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FastLaner
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RodBartley, post: 188177 wrote:
Hi FastLaner,

I’m sorry that you’re disappointed that NPF could not offer you a solution. However there’s a good reason for this.

When your business is in its infancy, it’s really important that that you have a hands on approach with managing your orders. Picking and packing orders yourself (or use a part time helper) will give you a real feel for how you want your orders packed, the packaging to be used, shipping methods and most importantly how you would like your customer to feel when they receive your products.

You will also get an idea of how much time you spend doing this and possibly try and put a value to it. For example to pack 2 or 3 orders a day you would need spend say 30 minutes to get the orders ready, update your systems and drive down to the local Australia Post shop to ship the orders. So if you valued your time at say, $50 an hour then the cost per order for you to do would be around $8.00 an order (not including postage). Of course you could combine 2 or 3 days of orders together to get some efficiencies, however this means your customer has to wait longer for their order.

Then you have the issue of how many product lines (popularly known as sku’s) you need to carry. When you start out, you can experiment until you get the optimal number, which makes the most sales for you. The 80/20 rule will most likely apply; 80% of your sales will come from 20% of all the products you carry.

A Fulfilment company at the end of the day is a brick and mortar business and space is always at a premium. To carry a high number of sku’s takes up valuable space. This space could be used to accommodate other clients who are generating higher sales.

Postage and freight charges are based on the carrier, destination and the weight and dimensions of the final parcel. Depending on the agreement, you may receive a weight based charge or cubic weight. Generally, you will save on postage when you outsource as the Fulfilment company most likely has better rates because of the volume they ship – efficiencies in scale.

In Australia, all Fulfilment companies have to adhere to national standards, which included award wages, workers compensation, payroll tax etc. Therefore, outsourcing fulfilment is not necessarily cheap. However the overall value and savings have been tested and with the right volume of orders could save you 20-30% of your overall warehousing and shipping costs.

Based on my experience I believe that the best time to outsource your fulfilment is when you are shipping 20 orders or more a week. And your product to order ratio is 2:1. Basically, if you ship 20 orders a week you should not be carrying more than 40 sku’s.

Hope this helps.

Cheers,
Rodney

Very late reply, sorry I have been away from this forum.

As per your post, my business is a few years old and ships more than 100 orders a week. It takes me less than 1 minute per parcel on average to package, this includes picking the items, wrapping them in bubble wrap and putting them in a satchel. I have software that prints the labels instantly and Australia Post picks the parcels up.

Also tracking numbers and the shopping cart system automatically update tracking numbers etc.

So all up it takes me around 15-20mins a day to do 15+ parcels a day.

Maybe my system is better than yours? I can’t imagine spending 30mins on 3 parcels. or $8 per order.

I chose not to go with a fulfillment company as the cost wasn’t worth the time I would save. I have continued to do it myself until the volume is high enough to put on a staff member.