Before 2000, every aspect of back-end support operations for the direct marketing industry was tailored to meet the needs of typical catalogers and their customers. In the 1970s and ’80s, direct marketing was limited to the mailbox. The costs and requirements for information systems, fulfillment operations, inventory management and transportation functions were limited by technology and developed exclusively to meet the expectations of catalog customers. Consumer catalog orders were generated over a 12-week selling season. Inventory planning was based on historic patterns of sales and procurement, with sufficient lead time to forecast needs, buy products, transport them to the fulfillment center and fill customer orders.
Nicholas C. Isasi
By Nicholas C. Isasi Your vendors probably bundle freight expenses with the cost of goods and then give little consideration to the price to ship those items to your distribution centers. Indeed, most vendors actually use freight as an additional profit center. The markup for vendor prepaid freight can reach as high as 40 percent. That's why properly managing your inbound freight expenses can make the difference between a marginally good year and a successful one for your catalog company. Inbound freight typically represents 2 to 4 percent of gross sales for consumer products companies. Yet inbound freight costs seldom appear as a