Can You Hire an Order Processing Team for $800 a Month?

Do you have a drop ship order processing team that works 24 hours a day, seven days a week for $800 a month?  Probably not, but this is what OPAL, an Autonomous Order Processing Solution gives you.  And, you do not need to have a one size fits all solution.  In fact:

·         It adapts to your specific business rules and processes

·         It works transparently with all of your retailers and e-tailers to exchange mandatory electronic information and create compliant Packing Slips

·         It works transparently with your e-commerce shopping carts to process orders and communicate shipment tracking to your customers

·         It works with your Accounting and Inventory System to create accurate invoices and decrement inventory without manual entry

·         It works transparently with your primary shipping carriers such as USPS, FedEx, UPS, DHL, etc. without having to use 3rd party software for shipping and labels or going to one of their portals.

·         And, it works effectively with and optimizes your warehouse or 3PL. 

So, think about it for just a moment.  $800 a month ($9,600 a year) as opposed to $15,000-$20,000 per year plus overheads for one person to handle order processing.  And this one individual will not be processing your orders 24 hours per day, 365 days per year.  

If you add order volume to the equation, how many orders per month can one person really handle?  If it’s 1,000 then your labor cost per order is probably going to be at least $3,000 ($3.00+ per order) versus $.80 with OPAL ($800 divided by 1000 orders).  And, the more orders processed each month reduces this per order cost even more.

 Are you striving to achieve productivity gains to increase drop ship order profitability?  Before dismissing the possibilities, please contact OPAL (www.meetopal.com) – the ONLY Autonomous Order Processing solution – to see what it can do for your business. 

 

The ROI of Autonomous Order Processing

We’ve talked extensively in the past about the productivity gains and increased revenue potential through the use of Autonomous Order Processing, especially as it relates to the huge, positive impact it has on drop ship order profitability. 

But, many times, business owners are reluctant to even consider the potential cost to their business – so much so that they don’t even investigate it to see if it is viable.  And, sometimes if they do, they have serious sticker shock and dismiss the idea.  However, what’s often not considered is the very fast Return on Investment (ROI) that is achieved and how quickly that increased profitability and productivity comes to pass for your company. 

Yes, it’s not free.  An Autonomous Order Processing System is NOT a one size fits all solution and it needs to work with a lot of moving parts within your business, like:

  •           It must adapt to your business rules and processes
  •          It must work transparently with all of your retailers and e-tailers to exchange mandatory electronic information and create compliant Packing Slips
  •          It must work transparently with your e-commerce shopping carts to process orders and communicate shipment tracking to your customers
  •          It must work with your Accounting and Inventory System to create accurate invoices and decrement inventory without manual entry
  •          It must work transparently with your primary shipping carriers such as USPS, FedEx, UPS, DHL, etc. without having to use 3rd party software for shipping and labels or going to one of their portals.
  •          And, it must work effectively with and optimize your warehouse or 3PL. 

So, for example, let’s say that you have to invest $10,000 to connect all of those moving parts discussed above.  Sounds like a lot doesn’t it, but you REALLY need to consider the following: 

1.       I don’t know what your current per drop ship order processing cost is, but in my experience it runs at least $3 per order in labor cost.  At a run rate of around 1,000 orders that would be $3,000 per month.  With Autonomous Order Processing it would be $.80 or $800 per month.  A savings of $2,200 and an ROI in 4 to 5 months. 

2.       Also, if you are growing, as I’m sure you are, and have the need to add personnel to manage the load at some point, Autonomous Order Processing eliminates the need to hire additional personnel.  A savings of $15,000-$20,000 plus overheads each year.  Once again, the cost of one additional hire more than covers your investment. 

Before you dismiss the possibilities out of hand, shouldn’t you contact OPAL (www.meetopal.com) – the ONLY Autonomous Order Processing solution – to see what it can do for your business, while also paying for itself extremely quickly?  

The Drop Shipment Train is Coming

“Tis the Season” and if you are one of those businesses that experiences extremely high order volume during the holidays you may be looking for that light at the end of the tunnel following Christmas.  Unfortunately, that light may be a train! 

The Black Friday statistic for 2017 were pretty interesting.  Foot traffic in retail stores stayed pretty steady, dropping at most by 1-2% while on-line shopping increased by over 16% according to CNN Money.  Some of the big winners between Black Friday and Cyber Monday were Amazon, Walmart and Target – all retailers that have embraced the on-line, ecommerce, drop shipping business model.  There was also a statistic reported that Amazon managed over 700 ORDERS PER SECOND.  WOW!

The on-line, ecommerce world with its inherent need to drop ship directly to consumers has been experiencing double digit growth year-over-year for a while now – it’s apparently unstoppable.   So, the question is, how many seconds does it take you, as a supplier, to process a drop ship order?  It’s pretty clear that there are going to be more and more each year.  Are you going to be able to keep up? 

To compound matters, expectations are getting higher and higher regarding supplier performance.

If a consumer orders something at 3:00am Saturday morning, they want to see an acknowledgement, tracking number and expected delivery date very quickly.  They also expect to receive that order in a few days at most.

Marketplaces want their suppliers to drop ship from their own warehouse rather than one of their fulfillment centers, provide acknowledgement, tracking number, ship it in a maximum of one to three days, provide accurate invoicing and provide them with accurate item inventory updates on a frequent basis.

Unfortunately there aren’t a lot of good tools to automate this and make it feasible to really fill all of the orders you possibly can without adding a bunch of seasonal staff.  Much of what is available is cumbersome, requiring you to cobble disparate technologies together to ease some of that labor intensity.  This usually includes things like an Enterprise Resource Planning (ERP system), a method to translate, send and receive data to / from the marketplace, software to automate management of that data and software to communicate with shipping carriers – all of which usually still requires some level of dedicated staff and time to ensure everything goes smoothly.

This dramatic supplier need led to the creation of OPAL (www.meetopal.com), the first and only smart platform that combines all of the needed capabilities into one place for drop shipping.  It automates and enhances your ERP order processing capability, requires no human intervention, works 365x24, is fully compliant with all marketplace requirements, provides document data translation and transmission without errors at zero cost, and works with your 3PL or warehouse to provide all labels and information needed to pick, pack, ship and track an order.

And, best of all, it will process those drop ship orders in less than 8 seconds.  How many seconds and how many people do you currently need?

Managing EDI and Other Financial Impacts on Drop Ship Orders

Unlike bulk orders worth thousands or hundreds of thousands of dollars, drop ship orders are problematic in terms of managing your cost components well enough for a product to be profitable, especially when it’s retail price is less than $40 or $50.

A lot of operating costs can severely impact your profitability:  The manufacturing of the product, warehousing, EDI costs associated with communicating with your Trading Partner, order processing handling by staff, pick, packing and shipping by the warehouse, and the technology investments needed like an ERP or simple inventory and accounting system, shipment scheduling / tracking tools, etc.

To complicate things, drop shipping is becoming a preferred business model for many traditional brick and mortar retailers, in addition to the many e-tailers that have already shaped the e-commerce market over the last few years.  For suppliers, this will mean an exponential increase in small orders to process, shorter and shorter acknowledgement and shipment deadlines and more and more staff to keep up with the load.  And, of course, there’s the retailer commissions charged for allowing you to sell on their marketplace.  All of which impact profitability on drop ship orders even more.

So, what can you manage?  Well, from a retailer perspective, there’s not much you can do other than ensure that they are complying with your Minimum Advertised Price (MAP) Policy to protect your margins and brand.  And I’m sure that you have already and are continuing to reduce costs in your supply chain, and have probably optimized your warehouse operations and / or negotiated the best cost possible with your 3PL.

So what’s left?  EDI charges and order processing costs!  These alone are commonly more than $5 per order!  That’s at least a 10% margin loss on a small order.

Depending on your drop ship order volume this $5+ cost can be reduced to $1 or significantly less with OPAL.  That’s a $4 gain per order without even trying.

If you are doing a great deal of drop shipping to customers and are struggling with the cost of EDI when doing business, please take 15 minutes of your time to view a demonstration of OPAL (www.meetopal.com) so that we may answer your questions and see how it can solve the problems you are encountering and improve efficiency and profitability. 

OPAL is an autonomous, cloud based order processing and fulfillment solution and works 24 hours a day, 7 days per week, even when there’s no one in the office.  It works with and enhances your ERP investment and automates drop ship orders – processing them in less than 8 seconds – and prepares all of the necessary information, packing slips and shipping labels necessary for a warehouse or 3PL to pick pack and ship the order.  It even tracks the order and notifies you when there’s a shipment issue.  All without any EDI costs or additional software tools.

The Future of E-Commerce Orders – Autonomous Processing

Do you ever wonder what new, unexpected changes you will face to stay current, profitable and relevant to your customers?  There are new emerging trends every day and suppliers are often struggling just to stay current with what’s happening today, much less what the future may throw at them.  

Many are trying to adapt to the increasing pressure to drop ship directly to consumers by their formerly traditional brick and mortar retailers.  Many are trying to figure out how to meet retailer requirements regarding EDI technology and handling.  Many are working twice as hard to fulfill orders and deliver them to consumers in a much shorter period of time.  And many are struggling just to figure out how to optimize their operations in order to remain profitable.  

All of these obstacles force them to focus on technology, something that most business owners simply aren’t comfortable with and don’t feel they can afford – but unfortunately, it’s the only available answer.  Otherwise you’re just adding more workload and more staff, but not really getting ahead of the curve. 

Emerging trends indicate that it’s not very long before all vital parts of your business will have to be smart and connected – people, devices, processes and systems – everything from your factory floor to your customer. 

Now, to be clear, this is not going to be a technical article.  Instead I want to focus on the advantages of technology for the business owner facing new, unexpected order processing challenges.  By this I mean technology attributes that are both cost-efficient and have a serious return on investment, enabling you to keep up with all of these changes and pressures and still have the bandwidth to grow your business.   

A checklist for evaluating if any technology solution is meeting this expectation should include the following:

  •          The ongoing cost of the technology should be significantly less than the labor and overhead currently required to process an order.  It must produce a 50%+ drop in the cost of processing each order.  This would come from less staff needed to physically manage and guide the order from its receipt until it’s ready for pick, pack and ship by the warehouse. This is the basis for your Return on Investment (ROI).
  •          It must be a painless addition to your business, completed quickly while not impacting your current workload.
  •          It must work with your current in-house systems like accounting and inventory management, and make them easier to use. 
  •          It must give you the ability to expand your operation, allowing you to process orders and have them ready for fulfillment by the warehouse 24x365 without the need for hiring additional personnel.
  •          It must remove EDI processing and 3rd party EDI costs from your day-to-day business worries.
  •          It must adapt to your business processes rather than you adapting to it.
  •          And it must give you the ability to grow and quickly add more marketplaces to your business whenever you can.

OPAL (www.meetopal.com) can meet these expectations.  See what Autonomous Order Processing really looks like.  Please visit us.

Why Drop Shipping Is Inevitable

In recent years, we’ve all seen a number of high-profile retailers close their doors or file for bankruptcy simply because they were unable to navigate the rapidly changing consumer mindset.  The example: on-line shoppers grew by 20 million between 2015 and 2016 alone.  In fact, the National Retail Federation (NRF) is only predicting 3-5% growth in traditional brick and mortar retail sales in 2017.  On the other hand, the NRF expects online retail to grow 8-12% -- up to three times higher than the growth rate of the broader industry. 

This is why we’re seeing so many of the surviving Big Box Retailers expanding into the direct to consumer drop ship market.  After all it’s worked well for the pioneers like Amazon, Wayfair, Overstock, Hayneedle, etc. etc., and it’s working for them. 

It’s very advantageous.  All the retailer needs to do is work with suppliers to resell their products on their on-line marketplace.  They can have as many suppliers as they want, listing all of the products that would be attractive to their customers, and they don’t have to worry about warehousing to store those products since you, the supplier, are managing the inventory.  As the middleman, they collect the payment and then pay their suppliers.  All in all, a pretty good business model for them. 

Now, it may already be part of your business model, but as a supplier are you ready for even more pressure to drop ship directly to consumers?  Given the trend, it seems to be coming. 

Drop shipping means exponentially more orders to process with more employees needed to handle invoices, create packing slips and custom branded 3rd party packing slips, as well as more EDI transactions to manage and pay for.  Not to mention much shorter delivery deadlines.  

Given that situation, what if you could process a drop ship order in 8 seconds or less? By this, I mean receiving orders from your customer retailers and e-tailers, managing all of their EDI transactions, processing and invoicing orders through your ERP and accounting system, creating packing slips and custom branded 3rd party shipping labels and getting them to the warehouse for pick, pack and ship – 24 hours per day, seven days per week – even when there’s no one in the office. 

AND process that drop ship order at roughly the same processing cost as a large bulk order. 

OPAL does this for you.  Originally designed and built for a manufacturer in the pet industry to handle not only their bulk shipment orders but to handle the ever increasing workload associated with drop shipping as that part of their business grew, OPAL enabled them to reduce their order processing staff from four employees to one part-time employee. 

So, what can it do for your business?  OPAL enables you to take on more and more direct to consumer drop shipping business so that you can grow beyond what you are today and remain competitive and profitable in the future.

 

Why Autonomous Order Processing is Important

Well, the short answer is that it saves time – increasing your capacity for sales and delivery, it saves order processing labor – decreasing overhead costs, and it eliminates order processing errors – once again saving time while also building your brand in the marketplace.

But what does “autonomous” really mean?  It means eliminating nearly all, if not all, of the manual steps we must all perform when processing an order.  This includes receiving orders from your customer retailers and e-tailers, managing all of their EDI transactions, processing and invoicing orders through your ERP and accounting system, downloading or creating custom packing slips, creating shipping labels, UCC128 labels and / or other shipping documents, getting them to the warehouse for pick, pack and ship and monitoring delivery progress of the order.  Now, imagine doing that 24 hours day, 7 days per week, and only having to focus on the few exceptions that will inevitably occur outside of your control.  That’s obviously going to save you money and give you the capacity to increase sales, right?

Oh, and it also removes EDI transmission / translation and associated costs from your business world.  That’s less to worry about and saves a chunk of change, especially if you’re drop shipping.

So how do you get autonomous order processing?  The best answer is OPAL.  OPAL enables you to process all (drop ship and bulk) orders within one software platform, eliminating the need for most of the 3rd party applications you may be using.  Additionally it enhances the investments you’ve made in your ERP or accounting software, automating order processing related activities.  AND…most importantly, it removes 90%+ of the overhead cost of drop ship order processing and levels the playing field with bulk shipment order processing cost.  

If this sounds interesting and is worth 15 minutes of your time, visit www.meetopal.com to schedule a demonstration, get answers to your questions and see how it can solve the problems you are encountering and improve efficiency and profitability.  

Why Pay for EDI as Part of Your E-Commerce Business?

All companies large or small that are selling products on-line or for warehouse fulfillment to big box retailers like Walmart, Sears, Kohls, Home Depot, etc. or through e-tailers like Wayfair, Overstock, Hayneedle, etc. need EDI (Electronic Data Interchange). It’s a hassle, forcing many suppliers to employ individual(s) just to coordinate it and keep it accurate.

Plus, you get to pay for the EDI documents needed. It’s certainly not a big deal when you are shipping bulk orders, but when you’re drop shipping small quantities that’s a very different story.  EDI service companies LOVE IT when that happensIt's true! Drop shipping means hundreds of more orders, hundreds of more EDI documents to process, HUGE COSTS to you and HUGE REVENUE for them.

Then, of course, there’s the added cost and problem of effectively managing all of those additional orders.  To do that you need to have staff to manage a lot of moving parts from order retrieval to acknowledgement, shipping labels, packing slips, ASNs, shipment tracking, invoicing and inventory reporting – not to mention all of the exceptions that can occur with possible, subsequent charge backs.

All of these things combined really hurt your business’ profitability.

OPAL (www.meetopal.com) removes these business issues.  It is an intelligent, self-driving drop ship and large order fulfillment software solution that plugs into your existing software investments and truly automates the entire order process, working 24 hours a day, 7 days a week.  

OPAL touchlessly automates receiving orders from retailers and e-tailers, manages all EDI transactions, processes and invoices orders through your ERP and accounting system, and creates packing slips and custom branded 3rd party shipping labels per any retailer’s or e-tailer’s requirements.  Once shipped, it sends back tracking information and invoices to the retailer or e-tailer, as well as tracking packages and sending inventory updates.

Not only that, OPAL takes advantage of the direct EDI links now provided by retailers and e-tailers enabling a supplier to process a drop ship order with $0 cost for EDI documents – or an LTL, Full Truck Load or Container order for that matter.  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. 

So, if you employed OPAL, eliminating the cost for things like EDI document charges, EDI management and troubleshooting labor, order processing labor, reduced order exceptions to less than 5% of your order volume, and accomplished it with a total cost of CENTS rather than DOLLARS, wouldn’t that be worth checking into? Schedule a 15 minute demonstration to see the possibilities.

Why Drop Shipping can be More Profitable (and Less Time Consuming)

Ultimately, every business must deliver product on time at the lowest possible cost and remain profitable.  To do that, however, you need to manage a lot of moving parts from manufacturing, to warehousing, to order processing and shipping – not to mention all of the exceptions that occur and possible, subsequent charge backs.  Plus, you get to pay for all of the EDI documents needed.  At an average of $4.00 per order that’s incredibly expensive all by itself.  

All of these things combined really hurt your business’ profitability.

The first big part of successfully solving this puzzle focuses on a dramatic reduction in order processing time, order processing cost and order errors.  The second big part is eliminating, or at the very least substantially reducing, the cost of EDI in working with your trading partners.   But how do you do that?

Here’s how: OPAL (www.meetopal.com) is an intelligent, self-driving drop ship and large order fulfillment software solution that brings most of these technologies together into one complete platform,  plugs into your existing ERP / Accounting software investment and truly automates the entire order process, working 24 hours a day, 7 days a week.  

IN LESS THAN 8 SECONDS, OPAL automates receiving orders from retailers and e-tailers, manages all transaction communication, processes and invoices orders through a supplier’s ERP and accounting system, and creates packing slips and custom branded 3rd party shipping labels per any retailer’s or e-tailer’s requirements.  Once shipped, it sends back tracking information and invoices to the retailer or e-tailer, as well as tracking packages and sending inventory updates.

OPAL also takes advantage of the direct communication links provided by retailers and e-tailers enabling a supplier to process a drop ship order with $0 cost for EDI documents – or an LTL, Full Truck Load or Container order for that matter.  OPAL downloads POs from retailers and e-tailers, sends back Acknowledgements, ASNs, Invoices and Product Inventory with no translation or transmission charges regardless of the format required (EDI, API, HTML or JASON) and is 100% compliant with each retailer.  

So where do the savings really come from?  Just compare the cost of a traditional drop ship order to how OPAL accomplishes the same thing:

Traditional Drop Shipping

2,000 orders worth $20 each

Order processing cost approximately $4 each

Shipping time of 2 days

Labor and Infrastructure cost:

  • 8 clerks
  • 8 PCs
  • 8 Desks

4,000+ EDI Transaction Charges


OPAL Drop Shipping

2,000 orders worth $20 each

Order Processing Cost of 40 cents each

Shipping Time of 2 days

Labor and Infrastructure cost: 

  • 1 Clerk
  • 1 PC
  • 1 Desk

Zero EDI Transaction Charges


So, if you employed OPAL, eliminating the cost for things like EDI document charges, EDI management and troubleshooting labor, order processing labor, reduced order exceptions to less than 5% of your order volume, and accomplished it with a total cost of CENTS rather than DOLLARS, wouldn’t that increase your business’ profitability? 

Are You a Drop Shipper?

If you sell a product, pack it, and ship it in small quantities then you are a drop shipper. Unlike bulk LTL, truckload or container orders, drop shipping can be a complicated, time consuming process for not a lot of revenue per order and 20% of your orders can take as much as 80% of your time and resources. 

The most profitable business model, of course, is Bulk Shipping.  It requires less overhead to manage processing and the revenue on each order is much, much larger.  However, for better or worse, drop shipping is the wave of the future.  E-tailers like Wayfair, Overstock and countless others are placing enormous pressure on traditional brick and mortar retailers.  Some of these, Walmart for example, are forcing their suppliers to become Drop Ship Vendors (DSV) and are expanding their e-Commerce capabilities. In fact, virtually all brick and mortar retailers are searching for ways to compete more effectively in the e-Commerce world. 

Bulk shipping won’t ever disappear; however, drop shipping by you as a supplier will become more and more necessary. 

With the right tool, though, you can simplify the impact on your business and make drop shipping highly profitable.  Automation is the key when drop shipping and to reducing its overall business cost. For example: Do you pay for EDI services? Do you receive your orders automatically? Are pick lists, shipping labels and packing slips generated automatically for the warehouse without a bunch of 3rd party software applications needed? Is your inventory automatically updated and communicated to your retail marketplace? Are invoices automatically sent? Are tracking numbers automatically sent and shipments tracked? 

Can your process do all of this and more in just 8 seconds per order, 24 hours a day, even if your business is closed?  Probably not.  

So how do you prepare?  OPAL enables you to process all (drop ship and bulk) orders within one software platform, eliminating the need for most of the 3rd party applications you may be using.  Additionally it enhances the investments you’ve made in your ERP or accounting software, automating order processing related activities.  AND…most importantly, it removes 90%+ of the overhead cost of drop ship order processing and levels the playing field with bulk shipment order processing cost.