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eCommerce Archives - National Courier and Logistics; Supply Chain logistics - Need it Now Delivers

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Retail eCommerce sites sold over $445 million worth of products in 2017 in the United States alone, and that’s only retail.

There’s no denying that eCommerce is one of the most booming forms of shopping. If you run an eCommerce site, you know that the competition is stiff.

Because of this, you should always look for better ways to improve your business. You never know what small change could make your business soar.

When it comes to shipping, you may consider using a first in first out inventory (FIFO) method for your store. But you might have some hesitations.

Lucky for you, this article will tell you everything you need to know about the FIFO method.

Read on to learn more!

What Is First in First out Inventory?

In short, the FIFO method is what it sounds like. The first products you buy are the first ones you sell.

FIFO isn’t only a strategy. Instead, it’s an accounting method that the IRS says a business can use to calculate its cost of goods sold.

Your cost of goods sold is the amount of money you spend on buying products that you then resell. Knowing this number is helpful for you because you can put it as a business expense for your taxes. This lowers your taxes for you.

It works by adding up the amount of each product you sold. This also helps you because it keeps track of which products you’ve already sold.

And because most businesses work with a FIFO mentality, it makes it an effective way to keep track of business.

How Can First in First out Inventory Help Your Business?

1. Sets Structure

As a business owner, you want to make sure you have oversight over your business. Even if you aren’t anything close to micromanager, having set structures in place can give you and your managers peace of mind.

One minor structure you can set up is FIFO. FIFO is a simple addition to your employees’ work days that can have great benefits.

It won’t change everything about your business of course. But it could give everything a little more structure. And structure means security.

FIFO is also helpful when you hire new team members. Most people with warehouse experience will know what FIFO is. This means there will be less training time when hiring new employees.

2. Helps Your Delivery Team

Let’s say your delivery team does the packing for you. Even if they are a great team, odds are they may get confused at sometimes.

Because they may have many clients, they might confuse your packing method with another business. Why?

The majority of businesses use FIFO in their warehouses. It’s a uniform structure.

Using this method will make your delivery team more efficient. This could save you both time and money when working with an outsourced delivery team.

Even with an in-house delivery team, FIFO is an effective form of stocking your products. This will keep them working fast as well.

3. Gives Customers the Best Product

Let’s say that you ship or sell food products. Using the FIFO method can help make sure that you give your customers the best product.

Because food has an expiration date, you want to make sure that you’re selling the newest product. If you don’t, you may accidentally sell something spoiled.

Even if you aren’t in the food business, using the FIFO method could be helpful to you as well. Some products deteriorate or age over time, and using the FIFO method will make sure that doesn’t happen.

Not only is this great for customers, but it also will save you money in the long run. You won’t have to worry about throwing out old milk or customers asking for returns when their product has gone bad.

4. It Helps with Fad Items

With FIFO, you can make sure your business always has easy access to items. This means that you can easily get items when they are popular.

It also means it’s easier to clear those items out when they lose popularity. If your business has a special sale, you’ll be sure to have them ready to go with FIFO.

Are There Other Methods?

You may know this already, but FIFO isn’t the only accounting method accepted by the IRS. In fact, there are three other main methods, and we’re going to discuss them here.

1. Average Cost

Chances are that average cost is not going to be the most effective option for your business. Even though it is simple, it won’t be as accurate as FIFO or other options.

Average cost is making an average of what the cost of all the items you sold was. So, let’s say you sell all your items for an average of $6.28, and you sell 1,000 products. That means your cost of goods sold is $6,280.

2. LIFO

LIFO is the exact opposite of FIFO. LIFO stands for last in first out.

LIFO works as well as FIFO in some businesses. Businesses that aren’t worried about their products deteriorating might want to consider it.

The downside to FIFO is that it’s not effective for fad items. You don’t want to sell items that were popular a month ago. If your business has a regular system, LIFO may work best.

3. Specific Identification

As an eCommerce business, chances are you won’t be using specific identification. This is when a business has specific products that cost a certain amount.

A good example of this would be expensive jewelry. While it may work for those products, you wouldn’t want this for a business that ships a lot of product.

Looking for More About Warehousing?

After reading this article, making a decision about the first in first out inventory method should be a breeze for you. Even if you choose not to use it, consider finding a standard practice for your eCommerce site.

Are you looking for a way to get started with same day shipping? Get in contact today.

Still not sure? That’s okay too. Check out our blog to learn more.


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Cross Docking
Cross Docking

The question becomes, how does business A spend so much less on warehouse costs than business B? What could save so much money? The answer is something called cross docking. In a nutshell, cross docking is a shipping method that cuts out most of the warehouse process. This means fewer workers, less cataloging inventory, and less money spent. So today, we’re breaking down 5 frequently asked questions about cross docking. Because if given the choice, wouldn’t you rather become business A? We know we would.

Operating a warehouse costs an average company anywhere between $3 and $17 per $1000 of revenue. That’s an enormous variance that’s best understood with an example. Let’s take two hypothetical businesses. Business A has $1000 in revenue per year. Business B also has $1000 in revenue. Business A spends $3 per $1000 operating their warehouse, while business B spends $17. So, over the course of one year, business A spends $3000 operating their warehouse. Business B spends $17,000. Business A can operate their warehouse for almost 6-years before they match business B’s spending.

Everyone wants to save money and cross docking is the perfect answer to cutting costs in a realistic, productive way.

So, What is Cross Docking?

Cross docking is the name given to a streamlining technique that involves unloading goods from inbound delivery vehicles and immediately loading them onto outbound vehicles.

Eliminating warehouse storage costs allows companies to minimize space requirements, inventory handling, and helps deliver products faster.

Usually, cross docking happens at a warehouse’s dedicated terminal. Workers sort the inbound goods and load them onto their outbound transportation. The key being zero actual storage time.

It’s a process that works best with products that have fast delivery times. This could mean things slated for next-day delivery or things, like food, with short shelf lives.

And beyond multi-company cross docking (say, a food supplier to a grocery chain’s warehouse), some companies use the technique to expedite their own shipping times.

Businesses move products directly from production and onto their outbound dock, removing the need for long-term storage. Without the storage issue, they also avoid labor costs and inventory management.

Are There Different Types?

Yes, and we’ve already touched on multi-company and single company cross docking. But cross docking specifics go much deeper than one or two companies. Let’s take a look.

Retail Cross Docking: This is your average cross docking setup, commonly used by large retail stores. Think Walmart, Target, and other extremely large stores. The process involves products from different suppliers all shipping to the main warehouse, which then using cross docking, consolidates products onto vehicles bound for individual stores.

Manufacturing Cross Docking: One company receives products from another, and uses cross docking to ship those products to manufacturing plants for final assembly.

Distributor Cross Docking: Think large, multi-product vendors. One distributor consolidates multiple orders into one larger order which gets sent to the vendor’s multiple clients.

Opportunistic Cross Docking: Probably the easiest type of cross docking to understand. A company ships straight from one production facility to their distribution center, and then onto the transport. It’s designed to meet a deadline (customer demands etc.).

What Products are Best for Cross Docking?

The best products for cross docking are either perishable, ready for sale, or those on a sensitive time schedule.

For perishable products, this usually refers to food. Suppliers receiving food from farmers or other suppliers often engage in cross docking to ensure their meat, produce, etc. makes it fresh to the grocery store.

Ready for sale products include anything that doesn’t require inspection, that’s pre-tagged (barcodes etc.), and that’s in constant demand. Meeting these criteria ensures the entire shipped supply is still sold on time and within regulation.

Time scheduled products can include free promotional products or other items needed to fill some demand, be it supplier or consumer.

Why Cross Docking?

Simple. Cross docking saves both time and money. It’s fairly obvious that skipping the warehouse process saves time, but the monetary savings go much farther than most people suspect.

Savings come from decreased warehouse space, yes, but the real savings come from reduced labor and also better inventory cataloging. Less inventory means less manpower moving, organizing, and removing that inventory.

Keeping accurate inventory is extremely difficult, which again takes a large staff. With cross docking inventory gets received and shipped before cataloging becomes an issue.

Are There Any Disadvantages?

Like anything, cross docking isn’t perfect. In fact, it does come with some pretty clear disadvantages that apply to specific circumstances. For instance, designing an efficient cross docking terminal takes extensive planning.

Moving products from vehicle to vehicle isn’t easy, especially if you’re dealing with different types of vehicles (think trucks and planes). You can’t just use your existing loading docks.

Cross docking also fails if you’re not using, or working with someone who isn’t, using enough carriers. The slower products arrive, the greater the chance you’ll need to utilize warehouse storage.

Likewise, scheduling mismanagement can result in incomplete cargo loads that need to sit in storage while more products arrive.

Your Own Cross Docking Service

Organizing your own cross docking system can take your business from adequate to a shipping all-star. And when you streamline the shipping process, your return on investment soars.

But how do you set up the best cross docking strategy for your needs? Simple, you need high-quality couriers. Our transport teams can help your business cut out the warehouse and improve your productivity.

So if you’re ready to get started cross shipping, get in touch with us. We’ll get you the help you need to start cross docking as soon as possible.


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Warehouse & 3PL

Last year, e-commerce sales amounted to an astounding $2.3 trillion globally. The top 3 online stores – Amazon, Apple, and Walmart – accounted for nearly $100 billion of that total. There is one thing that all successful e-commerce businesses have in common: the use of third-party logistics. We’re going to let you know what you can expect from a 3PL provider and how utilizing one can help your online business stay ahead of the curve.

What Is A 3PL Provider?

You may be thinking, “Yes, I want to do everything I can to grow my online store but what is a 3PL provider?”

The term 3PL provider, or third-party logistics provider, has changed in meaning over the last 25 years. In the ’80s, 3PL companies mainly provided transportation and warehousing but in the tech-driven world of today, the use of a 3PL provider encompasses a wide range of outsourced services for all aspects of a supply chain.

How Has 3PL Changed Over the Years?

The perfect example of how business has changed over the last century due to technology and why the use of 3PL providers has changed along with it is the milkman.

In the 1920s, just about every American household got their milk via a milkman. Fifty years later, 15% of households in the U.S. had milk delivered and by the ’90s, the number dwindled to 1%.

Americans have always drunk milk, so what happened?

Local dairies were plentiful in the 19th and early 20th centuries, but people had no way to store milk at the time. Ben Franklin may have “discovered” electricity in the 1750s, but it took until Thomas Edison formed Edison Electric Illuminating Company of New York in 1882 before parts of Manhattan had electric light and 50 years after that before half the homes in the U.S. had electricity.

Milk needs to be refrigerated, and people just simply couldn’t do that back then, so a milkman took a home’s milk order and delivered it the next day. Milkmen mainly worked for the dairy, and in some cases, were also the milkers.

As technology made way for cars to be mass produced, homes to have the latest gadgets, and stores to be able to provide all-in-one shopping for families, the milkman became obsolete.

Today, there are just over 40,000 dairies in the U.S., according to the USDA’s January 2018 report. Just about every one of them uses 3PL solutions to make their business run.

What Exactly Does A 3PL Provider Do?

In a nutshell, a 3PL provider can do anything you want them to do.

Going back to the example of a dairy, what was once a simple process that involved a dairy and a home that wanted milk, has turned into a detailed process where several logistics providers are involved.

After the milk is harvested from the cows and sits in a cooling tank, a driver picks it up and delivers it to a processing plant. After the milk is tested, pasteurized, and homogenized, it gets packaged.

Then, it gets driven by another truck driver to a grocery chain warehouse or distribution center where it stored in large refrigerators until a store places an in-house order to have it brought to their location.

Every step from the dairy to the store’s unloading dock involves a 3PL provider.

How Can 3PL Work for Me?

The biggest online retailers didn’t become the money-making juggernauts that they are by doing everything themselves. But your business doesn’t have to generate seven-figure sales numbers to benefit from 3PL solutions.

Here are just five benefits that using 3PL companies can give your online store…

Save Time and Money

Your bottom line is important to you which means you can’t afford to spend valuable time and money building warehouses, installing technology, hiring more employees than you can handle, and organizing transportation and deliveries.

3PL providers also eliminate many of the paperwork hassles like billing and audits that come with supply chain management.

Flexibility and Scalability

Maybe your online store isn’t the size of amazon.com or walmart.com right now, but what’s stopping your business from becoming that big someday? Part of your answer may involve fear, and that’s understandable.

How will you have the money to expand your warehouse? Where will you find the best drivers to transport your product to your customers? What kind of warehouse equipment do you need?

Those questions are no longer on the table when you hire a third-party logistics provider because they do all of that for you! Many 3PL companies are flexible and will work with you during a slow period, so you’re not paying for warehouse space you’re not using. In other words, they’ll grow with you as your business grows.

Efficiency

The most successful companies get where they are because they’re efficient; the CEO makes the final decisions, the marketing director thinks of ways to sell the product, and the sales representative works his or her magic to get the product in front of the customer, and so on down the line.

When you hire a 3PL company to handle aspects of the business you’re not proficient in, you can focus on doing what you do best which will help your business to run more smoothly.

Technology

Advancements in logistics technology happen often including software, hardware, and equipment. A reliable 3PL provider will handle all of the upgrades, system bugs, and equipment training, so you don’t have to.

Network of Resources

Just as networking is important for you to sell your products, it’s just as important in logistics. 3PL companies have a far-reaching network of resources that can help lower your costs, find bigger discounts, and give your customers better and faster service.

Final mile delivery is becoming an absolute must in the e-commerce marketplace and having access to warehouses and distribution centers in markets you have tapped into yet is a significant advantage over in-house supply chains.

Find the Right 3PL Provider to Partner With

Now you know what the 3PL advantage is, the next step is to find a provider that can help get your online business in the best position possible in the crowded e-commerce marketplace.

We provide many of the services that you need to be successful like warehousing, same day delivery, and even same-day international delivery. Visit our services page to find the 3PL solutions that work best for you or get your quick quote answered instantly.