by Ayal Latz
Several strategies exist when it comes to management of back end functions for a direct to consumer campaign. On one hand you can take the multiple vendor route, where each takes its own function, such as Customer Service, Order Management, and Fulfillment. On the other hand, some choose a vendor providing turnkey order fulfillment. What’s the best approach? Well, it’s not always easy.
There are lots of considerations but it all boils down to the fact that the marketer of a product needs to be 100% comfortable with the vendor (or vendors) they choose to work with on these critical functions. Here we breakdown the advantages of going turnkey, should that be the route you’re considering to take.
Benefit 1 – Cohesion. With turnkey order fulfillment providers communication is both streamlined and consistent. The turnkey fulfillment services provider can speak to the marketer about all areas, at one time and in one format leading to faster reaction time and less opportunity for miscommunication.
Benefit 2 – Cross-Function Communication. Great turnkey order fulfillment providers share information across functions, and with their clients, often in real time. This interconnectivity can translate into lightning speed problem identification for the marketer and resolution by leveraging data from one department and applying it to the other.
For example, if Customer Service begins receiving calls about a product defect, the manager in a turnkey environment can walk down the hall and ask the warehouse manager to go and look at the items in stock. If there is indeed an issue, the marketer can be notified and additional shipments can be stopped until a resolution can be put into place.
Benefit 3 – Savings, Savings, and more Savings:
Selection and Implementation. Choosing vendors is time consuming. Obviously wanting the best vendors in place, a marketer interviews potential prospects for each function. This can result in 10-15 options to consider. In a turnkey model, multiple vendors are evaluated, but each is offering a complete suite of services, so overall you save time without sacrificing choice.
The same can be said for implementation. The upfront contracts and legal work, product and campaign setup, and integrations are all simplified through a turnkey order fulfillment model, saving both time and cost.
Service Cost. A marketer that bundles multiple functions together becomes larger and more attractive to the turnkey provider. For example, a campaign with 1,000 orders a week, also needing customer service, order management and returns management, can leverage all of these needs by keeping them together. The turnkey provider on the other hand, sees efficiencies by integrating all of these services. It’s a win-win for both the Marketer and the turnkey provider.
Management. One Stop-Shop also means a single Client Services department to help with a wide range of needs, including: offer changes, sku-setup, scripting, etc.
Additionally, the benefit of receiving one itemized invoice, which can be paid with a single payment, saves administrative time and makes reconciliation easy.
Inventory management savings. Some marketers utilize different vendors based on the type of fulfillment – retail versus direct to consumer. This requires splitting of inventory and is inefficient, inflexible and costly.
Why? Here’s two reasons:
1) Stocking inventory in multiple locations will likely require more inventory due to the complexities of having the right product in the right places.
2) With all of the inventory in one location, the Marketer can react to the ebbs and flows of different types of customers.
Take this for example. A larger than expected Retail order can be handled by “borrowing” inventory from the direct to consumer allocation. That can be replenished when the next shipment of inventory arrives. Or if the direct to consumer campaign changes, and a new assortment is needed, having additional stock available to draw from increases the response speed.
Another way to be efficient with inventory is placing returns and refurbishment under the same roof as order fulfillment. With this set up, product can be quickly and efficiently injected back into inventory. There are no shipping costs or time delays caused by locating these functions elsewhere.
Benefit 4 – Peace of Mind. To sum it all up – the ease of communication, often with one point of contact, empowers the marketer. You know who is handling the issues and where accountability lies because there is one entity responsible for all functions, versus many different companies needing to communicate and coordinate on each and every issue. The payoff? As you work closely with your valued turnkey provider, your communication and teamwork constantly improve, allowing for even greater trust-and peace of mind.