WHY IS NOW THE TIME TO PLACE YOUR HOLIDAY INTERNET ORDERS?

We are again entering the part of the year where Holiday Marketing brings out the absolute frenzy in people, shopping for gifts. Now that much of the shopping is done over the Internet, people need to plan ahead, and should really complete their shopping by the end of November. This will minimize the chance of being disappointed in not receiving their goods by Christmas. During last year’s Holiday Season, I worked for one of many Internet-based retail vendors, who have implemented a ‘Drop-Shipment’ form of Supply Chain management. It was amazing how many people waited until Christmas week, trying to place orders and still expecting them to arrive by Christmas. 

To get a better understanding on why waiting until December to place orders is not recommended, let me explain how the Drop Shipment process works. Simply, multiple organizations are involved in the process. The Internet-based Retail Vendor partners with one or more Manufacturer/Fulfillment centers. This overall process can be described in three steps:

Step #1: Customer Places Order via the Retail Vendor’s Web Site.

When the customer places an order on the web site, the Internet vendor collects the order list along with the billing and delivery information. The product information and availability information that the customer sees, is usually provided by the Fulfillment centers. After the order information has been collected, the customer is presented with shipping options and then receives a ‘best-estimate’ delivery date. This date is computed based on processing turnarounds for the particular Fulfillment Center(s), and also on the type of requested shipping. Unfortunately, customers see this as a ‘promised’ delivery date, which especially may not hold true the later you get into the holiday season. Finally, you receive an order confirmation number. A required price range for specific items, can be defined by the manufacturer. 

Step #2: Order is sent to the Manufacturer’s Fulfillment center for Processing and Packaging.

Typically, it only takes a few minutes for the order to be sent from the Internet-based Retail Vendor to the Fulfillment center of the requested product. Instead of the retailers requiring to have their own stocked warehouses, with Drop Shipping, the retailer contracts with the product manufacturer’s Fulfillment Center. If the retailer deals with multiple manufacturers, they might work with multiple Fulfillment Centers. Each Fulfillment center defines their own turnaround time from when the order arrives to when it is processed and packaged for delivery.  A common turn-around time is two days, with other Centers specifying more days. In addition, some of these Centers are closed on weekends. If an item is out of stock, the order is rejected, unless re-stocking is expected within a short time frame. Some items that are on sale, could be a discontinued model and/or color and when it runs out, there are no more. Unfortunately, this information is not always relayed back to the Retail Vendor in timely manner, to update/remove the item from their web page, before someone else attempts to order it. Assuming the item is available, it is then boxed for shipment. The item cost is not billed back to the customer, until this point. Based on the customer’s shipping option (and available shipping vendors at the Fulfillment location), the shipper is called out to pick up the box for delivery.

Step #3: Item is picked up by a Transport/Delivery Company

It may take the shipper a day or two to pick-up the box. The standard shipping time is based on the type of transit (i.e., ground, air, or overnight) and the location of the Fulfillment Center to the location of the Recipient. People get confused thinking that ‘overnight’ means from the time when their order was placed, but it actually means overnight from when the shipper receives the box. Another shipping option, which some customers had problems with last year was with “Smart Post”. This is typically the least expensive option (and also the slowest), where the boxes are sent out via FedEx Bulk Ground. These boxes are sent to a bulk facility, then separated, and finally go to the recipient’s local FedEx facility. From there, they are delivered to the local USPS facility, who actually does the final delivery. For some customers, last year, it took up to 2 weeks for their final delivery! Weather also plays into delivery times. If a main highway is closed due to a snowstorm, this will definitely impact on how long it will take for the delivery. It still amazes me how these shipping companies are able to deliver millions of packages during the holiday season. These numbers will continue to grow, creating an even bigger challenge for these shipping companies.

Final Thoughts

I hope that this article has convinced you, why now is the time to place your holiday orders. People like to blame the Internet-based Retail Companies when packages don’t meet the estimated delivery date, but they need to realize that the Fulfillment Center and Shipping companies are not owned by the retailer, who cannot dictate when the order must arrive. Fulfillment Centers and Shipping vendors do try to work with the retailer, but during the Christmas holiday season, options are greatly limited. Customers need to realize that they are competing against thousands of other customers, and this is why it is important to do your homework and place your orders by the end of November. For last minute customers, the Brick and Mortar stores may be the only option, as long as they don’t need to ship the items out of town.