Deliver Better, Faster & Cheaper

Challenge: How will you deliver to your customers better, faster, cheaper than Amazon in 2020?

When Jeff Bezos entered the new world of E-commerce, he believed that he was entering unchartered territory. When he opened his first fulfillment center the world was waiting for 6-8 weeks for delivery and paid the mysterious “shipping and handling charges”. The fulfillment centers worked in response to catalog orders at late-night TV advertising. Much of the supply chain moved pallets and full cases through Distribution Centers (DC). 2020 marks the 25th anniversary of when Bezos sold his first book online,  Douglas Hofstadter‘s Fluid Concepts and Creative AnalogiesFulfillment centers would never be the same and distribution itself would be forever transformed. 

Direct to Retail Outlets and Distributors

Distribution Centers spend their time receiving and shipping pallets and cases to retail locations for sale. The goal is to handle products as little as possible, especially when supplying the original distribution to the retail stores. As the product was sold within stores a replenishment order was required of the DC. These replenishments more closely resemble the work of a fulfillment center. This work is labor-intensive and the cost per unit increases quickly. Who operates DC’s in 2019? Common businesses that operate DC’s are supermarkets, wholesalers, and manufacturers but even this is changing.

Direct to Consumers

No longer just an online bookstore, the rise of Amazon has changed the way the world shops for everything. The Amazon Fulfillment concept has set the standard. The “each pick” becomes the norm. The challenges that face thousands of retailers today are countless. Amazon’s “no regrets” approach has forced traditional retailers like Walmart, Nordstrom, and Macy’s to spend heavily to offer their products online. The consumer is equally likely to purchase on-line as they are to go to a store. Many of the great minds that streamlined the DC’s have had to rethink everything. The ideas of same-day shipping, free shipping, and subscription-based business models are here to stay. Not convinced? Walmart is on pace to grow their on-line business by over 30% for 2019. 

Omni-Channel

The idea that you can do both within one facility is a challenge. The investment in “process”, software, skilled management team and staff is required. Forward-thinking has allowed traditional retailers to leverage their network of stores to act as fulfillment centers. Walmart and Target are offering more SKU’s for free same-day and next day shipping than any other competitors to Amazon. 

The pressure to compete is tremendous. Rising labor costs and scarcity of labor within the US add to the challenges. Margins are impacted by the absorption of shipping costs. Deliver better, faster and cheaper will always be a challenge.

ABCO Systems provides both startups and established “brick and mortar” retail with insights into industry trends and provides solutions that reduce costs and improves shipping times. Contact us today to have an ABCO engineer work with you on the right solution for your business.