Catherine Langman:
Well, hello there. It’s Catherine Langman, back with another episode of the Productpreneur Success Podcast, and today on the show, I am going to be welcoming back a guest who has actually been on the show before, Kristy Rigby.
Catherine Langman:
So, Kristy Rigby is actually the owner of Babiators, kids sunglasses in Australia and New Zealand. But she also, alongside her husband, John, runs a logistics, third-party logistics warehouse service. And so I thought who better than to answer a whole bunch of questions that I get asked and that we get asked all the time about fulfillment? So the logistical side of an e-commerce business.
Catherine Langman:
We’re just getting questions all the time around shipping and picking and packing and how to be organized and efficient about picking and packing orders and choosing the right careers and how much should you spend and all of this kind of stuff. So really trying to streamline and be efficient and cost-effective with this side of the business. It’s, seriously, I reckon I would get questions at least every week about this part of the e-commerce business model.
Catherine Langman:
So without further ado, I’m going to welcome Kristy to the show. Please go make yourself a cup of tea or coffee or whatever your beverage of choice is, make yourself comfy and get out a pen and paper, because this is a juicy episode. You’re going to want to take notes and hopefully you’ll pick up a few good tips and tricks that will help you in your business. So without further ado, let’s welcome Kristy back onto the show.
Catherine Langman:
So welcome to the show Kristy, Kristy from Boutique Brands. And today on our show, we are going to be talking all things fulfillment. Yeah?
Kristy Rigby:
Woo hoo. Sounds good. Let’s do it.
Catherine Langman:
Yeah. So, as we were saying before we hit record, questions come up all the time about shipping related questions, fulfillment related questions to do with sending out orders to customers. So shipping related questions, all of this good stuff. So we’re going to tackle them hopefully from the start and go through a whole bunch of these common questions that we have all the time. And you’ve been through this, figuring this stuff out in your own business. And of course, now you have the 3PL fulfillment business as well. And so you figured a few things out.
Kristy Rigby:
Yep.
Catherine Langman:
Yep.
Kristy Rigby:
Yeah, yeah. I suppose in lots of ways I’ve been picking and packing for over 10 years now and picking our own stock. And then a few years ago when John, my husband left his full time job to join the business full time, we started working with a few other brands to help them pick and pack their products as well. So we’ve seen a range of different products and use a [inaudible 00:01:26] of different shipping companies and all of those things. So we’ve we’ve certainly tried to keep things in our prime and really happy to share our experiences with everybody else.
Catherine Langman:
Yeah. Fantastic. Awesome. So let’s start from the top then. And the first question that I have on the list here is how to go about setting up stock in a warehouse for easy picking. And I guess this probably stems from businesses who maybe start out working from home, which is a very common thing these days. And it’s easy to start things when you don’t have a lot of orders and you can do things one way. But as you start to get busy, it doesn’t work like that anymore and you have to think a little bit bigger and start streamlining things and so on and so forth. So how do you go about setting up stock in a warehouse for easy picking?
Kristy Rigby:
Absolutely. All of these things are always going to depend on your product and your product range. So when we had a little online store and we had a little bit of a whole lot of different stuff, you just had to have everything available in a space that can be easily got to. And so if you’ve got a really broad range, having things like shelves, working out storage buckets that fit the product and putting like product together and all of those things. Have a bit of a system. You might put like brands together, like products together. All of those things.
Kristy Rigby:
Clothing is an interesting one. We have been packing for a clothing brand for a little while. Textiles can be unusual. What we usually make sure that we do is when we get the order of product in I don’t believe in how the factory sent it. I literally open every single box and I put the garment standing up in a box so that if I pick through them, I can see the size right up the top. So whatever the labeling system is, I need to be able to flick through the box like an open top box and just be able to pull the right item out really easily.
Kristy Rigby:
And so that can actually take a fair bit of time. And so that’s with the textiles. With our baby ranges, which we have, because they’re quite small, we’re able to just have our full shop just out on the shelf. But if you’ve got a small range of products. But you go in deep in each of those products, so you buy lots of each of the same products. So I’ve got 300 black 0 to 2 [inaudible 00:04:16] on the shelf in there. If you’re going deep like that on a single [inaudible 00:04:22], what we often do is we actually set up the picking shelf so that we’ve just got enough to pick from on the picking shelves and then we will store the bulk of the products easily somewhere else in the warehouse. But when you go to pick your product, you’re not having to walk past all your products there sitting on the shelf. So it spreads your product at one mile long down your shelf space.
Kristy Rigby:
You just have the stock in a few a shelf space as possible. So you literally so if you can, you put the most popular products closest to your picking desk so you can literally turn around, pick that item, put it in the packet. And so it’s about working out for yourself what products are most regularly picked and putting that closest to your picking desk and then just clustering things appropriately so that it’s easy to find them. But yes, in summary, if you’ve got a deep range, just have a picking shelf and storage elsewhere. For example, with some of our bulky products, we actually have picking shelves here in the house, in the double garage. But then the bulk of the product is actually stored down at the storage unit. [crosstalk 00:05:41]
Catherine Langman:
Yeah that’s what we do [inaudible 00:05:47] too.
Kristy Rigby:
Yeah and years ago we just put everything in the storage unit and we used to go and try and pack from down the storage unit. But it was just a lot less convenient, it’s often hot or uncomfortable because there’s a lot of people around, all of those things. And so what we just ended up doing is making sure that we just put bulk in the storage unit and had the picking shelves in the office, essentially.
Catherine Langman:
Yeah, yeah, yeah, no that makes sense. And so I guess you were touching already on some tips for efficient picking and packing. And is there anything else that you can add to that? I know that that some of our clients, they start out with all this elaborate wrapping and ribbons and hand written notes which becomes pretty inefficient as you scale up.
Kristy Rigby:
Yeah. And I think that’s a great way to get some momentum when you’re starting out. We absolutely had tissue paper involved. We had boxes involved. We had all kinds of things about and we fully hand wrote a card for every customer. And you’re building a loyal customer base. But as you get bigger and you get more orders going out, you have to automate some of those things so that you can still really attend to each customer’s order without taking a whole lot of time around it, because the longer you take on one order, it takes you longer to get to all the other orders.
Kristy Rigby:
So sometimes we just worked out that people would prefer to get this up quickly, efficiently in a good state than necessarily all the wrapping in the world. So it depends on age and stage your business is at as to whether you go to all the fuss of the tissue paper or not. What we found was we still do a handwritten card, but we actually have most of what we would normally have said with, hope you love your Babiators, already printed on the card. And the packers just write, hi, and their first name and then does a smiley face and signs their name.
Kristy Rigby:
And so it’s still a handwritten card, but it’s much more automated. It actually takes a whole minute out of our packing time for Babiators. The other thing that we find in terms of efficient picking and packing, packing particularly, is having the right size package for your product. So if you’re using satchels, and we’ll get couriers later, but if you’re using a prepaid satchel of some kind I always look to find the most efficient box for that satchel. So I want to put the most of my products that I can in a box that will fit into that satchel, because particularly if you’ve got a product that’s got packaging around it, we used to just send out the Babiators in Australia in a satchel and people were saying, they wanted to give them as a gift. And when they got them, the box was squashed. Because even if we bubble wrapped so the glasses wouldn’t get broken, the box was still squashed. And so customers weren’t real happy about that. So we ended up having to decide, yep, we would go with boxes. But what we did is, we found the largest possible box that would fit in the prepaid satchel that we had at the time and fit the most Babiators in it.
Kristy Rigby:
So make sure it fits the width of the packaging, the right height of the packaging so you could get the most, I think we can get about five original Babiators in one of our smallest boxes. And that fits straight in that 500 gram satchel that we used to have. And so getting the packaging right. So we’ve been packing your planner Cat. And so when I got your planners, I went straight away and go, okay so it needs a little bit of bubble wrap, right? But it probably doesn’t need a box because it’ll just rattle around in a box. So we’ve got some really nice padded satchels, padded bags, tough bags that fitted your product in it perfectly. And so that way it actually makes your packing more efficient if you get the box right. Or you get the packaging right. So it just means you can go bang, bang, bang, bang, bang. I think John’s got a whole lot of your planners already set up in padded bags and you just put the label on it. [crosstalk 00:10:08]
Catherine Langman:
Oh sensational.
Kristy Rigby:
Just puts a label on it [crosstalk 00:10:09]
Catherine Langman:
I better sell some more then.
Kristy Rigby:
Thanks very much. Yeah, absolutely. They’re the best things. People really need them in January that’s for sure. So that’s having the right packaging. So when someone comes to us and they say, we’re interested in you guys packing for us, one of the first things I do is I actually say, can you send me a sample of your product because we want to handle it. We want to know the size of the bottle, how heavy it is. Does it come in a cardboard box, if it comes in a cardboard box, how many of those boxes, what’s your typical order size?
Kristy Rigby:
So we would work out whether we going to use satchels or whether we’re going to use a box and what size box does that look like? And then once we work out what the most efficient, safest packaging for that particular product is, we can then start quoting what shipping rates that we can get. But you can’t really work that out until you know how are you going to send stuff. So every now and then we’ve gone, oh yeah, we think that box is right for that product. We’ve brought in a box and it’s half a centimeter too thin. And so it squashes the box down every time you put it in the packing thing, so you’ve got to get your packaging right.
Kristy Rigby:
And I think it’s one of the biggest hot tips. To effectively making pick and pack super easy, is just having that packaging right- [crosstalk 00:11:29]
Catherine Langman:
Yeah. And not wasting time trying to figure every single order out.
Kristy Rigby:
Exactly that brainpower that you use trying to Tetris how we fit [inaudible 00:11:40] dinnerware sets. What does that go in? If I went through to John and said, John I’ve got to pack [inaudible 00:11:47] boxes. What does it go in? He can tell me exactly what satchel size and what direction you put it in. [crosstalk 00:11:53]
Catherine Langman:
And as you scale up. Because it’s not just one person packing, it’s several people, they need to be able to pick it up quickly without making mistakes as well.
Kristy Rigby:
Exactly and that’s where you can use a book or a wall with pictures on it or whatever of if you’re packing this, put it in this box. If you’re picking this put it in that box. So documenting that process, the more different things you have and the more people that have, the more you need to just document things because it will actually save you time not cost you time. The staff members like standing looking, how do I fit that box into that satchel? And, really they should be putting it in that box. Then you’ve just wasted time. But if you’d told them straight up, this is how it needs to be done. Here’s the reference guide for it. If you forget, look up there and you’ll see. Then you got a whole lot of efficiency created on that. But also, Barack Obama actually [inaudible 00:12:52], they said he used to have two suit colors and three tie colors. By reducing your decisions that you have to make in any given process, you actually reduce your stress and increase your efficiency.
Catherine Langman:
Yeah, Steve Jobs was like that too wasn’t he? He just had his polo shirts and he didn’t have to think about what to put on every day.
Kristy Rigby:
Exactly. It’s one less decision you have to make, so every less decision that you have to make while packing an order, the more efficient it will actually be and the more enjoyable it’ll be too because you’re not stressing about anything.
Catherine Langman:
True, one of our clients that we manage Facebook ads for. She’s had a nice big quick squirt of growth over the last few months, which is always exciting.
Kristy Rigby:
Woo hoo.
Catherine Langman:
And she struck this issue, because I think she’d been hand writing labels and cutting and pasting the tracking as well and didn’t have any way. So she didn’t have a printer for printing out labels or any of that stuff. So presumably that’s another way you can start getting some efficiency.
Kristy Rigby:
Yeah, yeah, absolutely. And you can get plenty of apps that can help you with those things. We use an app called Starshipit. And what it does is it connects to our Shopify store. But it will connect to a WooCommerce store. I think we’ve got about four Shopify stores and a WooCommerce store connected up to ours at the moment and all the orders go into Starshipit and then when you open an order. You can actually just choose from the different couriers that we have accounts with. If we put the dimensions and the weight into that parcel, we can actually see how much each courier is going to cost for that particular parcel.
Kristy Rigby:
And and so that’s really been helpful to us, too because it let’s us print those labels out and just whack them on the thing. And this is one of the tricks with Australia Post. Australia Post is great if you can use a prepaid satchels. One of the things with prepaid satchels that we do for efficiency is just print your invoice and work out how you can fold the invoice so the shipping address is at the top and then you slide it into one of those clear invoice stickers and you stick it on the front of your parcel. That’s a really efficient and easy way of doing prepaid parcels. And then we just take the labels off and put them in a new book and write down which order number that label links to and then we can put the tracking in manually later.
Kristy Rigby:
So that’s one way of working with prepaid or Australia Post. Another way, My Post and E-Parcel. So there’s two different things there, so My Post, while you can get some great bulk business rates. A lot of times people have to copy and paste the addresses into My Post. You can get an app called ReadyToShip and it will format, you can select which orders you’re wanting to ship and then it formats it properly it gives you like a CSV file file export that you can then import into into My Post. So that way it take the copying and pasting out of the whole process if you’re using My Post. That’s one great way of doing it.
Kristy Rigby:
But the other service that Australia Post has is the E-Parcel account and you usually need to be over a thousand parcels a year to get an E-Parcel account and E-Parcel account will actually integrate directly with a lot of shipping services. So we can’t use My Post in Starshipit, but we can use our E-Parcel account in Starshipit. And you’ll find that with most things. Shippit, ReadyToShip, Starshipit, Ship Manager. All of those apps that you can get that integrate your Shopify orders with the shipping platform, most of them will require you to have an E-Parcel account if you want to be able to choose from Australia Post option.
Catherine Langman:
Right, okay.
Kristy Rigby:
Readytoship is the exception. It does on My Post, but it does it as an export to a CSV public file that you then need to input into My Post.
Catherine Langman:
That’s interesting. Okay.
Kristy Rigby:
That’s the thing like when you work out what courier is going to be best for you and when you’re working out what courier is going to best for you, these are a whole lot of things that you need to take into account. And so sometimes it’s worth just picking one and sticking with it, getting yourself a good E-Parcel account. You hear Johnny humming in the background that his standard hum. [crosstalk 00:18:08][inaudible 00:18:08]
Catherine Langman:
I just heard a bird.
Kristy Rigby:
Oh can you, there you go. Johnny used to play the trumpet when he was younger and so he always seems to be playing the trumpet as he walks around the house.
Catherine Langman:
In his head, yeah.
Kristy Rigby:
Yeah in his head. And you can hear it out loud.
Catherine Langman:
That’s funny.
Kristy Rigby:
It’s lovely. So there’s a whole lot of things that come into play when you’re choosing a courier and one of them is the technology that you’re going to use as well. So a few of our customers, have found that they can get some really good rates from My Post because they’re on band five and the rates that they’ve got a different to our E-Parcel rates for different reasons. Because this one’s a flat rate and this one will give you a signature on delivery, blah, blah, blah, blah. So there’s so many details that you have to dig through with each different courier.
Kristy Rigby:
The other thing to take into consideration, oftentimes, is the delivery time for couriers. So Sendle is quite good because it integrates directly with Shopify and a few other things. But we found over time sometimes we can get quicker services with other couriers and other times if you’ve got a good local courier in the area, who does your pick up really quickly, their time frames are sufficient. Are you in Western Australia or are you on the Eastern Coast, all of those things are going to impact the time frame of that particular courier.
Kristy Rigby:
So the mechanisms that you need to connect your orders into your shipping system and also the prices that you can get and also the delivery times that you can get are all important considerations when you’re choosing a courier situation. And sometimes, some days you could get three parcels out of five will be best off with your E-Parcel account. One out of the five will be best with Sendle and the other will be better with [inaudible 00:20:20].
Kristy Rigby:
Sometimes with going, you know what, three out of five is good enough and I’m going to save myself a whole lot of hassle rather than trying to work out which shipper I need to send it with every single time I’m just going with E-Parcel. And I’m going to lump a couple of dollars here and a couple of dollars there- [crosstalk 00:20:37]
Catherine Langman:
Yeah, just to save time.
Kristy Rigby:
Because I’m going to save hours and brain space by just going with one courier and one shipping service.
Catherine Langman:
Yeah.
Kristy Rigby:
And so sometimes you got to make those trade offs. And you might decide to change your flat rate shipping just a little bit to cover this one and that one.
Catherine Langman:
I think the other thing with choosing the carrier, which obviously a lot of people make the decisions and rightly so in the early days based on cost. But as you scale, choosing which carrier can actually impact the customer service time that you spend as well.
Kristy Rigby:
Absolutely.
Catherine Langman:
Because in my first business I had an E-Parcel account, there wasn’t as much choice back then, but a couple of our clients in the last year or so shifted to E-Parcel from, I guess, My Post and Sendle, using a variety of things. And they just found that all of their customer service inquiries pretty much dried up because people just contacted Australia Post instead of business. So that’s worth a couple of dollars here or there on your front.
Kristy Rigby:
Absolutely. And that whole thing of the APO, with E-Parcel. So with your e-commerce platform being able to talk directly to E-Parcel, is it pushes the email address through and people get those standard text messages and emails from Australia Post that they’re used to getting and then they know how to deal with Australia Post because it’s quite common for them to get those kinds of emails. The other thing that my E-Parcel accounts manager pointed out to me the other day, all E-Parcels go with signature on delivery. And the important thing about that is that’s included. Whereas if you’re in My Post, you have to add that as an extra- [crosstalk 00:22:29]
Catherine Langman:
And pay more.
Kristy Rigby:
Yeah. The My Post rates might look good, but they don’t always include signature on delivery and that can actually really impact your customer deliverability rate. Because obviously Australia Post want to consider more carefully dropping and running on something that is supposed to have a signature on delivery to it than they are for something that could just be left. So those are other things to take into consideration when you’re looking at that stuff.
Kristy Rigby:
You’re absolutely right Cath. We had a fantastic courier for a while and were getting really great rates through their prepaid satchels. And one of the best things about them wasn’t just their price because we would have used them even if there’d been a price increase because if we had a parcel going missing, we could ring some people. And there was a small office of girls in Sydney and the girls would find my parcel. They would ring the couriers- [crosstalk 00:23:32]
Catherine Langman:
What, you’d talk to a human?
Kristy Rigby:
I’d talk to a human being in Australia and it was awesome. And unfortunately, that company has been sold to another company and their service rates have dropped, so their service rates have dropped then they tried to increase the price on it. And I was like, you know what? If they had left their service rates how they were and increased the price, I would have stayed with them for the sake of not having to deal with the customer complaints and all those things with a missing parcel. But because they dropped their service, I had to reconsider, even if the cheap prices were worth it. So sometimes you can get a really cheap price from the courier, it’s just not with it, because you’re looking at three or four days difference in delivery time. You’re looking at apathy if you call them about a missing parcel, you’re looking at other things that really impact the way that your customer perceives you, because the delivery of your product and the arrival of your product is something that makes or breaks that customer relationship.
Catherine Langman:
It is and even though you can’t really be liable for it because you’re not there, actually physically doing the delivery, at the end of the day, it is how the customer is going to perceive you.
Kristy Rigby:
Absolutely. And listen, everybody knows that the courier are smashed at the moment. So I’m waiting for a parcel Melbourne, from a lovely business. And I know, it was supposed to be delivered two days ago and it’s not even here. And you go, you know what, Australia Post is being smashed. I get it, I’m not blaming it on the business. Not everybody knows that. And so, once again, better the devil you know. Sometimes that E-Parcel account is a bit of a winner, but it really does depend. If you’re not doing 1000 parcels a year that’s not really an option for you. And so you need to just come up with the next best thing that works for you.
Kristy Rigby:
So we still do, for some of our bulkier products. We still use the comparison situation in Starshipit where we look at, okay, Australia Post versus Fastway. But, the other thing that we know is we know that if we send something with this particular courier to Sydney, it’ll get there. No problem. If we send it to Western Australia, forget about it.
Catherine Langman:
Right.
Kristy Rigby:
And so you get to know after a while what- [crosstalk 00:26:04]
Catherine Langman:
What’s worth it.
Kristy Rigby:
Customers in what places are just not getting their parcels on time it seems. And then you make your decision about whether you’re going to continue using a different courier, not just a once off thing, but if you get a pattern over time. You’re always going to have, one of your customers is going to have a bad experience with any courier company you use. And so you can’t just go, oh, well, we’ll never use them again because one person- [crosstalk 00:26:35]
Catherine Langman:
No you get stuck with another one.
Kristy Rigby:
Yeah, exactly. Because one person has this terrible, awful experience. All you can do there is there’s a customer service [inaudible 00:26:40] just try and do the best you can to really help that customer out and have them see that it’s not your intention that parcel have been misdelivered, that you’ve given them the best customer service you possibly could.
Catherine Langman:
Yeah, absolutely.
Kristy Rigby:
But you notch that one up and go, sending with X, Y, Z, courier to X, Y, Z location. No. So you just get to know that kind of thing over time. But I suppose my best recommendation for someone who’s starting out is pick one and go with it, create a simple system for yourself, because even though you might save a dollar here, a dollar there, three dollars over here. By creating yourself a simple process of one courier and just going with it and backing yourself. Going to save yourself a whole lot of heartache, if you’re # using that same courier all the time, you getting used to their support system you get used to calling them up and knowing what they’re going to do if you’re ringing up about missing parcel. They get to know you, you get to know them. Everybody’s happy. So pick one.
Catherine Langman:
I like that.
Kristy Rigby:
That’s my hot tip.
Catherine Langman:
Yeah. Just wanted to add one little tiny tip as well. And I can’t claim this is being from me. But just in terms of efficiencies and thinking about the customer service side of things, because when it comes to people waiting for the orders you’re always going to get customer service inquiries. And the bigger you get and the faster you grow or the bigger you grow as a business, the more of those customer service inquiries you’re going to get, which is a good problem to have. But how can you try and mitigate the time and effort that you spend on some of this stuff? And I heard, a couple of years ago Lisa Munro from Happytummies.com.au, she shared this very cool idea that she came up with where she had her frequently asked questions, sitting right above the contact us details on their website, on the same page. And it was genius, she literally save three a week. So-[crosstalk 00:28:56]
Kristy Rigby:
Yeah, of where’s my parcel? [crosstalk 00:28:57]
Catherine Langman:
Pretty much.
Kristy Rigby:
Why haven’t I tried checking the tracking, before contacting us.
Catherine Langman:
Exactly. And really at the end of the day, that’s what people want to know. So you just giving them information quickly and then if it’s something a bit more complex, then obviously they’re going to ring you. So that’s all good.
Kristy Rigby:
People want to find the information themselves, if they can, by the time they’re calling you or emailing you, they’re a little frustrated.
Catherine Langman:
Yeah, exactly.
Kristy Rigby:
And then other people are just never going to read so they’re always going to email and message you and Instagram DM you, all at the same time.
Catherine Langman:
That’s it.
Kristy Rigby:
Because they’re not going to read the FAQs. And that’s okay. That’s the way they flow. But for those of us that would love to just get the information, read the support ticket. Read the FAQ, make sure it’s there for them.
Catherine Langman:
That’s it, yeah, so I always remember that one. It’s absolute genius.
Kristy Rigby:
Yeah.
Catherine Langman:
All right. So we’ve gone over a few things. Few of the questions that we had written down. But just one thing. On the packing materials, just whether you have any tips and tricks on keeping on top of that stuff, because, yeah, that’s probably a fairly big task as you grow.
Kristy Rigby:
It can be a trick can’t it? Because you’re packing away happily and then all of a sudden you realize you’re missing [inaudible 00:30:11] or for us the other day it is we’re missing that the stickers that need to go on something and you’re like, oh my gosh, what are we thinking? All of a sudden everything grinds to a halt because you’re missing that critical item that makes your pick and pack so effective. And so one thing, Johnny and I were talking about this yesterday was, how are we going to do that for our return address labels and safety stickers that go on the Babiators. And he was like, okay, so when we get our print run of those, we’re going to tie 10 packets together because basically we haven’t reordered by the time we’ve got down to those 10 packets we’re screwed.
Kristy Rigby:
So we tie those 10 packets together and write on the top of them, reorder, please tell John. And so put that on the bottom of the pile and put all the other ones the top of it. Everyone’s merrily happily stickers away to their hearts content. But then when they get to that last box and they’re digging around and they’re like, I can’t find any other stickers, oh there’s these 10 here, okay, I need to tell John to reorder that stock.
Catherine Langman:
I love it. It’s like the emergency colored roll of Who Gives A Crap. If you get to that one, you need to order more.
Kristy Rigby:
Exactly. And it can be a little bit trickier with other things that don’t stack neatly on top of each other. We have boxes of boxes. And so sometimes you might have a secret stash of boxes that you hide from your general packing team. That you put them somewhere else. And as soon as you go to that place to take that last box. You need to reorder that minute.
Catherine Langman:
That’s the end point, yeah.
Kristy Rigby:
If you can’t find any other boxes that you have to go to that part of the warehouse to get that box, it means you need to reorder. So the other thing is also working out how long it takes you to get your packages.
Catherine Langman:
Yeah the reorder time frame.
Kristy Rigby:
Yeah. And then how many items you need to have of the buffer zone. So like across Black Friday, like I said, Johnny was like how many radiator boxes should we order, and he goes guys this many? And I’m like, ah-ah. And he doubled it and he went this many and I went ah-ah. And we worked out we needed four times as many boxes as we thought we did, because worst case scenario, we didn’t need them all. Worst case scenario of not ordering that many was that we come to a grinding halt in being able to send out our orders. Because we can’t send them out without a box and we are left at the mercy of our packaging company to get those boxes to us. And we’re sweating on the phone every single day for that box to arrive.
Catherine Langman:
That’s it.
Kristy Rigby:
And you just don’t want to put yourself under that kind of pressure. Because then the fiery Kristy as the girls called me yesterday, I made a couple of calls to a couple of services. [inaudible 00:33:07]. It was not my ideal self, let’s put it that way. And it’s not that person’s fault that I didn’t order that in time. But then when you’ve got a whole bunch of things going on, you just get stressed.
Catherine Langman:
So you’ve got to have that simple system in place that’s [inaudible 00:33:26] basically.
Kristy Rigby:
Exactly.
Catherine Langman:
Yeah I like that.
Kristy Rigby:
So these are all things that reduce your stress levels and increase your efficiency. So a restock point for your packing materials is important.
Catherine Langman:
Yeah. Yeah. I love that.
Kristy Rigby:
So that’s a whole other topic, we might get to that a little bit later.
Catherine Langman:
Yep I love it. Awesome. All right. So my next question for you is, how much should you spend on your shipping costs and whether that’s individual or as a percentage of your total revenue? I remember years and years ago in my first business, shipping was actually cheaper. It is a bit more expensive these days. I know. But, if we were sitting on the 10% that was about right.
Kristy Rigby:
Yeah.
Catherine Langman:
So, yeah, I don’t know what it’s like these days.
Kristy Rigby:
I probably couldn’t give you a percentage of ours- [crosstalk 00:34:24]
Catherine Langman:
And it depends answer really isn’t it? Because different products- [crosstalk 00:34:28]
Kristy Rigby:
It’s a just depends answer, yeah and I think one of the things that you need to do is you need to weigh up, are you going to do flat rate shipping or are you going to directly charge the customer for that shipping and at what point can you afford to do free shipping? So there’s a couple of things here, it’s making sure that you flat rate shipping generally covers what your shipping costs is going to be. But it’s also palatable to your customer. So we might make a decision to take a hit on shipping in order to have a cheaper shipping price so that we get more people across the line. Or we might make a decision to make sure that we can cover our shipping and it all stays nice and cozy. The other thing that you can do is when you’re coming up with your product pricing. If you set your product pricing, if you have a bulkier product or a heavy product or something like that, you might need to factor in a couple of dollars there so that you can keep your flat rate shipping or your free shipping to a certain point.
Kristy Rigby:
Now, I’m not saying go and incorporate your shipping fees into every single one of your product prices because you could price yourself out of the market. I have seen a company do that. And it wasn’t the best thing to do because it made their entry level product too expensive and people are used to the whole free shipping over concept. So, we all want to get people across the line, but not when it costs us money. So if you’ve got a $10 product that costs you $7 to ship, offering free shipping on it is a sure way to come to a grinding halt in your cash flow because you are not making money. Nobody expects to get free shipping on a $10 item. They’re cheering if they do but it’s not worth it for you. So it’s not worth even offering that that product at that price.
Kristy Rigby:
So pricing your shipping, like when you’re talking about percentage of shipping costs, price your flat rate shipping appropriately, put you free shipping threshold at a point that is acceptable to your bottom line and price your bulkier products to incorporate to offset a little bit of postage so you can keep a free shipping rate or have a bulk product shipping rate. So if the order exceeds a certain weight or something like that, they go up to the next level of shipping- [crosstalk 00:37:02]
Catherine Langman:
Yeah, we’ve had some clients do that. With furniture and stuff like that. Which is fair enough because that stuff definitely costs a lot to ship.
Kristy Rigby:
Yeah exactly. And listen, if you’ve got a bulky product, the reality is you can’t send a parcel in Australia for under $7 or $8 unless you’ve got a really good. With our E-Parcel account, I think you can send a 500 gram for $6 [inaudible 00:37:27]. Anyway, so something like that, but you can just get something. If you can get something for under $7 because you’re sending a bulk amount out that’s awesome. But the reality is most people will be paying at least $8 to send any parcels anywhere. So if you’ve got a bulky product and people are buying one of, give them an incentive to buy two of. So, yeah, it’s one of those things that I think the reality is people know that they’re going to pay $8 to $10 for shipping.
Catherine Langman:
Yeah, yeah. I mean that’s where it’s at these days. And, I suppose like you do see much bigger online stores who have much cheaper shipping rates and yes, that makes it harder for the small guys to catch up a little bit. But they’re doing it. They’re either patting out their product cost, retail prices rather. So that they’re covering the shipping that way or that they’ve just got such massive bulk rates that they can do that.
Kristy Rigby:
Yeah or they’re taking a massive hit on it, because that’s part of their marketing strategy.
Catherine Langman:
Yeah. Well they would be in the beginning for sure.
Kristy Rigby:
Yeah.
Catherine Langman:
I know when the Iconic launched in Australia, they took massive hits on stuff like shipping because it was all drop shipping but that was their strategy to acquire customers was to [inaudible 00:38:52] stuff like that.
Kristy Rigby:
Yeah, yep. Absolutely.
Catherine Langman:
Cool. All right. Now, we talked already about some apps for streamlining your order processing. We’ve talked about other strategies for getting some efficiencies. Next question for you is managing pre orders from a fulfillment perspective, so from a marketing strategy, it’s great to do pre order campaigns, but it can be a bit of a nightmare at the other end right?
Kristy Rigby:
And listen, we’ve all done them because the temptation to go, oh, there’s a time frame on the marketplace. People are buying a certain product right now. And if I don’t put my product in front of everybody, I’m not going to get the sale. There’s also the whole idea that you do pre orders and you get a little bit of money in your pocket to pay that bill that needs to be paid before that item arrives. So we’ve all done it. We’ve all been tempted doing it. A much big business owner than I said to me one day, “Oh, we just got a new managing director for our company. And he wants to do pre orders.” And she’s giggling. And so, I could just tell from that comment that those guys have done pre orders before and it was not pretty. Pre orders get not pretty. If you want to destroy your efficiency, do pre orders because it’s funny when one of our clients is, hey, is it okay if I do pre orders on this shipment? Johnny goes, “Raise your hands up in the air and go no!” Because from a fulfillment perspective and a customer service perspective, it can be quite challenging.
Kristy Rigby:
And so you just need to balance your reputation management if you are going to do pre orders, because here’s the thing. The order might arrive on time, but it might be missing an item or there might be something in the shipment that’s faulty. And then you’ve got the liability of a whole lot of people who have ordered this product. But you’re not going to be able to deliver the product because things are missing or the product is faulty.
Catherine Langman:
There is something wrong with it, yeah.
Kristy Rigby:
And so then you’re going to have to go back to the customer and say, “Listen, sorry, I’ve got to refund you because I actually don’t have that item to give you.” You can manage that really well from a customer service perspective and still win the customer. Absolutely can, but it’s not ideal and it’s a lot of work.
Catherine Langman:
It is a lot more work.
Kristy Rigby:
So that’s best case scenario that the product actually arrives on time.
Catherine Langman:
Yes. But then you’re very tongue in cheek there, I know. Because these days it’s very hard to get your stuff on time.
Kristy Rigby:
Well, exactly. And listen I had this constant thing with a particular airfreight company that once my parcels gets to Sydney, they send half of them to Lismore and half of them to the Gold Coast because we’re in between those two big major centers. So every time I get my delivery, Joe from from Lismore shows up and I’m like, “So mate, how many of my parcels have you got today?” And he’s like, “I’ve got seven.” I’ve gone, out of nine. That’s a winner. And then [inaudible 00:42:16] from the Gold Coast might show up that day or a couple of days later with the other two parcels. And and so I’ve been pretty certain about things at different times, going, yep, yep, nah, I’m sure we’re going to have that stock in [inaudible 00:42:30] this week. I’m like, “Oh John that stuff’s arriving, you can just tell that customer it’s okay that stock will be here in time.”
Kristy Rigby:
And he’s looking at me this morning, going, “You said that stock would be here on time, now I have to go back to the customer and tell them that the stock isn’t here.” And I can’t guarantee that it’s going to arrive today even, because it’s already a day late. Maybe it’ll be another day late. So I can’t even guarantee that it’ll go out Monday.
Kristy Rigby:
So that’s when you get these awkward conversations with customers about it because, will it arrive to you in time? Will it be shipped from your factory in time? I’ve had that happen, I’ve heard that happening before for clients and for other brands owners. Where the factory swears to them black and blue, that the production will be ready by this date. And so you put your marketing calendar together and you’re all ready to go with your sneak peak. And your the shipping dates and you pre order and all that kind of stuff. And then they bump the production back by two weeks.
Catherine Langman:
Yep that’s happened to me.
Kristy Rigby:
Sometimes they tell you and sometimes they don’t.
Catherine Langman:
Exactly.
Kristy Rigby:
And so then you’re like, okay so where’s my shipping manifest? And they’re like, well we haven’t finished production yet. And so then you’ve got however many customers of pre orders, you need to be able to communicate with all of those customers and tell them about the delay. Yeah. So in terms of managing pre orders, what I would say is communication, communication, communication. I would say over estimate if you have to, but my preference always is box in hand. That’s when the stock gets sold. If you want to be completely efficient about things, that’s the ideal world, obviously in the sales and marketing world, occasionally we need to go to market to catch the market at a certain time before we have the stock in hand. But just know the risk that you take when you do that.
Catherine Langman:
Absolutely. So I guess that being the case on the odd occasion where it does have to happen. What can we do to make the Johnny’s of the world lives a little bit easier in managing the fulfillment end of things?
Kristy Rigby:
Well, stock here, that’s when you start selling. That’s probably the easiest way. Don’t sell stock until the stock’s actually in the warehouse. I remember many moons ago when I first finished University and I was working my first job, it was a customer service job and they always said exceed expectations. And the way you exceed expectations is giving yourself a buffer zone. So if you’ve got this idea in your head that it’s going to arrive at the beginning of December. Don’t plan to market it until the end of December.
Kristy Rigby:
Give yourself a buffer zone knowing the time frames and the delays that particular supplier could possibly have or that that shipping outlet could possibly have. Give yourself a buffer zone if you can’t, if you really need that cash in your pocket or you need to meet a certain market deadline or all of those kinds of things. Communication, communication, communication, every item that is a pre order, you need to put in big, bold letters at the top of the description. Pre order, shipment expected, on this date. And blow the date out a little bit.
Catherine Langman:
Yeah, absolutely.
Kristy Rigby:
And then only do the pre order when the ship has left the dock, when it’s in the air and you’ve got an expected delivery date or it’s on the boat and you’ve got an expected delivery date, because you can still have delays at port and at customs. And misses a plane, I had an order that went from China to Vietnam to Malaysia. Two airports in Malaysia, and then came to Australia. Weird, strange. Strange things happen.
Catherine Langman:
And then, of course, we’ve had some strikes at the customs in what? Melbourne or Sydney or something. So, yeah all kinds of stuff happens. So some really great tips there. And I think it’s worth just reiterating that if you’re going to do a pre order, just be very careful and mindful and communicate, communicate, communicate.
Kristy Rigby:
Yeah, exactly. Yeah. And then make sure you’re only listing as much stock as you’ve actually got coming or give yourself even a little bit of a buffer zone. Say you’ve got 50 coming, just list 25 of them for pre order. And then you’ve got 25 of them as a buffer zone in case there was a couple faulty items or that kind of thing.
Catherine Langman:
Exactly.
Kristy Rigby:
So give yourself a buffer zone. But one of the other big efficiencies for both cash and business really is stock and that’s some of the other things when you mentioned pre orders that came to mind, was you put the whole thing of stock and production and really, in lots of ways, you have to work backwards, you have to work backwards, basically, and that is working at when you want to market a particular product. So, for example, in Australia, believe it or not, the winter season for clothing starts in the beginning of February.
Kristy Rigby:
I know it’s still hot then, but that’s the fashion time frame for when you fashion forward customer is buying their winter clothing. So if you want to be able to launch a product in February, you need to make sure that you’re building shipping time and then production time. So you need to actually start producing that item a lot earlier than you think you do. I can absolutely guarantee you that because I’ve seen it time and time again. So someone gets to the market in February, you drop in March and half of those full price fashion forward people have already bought their winter outfits.
Catherine Langman:
Yeah, which seems insane. [crosstalk 00:48:46]
Kristy Rigby:
And they just don’t have as much money for yours. I know right? I know. So get your seasonality right, get your marketing right. Work out when the market needs the product and then work the production back from then and then add an extra month and start your production earlier than that, because one of the biggest things is stock outages. There’s nothing worse than banging your head on the desk going, if I only had stock, I could sell more stuff.
Catherine Langman:
Exactly.
Kristy Rigby:
We see it time and time again with people who got their marketing really flowing and it’s got amazing momentum to it. And it’s great and the Facebook ads are returning ads. It’s going out of stock. And then they run out of stock. And so then all that momentum goes away.
Catherine Langman:
And everything grinds to halt.
Kristy Rigby:
Stock shortage is a real challenge for people. And I do understand, when I started, I think I had $5000 in my pocket to start my first business. So I know what it’s like to need go really slightly up.
Catherine Langman:
Scrimp and save.
Kristy Rigby:
Scrimp and save on buying stock. So that can be a real tricky thing. So if your stock has sold out quicker than you expected it to, part of you needs to go, woo hoo. [crosstalk 00:50:19]
Catherine Langman:
That’s a great problem to have.
Kristy Rigby:
What’s that mean? Is that you have done so much better than you expected to. And then you look at the stuff that you did to market that stock and the timing of it and all of those kinds of things. And you got great. I’m planning my next production run. So it’s like, don’t get down on yourself if you run out of stock because it means you’ve actually got a really good problem, it means you’re selling stuff and selling stuff is half the battle. Yeah?
Catherine Langman:
It is, yeah.
Kristy Rigby:
And so it’s taken me 10 years to work out how to have enough stock here in order to capitalize on my entire high season. And I am currently out of stock on two of my biggest sellers. And I’m 10 years into this.
Catherine Langman:
Yeah it still happens.
Kristy Rigby:
It’s always going to happen. And you do your best and you order a whole bunch of stuff. Well meaning, thinking that everything’s going to sell the same. So you order the same amount of everything and one thing takes off. But then after you sell out of that one thing, you’ve got the other things and they don’t sell nearly as quickly as the other thing. What you need to learn is next time you do post production lines you only order that thing because you’ve still got plenty of all the other things. But it’s about having the cash flow to then go and reinvest in that [inaudible 00:51:38]. So stock shortages really can slow down the momentum of your business, as a fulfillment. It’s like, well, we do the fulfillment but we also do people customer service as well. And so when people are out of stuff, we get a lot more inquiries. Let me know when it’s back in stock, that kind of thing. And a lot of the time people are okay about it, if you can tell them a date.
Kristy Rigby:
So some of them will actually hold off on buying another item from a different person if they know when you’re expecting to receive that stock. So it’s just communication, communication, communication when it comes to stock outages. But be gentle with yourself, give yourself and grace to become the business owner. Rather than expecting yourself to know everything from day one, you’re going to learn over time how your stock sells and how it doesn’t sell and then how to how to invest appropriately in stock. And it’s just communicate early, go ugly early, I heard one of the girls say. Go ugly early, tell the person, rather than going, oh, maybe if I just leave in a couple of days, that stock will arrive and da da da da. And then a couple of days later and you haven’t emailed the customer, the stock doesn’t arrive and it goes further and further out.
Kristy Rigby:
So go ugly early. Go, listen, I’m so sorry, the stock isn’t here. We’re expected in three days, not two days time, in three days time. So let them know the worst case scenario. And then they’re like, let’s make a choice either way, refund or I don’t mind holding. [crosstalk 00:53:16]
Catherine Langman:
Yeah. I like that saying.
Kristy Rigby:
Go ugly early. I love it.
Catherine Langman:
Excellent. All right. So I have two more questions for you. They’re kind of related. So this is around when to get help. So a lot of our audience, they start their business themselves and they’re bootstrapping from the ground up and it’s one person in the business. But of course, you get to a point where you just don’t have the capacity and the time to be doing all the things and still growing the business. And in my opinion, getting help with fulfilling orders is one of the first things you should do. As the business owner, it’s not a great use of your time to keep doing that indefinitely. You certainly wouldn’t be seeing Jeff Bezos at Amazon, packing orders. So one question we get a lot is when do you hire or outsource, so obviously, there’s two options.
Catherine Langman:
You can either hire some staff and set up your own warehouse and do it in-house or you can outsource to a third party logistics fulfillment place. And the second part of the question is, how do you choose or evaluate that sort of [inaudible 00:54:30] facility?
Kristy Rigby:
Yeah. So the first one really is hire or outsource, isn’t it? Because that’s your two options as a business owner. We’ve all got more than we can do in today day on our plate as a small business owner. And I agree. I think pick and pack is the first thing that you can outsource, because it’s the thing that takes the least amount of brainpower. It is easy to find somebody who can show up to your house in their active wear and pack a few parcels for you with a few basic instructions.
Kristy Rigby:
Mind you, the other thing that I outsource before I outsource pick and pack was someone to clean my house, so that I had more time to work my business. [crosstalk 00:55:13]
Catherine Langman:
Totally. I’m with you on that. [inaudible 00:55:15]
Kristy Rigby:
That’s my first thing that I outsourced. My house cleaning. And then I went for a pick and pack person. Because you can get someone to do that and and if you’re packing from home, you’ve got to take into consideration where you’re packing when you’re making this decision. So if you’re packing from home. I’ve always hired friends because this person is coming into my house. They’re going to be around my children and I’m going to want to be prepared for them to literally see my dirty laundry. So you want to feel comfortable about that, enjoying having that person come over, not dreading having that person come over, enjoy it while they’re here. All of those kinds of things. Obviously, you choose your friend carefully, someone who’s going to work well for you, all those kinds of things.
Catherine Langman:
You don’t want to ruin the friendship.
Kristy Rigby:
You don’t want to ruin the friendship. If you’re packing off site, potentially, you’ve got more scope than to employ someone you don’t know. So that’s the thing. I think at the end of the day, when you look at the options for hire and outsource, the point in time that you look for that is when you’ve got to a point of momentum. So, really, you do it all yourself when you’re bootstrapping. But once you get to a point where your time is more valuably spent in marketing than it is in sending stuff out, then you really need to get someone else to start packing for you.
Kristy Rigby:
Because momentum is the key, isn’t it? If it’s marketing versus pick and pack, ditch the pick and pack. Because you’ve got momentum building, you build that momentum, as soon as you outsource that pick and pack and you have a whole bunch more time for growing your business, you’ll have more pick and pack to do. And so you’ll actually limit your own growth by deciding to keep doing it yourself because you’re like, internally, subconsciously, you probably saying, oh, if I want to do too much marketing I’ll have to do too much pick and pack.
Catherine Langman:
Yeah that’s right. Absolutely.
Kristy Rigby:
It’s a mindset thing. As soon as you, even if you think you can’t afford to outsource that pick and pack, as soon as you start to outsource that pick and pack you’re going to get more momentum. And you all of a sudden going to be able to afford to pay for that pick and pack.
Catherine Langman:
Yeah, that’s right.
Kristy Rigby:
It’s a [inaudible 00:57:44] thing. And you have to make that decision based on your own financial situation and the situation of your family and your business situation. All of those kinds of things of when is it time to really invest in moving my business forward? That’s when you decide whether you’re going to hire or outsource. So outsource, okay, when you hire someone, you still have to give them instructions, they’re still going to ask you questions, you’ve still got to manage their their wages and there’s a whole bunch of other stuff that comes on board with that. So when you outsource, you don’t even have to look at that stock. It doesn’t have to sit in the lounge room. It doesn’t have to sit in your office.
Kristy Rigby:
You can just get the outsource company to send you some samples so that you can look through [inaudible 00:58:37]. And so you’ve got the best of both worlds. Is that it’s out of your work space and so it’s out of your head space in lots of ways. And there’s pros and cons to that. But the biggest pro is that you then have a lot more focus for the things that you need to do.
Catherine Langman:
Yeah.
Kristy Rigby:
Obviously, when you’re looking at outsourcing, particularly if you’re going with 3PL or other fulfillment services of some kind, in order not to worry about that, you’ve got to choose carefully.
Catherine Langman:
You do.
Kristy Rigby:
Because if you’ve got it out of your hands and out of your mind. You’ve got to be ready to let the baby go. You’ve got to be ready for them to make some mistakes. You’ve got to be ready for there to be a few little things that they do that you would never do.
Catherine Langman:
Yeah people always do things differently.
Kristy Rigby:
Everyone does things differently and you are not going to find the perfect fulfillment service. I’m sorry to say it. I know we are not the perfect fulfillment service we have had to navigate teething stuff for every single brand that we’ve ever worked with. Because we had to navigate teething stuff for our own brand. It’s just normal.
Catherine Langman:
I guess it’s more about finding people that you can work with. And for me, I always look for referrals. So if I know someone who’s worked with that business, then I’m more comfortable to go, because our audience, they’re all their own business owners. So it is like your baby. And so you want to choose somebody that’s reputable and has had good things said about them.
Kristy Rigby:
Absolutely. And your inventory is one of your biggest assets. For most importantly, it is the biggest asset you have. And you’re handing that over to somebody else.
Catherine Langman:
That’s it.
Kristy Rigby:
That’s a big deal. So you want to know that you’re putting that in the hands of someone you know or a company that you can trust. Listen. You’re always going to have to have teething issues, so chopping and changing is just going to create inefficiencies for you. Do your due diligence upfront. And it’s not always the cheapest service that you want. Trust me, it can be the most expensive decision you make to go with a cheap service provider and that is across the board, but particularly with a 3PL. It can be a really difficult situation. I’ve seen people have trouble getting their stock back.
Catherine Langman:
Yeah, I think that, I’ve seen people lose their stock. I’ve seen people where the fulfillment centers just randomly done credits to the inventory. So you have no idea actually how much stock you have. There’s lots of difficulties that can happen with a cheap and dirty sort of offering.
Kristy Rigby:
Yes. And out of sight, out of mind is good for your head space, but out of sight, out of mind has got its risks to it, too, because you don’t physically see the stock. You don’t physically handle every item and see the stock disappearing off the shelf. So you have to be diligent about checking your metrics, you have to be diligent about checking the stock level. Because you get this intuitive ability to order stock, because you see all the stocks come through your hands as a small business owner. When you outsource to somebody, you have to make sure that your metrics are in place and that you challenge yourself to check your stock levels so that when you’re doing your marketing, you market the stuff that you have the most stuff of. Or you order the stuff that’s flying out the door, you order it in time, you get your stock reordering point right.
Kristy Rigby:
So either setting up notifications through Shopify or WordPress or whatever e-commerce system that you use to let me know when things get to a certain point, not just the last five or 10, the last 200 sometimes. If it takes you three months to order that, you need to know that you stocks down to 200. So get yourself the right stock reordering points, all of those kind of things.
Kristy Rigby:
But having said that, so we’ve just given the listeners a whole big range of concerns about it. But the biggest thing is you can get so much momentum by getting that pick and pack out of your hand and into somebody else’s.
Catherine Langman:
Oh absolutely. Yeah, yeah.
Kristy Rigby:
You win head, face back. You win time back. You win so much stuff that you do need to factor in a little bit of time to manage the relationship. But there’s a whole lot of stuff that now you don’t have to use your brain space on so your brain space can be committed to other things. So that’s the advantage of outsourcing rather than hiring. So hiring is a good stepping stone towards building up to being able to hire.
Catherine Langman:
Yeah. I remember years ago with my first business, somebody had more experience than me in business, said, do it before you feel like you’re ready because, it’s a pretty common mistake to leave it to the point where you’re the serious bottleneck in the business. And, sometimes it is hard to spot that. I know now, obviously in my business now, I’m not primarily an e-commerce store, but I do have the planner product there and I realized I actually was not marketing it any more because I just didn’t have time to fulfill orders.
Catherine Langman:
And so once again, I’ve become this bottleneck in the business. And so, yeah, it was the best thing getting that out of my hair and out from my responsibility and into somebody else whose job it is to do and all of a sudden I can focus on promoting it, which is great.
Kristy Rigby:
Exactly. I saw another order come through this morning. We sent out a whole bunch for you last week. So it’s working, there you go, growth just straight away. Immediate growth for you by outsourcing that thing. The other thing comes down to when you’re choosing a 3PL or a fulfillment service of some kind, is it is the cost. So just be aware that when you’re looking at fulfillment services, so someone the other day said to me, this person has quoted me $3.85 to send one product and then 50 cents for each new product that goes into the package. And that’s the cost of my fulfillment. I said that’s not the cost of your fulfillment. That’s the cost of picking that one order. The cost of the fulfillment is okay, so most 3PLs have a number of different prices, different things that you need to pay them for. Generally, you’ll need to pay for storage. That’s probably just a given, whatever option you go with. You going to have to pay for storage.
Catherine Langman:
Yeah, absolutely.
Kristy Rigby:
Some companies will then charge you a monthly management fee of some format. Usually they might call it a software fee or something like that, but it’s a payment you have to make every single month for them to help cover their overheads of connecting with your website and getting the orders through to them and all of those kinds of things. Then you’ve got the actual pick and pack. There’s your little $3.85 or whatever that was. That’s a really low ball quote. Then when your stock arrives in their warehouse, there might be a receipting fee.
Catherine Langman:
Because it takes time to receive it and count up and get it on the shelf.
Kristy Rigby:
So the stock arrives, they’ve got to, exactly. They’ve got to get it. They’ve got to put it on their shelves somewhere. So they’ve got to go through. They’ve got to sort. You know what your stuff looks like when it arrives to you in the boxes from the factory. [crosstalk 01:06:51]
Catherine Langman:
It’s kind of a mess.
Kristy Rigby:
[crosstalk 01:06:55] In order to get it ready to be packing effectively because the 3PL wants to pack effectively. They need to charge for receipting of the goods. And then if you want to stock count, they’ll charge you for that too. And then if they make a mistake, sometimes with some 3PLs, they make a mistake, they’ll charge you for not only the shipping, but a handling fee for fixing their mistake as well.
Catherine Langman:
To fix it? Wow.
Kristy Rigby:
Don’t just go, oh it’s $3.85 for me to send a parcel. Rubbish.
Catherine Langman:
Yeah, well, the postage fees would be on top too, right?
Kristy Rigby:
And then you’ve got postage fees on top. And then what kind of rates have they got for their area. So if you’re in Sydney and you get a 3PL in Western Australia, then all of a sudden sending parcels to Sydney just went up a whole bunch. So anyway, I often suggest that people try and find something close, within a reasonable business day’s back and forth to your house. Because you want to be able to go, worst case scenario, the stock comes in and they open it up and there’s an issue with it, you want to be able to go look at it, grab some. Take it home with you, without it being a major hassle.
Catherine Langman:
Ordeal.
Kristy Rigby:
A major ordeal for you. So if you’re in Melbourne, don’t pick a 3PL in Sydney, having said that, we’ve got clients all over the country, unless it’s someone you really trust. And so that’s what our [crosstalk 01:08:42] do different because we, yeah.
Catherine Langman:
You do though, yeah you know these people. They’re people you’ve known for a long time.
Kristy Rigby:
That’s right. And these are people who come to us because they know that what we offer is a little bit different to what everybody else is offering. And we bundle a whole lot more love into what we’re doing than someone who’s going to charge you a little fee for every single thing that they do. So there’s probably smaller 3PLs and fulfillment centers out there. They’re all going to have some variation of fee structures and all those kinds of things. We do things a little bit differently because it’s our heart in fulfilling for people really was that we saw that our business was constrained by me sending orders out. And so I saw a whole lot of other Mom businesses who had incredible products, not a lot of capital to be able to start forking out these regular fees for a 3PL.
Catherine Langman:
And not at the point where they would have the volume that some of these bigger centers would accept that either.
Kristy Rigby:
Exactly. Yeah, exactly that. And so we just kind of like, well, let’s partner with some of these small Mom businesses to help them really get out of the packing room and into promoting these gorgeous products so that people find out about them. And so we just started working with a few businesses that knew worked really well. And one of the things we decided really early on was that we would not just pick and pack but that we would do customer service as well.
Kristy Rigby:
Because the biggest thing is, okay so customer has an issue with their parcel, they email the business owner who then has email the 3PL who then has to look it up for them, and maybe have to call a courier and then get back to the business owner. And then get back to the customer. So that could be a three or four day round trip. If that customer emails us, we can send an email in an hour and so we just saw it as one of those efficiencies that we could get. And then rather than charging a fee for this and a fee for that and da da da da da, we just work with people on a percentage basis.
Kristy Rigby:
So we do a fairly detailed analysis of someone’s business and their sending and their ordering patterns and their seasonality and what their product looks like and how easy it will be for us to pack and all of those kinds of things. And we just come up with a percentage and we just say, every time you sell an order, we’ll put the exact shipping cost, the exact packaging cost and this percent.
Catherine Langman:
Plus this percent.
Kristy Rigby:
This percent of the sale value. And so for a lot of people, that was a no brainer because the shipping most likely to be cheaper than what they’re already getting. Packaging, we buy in bulk. We just simply invoice them for the packaging that we’re using and then that percentage is not an up front fee it’s when they have money, they pay us.
Catherine Langman:
When they’ve made the money, because they’ve sold product.
Kristy Rigby:
And that’s the thing, with a lot of 3PLs, all the risk is with the business owner. In this situation, we take a risk on the business owner. And they know that, we’ve gone to the effort of receiving their goods, having it all set up in our warehouse, getting the packaging in, taking up space in our warehouse that could have been used for another brand because we believe in the brand and we believe in what they’re doing. And so we’ve partnered with them right from the beginning. And I suppose that’s our heart.
Kristy Rigby:
Obviously, nobody’s in this just provide a service and make no money, we do make a profit on it, but we don’t make a massive profit on it. It’s just a regular profit. And it helps us to employ other local parent to have great flexible school hours work. And so I think we’ve got about seven or eight staff at the moment that we employ. Amazing, diligent people who haven’t been able to find any other work because nobody is happy for them to work from 9:00 AM to 2:00 PM.
Catherine Langman:
Yeah exactly.
Kristy Rigby:
So we’ve got incredible stuff. And so making a profit on this stuff isn’t the idea. It’s about making it as easy as possible for this business owner to grow. And if they grow, we grow. We make a little bit of profit on that. We invested into the business and we can help more businesses grow and all those kinds of things. So that’s our heart. Listen you’re not going to find too many people around that are doing fulfillment services the way that we do it. But there are people out there and there are good professional 3PL services that you can find, do your due diligence. But it’s a brilliant idea. I tell you what, it really is the first thing to consider outsourcing, after cleaning your house.
Catherine Langman:
Yes, do that first.
Kristy Rigby:
I reckon do that first. And then think about either hire or outsource. Generally you might hire for a little while first, just to give yourself some momentum, and then outsource.
Catherine Langman:
And figure out some systems and that stuff.
Kristy Rigby:
Yeah, yep.
Catherine Langman:
I love it.
Kristy Rigby:
Yep, exactly. That’s my two cents anyway.
Catherine Langman:
I love it. And it’s been a mammoth episode. This one I reckon it might be our record.
Kristy Rigby:
Sorry get me chatting and I’m all over it.
Catherine Langman:
However, it’s such a big topic and it just comes up all the time. And I think it comes off at different stages of business as well. You know, you get something sorted as you get moving and then as you grow, things change and they certainly change as you scale. So hopefully you listeners have found this useful and you get some tips and tricks and ideas for how you can manage things as you guys are growing. Let’s leave it there, though Kristy and I will absolutely include your Boutique Brands link in case anyone wants to connect with you and ask you some questions.
Kristy Rigby:
Sounds great.
Catherine Langman:
Ask for help.
Kristy Rigby:
Yeah, absolutely. Yep no worries.
Catherine Langman:
Fabulous. All right, guys, let’s leave it there. I look forward to appearing in your earbuds again next week on the show. Bye for now.