Order Fulfillment

Retailers have been plagued by issues; some have suffered from product misses, others from deep discounts, and everyone has been hurt by the decline in consumer spending. But one factor that has actually been a positive for the sector may now begin to put pressure on retailers. After a decade of a favorable sourcing environment, the cost of production is rising. Prices for cotton have nearly doubled over the last year, capacity in China is drying up and freight costs are expected to rise. And retailers, who have finally begun to regain their footing, will now be forced to up their prices to pass along some of the costs to consumers.

With signs of economic recovery taking shape this year, especially in the world of retail, marketers are refocusing their attentions on maintaining a competitive edge. One way they're doing this is by considering outsourced fulfillment operations with third-party providers. Here are three reasons why it may be the hottest iron to strike this year:

To help shed some light on the packaging industry, and how it affects the consumer experience, JoAnn Hines, Packaging Diva, a consultant and expert on packaging, and Mark Mitchell, president of Tailford Mitchell, a branding and packaging design consulting firm, led a session on the topic at last month's National Conference on Operations & Fulfillment in Orlando, Fla.

In a session at last month's National Conference on Operations & Fulfillment in Orlando, Fla., a panel of cross-channel marketers spanning a wide array of product categories presented tips on how their companies survived the economic pressures of 2009 to see the promise of 2010.

Product returns are a part of every merchant's operations, whether you sell online, retail, catalog, B-to-B, apparel, consumer electronics, etc. In fact, according to a recent survey, returns cost retailers $53 billion last year alone. But what's often viewed as a drain on profits and employees’ time can also be an opportunity to attract and retain customers when the process is handled right.

For this very special report, we chose what we believe to be the three most crucial and timely and important topics in operations and fulfillment for multichannel merchants today.

Selecting software for order management or warehouse management systems, e-commerce solutions, or other applications is a challenging task. The process begins by documenting a set of requirements, constructing a request for proposal (RFP), identifying vendors, viewing Web demos, and conducting site visits and reference checks. But a trend is emerging to select vendors based on word-of-mouth recommendations and two-hour Web demos. The question is, is that really the right approach?

Hard times often require difficult decisions. Given the weak business environment and challenges facing multichannel marketers in particular, many have had to make tough choices to cut costs, with outsourcing being one of the options for doing so. Whether in good times or bad, however, outsourcing your order management, call center and/or fulfillment operations is one decision that requires careful consideration. Here are seven signs that you should think about outsourcing fulfillment:

Like many entrepreneurs who launched catalog businesses in bygone eras, the late Eddie Smith, whom I had the pleasure of knowing during the ’90s and early 2000s, stuck firmly to a number of ironclad principles during his 50-plus years at the helm of the National Wholesale catalog.

If inventory value is rising and back order rates are holding steady or increasing, this is a sign that your inventory is out of control. Before you confront your inventory management team, however, consider this: It might not be the team’s fault. Effective inventory management is a combination of art and science. The process seems simple: Review historical sales, project future sales, place orders and receive products. Simple doesn’t mean it’s easy. It requires someone with good instincts to predict trends and analytical skills to transform data into information. The old rules have changed. Economist Vilfredo Pareto’s 80/20 law worked because 80