A Supplier’s Experience: Touchless Order Processing

A Supplier’s Experience: Touchless Order Processing

A Supplier’s Experience – Touchless Order Processing

Yes, OPAL processes your drop ship orders in 5-8 seconds, 24×7, with 100% EDI compliance and zero EDI document costs across all of the retailers that you’re working with. 

So what does this REALLY mean to an e-commerce business?  Joe Miller, CEO of REACHbarrier, a company that provides an easy, affordable way for homeowners to save on energy costs by reducing their energy consumption experienced this common problem:

“We have products that sell for $11-$15 and were unable to sell them on-line due to the order processing cost. With OPAL we were able to lower our order processing cost to $.50 cents or less an order, opening up a whole new sales avenue to us. In addition, it used to take two people to process 100 orders per day. Now, we process thousands of orders daily during peak periods.”

In addition, have you ever thought about how many EDI documents you’re paying for per order?  Well, for a simple drop ship order you are going to need at least five, and the average order file size is 1KC (one thousand characters).  Each one costs $.06+ cents to send or receive.  That may not seem like a lot, but here’s what Victoria Bouldin, Vice President of Primetime Petz experienced:

“We sell our pet gates to the top 20 retailers in the market and were paying $1,100 per month in EDI charges. With OPAL all of that is gone.  The other thing that we really like about OPAL is that it has taken all of the errors out of our order processing.  Everything is accurate and everything ships on time.  It’s enabled me to focus on growing the business without having to worry about managing order processing.”

So, yes, OPAL will process your drop ship orders in 5-8 seconds, 24×7, with 100% EDI compliance and zero EDI document costs.  It is the only self-driving drop ship and order fulfillment software solution in the market today.

 

An Amazon Supplier Case Study

An Amazon Supplier Case Study

An Amazon Supplier Case Study

The labor associated with managing all of the moving parts associated with drop shipping for Amazon, plus the potential cost (if used) of EDI document set-up, translation and transmission seriously impacts the profitability on shipping just one or two items.  If the price per item is reasonably high it’s not so bad, but low cost items often lose money and need to be made up from the sale of higher priced items.

Below is an example of one real supplier that found themselves in exactly this situation before discovering OPAL.  

Here were the steps they went through to ship an $8.95 order through Amazon (fortunately, they were making up the difference on other product lines):

  • Log into the Amazon Portal
  • Click on each order and print it
  • Manually enter that data from the printout into the ERP system
  • Print a Picking Ticket
  • Put products into USPS packaging 
  • Log into the USPS website and re-enter that name and address – AGAIN – and print out the label
  • Go back into the ERP “Shipping Data Entry” and create an invoice
  • Manually type in the tracking number from the postal web site into the ERP
  • Print out an Invoice / Packing List for shipment
  • Go back to the Amazon Portal and re-enter the tracking number – AGAIN – for payment.

All of this took about 10 minutes per order.  This is the cost computed:

  • Order Total: $8.95
  • Minus Cost per Item: $1.57
  • Equals Gross Profit: $7.38
  • Minus Order Processing Labor: $3.67 (10 minutes per order @ $22.00/hr. + benefits)
  • Minus Materials $  .58
  • Minus Amazon Commission (15%): $1.34
  • Profit Before Overhead $1.79

After subtracting all other Overhead Costs, it was determined that nearly $3.00 was being lost per order.  

This is an extreme example, but using an approach that is configured to each individual company’s process, OPAL enabled this company to have an adequate margin – even on this item – by implementing a self-driving, touchless order process that eliminated the $3.67 labor cost per order, PLUS provided the necessary communication with Amazon at no cost, communicated with their shipping carriers and processed each order in less than 8 seconds 24 hours a day, including creating invoices in their ERP.  All they needed to manage was Pick, Pack and Shipment.

Creating a Win-Win Relationship with Retailers

Creating a Win-Win Relationship with Retailers

Creating a Win-Win Relationship with Retailers

When everything goes well, your retailer wins AND your business wins.

You already know the advantages retailers get out of working with you as a Drop Ship Vendor (DSV), but it’s also important to note that poor performing suppliers cost retailers billions of dollars each year.  If you want to be a valued supplier to a retailer, it’s important to make this relationship work efficiently.

Remember that retailers can opt to have as many suppliers as they desire and they don’t have to limit themselves to only one brand.   When you, as a supplier, make money for your retailers they will value your relationship more highly and provide you with the opportunity for even more sales volume.  

When you don’t, the opposite is true and it will be reflected in your Supplier Scorecard and subsequent penalties.

There are essential metrics where your performance is measured and where decisions are made regarding how, or if, they will work with you in the future.  These include:

  1. The number of Back Orders you experience – do you provide them with accurate item inventory so that orders aren’t placed by the retail channel when an item is out of stock.
  2. The number of orders you accurately fulfill within the customer delivery date – do you provide on time order processing and trigger an Advanced Ship Notice (ASN) to your retail channel.
  3. Compliance errors – do you consistently comply with all necessary transactions (Acknowledgement, Confirmation, ASN, Invoices, etc.), PO pricing, packaging, labeling and shipping documentation to minimize order issues and rework (cost) for the retailer.

So, how to you create a win-win with retailers?

Well, the first way is to be compliant with a retailer’s business processes.  This compliance makes you valuable to a retailer by reducing their expenses surrounding order issues and rework.

The second way is to have the ability to scale your business, delivering more on-time orders each day and the handling of peak periods without having to hire additional personnel. 

And lastly, you must maximize your warehouse’s efficiency, dramatically increasing the number of shipments that can be made each day and their accuracy.  

The bottom line is that OPAL addresses all of this for you and more, giving you the means to create a win-win relationship.  Recommended by major retailers to their suppliers, it combines all of your order processing and warehouse management activities into one AUTONOMOUS software platform – NO Warehouse Management System, NO Shipping Software, NO Retailer Portals and NO EDI companies or document charges.

eCommerce Business Planning for 2020

eCommerce Business Planning for 2020

The busy season is over for a large percentage of retailers.  It’s time to take stock of what worked and what didn’t for you as a supplier.  For example:   

  • Did you have to hire temporary employees?   If yes, how many did you need and at what cost?
  • Were you able to process orders in time to meet the customer’s delivery date?
  • Was your warehouse able to keep up and meet the customer’s delivery date?
  • Was your inventory accurate or did you suffer with backorders?
  • Was the cost of EDI documents extremely high?

If the answer is “yes” to any of these, then you need to be aware that OPAL addresses all of these things efficiently and inexpensively.   

  1. There is no need to hire for peak periods.  OPAL provides touchless order processing, meaning orders are retrieved, inventory checked, packaging calculated, and all shipping documentation is ready for batching and printing by the warehouse in seconds.
  2. Orders are processed without human intervention and ready for pick, pack and shipment.  OPAL processes orders 24×7 without human intervention, eliminating order processing bottlenecks.  The only human intervention required is for the 3%-5% of exceptions that will always occur.  
  3. Time and motion are minimized in the warehouse and shipment of orders is accurate.  OPAL provides the tools to pick in a sequence that minimizes the number of steps a picker must take, enables packers to have sufficient packing material in the area before beginning to pack, having master group items kitted in advance for packing, having shipping labels and documents pre-printed based on dimension and weight and sales order scanning for shipment and inventory accuracy.   
  4. Inventory is accurately maintained and reported to your retail sales channels.  OPAL tracks inventory, back orders, reorder levels, your suppliers and lead time – then computes inventory and sends it frequently and accurately to all of your retail channels.  All without overstating inventory to low volume retailers and understating it to high volume retailers.
  5. EDI costs are gone.  OPAL takes advantage of the direct EDI links provided by retailers and e-tailers enabling you to process an order with $0 cost for EDI documents.  OPAL downloads POs (Document 850) from retailers and e-tailers, sends back Acknowledgements (Document 997), ASNs (Document 856), Invoices (Document 810) and Product Inventory (Document 846) with no EDI charges and is 100% compliant with each retailer.

Sound “too good to be true”? If you missed expectations in 2019 or were simply struggling to keep up by throwing more labor resources at the problem, check out OPAL.  It may be the answer and it costs nothing to find out.  

 

Things That Retailers Grade Their Suppliers On

Things That Retailers Grade Their Suppliers On

The number of on-line sales in 2019 were absolutely extraordinary!  So, I hope that everyone had a successful year end close. Looking at it in retrospect, though, how well do your retail channels think you performed?  What have they shared with you?

There are essentially two (2) key metrics where they measured your performance and will make decisions regarding how, or if, they will work with you in the future.  These include:

  • The number of Back Orders you experienced.  This is all about having provided them with accurate item inventory so that orders weren’t placed when an item was out of stock.
  • The number of orders fulfilled within the customer delivery date.  This is all about the actual time you took to process an order and trigger an Advanced Ship Notice (ASN) to your retail channel.

The first, number of back orders experienced, all comes down to accurate inventory management.  This means tracking inventory, back orders, reorder levels, your suppliers and lead time – then computing inventory and sending it frequently and accurately to multiple retail channels.  All without overstating inventory to low volume retailers and understating it to high volume retailers.

This requires things like a robust inventory system, purchase order scanning for receipt of items, sales order scanning for shipping and decrementing of inventory and the ability to see what’s “on the water” to know when new inventory will arrive, and the ability to manage orders based on those impending arrivals.

And then, it requires INTELLIGENT REPORTING of inventory to these multiple sales channels based on things like item availability, the number of retailers you’re working with, sales trends and profitability.

The second, the number of orders fulfilled within the customer’s delivery date, falls squarely on the shoulders of your order processing team and warehouse operation.  This is all about efficiency and productivity.  

Achieving this efficiency and productivity requires management of orders with little or no human intervention – putting a focus on those orders that are exceptions only.  If inventory is available and all is correct on the order it should be processed and ready for warehouse pick, pack and shipping within seconds rather than the minutes normally required to process an order by a person.

Achieving this efficiency and productivity in the warehouse requires minimizing time and motion.  This includes things like picking in a sequence that minimizes the number of steps a picker must take, packers having sufficient brown boxes in the area before beginning to pack, packers having master group items kitted in advance for packing, and having shipping labels pre-printed based on dimension and weight.   

If you missed your retailers’ expectations or were simply struggling to keep up by throwing more labor resources at the problem, check out OPAL.  It’s 100% compliant to all retailers and reduces Order Processing time by up to 90%, Order Processing Cost by up to 80% and Undelivered Packages to less than 1%, while also increasing Order Accuracy up to 99% and Picker and Packer Productivity by 25%-50%.  All without EDI charges.

How Successful Are You at Managing the Cost of Drop Ship Order Fulfillment?

Do you ever have difficulty achieving expected – or sometimes even adequate – profits on drop ship orders?  Unlike bulk orders worth thousands or hundreds of thousands of dollars, drop ship orders are much more problematic when it comes to managing costs well enough for an order to be profitable.  

To complicate things, suppliers are seeing an exponential increase in the small orders to process, more retailer compliance requirements added to the fulfillment process, shorter and shorter acknowledgement and shipment deadlines, more opportunities for retailer chargebacks, and more and more staff to keep up with the load.  All of which impact profitability.

So, what leverage do you have to cut costs?  

The first way is to improve order processing efficiency through cost effective order processing systems.  This reduces the cost to process an order and also allows you to deliver more on-time orders each day with the same or fewer resources.  

 

Secondly, you can maximize your warehouse’s efficiency through cost effective warehouse productivity systems.  This dramatically increases the number of shipments made each day and their accuracy.  

 

And the third way is to be compliant with a retailer’s business processes.  This includes processing a retailer’s orders, complying with all of the necessary transactions, PO pricing, packaging, labeling, shipping documentation and accurate inventory feeds.  This significantly reduces unexpected retailer chargebacks and maximizes your business relationship with them.  

The bottom line is that OPAL addresses all of this for you and more.  It combines all of your order processing and warehouse management productivity requirements into one COST EFFECTIVE, AUTONOMOUS software platform:

  • No additional Order Processing System
  • NO additional Warehouse Management System
  • NO additional Shipping Software
  • NO Retailer Portals Needed
  • 100% Retailer Compliant
  • And NO EDI Document Charges.