By Paul Lang, Editor, Sell It!
February 16th, 2000

See Also   The Insider Secrets to Marketing Your Business on the Internet   Alternative Payment Solutions   Fraud Prevention Tools   Top Tools to Help You Boost Customer Service   iV-Caller Verification Service   Make Your Price Sell!   FindWhat.com   Make Your Knowledge Sell!   HumanClick   Netship   iFulfill.com   Nexchange   Nothing But 'Net   Netwhistle.com   Bigstep.com   Make Your Site Sell!   AWeber   GoTo.com   Constant Contact   WebAdverts   PersonalStore   SiteInspector   LinkExchange   ClickTrade   Safe   eCHARGE   MilliCent

Product	Netship
Description	Fulfilment service for online businesses
Available	Now

Even if you have only recently started to surf the 'Net you probably have already come across the phrase “Internet time”. This phrase illustrates a concept that time on the Internet effectively passes much faster than in the real world, because changes happen on the 'Net at such a rapid pace.

Having been fortunate enough to be involved with electronic commerce for several years now, I can definitely say that the concept of “Internet time” is a valid one, for in just a couple of years e-commerce has moved rapidly through three phases which can be roughly summarized as:

• Phase one: how do I add e-commerce capabilities to my Web site?

• Phase two: how do I get people to buy in my Web store?

• Phase three: how do I ship all these orders?

Now, whilst accepting that the above is a broad generalisation, there's no doubt that the process of putting together a Web business has become easier. There are now many powerful tools available that enable a Web store to be built quickly, the Web is full of Internet marketing advice, and there are plenty of people online and willing to spend their money. So increasingly the biggest challenge for Web merchants is to design a process that enables them to efficiently and cost effectively fulfil their customers' orders.

The extent of this fulfilment challenge was highlighted during the recent Christmas online shopping spree. For example, according to AMR Research's January Report on Retail Applications:

"...analysis of the holiday shopping season revealed that poor demand planning and disconnected fulfilment systems forced many Internet retailers to execute 'all hands' picking and shipping marathons to meet customer demands. These efforts raised Internet retailers' costs and disappointed customers with missed delivery dates and high out of stock rates. Fulfilment failures led to a low customer satisfaction rate among Internet shoppers and deterred many consumers from completing their purchases on-line."

Not surprisingly then, a number of new companies are starting to spring up to help online businesses solve their fulfilment problems. However, selecting a third party to fulfil your orders is a major decision, one that could severely damage your business if you get it wrong. It is therefore very important to be aware that these new fulfilment companies differ widely in the scope of services they provide and in the amount of real-world fulfilment experience they have.

The fulfilment services that Netship offers differ from most of their competitors in two key areas: they have a huge number of distribution centres in the US (around 450) and their extensive fulfilment experience (they are backed by Parcel Plus) means they can help merchants not only fulfil orders domestically and internationally, but they can help them import their goods into the US as well.

Netship currently provides three services: Domestic Distribution, Import Distribution and Auction Seller Services.

The Domestic Distribution service is designed for US based businesses. Netship works with the merchant to identify which of their distribution centres should be used to best service the merchant's customers. They then arrange for the inventory to be collected from the merchant's suppliers and shipped to the appropriate distribution centres where the goods are stored in secure facilities.

Currently, order information is transmitted by the merchant to the distribution centre via a text message, although a new electronic management system is due to be launched later this month. This will be able to interface with most shopping cart software and will provide inventory reports, shipment tracking, shipping history, and shipping options for customers. The service is due to be further expanded next quarter, with the addition of full credit card processing capabilities.

Once the distribution centre receives the order they pick, pack and ship it as instructed by the merchant. They can also carry out any special packaging requirements, for example the addition of marketing materials.

Pricing for the Domestic Distribution service is structured as follows:

• Inventory management: $10 per hundredweight to receive and stock goods and then $1.75 per sq ft to store them

• Pick, pack and ship: ranging from $8.50 UPS/$8.00 USPS for a parcel weighing 1lb through to $11.00 UPS/$12.25 USPS for a 5lbs parcel, including the cost of packing materials and labor.

The Import Distribution service builds on the Domestic Distribution service by helping merchants to import their goods into the US. This service is for non-US merchants who wish to sell their products in the US, or for US merchants who need to import their products. Interestingly, Netship plan to make their credit card processing capabilities available to non-US merchants: this should be very attractive to merchants who are either unable to get an Internet merchant account in their own country, or are unable to get one that allows them to bill their customers' cards in US dollars.

The final Netship service, the Auction Seller service is a variation on the Domestic Distribution Service. This allows merchants selling through an auction service such as eBay to transmit order information by email to their selected distribution centres.

These three Netship services are not suitable for everyone: merchants need to have a solid credit history and be selling products that have repeat sales, weigh less than five lbs and are less than 12" x 12" x 12" in size, and have a typical order value of at least $50.

Verdict: Netship's unrivalled US distribution network coupled with their alliances with International carriers makes them a very attractive fulfilment option. And once the new electronic management system is up and running the Netship fulfilment solution will be hard to beat.