With online shopping increasingly becoming the norm among consumers, competition among B2C companies to offer cheaper, faster shipping options is fierce.
Driven by companies like Amazon offering two-day, one-day, or sometimes even same-day delivery, companies who choose not to offer faster shipping may be rapidly losing customers. In fact, 31 percent of online shoppers expect to have the option to expedite orders when checking out (1). When fast shipping speeds aren't an option, 41 percent of general online shoppers and 60 percent of Amazon Prime members think twice before making their purchase.
This demand for faster shipping times from B2C companies is beginning to spill over into the world of B2B sales as well. But much of the industry is far from prepared to meet this demand. Many companies aren't equipped to offer faster fulfillment on orders shipped to businesses, leading many of those businesses to seek alternative options.
Red Stag Fulfillment is one such alternative. Born from a successful e-commerce store owned by two entrepreneurs frustrated by a lack of high-quality fulfillment partners to handle their company's growth, the company now has warehouses across the U.S. working to provide an innovative approach to B2B fulfillment. We caught up with RSF's Director of Business Development and Marketing, Jake Rheude, to talk about how the company is bringing the speed of B2C to B2B.
Who are your customers, and what services do you have to offer?
Red Stag Fulfillment (RSF) fulfills orders for online retailers. Our clients are a mix of e-commerce companies in the B2B arena, as well as some from the B2C arena. We also have some that would be categorized as serving both fields. Either way, Red Stag is focused on serving e-commerce companies that are shipping large, heavy, and/or hazmat products. This includes everything from medical devices, office furniture, to pet food and cases of olive oil. Our expertise is in our knowledge of ideal packing materials for these heavy products that would be difficult and expensive for retailers to ship on their own. Our technology also ensures an error-free order fulfillment process.
What are the main pain points you see B2B companies have?
More and more frequently, we’re working with B2B clients who are looking to enhance their fulfillment speed to match the expectations of B2C online retail. Two-day fulfillment has become the standard when it comes to customer expectations in the B2C space. In the past, B2B customer expectations in terms of shipping times have been more relaxed. However, more and more purchasers from B2B companies are seeing those two-day shipping options becoming the norm for B2C companies. This has led to a demand for two-day shipping from B2B companies as well.
What are your main tactics to reach new customers? How do you encourage repeat purchases and turn those first-time buyers into loyal customers?
Red Stag takes a unique approach when it comes to maintaining our clientele. Unlike other fulfillment companies, we do not require our clients to sign a long-term contract. Instead, we use revolving 30-day agreements. Our philosophy is that we understand how crucial of a step order fulfillment is, so if we aren't meeting the expectations of our clients, they should be able to leave us, no questions asked.
We also operate with the in-house expectation that we will earn the ongoing business of our client’s month after month. We've found that this mindset has led to better performance from our operations team, as well as success acquiring new customers from a sales perspective.
What are some of the biggest challenges associated with selling to businesses? What are your main takeaways?
I'll be the first to admit that we are not the least expensive fulfillment option out there. We consider ourselves “middle of the road” in terms of our pricing. But we also have much better accuracy and on-time rates than our competitors. Because of this, we have struggled with some businesses who may choose another fulfillment provider who might be $0.15 cheaper on a per order basis. That said, we have also experienced several instances where these companies end up coming back to us 6-12 months later, because they realize that the $0.15 cost difference is not worth the headache of the added late shipments or incorrect shipments being sent to customers, or the lack of transparency and accuracy dealing with their inventory. We’re very focused on being the best total value solution for our customers, but for potential clients who are primarily focused on line-item costs, this can be difficult to communicate effectively.
What would be your main advice to other B2B companies just now starting to sell online?
You’re not going to be able to do everything yourself. But when evaluating potential partners, look at total value, not just cost. Especially for any sort of online retailer, fulfillment services are a critical element to success. After all, if you’re constantly putting out fires on the order fulfillment side of things, you’re never going to maximize your potential growth or maintain your customer relationships. Consider the old saying: “If you think it’s expensive to hire a professional, you should try hiring the amateur first.” Take this to heart when evaluating the outsourced partnerships that have the chance to make or break your company’s growth.
Where offering the lowest priced items or the highest quality materials may have once been enough to keep your B2B or B2C customers loyal, the changing world of online shopping now requires more. If you want to continue to grow and adapt digital transformation to your industry, rethinking how you fulfill your orders is a must.
Red Stag Fulfillment
Red Stag Fulfillment, an order fulfillment company with warehouses across the United States. Red Stag Fulfillment was born out of a successful ecommerce store when two entrepreneurs couldn’t find a high-quality fulfillment partner to handle the company’s growth. By taking an innovative approach to how an ecommerce fulfillment service should operate, Red Stag was born to meet the needs of other online stores aiming for world-class levels of customer satisfaction and retention.
Topics: Disrupting B2B