Retail fulfillment is a niche area of logistics that is intricate, complex and more difficult than DTC (direct-to-consumer) fulfillment. Sending products to retailers requires a higher level of quality control, timing, accuracy, and attention to detail.
Because retail fulfillment can be complex and challenging, it’s important to partner with a 3PL who has the experience to meet the demands of each individual retailer.
If you are vetting a new 3PL or looking to work with your existing fulfillment partner to send products to retail stores, make sure your provider has the services listed in this article, at minimum. These are the core needs to complete retail fulfillment, your products or retailers may need specialty services on top of these.
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EDI Support
All retailers communicate in different ways. Many big box stores use a very specific type of digital document exchange called EDI which stands for electronic data interchange.
EDI is a system for communication between retailers and merchants (and fulfillment providers, or other supply chain partners). It allows all parties to process and exchange documents and transactions. For example, EDI is the manner in which a retailer can submit a purchase order to the merchant, and the fulfillment provider can also see the transaction to prepare and process the orders.
A 3PL that doesn’t have EDI support will limit the types of retailers you can contract with. Independent shops may not use EDI, but Target, Walmart, Best Buy, and other big stores require it.
Dropshipping
Dropshipping is an order fulfillment strategy where the retailer does not keep products in inventory, rather they rely on wholesalers or manufacturers to ship orders directly to customers. If you sign a contract with a retailer and they want to use a dropshipping strategy, you must first figure out if your fulfillment provider can support that.
While dropshipping has many advantages, it creates complexity within the fulfillment flow, therefore not all 3PLs offer this service. If a 3PL does your dropshipping it means they will be communicating more directly with the retailer (regarding order volume and pickups).
Getting the Routing Guide Right
A routing guide is a precise and detailed document that a retailer supplies to the merchant. It includes the retailer’s pre-determined set of rules and regulations that dictate how your products will get to their stores. Sharing this with your 3PL is imperative to getting your orders to the retailer exactly as they need it.
Your 3PL team should be creating a routing guide summary before the first order drops. Every single detail needs to be correct—it’s best to go through multiple iterations and test orders to ensure everything is mapped out perfectly before launch day.
Labeling
Some merchants might need to present their products differently in a direct-to-consumer package than on the shelves of a retail store. A fragile product like a candle or high-end camera may need specialty packaging for shipping, but not when it’s shipped in bulk to be placed on a store shelf.
The process retail customers take to purchase a product (spot it on a store shelf, take it off, read the label, etc.) is much different than a consumer buying the same product online. This is a big consideration and requires correctly labeling products for these different sales outlets.
To put new labels on products for a new retail outlet seems like a pretty simple task, right? But labeling or re-labeling is not a service that all 3PLs offer, in fact most consider it a value-added service.
When you’re vetting a new fulfillment provider, if you have retail considerations, ask about their value-added service and if they can re-label products for retail. It may cost a bit extra but when that’s what is required from that vendor, that’s what you’ll need to do.
How to Scale Your Growth
By launching a new sales channel, especially one as difficult as retail, you may be putting a strain on your company. It’s stressful, and it needs to be done right.
If you sign a contract with a retailer, your order volume will likely increase by a big percentage very quickly. With such quick growth, order accuracy can fail. Many retailers have very high standards, and they deal with many merchants. Having your orders on time, accurate, and in line with their specifications is paramount to a continued relationship.
With all the complexities and challenges of retail fulfillment you’ll need to have a fulfillment provider on your side who can help manage the quick growth. Getting into one retailer may help you get into more. Managing many retail accounts is difficult and you want to keep everyone happy. A quality fulfillment provider can help you do this.
If you are looking for a 3PL partner to work with we would love to hear from you. You can read DCL’s list of services to learn more, or check out the many companies we work with to ensure great logistics support. Send us a note to connect about how we can help your company grow.
Tags: Dropshipping, Retail Fulfillment