Category: MA Fulfillment Services

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Amazon is Drawing Increased Attention as Antitrust Chatter Grows

In the world of online retailing, Amazon is the proverbial 800-pound gorilla. The one-time bookseller has become a global juggernaut, allowing consumers to shop for everything under the sun from the comfort of their own home.

With annual revenue approaching $400 billion, it may seem as though it’s Amazon’s world and we’re just living in it. Earlier this year, a group of independent-business organizations joined forces to take aim at monopolies, with Amazon at the dead center of their target.

Small Businesses Feel the Squeeze

Over the years, Congress has enacted various antitrust laws designed to maintain a level playing field. The purported goal of such legislation is to prevent monopolies and promote a competitive marketplace.

In reality, these laws are only as strong as their enforcement. Larger companies have the means to play Goliath to the smaller companies’ David. In 2020, Amazon alone spent approximately $18 million to lobby against stricter antitrust measures.

It may seem as though fighting the retail giants would be a tall enough order. Adding insult to injury, many small businesses feel that industry organizations such as National Retail Federation (NRF) pay lip service to the idea of equal representation while quietly favoring their largest members.

Standing Up for Market Equality

In a proactive effort to regain some equitable conditions, more than 20 trade and business groups formed a coalition under the name, “Small Business Rising.” Members include organizations such as the National Grocers Association (NGA), the American Booksellers Association (ABA) and Institute for Local Self-Reliance (ILSR), a vocal critic of Amazon’s dominance.

Small Business Rising announced their formation and goals in an April 2021 press release. Amazon was specifically cited by name several times, making it clear what the organization sees as one of their biggest obstacles. As Stacy Mitchell, ILSR co-director stated, “concentrated market power” is the toughest challenge facing today’s small business owner.

The organization’s objectives call on policymakers to do the following:

*Break up tech monopolies, such as Amazon, to prevent them from cornering the online market.

* Add teeth to antitrust laws by making them stronger and more enforceable.

* Put a stop to mega-mergers and set higher criteria for regular mergers.

In addition, Small Business Rising is leveraging the relationships local business owners have with power players in their respective hometowns. Members are organizing meetings, seeking out media coverage and waging letter-writing campaigns.

The Rich Get Richer

The unprecedented conditions of 2020 served to magnify the gap between Amazon and other e-commerce businesses. While COVID restrictions created a surge in online shopping, small online retailers faced corresponding supply chain and distribution difficulties, making it hard for them to accommodate demand.

On the other hand, Amazon was able to draw on its significant resources to weather the storm and emerge stronger than ever. The company spent a reported $4 billion on “incremental COVID-19-related costs,” enabling it to successfully adjust its processes and policies.

In the face of mounting criticism during the last few years, Amazon has tried to brand itself as a valuable ally to small businesses, especially with Amazon Marketplace, its third-party online sales platform. Companies have responded by pointing out how Amazon uses prohibitive fees and data access for competitive advantage.

Grow Your Online Business with Medallion Fulfillment & Logistics

Are Amazon’s arbitrary and restrictive fees and policies helping or hurting your e-commerce business? Medallion Fulfillment & Logistics works with you by offering a full assortment of services tailored to fit your needs.

Contact us to learn more about our flexible and cost-effective fulfillment solutions, including our innovative Amazon replenishment warehousing service.

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The Technology Behind Successful Ecommerce Fulfillment

Fulfillment Warehouse

Online sales in the United States have more than surpassed expectations. In 2012, online sales hit a record $226 billion, and accounted for 7% of all total retail sales. Experts projected $327 billion by 2016, but they were wrong… Total online sales in 2016 were $394 billion! If your fulfillment company isn’t participating in the ecommerce segment, no doubt you know that you’re missing out on an exceptional opportunity!

In this article, I’ll focus on the technological capabilities a warehouse needs in order to implement an ecommerce fulfillment service. The article isn’t going to be about listing the pros and cons of the Top 10 software programs on the market, because I don’t know your current capabilities or strategic goals. Instead, I believe that the most productive approach is to breakdown the process to help you identify where you can improve your systems.

Let’s talk about process integration. Ecommerce clients will typically approach a fulfillment company with an established business infrastructure. Integration means adapting your systems to plug into those of your customer. The processes that are frequently affected are:

  • Order Capture & Management
  • Picking/Packing & Shipping
  • Synchronizing Order and Inventory Status
  • Visibility
  • Client & Customer Service

Order Capture & Management

There are more than 300 ecommerce shopping cart companies on the market. Your company needs to be technically capable of adapting to the wide variety of methodologies for communicating with those carts. Orders from carts need to be harvested on a regular basis, controlled to insure none are dropped or duplicated, and converted into a form that is compatible with your system.

I believe this area represents the greatest technical challenge for fulfillment companies in the ecommerce space. Your tool bag for interfacing with a client’s systems must include a wide array of technologies, including the ability to interact with flat files, Application Program Interfaces, Web Services, File Transfer Protocol, call center systems, and the occasional manual-order entry. IT resources to plan the implementation and support this process need to be broadly skilled and creative. Administrative resources that perform the daily-order harvesting routines need to be highly attentive to detail.

Picking/Packing & Shipping

This process is probably the most straightforward. Picking slips are generated, product is picked and boxed, and shipping labels are applied using traditional fulfillment methods. Although there may be special requirements for packing slip and box branding, those requirements don’t vary much from conventional fulfillment. It is essential to operate at a very fast past as ecommerce performance is measured in hours and the volume of orders is measured in thousands per day.

Synchronizing Order and Inventory Status

Ecommerce fulfillment requires that the client’s shopping cart has the most recent inventory and order status information. Your systems need to regularly communicate inventory availability to the cart to ensure that a client’s customer is made aware of out-of-stock situations before placing an order. Customers also need to be able to reference the shopping cart to find the status of their order. Process synchronization between your operation and that of your client is an absolute necessity.

Visibility

Ecommerce fulfillment is very fast moving! We used to joke that customers would press the “buy” button and run to the front door looking for the UPS truck! With Amazon’s latest experiments in same-day delivery, this joke is almost a reality. Given the speed of ecommerce, it’s important for your clients to be able to have a real-time window into your process and inventory. At a minimum, clients should be able to see orders and inventory in near real time. The leading-edge, ecommerce fulfillment companies have taken a more pro-active stance by publishing “alerts” when important events are happening in the fulfillment process. Alert examples might include: Product X is running low on inventory; a new shipment of stock has arrived; or a customer has returned an order.

Client & Customer Service

The fulfillment process is heavily impacted by fast-paced marketing and promotional decisions. Ecommerce client support typically requires a designated coordinator to represent the client’s requirements to the fulfillment organization and to coordinate program changes. The volume and minutiae of detail often warrant the implementation of “issue logging” and “project workflow” processes within the organization. Given the pace of the business, these processes are best automated.

Some clients, particularly the Entrepreneur and Offshore segments, may ask the fulfillment organization to manage customer support. This might involve call-center work, authorizing returns, handling the occasional complaint, and so on. These client groups often have too small a volume to outsource their work to large call center. Having an arsenal of exceptional customer-support tools, therefore, positions you to capitalize on a good revenue opportunity.

In summary, successful ecommerce fulfillment relies on solid technical foundations. Warehouses and 3PLs must understand that ecommerce clients have very different needs (and expectations) for the technical aptitude, agility and pace of their fulfillment partners.  To fully capitalize on the ecommerce segment, your fulfillment service must meet–and exceed–these requirements.

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How Can You Compete Against Amazon

Yes, when it comes to ecommerce, Amazon is the proverbial elephant in the room. Ignoring the online giant isn’t going to make it disappear, so the only business you have control over is your own. Do you wave the white flag or dig in and fight?

The good news is that, with a little creativity and skillful marketing, you can successfully compete against Amazon. Incorporate these valuable tips to reinvigorate your digital storefront and your ecommerce fulfillment services will be running on all cylinders in 2020.

1. Refine Your Focus

Amazon’s blessing and curse is that it wants to be all things to all people. As a small- or mid-sized online business, you have the flexibility to find your company’s specific niche and learn that segment inside and out. Once you’re established as an authority, you’ll become the go-to source for your product offering.

2. Leverage Content Marketing and Social Media

Amazon is a faceless behemoth and they do nothing to counteract that image. Use content marketing and social media to personalize your company and forge a connection with customers. Start a blog, share interesting stories and articles, run a contest, post pictures and videos. Be sure to track results and fine-tune your strategy based on what’s working and what isn’t.

3. Optimize Customer Experience

Can you even remember the last time Amazon made any changes to their website? Product pages are busy, clunky and boring, regardless of the device. A sleek, streamlined, user-friendly interface that’s consistent across all platforms and devices goes a long way toward making your company stand out. By the way, if you haven’t optimized for mobile traffic yet, what are you waiting for?

4. Don’t Fall Into the Price Trap

Some retailers make the mistake of lowering prices as a knee-jerk response to competition. Almost no one has the same economies of scale found at Amazon, so slashing prices is a losing proposition. Memberships, limited-quantity items and customization are just a few ways you can make shopping your storefront feel exclusive, which is a more effective way of differentiating yourself.

5. Offer Rewards and Loyalty Programs

Did you know that, until Apple Pay finally edged it out in late 2019, Starbucks had the most widely-used mobile payment app? Part of the reason is because users earn points toward free Starbucks food and beverages. Programs that offer discount codes, special offers and similar perks to frequent shoppers or members are a reliable way to build loyalty and encourage repeat sales.

6. Create a Subscription Service

According to a study by top management consulting firm Bain & Company in conjunction with Harvard Business School, just a five percent increase in customer retention can boost profits anywhere from 25 to 95 percent. A subscription service is easy to implement and brings in steady revenue while reducing costs. As a bonus, repeat customers are more likely to make referrals.

7. Provide Top-Level Shipping and Delivery

Thanks to Amazon Prime, online shoppers expect prompt, free shipping and convenient delivery. While it may not be feasible for you to offer 100 percent free shipping, you should provide at least some type of option, such as free delivery for a minimum total purchase. Tracking details and a no-fuss return policy should also be included in your shipping and delivery program.

Medallion: Ecommerce Fulfillment Services for Today and the Future

Are you looking for ecommerce fulfillment services that will grow along with your business? Medallion Fulfillment & Logistics offers a full range of services that are flexible enough to scale according to your needs.

Contact us to learn more, including information about our Amazon replenishment warehousing service. We now have a warehouse in Boston, Massachusetts in addition to our Los Angeles, California location to serve your need for fast delivery nationwide.

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Beyond Amazon, the Power of E-commerce Marketplace Diversification

Fulfillment Warehouse

Plenty of businesses use Amazon as their primary online marketplace. But many observe the old adage and don’t put all of their eggs in one basket. Diversification is a successful e-commerce strategy that allows your business to reach more customers in more places.

Our clients use a variety of marketplaces to expand their businesses. These are some of our favorites. Sprocket Express and Medallion Fulfillment integrate with all of these markets quickly and efficiently so that you can ship all of your orders using one easy fulfillment interface.

eBay

This year marks eBay’s 25th anniversary as an online marketplace. It was one of the first and continues to function as a major selling platform. Although Amazon has risen to number one with roughly three times the annual gross merchandise volume (GMV), eBay is still the second leading marketplace in the U.S.

Similar to Amazon, an e-commerce eBay “shop” allows retailers a single branded storefront for all of their listings. Whether used in conjunction with a brand website or as the primary online presence, the eBay shop is a powerful selling tool.

Sprocket and Medallion Fulfillment are fluent in multiple e-commerce marketplaces and already integrates with eBay for a seamless experience, allowing multi-channel merchants to focus on their products and leave the marketplace protocols to us.

Walmart.com

Walmart is the third largest e-commerce marketplace in the United States and represents serious competition to Amazon. Approximately 95% of Americans have shopped at Walmart or Walmart.com in the past year, so this is a massive audience and it continues to grow.

It is easy to start selling on Walmart with these seven steps. Marketplace items appear in search results on Walmart.com alongside other items.

Shopify

Shopify is an e-commerce platform designed to allow clients to easily build a website with a shopping cart solution. As one of the most popular e-commerce cart packages, this software option is a powerful online selling tool.

For businesses who prefer to sell mainly on their own websites, Shopify is an ideal choice. You can also use the platform to build your own marketplace for your brand. Look for a fulfillment service like Sprocket Express a division of  Medallion Fulfillment, which is already integrated and ready to connect to your site in fifteen minutes.

Rakuten.com Shopping

Buy.com (recently named Rakuten.com Shopping) is one of the largest online retail marketplaces with over 20 million customers in the U.S. On this platform, e-commerce sellers can create their own fully branded “storefront” to maintain cohesive brand identity.

As an added bonus, Rakuten clients have access to an e-commerce consultant to advise sellers on ways to expand exposure and increase sales. Customers of the marketplace also earn cash back, which promotes loyalty to the platform and encourages repeat business.

Retail EDI

Companies that sell to wholesale customers to supply their retail stores often use Electronic Data Interchange (EDI) to transmit orders. This is the most efficient way to resupply because the system does all of the work behind the scenes and all the store has to do is enter the quantity of an item to trigger the order.

EDI is a powerful strategy for B2B sellers and can trim time and staff expenses, contributing to a healthier bottom-line and less error in the supply chain. Sprocket Express is equipped with full EDI capabilities to allow our wholesale clients to focus on expanding their businesses without devoting valuable time to processing large orders.

In Conclusion

Sprocket Express a division of Medallion Fulfillment is expressly designed to serve multichannel marketers and omnichannel sellers. With built-in integrations for numerous marketplaces, we are prepared to serve your business wherever and however you choose to sell.

We currently support multi-channel platforms for over 25% of our clients, so we can also coach on carrier selection, shipping method strategies and more, based on your unique business needs.

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Startups and New Businesses Have Special Financial Needs, How to Plan for Success

Learn About the Amazon Effect

For many new entrepreneurs, managing finances is one of the more intimidating aspects of a startup business. Ensuring that funding, expenses and other financial elements are controlled from the beginning prevents minor issues from snowballing into major problems.

The good news is that financial management is not as difficult as you might think. Our fulfillment warehouse has been part of several successful startups, so we’re offering these expert tips to get your fledgling business rolling with solid financial planning.

Manage Expenses

In the beginning, expenses can be a huge drain on cash flow during the time you need it the most. Fortunately, most costs can be reasonably estimated ahead of time. Create a year-long budget covering rent, wages, materials, taxes and other fixed expenses and focus on keeping them as low as possible.

Avoid Commingling Funds

As the owner, you may feel all funds are ultimately yours so the line between personal and business finances becomes blurred. When you keep both sides completely separate, it’s much easier to track business finances and prevent personal spending from draining the company account. You should also formally pay yourself a salary rather than simply dip into company funds.

Keep Detailed and Accurate Records

When it comes to judging your company’s performance, you can’t afford to rely on gut feelings or instinct. Make sure an experienced accountant, either in-house or outside, is keeping track of revenue and expenses. Review financial statements regularly and make adjustments based on a clear, overall picture.

Don’t Overdo It

You may feel compelled to take on as many roles as you can to save money, but that strategy can actually be counterproductive. Learning unfamiliar skills on the fly can end up costing more time and money than hiring an experienced person in the first place. Delegating work frees you up to focus on your passion and grow the business.

Learn to Negotiate

Don’t take vendor terms at face value. You’ll be surprised at how often suppliers are willing to make concessions to gain your business. Prepare a game plan ahead of time so you know what your goals are. Remember that it never hurts to ask!

Invest in Technology

Business technology has become so advanced and so widely integrated that your company will be at a serious disadvantage from day one without it. Any investment you make in technology will pay for itself in money and time savings.

Establish an Emergency Fund

Financial experts recommend that people maintain an emergency fund to cover unexpected expenses, and a company is no different. Put aside a percentage of income during peak times to help tide you through the slow periods.

Fulfillment Warehouse Services That Grow Along with You

Are you struggling with adjustments as your business expands? Our fulfillment warehouse services can be tailored to meet you specific needs today and scale to accommodate future requirements. Contact us at Medallion Fulfillment & Logistics to learn more about why we are the first choice for one-stop warehousing, inventory control and order processing services.