The Support Report1 Aug, 2008 By: Doug McPherson Response
Experts in teleservices, fulfillment and shipping, and payment processing explain what DR marketers need to know to raise profits, lower headaches and ... much more.
"When DR marketers lack an inventory management plan in place before they launch a campaign, that can be a huge problem — it could kill the entire campaign because you can't ship if you don't have inventory, and as soon as you go on backorder you start losing money. If you're not processing orders and credit cards, you're losing money," Rebholz says. "Then, if you wait too long, it's possible the customer's credit card expiration date has passed, which means a lost sale or, at the very least, additional cost to get the sale back on track."
Packaging, too, can save DR marketers a lot of money, Rebholz says. "Improper packaging can lead to damaged product and returns, wasted shipping expense and customer dissatisfaction. Poor packaging can result in a lack of repeat sales and negative word-of-mouth."
Scott Swanson, vice president of sales at Motivational Fulfillment & Logistics Services, a fulfillment and distribution company in Chino, Calif. says that as DR marketers become more sophisticated, retail distribution is becoming more of a hand-in-hand service requirement along with the traditional direct-to-consumer fulfillment.
"Make sure your fulfillment company knows its way around electronic data interchange and the big box retailers' requirements if you intend to go the retail route, too," Swanson says. "If you're dealing with a fulfillment company with limited exposure to retail fulfillment and logistics, it could result in [incorrect] shipments and fines."
Swanson's advice is to involve fulfillment companies into the design phase of your packaging as soon as possible. "They're just as important to the health of your campaign as your production or media company," he says. "There are a myriad of different things, from kitting to packaging material to postage that all go hand in hand to affect hard costs."
Tony Sziklai, president of Moulton Logistics Management, a product fulfillment company in Van Nuys, Calif., says because cost structures in fulfillment are not what they once were, it may be smarter to increase your shipping and handling price instead of seeking a reduced rate from a fulfillment vendor. "That can lead to lower service levels and other costs, such as increased returns and customer service calls," Sziklai says.
He also recommends considering "bi-coastal fulfillment" to reduce shipping costs. Products made in China that are shipped to the major East Coast population centers, he says, are excellent candidates. "Make sure your fulfillment house has strategically located facilities that offer the best possible zone rates and service levels," he contends. "And make sure bulk-shipping of goods out to the East Coast makes sense. Many smaller goods can be shipped to consumers just as cost-effectively from the West Coast using the correct carrier and shipping service."
Some fulfillment companies specializing in packing and shipping are not only adding more technology, they're loading up on new services, too. Andy Arvidson, owner of Imagine Fulfillment Services (IFS), a fulfillment company in Torrance, Calif., says his company also recently entered video production and online auction services.
Last year IFS launched IFS-TV, a complete video production company to help market the very products it's contracted to fulfill. Arvidson says there are some 200,000 items in IFS' 300,000-square-foot warehouse. "There are wonder cookers and light sabers, miracle knives and steam cleaners," Arvidson says. "Now, with IFS-TV, we'll be able to capitalize on a new competitive edge in the direct marketing industry by making infomercials and commercials."
One of the company's new video clients is Lasik Spa in Los Angeles. IFS produced a spot where Arvidson underwent the eye procedure, and the infomercial will be unveiled soon, airing on West Coast media and Internet outlets, including IFS' own Internet television network.