Inbound Logistics | January 2022

Meeting nal-mile challenges is a necessity for success. Even the potential return is part of one big experience where service denes success or failure. “Two years ago, you’d say high-level fulllment—the order, delivery process, and product—is a competitive advantage,” says Kasia Wenker, director of supply chain solutions, ITS Logistics. “But that’s no longer the case. Fulllment is now a necessary condition for companies to even survive among the competition.” Fulllment intimately impacts operating margin today and the nancial considerations of shipping decisions extend well beyond the cost of the shipping rate. Wenker cites shipping cost as an example of this. Fail to display it at checkout fast enough and you can lose the sale. “If you can’t produce the shipping cost, if your APIs time out, consumers will abandon the cart,” she says. “You literally have three to four seconds.” This is one example of shipping determining sales. And it’s why the customer journey should drive fulllment options, Wenker says, because brand perception, customer commitments, and customer expectations are all affected by shipping choices. Successful e-tailers have eliminated the line between e-commerce and e-commerce fulllment. ShopWorn’s intentional approach to fulllment is

an example. “Our mission is to give the customer the most authentic experience possible for this luxury goods space,” says Michael Goad, vice president of revenue. Free shipping is an inextricable part of that experience. Even with sky-high small parcel rates, there was never any discussion about charging for shipping. “Over my years, I’ve seen pushback from customers not wanting to spend extra for freight,” Birnbaum says. “You have to listen to the people.” Protecting the e-commerce experience inspired Undercover Snacks to bring fulllment in house, although that may change, according to Levy, as e-commerce sales continue to grow. They currently sell from a Woo Commerce platform and their products are sold on Amazon, but not fullled by Amazon. “We would gladly use Fulllment by Amazon, but they do not provide ice packs or other cold shipping solutions that are required to transport chocolate in warm climates,” Levy says. Fulllment by Amazon (FBA) is driving the industry forward by enabling many e-tailers to deliver products in one or two days almost anywhere in the United States. But Wenker says today’s delays in the upstream supply chain can make it hard to compete in the FBA arena. “FBA is a wonderful product,” she says. “But if you can’t keep your products stocked with Amazon due to supply chain issues on the front end—like at the ports—your rankings will fall off. And all of a sudden, the Amazon machine will not work for you.”

Supporting service excellence while ensuring service capacity is a balancing act for SMBs with growing e-commerce sales. Both Undercover Snacks and ShopWorn like to handle fulllment in-house to control the service and ultimately the brand experience, but they both also outsource a portion of their fulllment to 3PLs. For now, both will continue to use a combined approach as they continue to grow. Expanding will be an expense either way, but, as Wenker explains, it’s a piece of an evolving operating margin equation that is an unavoidable part of success in the e-commerce world. “Your brand will no longer survive based solely upon the products you offer to the customer,” she says. “It is the delivery portion of it as well: The customer journey from the point of purchase to nal delivery is part of your brand because everybody can nd another cheaper, faster, better option online. Execution has to be part of your successful product offering.” Winning in the middle and nal mile will come from taking the long view on relationships with carriers, customers, and every supply chain partner between. But SMB shippers don’t have to wait for long-term results. The benets of committed collaboration with carrier partners, and taking the steps to ensure what Michael Goad of ShopWorn, calls an “authentic” experience, are the keys to short-term success in today’s crazy capacity-stricken supply chain. And they’re the strategies many small and mid-sized businesses use to write their own success stories. n

Luxury e-tailer ShopWorn receives almost all its merchandise from overseas. During the pandemic, relationships with freight forwarders—some stretching back 20 years—were essential.

196 Inbound Logistics • January 2022