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Caution Needed in Fulfillment Services
Call Centers Represent Upstream Opportunity
Wednesday, July 17, 2002
Why Freight Management and Logistics Are Important to Small Publishers
I continue to believe effective freight management -- rate shopping, aggregation, multi-carrier options just like the "Big Boys" -- is an important competitve advantage to small- and medium-sized publishers.From M.J. Rose' column in Wired News?
Summer means discounts: Free shipping and discounted books are heating up at online bookstores.[Wired News]Amazon.com is offering free shipping on all orders of $49 or more (down from the usual $99), and discounting almost all titles usually listed over $15 by 35 percent.
Some Buy.com bestsellers are 50 percent off. Free shipping is also available on some of these books. And orders of $99 or more that weigh less than 20 pounds are shipped for free.
Barnes&Noble.com is offering free shipping when two or more items are purchased.
How can a small publisher break through when shipping a $15 book costs the buyer $4-$7?
Today, the vast majority of POD books are shipped from print facilities that have little to no experience in handling advanced logistics. They may have enough volume to get a UPS discount, but it's unlikely they can even come close to the rates that an Amazon or B&N.com achieves by using a mail consolidator such as http://www.dropshipexpress.com">DropShipExpress. Besides low rates, DSE can provide tracking numbers and certified delivery via USPS -- just like UPS or FedEx.
Granted, major shippers get significant discounts from UPS and FedEx, but they get significant advantage by aggregating thier shipments with consolidators and optimizing shipping with low-cost carriers. A POD provider who can do the same can offer e-Publishers a direct-ship model with similar benefits, while bypassing the inventory and discounts required by the major distributors and wholesalers.
Such sales will not supplant the in-store sales of the major retailers or the big on-line merchants, but it does give the independent a better shot at competing.
Tuesday, July 16, 2002
Caution Needed in Fulfillment Services
A recent print industry report touted fulfillment services as the next "killer opportunity" for print service providers. Fulfillment is a legitimate way for digital printers to expand service offerings, but executed poorly -- or with the wrong model -- it can lead to disaster.Caution must be taken not to overlook the actual ROI of most fulfillment operations (low) and the costs of inventory (high). Many fulfillment providers today have built businesses based more on storing things than providing robust services. As the cost of inventory and real estate has risen, they've found themselves pinched between expensive warehouses and customers who no longer want to maintain inventories. Most printers will likley have to make changes in their market and sales strategies for fulfillment to generate significant revenues. And selling print is a far different proposition than selling operational support services.
Fulfillment can be a solid service when matched with other appropriate offerings -- such as sophisticated freight and logistics management -- but printers must be wary of treating it as a simple warehouse adjunct. Instead they must address fulfillment as just one aspect of a demand-driven business and customer model, and build a solid value proposition for these emerging markets.
Fulfillment Services The Next Killer Application for On Demand Printing [WhatTheyThink]
Monday, July 15, 2002
Call Centers Represent Upstream Opportunity
James Robertson of Column Two has published some informative work on call centers over the last couple of days.Call centers are an emerging opportunity for Print Service Providers looking to move into upstream, value-added business. Already, if you call Microsoft's Certification & Training center, your call is answered by a Bertelsmann employee in Burbank, CA. If you call John Deere's dealer support line your call is answered by an employee at Midland Information Resources in Davenport, IA.
These companies handle the printing, inventory, and fulfillment tasks for training or parts manuals. It was a natural extension to begin handling the questions that go along with these products. A call center doesn't have to be a huge enterprise (Midland's has four employees), but running a call center is nothing like the printing business. It requires a whole new set of skills and understanding.
If you're interested in how call center management could fit into your business, or want to better understand the value proposition for such an operation, James' work is a good place to start.
Tog on call centers. Bruce Tognazzini (aka "Tog") has written an excellent piece about How Call Centers can Make or Break Companies. This talks about the value that a call centre call can add to the business as a whole.Interestingly, this is exactly what I wrote yesterday, when finalising the Powerpoint presentation for my talk at IIM 2002 on "Knowledge management for call centres".
For the record, these are the six advanced KM for call centres points at the end of my presentation:
(For more on this topic, see my full article.) [Column Two]
- Building 'communities of practice' within call centres
- Developing relationships between customers and the organisation
- Call centres as a strategic corporate asset
- Call centres as a source of innovation
- Incorporating call centre expertise into research and development teams
- Integrating training, usability testing and knowledge management
Terry Frazier at 12:00 AM
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