Month: August 2022

What is freight shipping and how does it work?

Posted on | by chrisqureshi | Leave a Comment on What is freight shipping and how does it work?

Modern businesses from every industry now operate across multiple states and countries. Thus, they need fast, efficient shipping services.

 

What is freight shipping?

Freight shipping means transporting heavy or large volumes of goods, commodities, and cargo by land, sea, or air.

Freight shipping is important for any business that caters to people in different locations. Most ecommerce businesses serve customers worldwide, and often they partner with third-party logistics providers (3PL) for their freight shipping services.

 

Freight vs. parcel

According to FedEx, any shipment weighing over 150 pounds is considered freight. Any shipment under 150 pounds can be shipped as parcels. For instance, a microwave you booked online and delivered to your home is a parcel. A truck of microwaves shipped to the home appliance store is freight.

 

How does freight shipping work?

When goods are too heavy or delicate to be shipped by a standard ground shipping carrier, freight shipping is needed. Freight shipments involve packing items in wooden pallets or crates to keep them safe during transportation.

In general, freight shipping companies use ground, air and ocean transportation. The freight shipping company can recommend the best suitable mode of transportation based on your freight items and weight.

It’s highly advisable to discuss the delivery options with your freight shipping partner. For instance, if your warehouse doesn’t have appropriate equipment for easy loading and unloading of goods, your freight shipping partner can help you with some loading equipment to unload goods at an additional cost.

Freight shipping companies often send messages with a tracking number and freight carrier details when the truck is on its way. After the freight reaches a nearby terminal, you will probably receive a call from the freight carrier. You can schedule an appointment date and time for your freight delivery. You can inspect the shipment for any damage before receiving it.

As an ecommerce business owner, you must clearly understand freight shipping options before collaborating with a 3PL. Thus, you can choose the best shipping method that suits your business requirements and customer needs. For instance, investing in reliable inventory management software is highly recommended if you sell your products on multiple ecommerce platforms. The software allows you to integrate with diverse shipping service providers and fulfill orders in multiple locations.

 

Types of freight shipping

Let’s discuss the significant types of freight shipments used for commercial purposes.

1. Air freight

Air freight is the ideal mode of transportation if you have to ship high-value items. Air shipment is more common in the pharmaceutical and medical industries. Though it comes with a substantial cost, the shipment reaches the customer faster.

2. Rail freight

Businesses with large goods that need to be shipped within the country prefer rail freight. It is inexpensive compared to other freight modes but it may take a longer time than a truck. Often, businesses use rail in combination with other transportation modes to ship freight.

3. Ocean freight

Ocean freight is an alternative to air freight when you have to ship freight overseas. However, shipments can take a long time to reach their destination with ocean freight. If there is no urgency, ocean freight is a perfect choice.

4. Full truckload (FTL)

Businesses go for FTL freight shipping when they have enough stock to occupy an entire truck. A standard truck can carry around 26 pallets or load more than 15,000 pounds. However, the load weight or the number of pallets varies with the freight shipping company. Thus, it is always advisable to ensure the limits with the freight service provider.

FTL is only cost-effective when you have enough stock that covers the entire truck. Since you will be paying the truck’s total cost, unlike other freight shipping methods, you should make optimal use of every space available in the truck. It may be worth the money as order deliveries are much faster in FTL, as there are no stoppages in the middle for delivery.

5. Less than truckload (LTL)

Businesses opt for LTL when they have minimum freight quantities. In other words, shipments heavier than a parcel but not large enough to occupy the entire truck space are ideal for LTL freight shipping. Generally, shipping companies set minimum and maximum weight limits for LTL freight shipping. The weight limit varies from one company to another but ranges from 150 to 15,000 pounds, around six pallets.

In LTL freight shipping, businesses will share truck space with other companies. For instance, the shipping company will collaborate with multiple businesses and accommodate their goods optimally in the available truck space.

The prime advantage of LTL shipping is paying for what you store, not the entire truck. However, the downside is that goods are often transferred to different trucks before being delivered to the destination, taking more time for delivery.

6. Partial truckload (PTL)

Another option between LTL and PTL is partial truckload (PTL). If your shipment is over 5,000 pounds or six pallets, PTL can be a cost-effective method for you. Otherwise, it works like the LTL freight shipping method. You split the cost of the truck with other businesses, and you pay for what you store. One advantage of PTL shipping is the relatively low chance of transferring goods to different trucks.

7. Intermodal

Intermodal shipping means shipping freight by two or more modes of transportation. With intermodal containers, freight companies move shipments between truck, train, and ship effortlessly. Businesses prefer intermodal shipping as the freight is moved in containers without manual handling of items. Moreover, it is pretty cost-effective as there are no labor costs.

8. Expedited

Expedited freight shipping is the most expensive of all shipments and is reserved for emergency or time-bound shipments. Generally, expedited goods travel by air rather than by ship or rail, making it costlier. Plus, it also involves transporting goods in express shipping lanes for prompt delivery.

 

Importance of faster delivery

According to Grandview Research, the global same delivery market size is expected to grow at a compound annual growth rate (CAGR) of 20.3% from 2020 to 2027. The research further predicts that the market growth will be due to increasing urbanization, rapid ecommerce adoption, and evolving customer expectations towards delivery services.

As an ecommerce business owner, you should address the customer’s expectations of faster delivery. Shipping is a pivotal part of the supply chain as the order is closed only when the product reaches the customer safely and promptly.

Whether you own an online store, sell in multiple online marketplaces, or supply to major retailers like Walmart and Target, partnering with a 3PL company can be a winning supply chain strategy. However, before collaborating with a 3PL, knowing the basics of freight shipping and its costs can help you choose the ideal shipping method.

 

How much does freight shipping cost?

Shipping cost directly impacts your business’s profit or loss. Thus, keeping the shipping charges minimal while offering faster delivery to your customers becomes crucial for long-term success. In general, freight shipping costs depend on multiple factors, including

  • Cargo weight,
  • Cargo package dimensions,
  • Value of the cargo,
  • Shipping destination,
  • The urgency of the delivery,
  • Custom clearance, and
  • Unexpected delays.

Based on these factors, you can narrow down the mode of transportation for your shipment. Especially for international shipping, you may need to choose between air and sea freight. For instance, some loads can be too big or too risky for air shipments. Thus, consider all factors before finalizing the shipment mode.

 

3PL or freight forwarder: Which is better?

As an online retailer, you will ship products to customers all over the world. Partnering with the right shipping company can provide better customer service. Therefore, do your research before partnering with a shipping service provider.

The two most common shipping service providers are freight forwarders and third-party logistics providers (3PLs). Understanding how they work will help you choose the right service provider to align with your business objectives.

Freight forwarder

Freight forwarders are companies that move goods from your warehouse to your customer. They don’t really handle transportation or supervise drivers, but they actively manage your shipment. In short, they act as a mediator between you and the freight carrier. Freight forwarders often decide the mode of transportation – truck, air, or ocean for optimal order fulfillment.

Shipping carriers are generally expensive, but freight forwarders regularly deal with multiple shipping carriers, so they can get you better deals for your shipments. Freight forwarders have the expertise and in-depth knowledge of how various modes of transportation work. They are familiar with customs, as they often deal with importing and exporting goods.

So, freight forwarders can help you ship your products anywhere in the world.

3PL companies

A 3PL company can do all a freight forwarder can and manage the entire supply chain process. A reputed 3PL company will maintain your products in optimal condition, get you the best possible shipping costs, and ensure the right products reach the right customers when an order is placed. A 3PL company also handles reverse logistics.

Furthermore, a 3PL company allows you to receive orders from every sales channel and fulfill them seamlessly. By outsourcing your logistics to a 3PL company, you can focus on your business growth and customer experience.

 

How can an inventory management system help your business to ship freights to diverse locations seamlessly?

As an ecommerce business owner, you will regularly ship your products to multiple locations, catering to diverse customers. Thus, managing logistics is as crucial as managing inventory for your business. Cin7’s multichannel inventory management system comes with around 700+ business tools like accounting, marketplace, 3PL warehouse, shipping, and more that connect all your orders, inventory, shipping, and workflows. It’s an all-in-one software that allows you to manage inventory, ship and track orders, monitor analytics, and more. Reach out to the Cin7 team for a quick demo now.

How retailers can thrive in tough economic times

Posted on | by chrisqureshi | Leave a Comment on How retailers can thrive in tough economic times

The last few years have been really hard for retailers. Disruptions from the Covid-19 pandemic forced many businesses to slow or halt operations altogether.  Factory shutdowns created a production backlog, with 38.8% of small businesses facing delays from suppliers, according to the US Census Bureau.  At the same time, consumer demand for many products spiked as people panicked about the future, making it difficult for retailers to meet demand.

Today, there are new challenges for retailers. The Russia-Ukraine conflict has destabilized the energy and commodity markets. Labor shortages have made it difficult to find workers, and inflation is at 40 year highs. In fact, in a survey conducted by Small Business for America’s Future (SBAF) 60 percent of 1,576 small business owners said that inflation is their top challenge.

 

What can retailers do to improve their situation?

 1. Improve your inventory management

Inflation makes it expensive to replenish your inventory from suppliers. You need to either raise your budget to get the same level of inventory that you got before the inflationary period, or you must lower your order quantity.

It is important to be strategic about your inventory, as piling up unsold inventory raises storage costs and freezes your working capital.

ABC analysis is a popular inventory classification method that can help you sort your inventory. It helps identify the critical SKUs that generate the majority of revenue for your business.

To learn more about ABC analysis, refer to our detailed guide.

Using your sales data, you  can eliminate underperforming SKUs. You can channel your working capital to acquire the best sellers by removing the bad ones. To ensure that you don’t overstock underperforming products, it is important to always have a clear picture of what is in your inventory.

Cin7 inventory management software offers advanced reporting features that can improve your inventory planning. In addition to inventory tracking, you can gauge the performance of your SKUs and forecast the demand accordingly. With the right data at your fingertips, you can make better decisions around inventory replenishment and avoid overstocking situations.

2. Use inventory management software to leverage multichannel sales

Using specialized inventory management software can be a gamechanger for multichannel sales.

Without inventory management software, you’ll have to manually allocate inventory for your offline and online stores, which can lead to a loss in opportunities. For instance, say you sell smartphones on Amazon, Shopify, and your bricks-and-mortar store. If you have 100 units of iPhone 13 ready to sell, then you have two options:

Option 1: Placing maximum inventory for all channels

In this option, you put the same quantity (100) on the online and offline store. The problem is if you receive 60 orders online and 60 orders offline at the same time, you cannot fulfill all the orders as you have oversold your inventory. You have a total of 100 units, but the ordered quantity is 120.

Option 2: Dividing the inventory
Another option is to divide the inventory across all the channels. You can allocate 33 units for Amazon, 33 units for Shopify, and 34 units for your offline store. In this case, the issue is underselling. If someone wants to place an order of 50 units on Amazon, but you’ve listed only 33 units, you’ll miss out on potential sales despite having inventory in your backend.

An inventory management solution saves you from the trouble of allocating inventory. It syncs your inventory in real-time, so if you receive 60 orders from Amazon, it automatically reduces the available inventory to 40 in Shopify and your offline point-of-sale system.

In addition to multi-channel sales, offering omnichannel support (i.e., unifying the online and offline buying experience) can sweeten the pot. Joe Troyer (CEO of Review Grower) says, “Customers are smoothly switching between online and offline experiences, and they are willing to shop at businesses that can make this transition as simple as possible. In-store research and showrooming, the practice of inspecting a product in-store only to make the buy online, are now more widespread than ever thanks to the development of mobile retail.

By incorporating real-time feedback across channels and devices and engaging the customer wherever they may be, they may use the right customer data to build an omnichannel customer experience that enables consumers to participate whenever and however they choose.”

3. Learn from competitors

You should carefully monitor the actions of your close competitors. Ask:

  • What are my competitors doing to attract more customers?
  • Are they making any changes in their pricing strategies?
  • Are they offering any discounts or bundling products to offer more value?
  • How are they promoting their business across various channels to attract new customers?

The insights you collect will help you in determining the price changes in the market so that you can maintain price parity.

For those who are pondering over offering products much cheaper than the competition, with the intent of attracting their customers — this can backfire. For instance, low pricing might signal that your quality is inferior to your competitors (tarnishing your brand image). Additionally, increasing your sales volume by reducing prices doesn’t necessarily lead to higher profits when there is inflation.

4. Outsource fulfillment to 3PL

Being strategic in what you outsource can be of immense help in reducing your operational costs and freeing up working capital. You should focus on cutting costs without sacrificing the product’s quality.

Third-party logistics (3PL) providers are businesses that take care of an organization’s supply chain and logistical operations. 3PL providers can offer a lot of fulfillment services such as

  • Warehousing,
  • Shipping and receiving,
  • Order picking and packing, and
  • Returns management.

If you do all this on your own, you will incur the hassle of setting up your warehouse, hiring and training employees to fulfill the orders efficiently, managing payroll, and maintaining the warehouse. Outsourcing this to a 3PL can help you save money. Additionally, as they specialize in fulfillment, you can expect a lower error rate in shipping orders.

Altogether you get better efficiency and professional experience while saving you time and resources.

Speaking of logistics, Amazon has made it a norm for customers to expect free shipping. However, offering free shipping at this time can put you in a very tough spot. Here is a suggestion from Anders Ekman (COO at Ingrid delivery platform):

“Interestingly, there is a “sweet spot” where paying for delivery might mean selling fewer products, but still earning more. It turns out that free shipping is not always the best solution for every e-retailer after all.

To give you an example, one of our customers at Ingrid started experimenting with paid delivery options instead of offering free shipping for all orders. Once they began to charge 10 SEK more for the delivery, the conversion decreased by 2.5% but the value of an average shopping cart increased by 4.2%. At the end of the day, revenue from deliveries alone increased by 11% and the profit margin increased by 5.5%.

If you’re still skeptical, you can start small – A/B test your delivery checkout alternatives, and offer different delivery options and prices based on what margin you have on the product (for example, a high-profit margin item should have a lower delivery cost and vice versa). Whatever you decide, don’t be afraid to start charging customers for deliveries. Experiment with your delivery strategy and different software integration – the results might truly surprise you, despite the current economic climate.”

5. Revamp your pricing and promotional strategy

High inflation also strikes your supply chain partners, and they are likely to offset the “extra” expenses upon you. For instance, if you use a fulfillment partner to deliver your products, rising fuel prices could force them to raise their fees and increase your expenses. You need a strategy for pricing because drastic price changes can negatively impact your sales.

Here’s what Lou Haverty (CFA and founder of Enhanced Leisure) recommends: “Retailers feel a pinch on both sides. Retailers face higher costs sourcing their products, but face slowing consumer demand. They can either lose margin or risk lower customer sales if they raise prices.

Their best option is to reduce product quantity instead of price. Keep the price the same, but slowly reduce the quantity sold at a given price point. This creates the least amount of negative customer feedback.”

Rethinking the product assortment is also crucial for maintaining healthy sales. “Due to rising prices, customers are less likely to stick with a single brand and are instead purchasing private-label items.

Retailers may take advantage of this by revising their category strategy frequently. Product-specific inflationary pressures and quickly altering customer preferences must be balanced by winning retailers. For example, their balance of private and national brands might be reconsidered.” says Sina Will (Marketing manager at Foxbackdrop). You can also bundle your low sellers with best sellers to clear off your inventory and offer a better value to the customers.

At tough times like this, you need your loyal customers more than ever. Here are some tips by Amar Vig (MD at London-fs) to build customer loyalty, “Remember that most customers also serve others in their day jobs, so when they are behind the counter, they want to feel significant.

Promotions and freebies can undoubtedly help customers feel special, but personalization is the actual secret to a truly memorable experience.

Retailers can increase customer loyalty by getting to know their clients through their prior purchases and hobbies. These conclusions can be drawn from statistics or even from a straightforward chat. Which of these approaches is most practical will undoubtedly depend on the size of the company, but no company should be too big to have a casual chat with a regular client.

The customer’s preferred form of communication may be used to give customized content and offers that anticipate their desires and requirements and direct them down the sales funnel toward their next purchase. Even a personalized email subject line can make all the difference.”

6. Leverage working capital

You need a consistent cash flow to combat inflation. If your expenses exceed the income generated, you have a negative cash flow. Conversely, if you’re making more cash than paying – you are cash flow positive.

The benefit of having liquidity can’t be overstated. Thanks to consistent cash flow, you can continue running your operations as usual. You’ll be able to pay your staff on time, boosting their morale and productivity. Moreover, you can avoid out-of-stock situations by having enough money to buy more inventory.

If you’re running an offline store, then negotiating better rental terms with the landlord can help alleviate the monthly overhead. Leveraging your bargaining power can also help in saving some working capital. “While small retailers don’t exert the same sort of control as big retailers, there are still ways to reorient your supply and distribution networks for cost and distance efficiencies, even if it means saying goodbye to some old suppliers and making friends with new ones,” says Alice Li (Founder of First Day).

In case your retail store isn’t able to generate enough consistent cash flow, you can resort to retail borrowing solutions. You can get a business line of credit to get some relief. Finding a suitable financing option can help your retail business to cover up for the extra expenses led by inflation.

7.Refine the buying experience at your retail store

To survive, retailers need to find ways to deliver better value to the customers. The rise in online shopping has made competing tough for some traditional brick-and-mortar retailers.

Brandon Wilkes (marketing manager at The Big Phone Store) highlights the importance of cleanliness, “The pandemic has highlighted the importance of health and safety, and this is likely to be a key consideration for consumers in the future. Retailers will need to ensure that their stores are clean and safe, and that their products are sourced from reputable suppliers. They will also need to be transparent about their health and safety policies and procedures.”

“Brick-and-mortar retailers can use their physical locations to create unique customer experiences that cannot be replicated online. In addition, retailers can focus on providing personalized service and developing relationships with their customers. By doing so, they can create a loyal customer base that will continue to support them in the future.” says James Jason (founder of Notta.ai).

To deliver a stellar buying experience, you need to listen to them. In the words of Bill Glaser (CEO of Outstanding Foods), “Retailers can also improve customer retention (guaranteeing profitability) by innovating according to customer feedback. Small businesses have the unique advantage of adjusting quickly to changing consumer demands. Your business can survive and thrive during economic downturns if you hone in on customer needs.”

Irrespective of the experience that you deliver at the offline store, there are still some strong merits of having an online store. For starters, you can reach out to more people than in your local vicinity. Even the operational costs of scaling are marginally lower than an offline store. Thus, instead of competing with online stores, it’s wise to also complement your offline store with an online store. Cin7 can help with that.

8. Make product returns a win-win situation for consumers and you

At a time when consumers are thinking carefully about their purchase decisions, you should do everything possible to mitigate their purchase risks. Allowing product returns is one such tactic that you can use for risk-reversal.

However, stores must weigh the cost of receiving returns. For starters, it increases storage costs, and you don’t want to pile up excess inventory that doesn’t get sold. In this regard, Gary C. Smith (President of NAEIR) says, “Returned products are a headache. They need to be inspected and repackaged, which takes valuable time. Plus, the retailer is taking a chance that the product won’t go out of style or expire before it can be resold. It’s unlikely most returns can be resold at full price, so even brand-new merchandise can end up at a liquidation warehouse or in the trash heap.

Rather than trashing merchandise or selling to a liquidation warehouse, where brand identity can be at risk, retailers have another option: Making in-kind donations to a nonprofit. The resulting tax break may be quite handsome, and it may even be more financially beneficial than reselling the merchandise at a cut-rate price.”

9. Use an inventory forecasting tool

In normal circumstances, retailers can accurately forecast product demand. However, with an inflationary environment, the market is volatile, so forecasting demand can become… demanding.

Incorrect inventory forecasting leads to situations like understocking or overstocking, both of which aren’t desirable for any retailer. Read our inventory planning guide to learn best practices to improve your forecasting. 

If you’re looking for a sophisticated software solution for inventory forecasting, you should check out StockTrim. Based on the demand levels and your supplier’s lead time, you can get details about the quantity that you should order to ensure that you don’t face stockouts. You can also analyze the current demand trends from StrockTrim. With the tool, you can even predict the demand for new products (without any sales history).

In addition to all this, Stocktrim perfectly integrates with Cin7

 

Way Ahead

Navigating economic challenges is part of the business of retail. Successful navigation is made easier with the right tools. Cin7’s inventory management tools offers real-time inventory visibility, advanced reporting features, and multi-channel sales management to give you better insights and improve your operations. Book a demo with our experts today.

Complete guide to expedited shipping

Posted on | by chrisqureshi | Leave a Comment on Complete guide to expedited shipping

Your customers hate waiting to receive their products. According to a study by Oracle retail, 13% of them won’t buy from you again if you don’t deliver on time.

Offering expedited shipping can help you meet your customers’ expectations and increase your profitability.

 

What is expedited shipping?

Expedited shipping is performed to deliver orders faster than the regular shipping time. For instance, if your standard shipping time is a week, then using expedited shipping would ensure that consumers receive the product in two days.

Expedited shipping allows you to serve time-sensitive customers, many of whom don’t mind paying a premium to receive their shipments as fast as possible.

 

How fast is expedited shipping?

The exact turnaround time for shipments varies based on factors such as the size and weight of the products and the location of the customer. It’s possible that your standard shipping time could be equivalent to another seller’s expedited shipping.

Let’s look at different shipping options and compare them with expedited shipping.

Standard shipping vs expedited shipping

Cost-wise, standard shipping is cheaper than expedited shipping. That’s why standard shipping is often incentivized with free shipping.

Standard shipping is best for orders that aren’t urgent, whereas expedited shipping is ideal for situations where you need goods faster. Pharmaceutical supplies, seasonal products, and perishable items such as frozen food are suitable for expedited shipping.

Express shipping vs expedited shipping

Express shipping can be used to deliver items on the same day of ordering or the next day. Expedited shipping is simply quicker than the standard shipping delivery time. That can be within three days or the same day as well. If a seller offers both express and expedited shipping, the express shipping option is generally faster.

 

Benefits of offering expedited shipping

#1 Meets customers’ expectations

There is a rising trend of customers preferring faster shipping. Infact, a survey by MetaPack found that speed of delivery is a top priority for 26.6% of respondents. Another survey found that 77% of consumers are more likely to make the purchase if the delivery time is two days or less.

Your potential customers will likely opt for your competitors if they have faster shipping options. Therefore, offering a faster delivery option can provide you with a competitive advantage and help you build brand loyalty. Partnering with a third-party logistics (3PL) company can help with strategic warehousing so that there’s less distance between the warehouse and the customer. In addition to choosing a fast shipping provider, a lesser distance to travel can be another crucial component in executing expedited delivery.

#2 Minimizes cart abandonment

In the 2016 State of Ecommerce Delivery Report by MetaPack, 39% of the respondents admitted to abandoning their cart if the delivery option they wanted was not available. By offering expedited delivery, you can prevent cart abandonment issues and boost your sales.

#3 Retains customers

Consumer satisfaction is essential for repeat purchases. By meeting their expectations about faster delivery, customers will not just buy more from you but also generate positive word of mouth, increasing your profitability.

#4 Ensures delivery of fresh items

Perishable items like fruits, frozen food, and dairy products face the risk of getting spoilt over time. Shipping them using expedited delivery can ensure that your customers receive fresh items.

#5 Reduces loss or theft

During standard shipping, products often need to stop at various points, which increases the risk of transit damage as well as theft. Through expedited shipping, the packages stop at fewer locations, reducing the odds of cargo loss.

 

Challenges associated with expedited shipping

There are some drawbacks to expedited shipping.

#1 Higher cost

Around 80% of people preferred to buy from Amazon in 2020 because of their free and fast shipping. Amazon also offers free same-day or two-day delivery with its prime membership.
To remain competitive, you may want to offer expedited shipping. However, expedited shipping costs more than standard shipping, and most retailers don’t have deep enough pockets to offer expedited shipping services for free.

To deal with this, you can often pass on the higher shipping costs to your customers. This way, customers who want fast shipping pay a premium for the benefits. You can also add a minimum cart value to make the order eligible for expedited shipping.

#2 Limited availability

Expedited shipping isn’t offered by all delivery companies. You may need to change your existing delivery partners if they don’t offer expedited shipping.

 

How does your inventory management speed up your shipping?

There’s no magic spell that can miraculously help in teleporting your products. Instead, optimizing your fulfillment process and using effective inventory management can smooth operations and make expedited shipping easier.

Cin7 can help you in this. With Cin7, you can optimize your warehouse’s picking and packing processes, and the software integrates with shipping software, such as Shipstation, so you can expedite delivery.

If getting your products to your customers quickly is a priority for your business, book a call with our experts, to learn more about how Cin7 can help with shipping.

7 Common mistakes wholesalers and distributors make

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Business models such as ecommerce and direct-to-consumer (DTC) are giving a tough time to wholesalers as well as retailers. You may already be struggling with razor-thin margins, and during such situations committing mistakes can cost you dearly. You need to be on top of your game.

This article will share some common mistakes that wholesalers and distributors make while running the business. Understanding these mistakes is a stepping stone to avoiding them.

 

Some common mistakes that wholesalers and distributors make

1. Using outdated methods

It’s surprising to think about how many businesses still rely on manual approaches, like using pen and paper to manage their businesses. Although pen and paper do have their own merit, for starters, they don’t need any electricity to run. However, papers can be easily misplaced or stolen, which you don’t want. Storing them can be a headache too as it will take significant space in your office premises. Plus, it’s not convenient to share them with your business partners.

While some people have migrated to digital forms like spreadsheets, it’s not enough to be successful today. Spreadsheets can get really messy, and you’ll have to spend a considerable amount of time updating them regularly. Plus, it’ll take digital storage space, which is risky if your storage drive gets corrupt.

The best solution is to use a cloud-based inventory management solution. The data gets updated in real-time, so you get accurate visibility over your inventory. As the data is securely stored in the cloud, there’s no risk of losing it.

 

2. Sales representatives lacking information and resources

Sales is the primary revenue generating activity for your wholesaling business. Your sales representatives are entrusted with the responsibility to drive sales, and thus, they must be equipped with all the right tools and knowledge. They need to have full visibility over your inventory and should be well versed with your product and promotional information.

It’s best to also acquaint them with your business process so that they can confidently answer queries about delivery time and product returns. Failing to do this will affect your customer service, and you’ll lose out on loyal customers.

You can leverage Cin7’s inventory management solution to empower your sales team. They can easily get data about your customers, suppliers, and all necessary product-related information. The features of Cin7 aren’t just limited to inventory management. You can also use it to streamline your sales quoting process. Cin7 allows you to offer accurate quotes/prices to your B2B customers and also set the payment terms. On top of that, you can receive payments and generate invoices.

Cin7 is your one-stop solution for managing your sales and inventory.

 

3. Inadequate customer management

Customers can make or break your wholesaling business. You need to ensure that you manage them well and satisfy their expectations so that they continue doing business with you. It is necessary to take their feedback about their experiences with your service, and you should improve accordingly.

You should be fair in your treatment of your business customers irrespective of the revenue that they generate. On top of that, you should also regularly communicate with your customers. Thanks to digitalization, this process is easier than it has ever been. You can use email sequences to broadcast information to your customers so that they feel informed and valued. You can also segment your customer base and then target them effectively with specific messaging in emails.

 

4. Monitoring stock levels

Being a wholesaler, you deal in large volumes of stock. It can be challenging to monitor your stock levels when you’re dealing with multiple buyers and deliveries being made daily. But you can’t afford to lose track of inventory as poor inventory management can lead to situations such as understocking and overstocking (both being undesirable).

You need clear visibility about when the items enter and exit your warehouse. This way, you’ll be able to track and share inventory updates with your customers. Cin7 can help you with inventory control as you get real-time visibility over your inventory in the warehouse. This would help in optimizing your processes to ensure a smooth workflow.

 

5. Ignoring business relationships

In the race to raise your profits, you shouldn’t overlook business relationships. Relationships are necessary, especially in the B2B arrangement that you deal with. Positive experience with customers can lead to more business opportunities as they can endorse you to their business partners. This is the key to long-term success.

Better relationships will ensure that your customers stick even through market fluctuations. Do your best to build these relationships by offering great customer service, making transactions convenient, and fulfilling orders quickly. Good relationships can also help in better negotiation with the suppliers so that you can lower your costs.

 

6. Not monitoring the cash flow

Healthy cash flow is the fuel for your business. Offering credit to your customers can help with increasing your sales. However, overextending the credit is risky for your business as it can lead to defaults.

You should thrive to proactively remind your customers about their payables and you should make it easier and more convenient for them to pay their invoices.

Cin7 can generate sales reports using which you can not only gauge the financial health of your business but can also ascertain your inventory’s performance. To sweeten the pot, we have integration with several accounting softwares such as Xero and Quickbooks.

 

7. Not following up with your customers

The relationship between you and the customers shouldn’t end after finalizing the sale. You need to nurture them so that you make repeat purchases.

You should follow up with your customers after they receive their offerings to check whether everything happened as per their expectations or not. You can send a follow-up email after the product is delivered.

 

Conclusion

Avoiding these common mistakes will help you improve your business practices. As you look for solutions to some common mistakes, consider new software, like Cin7’s inventory management, as part of your solution.

Book a demo now.

How to execute a year-end inventory count

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Whether you’re running an auto body shop, a law firm, or a retail store, doing a year-end inventory count helps your business close the books on the past 12 months and organize yourself for the year ahead. In fact, the year-end inventory count is necessary for successful inventory management throughout the year. It allows you to clean up records and gives your business verified data to analyze.

Since retailers have a lot of inventory to manage, counting inventory correctly is crucial and allows you to make informed buying decisions later. Learn how to execute a year-end inventory count and how your annual count can help forecast demand for the year ahead in this article.

 

What is a year-end inventory count?

A year-end inventory count is a physical count of all the inventory on hand at the end of the year. The count is performed to verify that the physical inventory matches the numbers in your inventory management system.

A year-end inventory count is different from an inventory cycle count, which audits a smaller portion of inventory. While a cycle count allows you to monitor your inventory by sampling your inventory throughout the year, a year-end inventory is a physical count of everything you have on hand at one given point in time.

 

How do you conduct a year-end inventory count?

These are the steps that you need to follow for inventory counting:

  • First and foremost, you need to plan the day for conducting inventory count. It’s crucial to pause your warehousing operations while you do perform the counting so that you get an accurate snapshot of your inventory. You should plan a day that causes minimal impact on pausing the operations.
  • Once you finalize the date, you should form the team who will perform the stock counting. It is important to train them about your counting process and acquaint them with the warehouse’s premises. Dry runs can be organized a few days before the actual counting day.
  • You should also prepare your warehouse for the stock counting process. It should be thoroughly cleaned, and steps should be taken to ensure that there’s no scattered inventory. If there are boxes lying around the warehouse, it will slow down the workers who are counting.
  • The warehouse should be organized, and the areas (count zones) should be divided amongst the counting team so that everyone knows their responsibilities.
  • It’s crucial to equip your team with the right tools for counting. For manual counting, you can use counting tags. If you are using tags, then it’s best to let your team work in pairs so that one person can count the inventory while the other can note the values in the counting tag and stick it near the inventory. It’s best to get the counting tags signed by the respective team as it gives you clarity about the person associated with counting for a specific section.
  • To cross-check the accuracy of the counting, you can personally examine the areas to cross-verify the values mentioned in the counting tags. Otherwise, you can allocate members from other teams to cross-check the tag values. Cross-checking is crucial to get an accurate representation of your inventory. In case your inventory is also stored at other locations, you should coordinate to get the accurate values from those locations as well.
  • Performing inventory counts using manual sheets and counting tags can be time-consuming and prone to human errors. Using an inventory management software like Cin7 can be of great help. Instead of using tags and sheets, you can use barcode scanners to scan the inventories on the shelves. The software reconciles the inventory values with the ones already present in the system. This way, you can easily gauge the discrepancies in the inventory that’s physically present with you.

 

Why do year-end inventory count?

The year-end inventory count is essential because it ensures the stock you have on your shelves matches your records. By getting an exact look at your inventory, you can comply with tax requirements, manage corporate audits, and offer accurate data to your accounting team.

Once you complete your inventory count, you’ll have the data you need to complete an annual financial analysis. You also get the data you need to detect inventory shrinkage and forecast how much inventory you’ll need in the year ahead. On top of that, you get the chance to get inventory organized for the new year.

Knowing your year-end inventory allows you to

  • Get a better understanding of what products you have.
  • Hold accurate inventory records for accounting purposes.
  • Gain insight into products that don’t sell well that you shouldn’t order in the future.
  • Understand which products require a new selling strategy.
  • Know the demand and profitability for expansion consideration.
  • Consider adjusting periodic automatic replenishment (PAR) levels for top-selling products.
  • Determine the cost of goods sold and total net income.
  • Make business decisions based on data instead of intuition.
  • Analyze pricing strategy and identify room for improvement.

 

Does your business have inventory shrinkage?

Inventory shrinkage occurs when there’s less physical inventory than what’s listed in your inventory records. Shrinkage occurs due to human error, damaged stock, vendor shortages, lost inventory, or stolen inventory. It can drastically affect profits and is a problem that always needs to be investigated further. Businesses usually uncover inventory shrinkage as they do their year-end inventory counts.

How to handle inventory shrinkage

If you uncover inventory shrinkage during your year-end inventory count, your team should look for more information about what happened. If you are using inventory management software, you can examine past inventory records to determine if there are any trends that need investigation. Significant, widespread shrinkage can indicate theft or fraud, while one-off mistakes tend to reveal clerical errors. Damaged goods are self-explanatory.

Once you uncover and investigate the cause of inventory shrinkage, you can put guardrails on processes to prevent further loss. Some common preventive measures include:

  • Tightening security where inventory is stored.
  • Installing cameras or locking up high-value items.
  • Training employees about proper inventory counting.
  • Allowing only trained employees to accept and inspect new inventory.
  • Reviewing daily transactions on inventory apps.
  • Verifying purchase orders, invoices, and delivery slips when new inventory arrives.
  • Checking inventory shrinkage via cycle counts.

Discovering inventory shrinkage isn’t fun — but it’s a wake-up call for many businesses.

 

What if you have too much inventory?

Once you complete your year-end inventory, you might realize that you have more physical inventory than expected. If you have a lot more inventory than you need or want, you may have to figure out how to deal with the surplus. The first step is to determine if the excess inventory is still good to sell. Then you can adjust plans, orders, and budgets accordingly.

Once you figure out what your business needs for the year ahead, it’s time to get creative. What kind of promotions or sales can you have? What items should be sold at a discount? There may also be items in your inventory that can be repurposed or donated. If you donate excess inventory, talk to your accountant about writing them off for tax purposes.

Finally, you should talk with a liquidator about buying excess inventory. It may not be very profitable, but you can cut losses, clear up space, and move on.

 

Using year-end inventory to predict next year’s demand

One of the best reasons for conducting year-end inventory counts is to understand how your business used (or didn’t use) items over the past 12 months. A detailed snapshot of available inventory helps your business forecast demand for the year ahead.

By reviewing what hasn’t sold, you can plan sales, promotions, and marketing campaigns. These strategies can help you move old inventory and lets you focus on restocking only what your customers want.

 

Cin7’s inventory management software simplifies inventory counts

Cin7 inventory management software allows your business to track inventory using modern technology and powerful automation features. Cin7 is the best choice for inventory management software because it helps save you time, money, and stress. When you switch to Cin7, you’ll be able to:

  • Access your data at any time and place.
  • Set it up quickly, easily, and to your liking.
  • Use ready-to-scan barcodes with your phone’s camera.
  • Customize and allow access to teams, vendors, and suppliers.
  • Generate custom barcodes for unlabeled stock.
  • Create data-rich, shareable reports to help you understand inventory.
  • Get alerts when you’re running low on a product, if it’s expiring, or approaching warranty.
  • Create product histories to answer who, what, and when details.

Ready to see how our inventory software makes your year-end inventory count easier? Book your Demo now.

How consumerization in B2B is driving growth in sales

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In today’s crowded space, businesses are doing what they can to grab and keep their customer’s attention. As a result, marketing has gotten much more personal. This trend began with B2C companies creating personalized, relatable content for their audiences, and is known as consumerization.

However, a popular myth associated with consumerization is that it only applies to B2C companies. This simply isn’t true. Consumerization is visible today in the marketing strategies of most B2B companies as well.

In this blog, we’ll try to understand the phenomenon of B2B consumerization and how it impacts sales.

 

What is B2B consumerization?

In simple words, B2B consumerization is the result of companies using more technology to engage with their clients. As in the B2C space, where consumers expect to be able to immediately access information and purchase products through digital means, B2B buyers now expect such options from the companies they do business with.

The shift towards B2B ecommerce is widespread. According to 2020 Gartner research, 80% of total B2B sales interactions will be digital by the year 2025. What’s in it for the B2B Sellers?

Makes sales more efficient

Any B2B marketer will tell you that, conventionally, B2B sales have relied heavily on personal relationships with clients. The biggest investment is the time put in to close a sale.

However, with digital products, companies are able to save their sales teams valuable time. By developing deeper insights into the targeted audience’s behavior before approaching the sale, sales teams can curate personalized sales strategies and offerings for their potential clients. This makes it easier to close more deals faster.

Leverage multiple access points

An access point, or a customer touchpoint, is any point through which the customer comes in contact with your brand. That includes radio ads, pay-per-click (PPC) banners, or elevator pitches.

Today, your business most likely interacts with your target audience using multiple touchpoints. Some of the most commonly used channels for B2B marketing are:

  • Blogs/articles,
  • Emails and newsletters,
  • Push notifications,
  • Digital and conventional advertising, and
  • Social media.

Using multichannel selling, your clients become familiar with your products or services while you have the opportunity to directly interact with potential customers.

Naturally, you’ll  want to reach your target market using as many touchpoints as possible. By collecting data from your customers, and with a bit of computing prowess, you can monitor and predict how your target market will react to your products or services.

 

And the result?

A much more efficient sales strategy with higher sales numbers. If you wish to scale your B2B business, try Cin7. Cin7 not only makes it effortless to manage your B2B orders but also helps in creating an online B2B store. Use it to showcase your product portfolio and boost your sales. Cin7 also comes with built-in inventory management features, so you efficiently manage your stock and prevent stockouts.

To learn more about how Cin7 can help in boosting your B2B business, book a demo with our experts.

Global DTC brands are opening more physical stores – here’s why

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This is a guest blog post written by Cin7 partner, Marsello. Learn more about our partner program.

Content Summary

Multi-national, globally-renowned Direct-to-Consumer (DTC) brands are adapting to growing online competition. The cost of acquiring a customer online is increasingly expensive as brands compete for ad placement. In this article, we’ll dive into why this means it’s more important than ever to build customer relationships and collect customer data.

Across America, the death of the mall has been widely reported, with the pandemic touted to be the final nail in the coffin.

But at the same time, multi-national, globally-renowned DTC brands are opening bricks-and-mortar stores left, right, and center. Both Warby Parker and Allbirds, DTC giants, have plans to expand their physical presence to boost profits, and others are following suit.

Why are we seeing a return to bricks-and-mortar?

1. Digital advertising is no longer cheap.

When e-commerce was in its infancy, digital marketing and advertising were cheap, and getting good digital ‘real estate’ was much less competitive. At this point, it made complete sense to downsize your physical presence—why pay rent when you could spend that money on digital ads and make 10x or even 100x the sales?

But as a majority of retailers filled the online space, it became harder and more expensive to stand out from the crowd, and returns on ad spend diminished.

What’s more, digital ads become even more expensive as you scale. So much so, that it will eventually make more sense for a growing business to pay rent and get foot traffic than add that spend to a digital ad account.

“No digitally native brand has achieved a billion dollars in annual revenue without a store. You need those stores as a cost-effective customer acquisition channel at some point.”

—Jason Goldberg, chief commerce strategy officer, Publicis

In another interesting effect, a study by the International Council of Shopping Centres (ICSC) found that when a retailer opens a new physical store, web traffic coming from that geographical market increases by an average of 37%. So not only does a physical store increase foot traffic, it also increases online traffic—and thus, online sales.

Bricks-and-mortar and e-commerce are no longer competing go-to-market strategies, they’re complementary channels. The “bricks-and-mortar is the past and online is the future” mindset is simply outdated. But at the same time, retailers who take an old-school approach to bricks-and-mortar will struggle.

2. We’re people, not robots.

As much as technology augments our lives, it cannot and will not replace our need for in-person interaction, at least not for a long time yet. The pandemic was a testament to this. Sure, we have the technology to work, shop, and socialize remotely, but we simply don’t want to live our whole lives on a screen (at least, not yet).

Workplaces are trying to attract people back to the office to increase morale and build back up that buzzing workplace atmosphere that has been lost to the waves of WiFi. And though we’re still on shaky ground, it’s clear that people have no desire to be holed up in their houses forever.

Getting out and about to wander the streets, browse shops, get coffee with friends, go out for dinner… it’s part of who we are. But when  we’re out shopping, we’re looking for that missing piece; the experience we don’t get when we’re online.

We are more discerning about in-store shopping experience than ever before, so retailers are using their physical stores as an opportunity to build community and create a deeper connection between customers and their brand.

Retailers are also realizing that their physical stores act as much as showrooms as points of sale. Consumers can go in and get a hyper-personalized experience: they can talk to an employee, browse the store, try on clothes or compare products in the flesh, and get authentic, in-person feedback.

While large multi-national retailers have the budget for extensive customer research, independent retailers still have the edge on customer experience.

Owner-operators are often behind the till, and staff are there because they are passionate about the products they sell. Where customers shopping at large retail chains will rarely connect with the same person twice, independent retailers know their regulars by name.

The experience that is delivered by independent retailers is the kind of personalization big box retailers strive for, and spend millions of dollars trying to recreate.

Apple’s Genius Bar is designed to bring customers into a ‘club’ and connect them with employees in person—all part of Apple’s exclusive, high-touch customer experience. Image source: Macworld

3. Better cross-channel data is more accessible.

A savvy retailer knows that e-commerce and bricks-and-mortar work in tandem. The experience must be seamless between the two.

A good in-store experience can lead to social follows, email sign-ups, website traffic—and more sales. A good online experience can likewise drive foot traffic, as people come to browse your store for inspiration, speak to a passionate expert, try in-store before they buy, or take advantage of click-and-collect convenience.

But an even savvier retailer collects customer data both in-store and online, so they can more accurately attribute all sales to their marketing channels and activities.

Let’s look at some examples of common frustrations.

  • EXAMPLE 1:
    You’re a fashion retailer. You send an email out to your customer database promoting this season’s new collection. While you see some direct sales on the online store, you’re not sure how many people shopping in-store have come in because they saw the email.
  • EXAMPLE 2:
    You’re an independent jewelry retailer, with a large following on Instagram. Some of your social media followers liked a post about a new necklace. Later that week, they come in-store and buy the necklace, but you can’t know that they saw the post, so you assume your social media isn’t very good at driving sales.

What if you could get visibility over which channels drove sales in each of these examples? What if you had the data to know when an in-store sale was generated by an email or even a social media post?

Integrated data is one of the most powerful tools an omnichannel retailer can possess. It’s simple. When you know what works, you can do more of it.

Brands who succeed in the new world of bricks-and-mortar…

✔ Build customer relationships.

First and foremost, you need to know who your customers are. Collect customer details at every possible opportunity—through promotions, at POS, from QR codes in marketing or at events or launches, through a loyalty program, et cetera. Learn from them—understand who your core customer is, and what messages they resonate with. Then, build genuine connections and grow with them. Engage with them on social media, greet them in-store, send your top customers access codes to pre-release products.

✔ Build an authentic brand experience.

Stay true to your brand’s vision, mission, and values. Live and breathe them. Hire people who believe in what you do, and who share your values too. If you have a purpose or desire to make an impact on the world, be loud about it. Get really creative, build an in-store experience around what your brand stands for, then use your digital channels as a ‘window’ through which to showcase the in-store experience.

✔ Do smarter marketing.

Know where your in-store sales are coming from, and which channels and activities get the best results. It can be difficult to know what the sales impact of opening a new store is, so be data-driven and methodical as best you can. That’s not to say you shouldn’t do something unexpected—like a big PR stunt—but track it. Connect your POS, marketing, inventory, and e-commerce data. Test, measure, rinse and repeat.

Cin7 + Marsello

Powered by Cin7 and your e-commerce data, Marsello works seamlessly in-store and online to provide a true omnichannel customer experience.

  • Capture in-store and online customer details
  • Deliver personalized and timely automated marketing
  • Incentivize repeat purchases with email, SMS, a loyalty program, and more
  • Grow your average basket size with advanced product recommendations
  • Accurately track and attribute sales to your marketing activity

Book a demo with Marsello

Effective inventory management: The secret to Black Friday success

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Black Friday, Small Business Saturday, and Cyber Monday traditionally kick off the holiday shopping season. Large and small businesses often prepare for months to capitalize on shoppers looking for deals on these days.

Any glitches, such as not having enough inventory or problems with shipping and delivery, can lead to substantial reductions in profit.

Automated inventory management can ensure the entire sales cycle is managed well throughout the holiday shopping season. And the bonus? When customers have a good experience, they become returning customers.

This blog discusses how a seamless supply chain impacts online merchants and suggests inventory management tips for your upcoming holiday season.

 

Inventory management and supply chain for online merchants

In retail, the supply chain is defined as the process from order inventory to product delivery. Supply chain management consists of manufacturing, fulfillment, storage, and shipping. If any part of the process weakens, sales are negatively affected.

Merchants selling products online must plan for issues that could come up this holiday season.

 

Tips to manage your supply chain and inventory this holiday season

Choose the best suppliers

Online merchants usually work with international suppliers as a cost-saving measure. It’s better to work with domestic suppliers as you can:

  • Prevent customs delays and cross-border shipping.
  • Avoid unexpected new tariffs.
  • Replenish stock quickly and easily.

If you still work with international suppliers for your business, diversify your suppliers. By ordering from suppliers in several countries, you have a backup if there are problems with delivery from one country.

Plan the fulfillment process

If you are a merchant with a large volume of inventory, you can send it directly to a third-party logistics (3PL) provider. The 3PL company can handle fulfillment and shipping on your behalf and let you focus on what you do best: ecommerce strategy and marketing.

You must think carefully while choosing warehouses whether or not you work with a 3PL service. Use a warehouse close to the suppliers and begin ordering inventory early. By planning ahead with time, you will give the warehouse staff enough margin to organize and categorize the products correctly.

Merchants with unused brick-and-mortar stores should consider using the space as a warehouse. Using your own space as a warehouse gives you an excellent visual idea of how quickly your stock sells. It helps you decide which products to push with holiday sales. Thus, you can save money on external services and have more control over stock management.

Another popular holiday season shopping method is buy online, pick up in-store (BOPIS). This method became popular during the Covid-19 pandemic. These click and collect options remove complications related to shipping and let you enhance the customer service you can offer. If you look to implement store pick up this season, ensure your customers know how it works by including instructions on your site’s checkout page.

Talk to supply chain partners early

Your partners in the supply chain are your suppliers and manufacturers. You all must work and succeed together, so take the time to discuss order volume and develop a process that works for everyone.

Contact your suppliers as soon as possible to work out potential issues in the supply chain. The earlier you begin, the more you can anticipate and head off any problems. When discussing the order volume of the inventory, be specific and tell suppliers exactly how much you expect. If they flag any potential holiday supply issues, adjust the product range or diversity accordingly.

Keep in touch with 3PL companies regularly for likely changes as well. They could have staff shortages or a lack of drivers, delivery restrictions, or warehouse closures. Integrated warehouse management software can help you head off fulfillment issues.

Price your products strategically

After deciding on inventory value, vary product prices to control stock levels. Lowering the rates of well-stocked products means you can sell more. Raising the prices of items you have less of may reduce the number you sell.

Adjusting prices is all about finding the sweet spot to meet your inventory goals while maintaining your brand image. The rule of thumb is to keep pricing consistent. Making your products too cheap or too expensive can confuse the customers.

If you look to position yourself as a luxury brand, increase the prices and do a cost-benefit analysis to see what is more beneficial for your company. Lower prices on the products can shift more inventory, but higher prices return better profits and prevent you from running out of stock quickly.

One alternative to amending the products’ prices is to give discount coupons. You can shift the discounts to emphasize different products across your holiday sales season based on inventory levels.

 

Conclusion

Black Friday and other holiday sales events are so much more than placing a few ads and expecting high sales volumes. From a business perspective, they’re more about effective inventory management and best fulfillment practices.

Optimizing warehouse operations for accuracy and speed should be a top priority for any business during the holiday season.

That’s what Cin7 inventory management software is all about.

If your business sells hundreds or thousands of products towards the end of the year, you need an inventory management software with forecasting tools from a reputed company like Cin7. The Cin7 team will be more than happy to help you with your inventory management solution decisions.

Book your demo today!