How to offer free shipping without losing money. The video covers ship from store, just in time inventory, buy online pick up in store, dropshipping, and supply chain streamlining to cut fulfillment costs.
Welcome to the seventh episode of the Ultimate Guide to Profitable Free Shipping. This week we will be talking about supply chain options to improve your shipping operations. Supply chain improvements are a constant process for any business, but the long term gains because of a proper supply chain can help you reduce your fulfillment costs. Points 31 through 35 talk about supply chain options geared towards e commerce businesses to fulfill orders profitably. Number Number 31 Minimize delivery time with Ship from Store if you have a brick and mortar presence, your stores can be an opportunity to fulfill orders by doubling the use of space and resources. Employees of the store can pick, pack and ship the orders from a space inside the store. A geographically spread out presence of stores can cut your shipping costs by reducing shipping distance. If you don't have a store, a partnership with one can work too where you take care of online operations and the store fulfills the orders through their facilities. Of course, some additional employees and training will be needed, but it's better than establishing a fulfillment center. Number 32 minimize inventory storage through Just In Time Just in Time is a classic supply chain tactic where industries reduce their inventory costs by ordering inbound supplies just in time for the demand. This ensures that less cash is tied into the inventory and less warehouse space is needed to run the whole operation. Online sellers can also use the data from their marketing and inventory software to estimate the demand more accurately and order only as needed. With smaller inbound shipping, you can get rid of most of the inventory sooner, requiring less storage and using the cash to invest in other aspects of the business. It can also be used to reduce storage costs at three PL solutions such as FBA by delivering the items in amounts that get sold faster. 33 buy online, pick up in Store Use Buy Online, Pick up in Store or BOPIS as an alternative to shipping. It provides the value of free shipping for customers by enabling the customers to pick up their orders quickly and at their convenience. It is especially useful in categories where fast shipping is more important than free shipping such as baby care and groceries. It can also be a great differentiator against a competitor selling the same item through normal shipping options. Generally, it requires dedicating a space at your fulfillment center or stores to enable pickups to minimize staffing needs. Innovative solutions such as self serve lockers are also a growing option. Number 340 inventory drop shipping a lot of online sellers swear by drop shipping, while others are doubtful about its future as a business model. Under drop shipping, whenever an order is placed, the seller purchases the item from a third party supplier and has it directly shipped from the supplier to the customer without ever taking control of it. This makes it a zero inventory business. It is great for sellers who are starting out as it does not need startup capital, a warehouse or fulfillment expertise. On the other hand, the seller has to contend with low margins and complete dependence on the supplier for fulfillment and quality. Though you end up with lower margins. Drop shipping allows you to offer free shipping while concentrating on improving your sales and marketing strategy without worrying about fulfillment. No number 35 streamline your supply chain Online businesses are still relatively young and business gurus agree that e commerce supply chains are not fully mature yet. So we'll end this episode with top supply chain recommendations for forward looking online sellers. Start with sourcing. As you grow your business, you will have more bargaining power with the current supplier or you can skip them to directly deal with manufacturers. Reconsider the location of your fulfillment center so that it is near your biggest market as well as your big suppliers to optimize inbound and outbound shipping. Reduce inventory by regular liquidation or promotional sales to get rid of slow moving unprofitable products. Splitting inventory requires added safety stock while using distributed warehousing. Consider this cost against the benefits of offering fast and free shipping. Explore multi channel sales to increase your market reach and to reduce the risk of failing because of one marketplace. To summarize the seventh episode 31 minimize delivery time with ship from store 32 minimize inventory storage through just in time, 33. Buy online pick up in store 340 inventory drop shipping and 35 streamline your supply chain. Thanks for watching the seventh episode of our series. If you enjoyed our content, please share this post with a friend or colleague who might benefit from this series. Subscribe for more such content and keep an eye out for episode eight next week in which we will share how to make free shipping profitable with optimal returns processing. And lastly, sign up to our newsletter for even more awesome content delivered right to your inbox. See you next time.
