Dirt Cheap Fulfillment!

By October 27, 2010 Fulfillment

If it sounds to good to be true, it probably is.  That saying resonates with all of us because there is a great deal or reality in those words.  I recently mentioned it to one of TAGG’s new clients as they were evaluating which logistics company to outsource their distribution and order fulfillment to.  Our fees where nearly 3 times higher than one of our competitors.  Since most fulfillment companies have a similar cost structure, it is hard to believe their pricing was really that much better.  After some further questioning, it turns out they were making up the cost difference by charging higher rates for shipping.  So they were loosing money on fulfillment but charging an outrageous amount for shipping – in fact, they were charging ABOVE published rates.  Since shipping costs can average 60% – 70% of overall cost to deliver product to your customer, it has a significant impact on your bottom line.  It is easy to focus on your per order charge or your pick fee.  But don’t loose focus on the biggest part of your bill.  If it sounds to good to be true, it probably is!!!!!