Leveraging the “IUM” to Lower Fulfillment Costs

Today, we're going to talk about a topic that's often overlooked but can significantly impact your bottom line: fulfillment costs. More specifically, we're going to dive into how you can leverage the Inventory Unit of Measure (IUM) to lower these costs.

When it comes to fulfillment, most people imagine that everything is simply an "each" pick. That is, each individual item is picked, packed, and shipped separately. While this is true for many eCommerce businesses, it's not the only way to handle fulfillment. In fact, if you're working with a third-party logistics provider (3PL) like Amplifier, you can take advantage of the savings inherent in "case picks" and "inner carton" picks as if they, too, were "each picks."

What are Case Picks and Inner Carton Picks?

Before we dive into the details, let's clarify what we mean by "case picks" and "inner carton" picks.

A case pick refers to the process of picking an entire case of a product, rather than individual items. This is typically more efficient because it involves less handling of individual items, which can save time and reduce the risk of damage.

An inner carton pick, on the other hand, refers to picking a smaller box or package that contains multiple units of a product. Like case picks, inner carton picks can also be more efficient than each picks because they involve handling fewer individual items.

How Can These Lower Your Fulfillment Costs?

Now, you might be wondering: how can using case picks and inner carton picks lower my fulfillment costs?

The answer lies in efficiency. When you're picking, packing, and shipping individual items, you're spending a lot of time and resources on handling each item. This can add up quickly, especially if you're selling high volumes of products.

By contrast, when you're using case picks or inner carton picks, you're handling fewer individual items. This means you can pick, pack, and ship more products in less time, which can significantly reduce your fulfillment costs.

Leveraging Amplifier's Services

Amplifier, a leading 3PL, has recognized the potential savings in this area and has structured their services to help eCommerce sellers take advantage of these efficiencies.

When you use Amplifier, you're not just getting a 3PL that can handle your each picks. You're getting a partner that understands the value of case picks and inner carton picks and can help you leverage these to lower your fulfillment costs.

When a client properly delivers inventory, Amplifier's systems can treat case picks and inner carton picks as if they were each picks. This means you can enjoy the efficiency and cost savings of these methods without having to change your business model or invest in new infrastructure.

The Role of a Warehouse Management System (WMS)

A key factor in a fulfillment company's ability to distinguish between different IUMs is their Warehouse Management System (WMS). A powerful WMS can accurately track and manage inventory at the unit, inner carton, and case levels. This allows the fulfillment company to optimize their picking processes and reduce the number of touches, leading to significant cost savings.

However, not all fulfillment companies have a powerful WMS in place. Some may use outdated systems or even manual processes, which can make it difficult to distinguish between different IUMs. As a result, these companies often default to treating everything as an each pick.

The Hidden Costs of Inefficient Fulfillment

At first glance, these companies might seem to offer lower prices. After all, if they're treating everything as an each pick, their pricing structure might appear simpler and more straightforward.

However, this approach can actually be more expensive in the long run. Why? Because each picks involve more touches, which means more time and resources spent on handling individual items. This can quickly add up, especially for high-volume sellers.

In contrast, a fulfillment company with a powerful WMS can leverage case picks and inner carton picks to reduce the number of touches. This leads to greater efficiency and lower costs, which can be passed on to the seller.

The Importance of the Right Team

Of course, a powerful WMS is only part of the equation. To truly leverage the efficiencies of case picks and inner carton picks, a fulfillment company also needs the right team in place.

This team needs to understand the importance of maintaining accurate inventory data and following the correct processes on the warehouse floor. They need to be trained to handle different IUMs and to use the WMS effectively. Without this, the data in the WMS can quickly become out of sync with the reality on the warehouse floor, leading to errors and inefficiencies.

In conclusion, while a fulfillment company might seem to offer lower prices by treating everything as an each pick, this can actually be more expensive in the long run. A powerful WMS and the right team are crucial for leveraging the efficiencies of case picks and inner carton picks and reducing fulfillment costs.

So, when you're choosing a fulfillment partner, don't just look at the headline prices. Dig deeper and ask about their WMS, their team, and their ability to handle different IUMs. You might find that a company like Amplifier, which has both a powerful WMS and a skilled team, can offer greater value and lower costs in the long run.