Holste Says: |
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Based on the amount of sales promotions and incentives we all receive encouraging us to purchase on-line, it probably cost less to process internet orders from a regional DCs than it does to sell direct to customers from neighborhood stores.. |
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What Do You Say?
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I did not request next day delivery nor did I need next day delivery. It was provided by default free of charge so long as the order exceeded $100.00 and was received prior to the cutoff time.
It never ceases to amaze me that some companies can manage to deliver merchandise the day after being ordered, from a location 100’s of miles away, and do it for FREE!
Retailer’s who offer, and in some cases guarantee, next day deliveries have no way of knowing how many orders they will receive on any given day. It just brings a smile to my face to know that today’s DC logistics systems can process and deliver orders so quickly and efficiently.
It appears that in today’s e-commerce world, next day delivery has become a normal expectation.
That got me thinking – What Does it Cost and Who’s Paying For It?
To get a clear vision of who’s paying for this “free” expedited service – look in the mirror! I’m guessing that we are all paying a little extra every time we make a purchase, even those among us who have been gifted with the ability to plan ahead and/or those who prefer to shop and buy from the store. It’s become a built-in cost of doing business in some ways similar to the cost associated with accepting credit cards.
The office supply retailer I placed my on-line order with has several small e-Commerce DCs strategically located throughout the country. This makes it possible to ship each customer’s order from a regional DC. Each of those DCs is equipped with the most up-to-date logistics systems and networking technologies. This provides them with the flexibility to ship from the available inventory of any in-network DC or store.
Based on the amount of sales promotions and incentives we all receive encouraging us to purchase on-line, it probably cost less to process internet orders from a regional DCs than it does to sell direct to customers from neighborhood stores. However, as mentioned above, I did take advantage of visiting my convenient neighborhood store to check out the available phone features and options before making my final choice. In this case it was important to me to see the phone prior to making a purchase decision, however, not a factor in buying the ink cartridges that my printer requires.
There are several indirect cost challenges associated with providing direct sales from the DC. At the DC, just like at the store, how many hours are lost waiting for the orders or customers to come in? How many times each day are DC managers forced to search for fill-in work to use up the work shift hours? How many employees leave because they cannot plan their lives around the erratic DC work schedules?
Aside from absorbing the premium shipping cost, which is a sales tactic, it could be that the real on-going cost of next day delivery is in not being able to:
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