Golf Accessories

Pick and Pack Warehouses

Pick and pack is a common storage and order completion method. A computer generates a list of items to be moved. The items are then taken from the shelves of the warehouse. When everything on the list has been collected, the order is packed together and taken away for transportation.

 

The advantage for the warehouse is obvious. Items can be stored in bulk on movable pallets or in large boxes and single items can then be picked from the pile as needed. Products enter the storage warehouse on mass and leaves in smaller quantities as part of a combined order.

 

For example, suppose your business provides electrical cable in different assorted lengths, colors and sizes for hobby purposes. You could keep huge amounts of the bulk wire in your warehouse and cut pieces to length as you recieve orders.

 

The advantages for drop shipping companies

 

Drop shipping companies prefer to use the pick and pack strategy when to supply storefront operators. Drop shipping companies sell and distribute modest amounts of many different items through a distributor chain. The end distributors are typically affiliated, but are seperate e-store owner/operators.

 

The advantage for drop ship companies is that lots of smaller orders quickly add up to huge amounts of stock sold. The advantages to the e-store owner is that he/she earns a profit on all sales directed to the drop shipping company without having to stock any items. Some drop shipping companies have been known to even help set up a willing entrepreneur.

 

Often, the online store owner isn't tied to a contract with just the one drop shipper – he/she is free to do business with whoever they want.

 

When the shipping company recieves an order, they pick and pack it from the warehouse and send it off. Confirmation that the order has shipped is normally sent via e-mail both to the business owner and the end customer.

 

The costs and benefits of pick and pack warehouses

 

While pick and pack can be an extremely efficient way to store goods and fulfill orders, there is one crucial thing to consider. Sales numbers should be at a high enough level to justify the storage of bulk stock. Because of this drop shipping companies need to maintain good relationships with affiliates.

 

Many pick and pack drop shipping companies charge a fee to what they call "small cap buyers". "Small cap buyers" are affiliates that regularly fail to meet sales targets. This is often not fair on the retailer. After all, every sale, no matter how modest, will have the same costs and benefit to the drop shipping business.

 

Costs should always be minimal. From the moment you establish yourself as a valuable affiliate, try to get your credit extended. What this means is that your credit card will not be charged to back-up payment from customers. Whenever possible, allow the drop shipping company to take the chance. This is especially true if there are a large number of returned items.

 

The main benefit for entrepreneurs is the ability to access stock and warehousing without incurring large expenses. Drop shipping companies sell to their associates at wholesale rates. The profit is in reselling it at retail prices.

 

One slayer of ecommerce in the drop shipping model is the charge-back. If consumers are likely to dispute an order placed by credit card because of faulty or damaged merchandise, you could be in for a real headache. If a purchase is disputed, it is very rarely worth challenging – the fees and trouble involved can eat up any possible profit.  Because of this, you should thoroughly investigate any drop shipping company before you agree to do business with them.

 

About the Author

 

Jeff Ehrlich is the head of FulfillmentPlusNY which delivers fulfillment services for a litney of accounts globally. Contact Jeff for product storing & shipping

 

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