Effective communication is an important aspect of today’s modern business environment. It is not only a way to stand out, engage and inform customers, but marketing surveys have also shown that delivery notifications massively improve customer experience post-purchase. Whether via email or SMS, delivery updates are a powerful tool for keeping customers happy and, in turn, loyal. Furthermore, they are also easy to set up which makes them essential for all companies.  

Keeping customers informed and reassured 

These days virtually everyone has a smartphone which they use on a daily basis – the average person checks their phone 160 times a day! Modern customers expect to be kept up to date about their orders and react particularly positively to SMS notifications; such messages are generally read in under three minutes and are essential in keeping buyers reassured. By the use of order receipts and delivery notifications, customers are informed of a successful transaction and kept in the loop. Simple status updates about a purchase like, “Order received” and “Your order has been shipped”, tell customers everything of import to them that is going on with their order and show them that everything is proceeding as planned. They are also helpful when there are unexpected delays: Rather than keeping buyers in the dark and worried (or even angry), in this way customers are quickly and effectively informed about what has happened and what they can expect. This not only shows that the company they ordered from is on the case and in control, but it also builds trust through transparency. 

This is especially important when it comes to online orders. E-commerce keeps transforming by the means of new technology and today most online retailers ask for payment in advance rather than on delivery. To reduce anxiety, it is beneficial to document every step of the way leading to a successful purchase. Customers should be informed when payment is received, when their order is shipped, and when it will arrive at their doorstep. By sending customers notifications, vendors reassure them and prove that they are reliable business partners. It highlights how important every single delivery is to them and that they value the client’s peace of mind. Moreover, this is especially effective if orders can be tracked and traced in real time – an informed customer is a happy customer! 

Advantages of SMS Delivery Notifications 

Despite the widespread use of smartphones, people do not check their emails as often as other messaging apps. Many companies nevertheless use emails to inform customers about order updates and while it does work, it is not as prompt as SMS. SMS are checked almost instantly and have a staggering open rate of 98%. Compared to email open rates of 20 to 30%. Hence, it’s easy to see just how effective an SMS is! Another great benefit of SMS is that there is no need for an internet connection to send or receive them. 

Marketing opportunities through notifications 

While marketing emails and SMS are a dime a dozen and usually annoying, delivery updates are better received because they serve a purpose. Customers will want to open and read them, which offers a great opportunity for brand placement. Mentioning a brand or online store in an order update or shipping notification is not intrusive but reminds customers of who is making an effort to keep them informed. It is also possible to include a link back to a webpage or platform, increasing the chances for return customers, or a simple call to action. 

Setting up a successful delivery 

Failed deliveries are annoying for customers and costly for shipping services. Accurate delivery notifications and predictions allow customers to plan ahead which, therefore, help all parties involved. Using an effective communication channel greatly increases the chances of a successful delivery on the first attempt. It is also important to note that most customers expect to be kept informed about their delivery time slot as well as failed delivery attempts by delivery carriers and couriers. On the other hand, not keeping customers up to date can cause them a great deal of frustration and anger, especially since it can be quite difficult and time-consuming to get information from customer service hotlines or through online service tickets. It is far more efficient and greatly beneficial for customer satisfaction and retention to make use of emails or SMS to communicate with clients. 

E-commerce is booming, making fulfilment services and shipping costs a hot topic. Third party fulfilment companies take over parts of the supply chain for clients and help them manage and grow their business. Fulfilment vendors charge their clients a (monthly) fee based on the services they provide and the total cost depends, in the main, on four cost factors: the receiving of inventory, storage and warehousing, pick and pack, and outbound shipping. The cost of each of these processes depends on volume and complexity (and sometimes order measurements). Additional services like brand packaging, item assembly and express delivery also cost extra.

In order to calculate the estimated costs of outsourcing in advance, companies have to add the aforementioned fees together to arrive at a grand total. BIZ Courier is all about transparency and this article’s goal is to give our clients an overview of our prices. Admittedly, it is rather difficult to give exact numbers in a business as complex as fulfilment; hence, please take the costs listed in the article as what they are: approximations which serve to provide a sense of what to expect.

Outsourcing or Company Owned Warehouse(S)

Companies that have their own warehouse(s) and shipping department generate different costs than those who outsource to fulfilment services. They both have to be calculated differently: warehouses have fixed costs independent of the actual number of fulfilment processes; therefore, even if sales are low, the costs remain the same and if business is booming, investments into storage space, personnel and infrastructure might be needed to cover the unexpected increase in fulfilment and shipping processes.

Outsourced warehouses on the other hand usually have low fixed costs; fees mostly depend on the number of fulfilment processes [i.e., as in items shipped] and the amount of goods stored. Costs therefore scale directly with sales and are more flexible.

Important cost factors in fulfilment

• Storage Costs
  Goods have to be received, stored and booked which takes time and, as a consequence, cost money. Receiving a common package or pallet amounts to about €2.67 whereas storage comes to between €1.60 and €3.90.
  Storage costs depend on the items value, dimensions, and quantity: companies can rent space and insure their products against any kind of hazard for 0,32 € to 0,49 € per Cubic Meter per day. Furthermore, at Biz, customers would only have to pay storage according to the quantities stored in each location upon the last day of each month. That is something which rewards them for supplying us with their fast-selling articles and assigning to us orders with their top selling products.

• Picking and Shipping
  As orders come in, the relevant items have to be moved from the warehouse, put together based on the order, packed, and shipped. Costs are based on labour, packaging material and shipping costs. High quality boxes are more expensive.
  Shipping costs are low because order fulfilment companies get discounted bulk rates – actual costs depend on shipping services [i.e., BIZ, TIPSA, GLS, DHL, UPS, INOUT, DPD etc.] and package weight. National shipping is cheaper than international shipping.

• Returns
  Returned items incur additional costs. These packages have to be received, inspected and put back into storage (or disposed of). Accepting returned packages varies from €0.25 to €0.30 (largely depends on the item in question) and storage costs have already been covered above.

• Additional Services or Value Added Services
  Additional services include, but are not limited to, enclosing flyers, creating sets and bundles from different products, cutting or refilling wares, and gift-wrapping. Most fulfilment service providers offer such services at an additional cost; however, it is difficult to give exact numbers. Perhaps it would be safe to say about €0.20 for adding flyers to packages or adding company labels. Furthermore, an hour of standard warehouse labour amounts to roughly €32, which offers an approximation of what to expect.

• IT-Services
  Fulfilment service providers usually have excellent IT infrastructure and well-oiled software systems in place. It is easy to connect these services to clients’ web shop-software or whatever program they use to manage their supply chain. Some fulfilment providers charge a small fee for each transaction, about €0.01; some offer such services free of charge.
  Sometimes some integration measures are necessary despite the aforementioned convenience of such IT systems in order to link two existing IT systems or even create a new one. Industry standards for IT-work are somewhere around €110.00 per hour.

Please do not take the prices listed above as anything more than approximate values, rough guidelines so to speak. Companies that ship large quantities and have many fulfilment processes can count on economies of scale and their own negotiating power to get lower prices. Volume discounts are very common in this industry.

Hidden costs

Finally, we would like to mention hidden costs, in this case the hidden costs of poor and ineffective order fulfilment. Good fulfilment providers help save money in a number of ways which often stay hidden until something goes wrong. Wrong orders, damaged packages, delays and long shipping times are the result of an ineffectual supply chain management which cost a lot of money on top of making customers unhappy. These issues have an immediate cost and long-term effects, as they tarnish your company’s reputation. Unfortunately, repairing fulfilment software, expanding infrastructure or training employees to avoid making these mistakes in the future is also expensive.

That is where professional fulfilment service providers have a huge advantage: they are very good at avoiding such blunders through experience and accumulated knowhow. After all, this is what they do day in, day out! When everything goes smoothly, it is easy to forget what could go wrong and how much that would cost.

Get in touch

If you have any further questions on this topic, or anything else for that matter, or would like to get an estimate of costs for your particular business, feel free to contact us. We would be happy to provide you with the information you need to make the decision best for your business!

Logistic businesses and warehouses located at import hotspots are those who package and deliver bundled shipments throughout extensive regions both domestically and internationally.

They are the ones who accomplish the bundled shipment of goods produced in various countries throughout the globe and, as a direct consequence, the distribution of these items overseas.

The main target of distribution from the logistics base, is to be as far-reaching as possible, i.e., deliver to as many countries as possible – ideally worldwide.

The industries which most commonly take advantage of what logistics offer are those in technology, electronics, fashion and of capital goods.

By making use of logistics, the products manufactured in these fields get delivered overseas in a highly efficient manner via airports or, a less costly mode, via sea docks which transport the goods to their chosen storage warehouse by means of Hinterland Transport. This, naturally, means that the customer’s order gets sent out from the storage point immediately after the order is placed.

Investors Usually Expect the Following to Be Requisite of Import Locations

• highly flexible infrastructure
• well-positioned so as to have an international gateway [i.e., cargo airport or container seaport] in close proximity
• Good, multimodal [i.e., a combination of modes of transport] hinterland connections
• large, adjoined property areas
• reasonable space and labor costs [secondary to good infrastructure]
• settlement support for large logistics investments

After having compared the defined requirements for a European Gateway with the location offered in the Leipzig-Halle region, it is safe to say that requirements have been met or even surpassed. In particular, and of paramount importance, its infrastructure is highly well developed with its more than ample number of motorways and its efficient cargo airport.

Additionally, the interlinked principal modes of transport – road and rail -can be used in combination in several locations, which testifies to the fact that, overall, the regions’ hinterland connections are well developed.

Furthermore, the areas numerous vacant spaces, comparatively low land and labor costs, decent range of local logistics service providers, including its evident settlement support for logistics investors, renders the Leipzig-Halle region highly attractive for every demand of this logistics task.

In short Order fulfillment is the procedure required from the moment the order is received by a given supplier/ sales point system to the moment when the product arrives at the recipient, i.e. the customer.

Which in the main entails the following:

• The Packaging of the order(s)
• The dispatch/ shipping of the order(s)
• The Delivery Process of the order (s)

An Order Fulfillment Service Is Advantageous In Numerous Ways:

• Long-Term Contracts Are Not Necessary
  If any given company is experiencing sales lows or highs, & even in extreme growth periods, the option of outsourcing fulfillment offers flexible pricing as they are able to offer you a bespoke service for your needs and make the necessary adjustments.
  As a result, you can avoid long-term contracts.

• Solving Issues Related To The Hiring of Staff And Or High Time Extras
  The renting of a warehouse immediately incurs greater responsibilities due to the necessity of having to hire staff. Consequently, when you fulfill and ship your own orders, as your business grows and expands, staff is required to handle the work-load. Staff you have to manage.
  Managing staff takes up a great deal of time which we often don’t have when running a business; in particular when your business is constantly in flux (e.g. ups and downs).
  
  Therefore, much precious time can be saved by leaving the hiring and firing up to an experienced outsourcing company especially in the hiring of staff only for seasonal work, for example, let’s say the Christmas rush etc.
  
  Hiring more staff for Seasonal and or high periods of business lead to problems when the upturn / high sales period turns into a low one; such as after Christmas. This is because obviously more staff had to be hired and maybe equipment needed to be bought, perhaps more space was required etc., so in the ensuing low sales period, you have more staff etc. than you and or the company can afford.
  
  However, all this can be regulated by an order fulfillment company; allowing you to get on with the actual business of running the company; hence your being more effective, creative etc.

Outsourcing is economically viable

• an outsourcing company can save you money in the long term
  
  And depending on the scale of the outsourcer, you can benefit from their buying power.