“Commodity” versus “value-added” order fulfillment

By: Jim Pettinger, President of UCanTrade, Inc.

Third-party fulfillment warehouses have existed for many years, originally developing to handle “mail order” from various catalog companies, large and small. However, with the recent explosion of e-commerce and other internet sales, it’s become a whole new ball game. A major trend is the differentiation between low-cost, high-volume “commodity” sales, mainly to consumers, and higher-price, lower-volume sales, both to consumers and businesses (e.g., retailers). Typically, the latter require a variety of “value-added’ services because their customers have more clout and can request special services, such as unique packaging, price tags and point-of-sale materials. Unfortunately, many “newbies’ to the fulfillment game are caught in between because they have few sales and need “hand-holding” as they learn the ropes. We usually recommend they invest in some initial hand-holding from a value-added fulfillment company while they work through their initial marketing, product and packaging issues.

Naturally, the largest and most prominent example of a modern commodity fulfillment operation is “Fulfillment by Amazon” (FBA). If you’re new to the game, it’s worth doing some research via Google to fully understand the requirements and costs (fees, surcharges and returns).

TradeTips blog is published by UCanTrade, Inc., your cross-border experts since 1984.

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UCanTrade
Website: www.UCanTrade.com
Phone: 360-380-6900
Email: info@UCanTrade.com
Twitter: @UCanTrade

What in the world is Amazon doing now?

By: Jim Pettinger, President & CEO of UCanTrade, Inc.

Spend a little time on Google and you will soon discover that Amazon is slowly but surely expanding its logistics reach both vertically and horizontally. Vertically, by investing in ships, planes, trucks, drones and warehouses, and horizontally by establishing operations around the globe from Europe to Asia and beyond. And besides all that, they are tying it all together with a staggering array of “web services”.

Order fulfillment and international logistics services.

A recent example is their expansion into ocean freight forwarding as reported recently in this article distributed by Reuters. As a former stockbroker, I remain amazed how Amazon can make this happen with a reported P/E ratio over 500 as compared to Apple at a paltry P/E of about 15. Perhaps this article in Yahoo! Finance will clear it up for you.

TradeTips blog is published by UCanTrade, Inc., your cross-border experts since 1984.

UCanTrade
Website: www.UCanTrade.com
Phone: 360-380-6900
Email: info@UCanTrade.com
Twitter: @UCanTrade

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