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 in 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!

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.

For many of our clients a “necessary evil” of their business is providing parts to their customers.  From computer and network related equipment to hardware and components of ready-to-assembly furniture, TAGG serves as the outsourced fulfillment provider to a variety of clients who supply product parts for their customers.

One such client sells ready-to-assembly TV stands and media cabinets through a variety of big box retailers.  In order to provide a high level of customer service, they have decided to make replacement parts and components available to their customers for a period of up to 5 years.  That means they have a large number of items that need to be stored and managed for a long period of time and shipped to customers quickly when needed….all of which contributes no direct profit to the bottom line.  When I asked the owner why he decided to outsource the parts business to a third party he replied, “Why not outsource the parts fulfillment to TAGG, let you guys completely take care of things so I can go about doing what I am good at, designing and selling more product?”  He also added “our approach to parts was an afterthought, it was a distraction and because it is not core to our business, it wasn’t getting done well.  A fulfillment center would better handle the process and free up valuable resources within our organization.”

TAGG designed a system that completely takes the burden off of our client.  Customer requests are taken at a call center or over the web, those orders are imported into our warehouse management system and parts are shipped to our client’s customers.  Our client has visibility over the entire process.  We even help minimize cost by disassembling customer returns and replenishing parts stock with the components.  What our client views as a necessary evil, we see as a core competency and a valuable service TAGG provides.

So you made the sale and are now going to market your product through the big box retailers and really push volumes.  Problem is, they require all products to be shipped from a distribution center using EDI.

EDI (Electronic Data Interchange) is a business trade platform on which buyers and sellers exchange critical documents electronically, without paperwork.  EDI has been evolving for more than a quarter of a century, but up until recently was limited to larger enterprises, primarily due to the excessive startup and operational costs. Now, with new technologies available, TAGG Logistics, in partnership with technology provider eZCom, has been able to offer more cost-effective EDI solutions, giving smaller suppliers the ability to participate.

eZCom’s Lingo™ is like an e-commerce passport:  it supplies an easy interface designed around your trading needs. Your focus should be on selling, billing, and shipping – on reaching new horizons, new markets, and new customers. Don’t get bogged down with distribution, routing guides and the technicalities of EDI.  Leave it to the experts!

“It’s Apples to Oranges to Bananas…”

by Tod Yazdi

So you have decided to outsource your fulfillment and distribution-maybe you didn’t want to buy a warehouse, purchase forklifts, manage additional personnel and invest in costly IT.  You have done your homework and decided on the best location-maybe you sell nationwide and the Midwest offered a centralized location within your customer base.  You have even gone out and talked with several different fulfillment centers.

You have narrowed it down to three, and now it’s time to get down to business.  What is the cost?  You have three proposals that you lay on the conference room table to compare to each other, but it’s like comparing apples to oranges to bananas.  How can you compare bids when all have different pricing variables?  In one bid there is a labeling fee, in another you have to ship on their account – which is marked up, and the third packaging is not included in the price.  The variables can be endless and the terms can be confusing.

When Scott Ohlgren, owner of BrainToniq, decided to outsource his fulfillment and distribution, he found it nearly impossible to determine the cost of doing business with a fulfillment center, much less to compare and contrast providers.  BrainToniq is the world’s first organic, botanical-based, non-caffeinated think drink specifically designed for those who need more mental focus and clarity.  The product is sold to consumers and retailers nationwide through both its website and stores like Whole Foods.  “I personally spoke with nine or ten fulfillment centers across the country.  I was able to quickly determine the best location for my distribution point and got a comfort for the service level of several providers, but comparing pricing was a whole other challenge.”
We suggest to Scott and others in his situation to prepare a Fulfillment Cost Model.  Simply put, give your fulfillment center data on past orders or create a hypothetical group of orders and have them determine the total cost.  Do the same for inbound receipts and what you would store at their facility and tell them not to worry about their pricing terms, translate it into how you actually do business.

To view the entire article, including a Fulfiment Cost Model, click here

“I looked for pricing that was straight forward with no hidden fees and costs that I could not quantify.”  According to Scott, “it was important for the fulfillment providers to translate their costs into the way I do business.  Then I could compare pricing and understand what the total cost of my fulfillment for each was.  In the end, I chose the provider with competitive pricing that was also easy to understand.  I didn’t want a bill that wouldn’t make sense to me or was different than what I was expecting.”

Creating a Fulfillment Cost Model serves two purposes.  First, it helps you to take bids that are different and translate them into common pricing.  This allows you to easily compare and contrast pricing from different providers.  Second, once you select a service provider and your first bill comes, it will hopefully eliminate any surprises!

Obviously pricing should not be everything.  You need to choose a logistics firm that is a good partner, has a high level of service and a commitment to making your business a success.  Then, they have to provide a good value.  Sometimes you need to take pricing into your own hands – and put it in your own terms – to be able to compare bids….or else it’s apples, to oranges to bananas!

At TAGG Logistics, we know that the only way to be successful is to make our customers successful. That is why we listen to our customers and design and implement a logistics solution that meets their needs. Whether it is order fulfillment, inventory management and distribution services or contract packaging, kitting and assembly, we have the systems and expertise to be your outsourced logistics provider.

Why Should You Outsource to TAGG Logistics?

By outsourcing to a logistics expert like TAGG Logistics, you can:

• Invest more time and money in your core competency
• Decrease your operating costs
• Decrease your staffing costs
• Maintain flexibility within your organization and more effectively manage future demands
• Improve customer satisfaction rates

What is your expertise?  Are you in business to provide logistics solutions, distribution services, order fulfillment or packaging?  We are!

Struggling to Handle your Logistics In-House?

If you haven’t outsourced some or all of your logistics, such as order fulfillment, your business is dedicating a portion of its work force, attention and capital away from your core expertise.  By outsourcing to a logistics expert, your products get stored, distributed and fulfilled more efficiently and you have fewer headaches and more time and resources to devote to the money-making aspect of your business.

TAGG Logistics partners with customers to design and implement the best possible logistics solutions. We believe the best way to meet our customers’ needs it to work with them as a partner providing outsourced logistics services.

The TAGG Logistics Commitment to our Customers

At TAGG Logistics, we respect the trust our customers place in our ability to successfully design and execute a critical component of their business. We take this responsibility seriously and always strive to deliver results that exceed expectations.

Complete Supply Chain Capabilities

Whether it is container receiving and unloading, packaging and shipping services or product fulfillment services, TAGG Logistics has the know how and expertise to meet our customers’ logistic needs and seamlessly integrate into their supply chain.

Flexibility

We pride ourselves on our creativity and flexibility to customize a solution to every challenge and problem our customers face.

Technology

We manage our customers’ inventory and distribution with state-of-the-art warehouse management system (WMS) software to provide pertinent and precise information, in real-time.

Would your organization benefit from a more cost effective outsourced order fulfillment partnership?  Contact TAGG Logistics for a free comprehensive review of your logistics needs.

TAGG Logistics – Your source for outsourced third party logistics services including inventory management and distribution, order fulfillment and contract packaging, kitting & assembly.

For all size businesses that are looking for a Fulfillment/Distribution Company – TAGG Logistics (www.tagglogistics.com) is the right choice for you. TAGG is a leading fulfillment/distribution service company providing product fulfillment, distribution and related services. Unlike other fulfillment companies, TAGG contains explicitly detailed descriptions of the systems, services, and staffing provision as well as a detailed set of rules and regulations that are strictly adhered to in order to benefit their customers. They offer solutions for both Business-to-Business and Business-to-Consumer clients, including Pick and Pack, Product Fulfillment and Distribution, Pack-out / Assembly, Order Management, Inventory Management, Logistics and Returns Processing services. I can assure you that TAGG Logistics is the right company for you! What are you waiting for? Check out TAGG Logistics today!