of new clients.  With as many unique requirements as we have clients, TAGG continually looks for new ways to improve this flow of information.  Accordingly, we have recently completed the successful roll-out of a new and improved web-based interface to our Warehouse Management System.  This system provides clients with real-time access to all of their pertinent business information, and expedites the flow of information between TAGG and our clients.

Interested in seeing this in action?  Call us today and we’ll show you how improvements in IT infrastructure translate to bottom line dollars!

So you have a fantastic idea, perhaps a new product or service, and you KNOW there’s a market for it.  You’ve heard it from friends, you’ve seen it in print, and most importantly you’ve experienced it yourself.  You’ve invested time and real dollars in research and product development, you’ve tweaked the prototypes and treated your family as if they were guinea pigs.  You’ve done your homework and selected the e-commerce web store that fits your needs perfectly.  You’ve lined up manufacturing, and you have inventory on the shelf.  Finally, the big day has arrived…show time…time to “go live”.  All the hard work is over, and now you get to sit back and watch the orders roll in…right?  WRONG!

It’s fairly easy to imagine a scenario where a neighbor two streets over (or a thousand miles away) needs your product desperately.  But when they sit at their computer and perform a simple internet search, your website doesn’t even show up.  Your greatest challenge in successfully utilizing the internet as a tool to grow your business is getting—and staying—found. As you are undoubtedly aware, cyberspace is an uber-crowded quagmire these days.  Here’s a little perspective for you:  one source from early 2007 cites an estimated 108 million websites with over 30 billion (with a ‘b’!) web pages.  How is anyone EVER going to find you?

Search Engine Optimization (SEO) is a systematic process of improving both the quantity and quality of traffic that is directed to your website by search engines such as Google and Yahoo.  Performed correctly, it’s a multi-faceted approach involving registration in directories, optimization of key words, link-building, and web-site updates all intended to drive the right traffic to your website.  If you haven’t designed your website with SEO top-of-mind, then…well…you should start today.

Next time we’ll get started on a step-by-step plan for Getting Found.  If you need a little help now, feel free to give us a call.  We’ll point you in the right direction.

Many of TAGG’s clients are first-timers, meaning their decision to use a third party logistics (3PL) company was the first time they decided to outsource fulfillment and distribution.  We hear all kinds of reasons why a client decides to outsource – they don’t have the right technology to manage inventory; they don’t have the right equipment or personnel to operate a warehouse; or they don’t want to invest in the infrastructure to set up a proper supply chain.  We also hear clients tell us that warehousing and distribution is not an area of strength and serves as a distraction from core competencies that lead to growth.  We love that reason and couldn’t agree more!

With the difficult economy, more and more of the outsourcing decisions have centered on decreasing overhead.  At its simplest, outsourcing to a 3PL is trading fixed costs for variable costs.  If your sales have decreased, you may have warehouse square footage, forklifts and personnel that are underutilized.  These costs are fixed overhead that you have to pay for if you use them or not.  When you outsource fulfillment, you only pay for what you use.  You pay for how much you receive from suppliers, you pay for the actual space you use and you pay for each order that goes out.  Think of it, if volumes are down, your bill goes down, if volumes are up your bill goes up.  You don’t have to worry about how you lease to much space when sales are down and you don’t have to worry about getting more space when sales are up.

This flexibility exists only in an outsourced situation.  You pay for what you get and you get what you pay for!  Focus on growing your business, let us worry about the warehouse.