We've Got a Secret

10 Steps to Fulfillment Success

Thou Shalt . . .

1. Start early. Get your fulfillment operation set up well in advance of taking orders so you'll have time to test the system.

2. Be vigilant about analyzing back-end costs, from warehouse labor to handling returns. Create a plan to lower these costs.

3. When choosing to outsource fulfillment operations, consider your needs (Is your product perishable? How quickly does it need to get to your customer? Do you have a broad product selection?) and find a company that can accommodate them.

4. Network with other entrepreneurs who can recommend reputable fulfillment houses.

5. Find an expert to oversee fulfillment operations.

6. Consider partnering with a catalog company-but be sure the company can meet your technical and customer service needs.

7. Be upfront with customers about how long it will take to receive products.

8. If you deliver directly to customers' homes, consider working with vendors like HomeGrocer.com and iShip.com, which offer residential delivery options. While companies like UPS, FedEx and Airborne dominate the consumer delivery market, they aren't well-equipped to handle home delivery.

9. If you plan to use a fulfillment house, create a plan to share the risk of taking on your business. A typical plan involves higher costs in the beginning, then a price break as your sales increase.

10. Expect to find bugs in your system, and make improvements regularly until it runs smoothly. Start-ups rarely do everything right the first time. It takes a lot of work for overnight success.

Julie Vallone finds fulfillment as a Silicon Valley-based business and technology writer. Her work has appeared in Entrepreneur and Investor's Business Daily.

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This article was originally published in the May 2000 print edition of Entrepreneur with the headline: We've Got a Secret.

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