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Tracey S. Roth

Dot Com Commerce

Managing Editor, [email protected] CENTER Solutions

[December 15, 1999]

Downloading A Sweater

It's a familiar routine: I go online to buy a product. I can see it a digital picture of it. I can ask to chat with a sales representative online. Companies can direct additional marketing or upselling at me, electronically. I enter my credit card into the computer. The purchase can be tracked. All electronically.

But there's one element of the whole process that still needs to be accomplished more or less in the old-fashioned way: warehousing and shipping. This is the tricky part about e-commerce that rarely gets attention. I can't download clothing. A dot com company can't store specialty Belgian chocolates on its intranet. When it comes down to actually supplying your flesh-and-blood customers with their physical products, someone still needs to pick and pack these items by hand. Not a big problem for the Very Big Corporation of America.com. They can maintain their own resources. But what about the small companies? Those same companies that were breathed into existence by the birth of electronic commerce? Often, these companies are run out of very small offices, or even homes. Not a warehouse in sight. Who will do their product fulfillment and store their goods?

Very smart shipping and warehousing companies wise enough to see the enormous opportunities e-commerce has presented to them, that's who.

Storage And Fulfillment For Small Business
The usual suspects have already announced their intentions to the e-commerce universe. In September, Federal Express announced the launch of a suite of services designed to help businesses selling over the Internet. Three APIs, called FedEx ShipAPI, FedEx TrackAPI and FedEx intraNetShip, were designed to allow companies to connect their applications to Federal Express information systems via the Internet for the purpose of automating the shipping and package status tracking processes in real-time.

United Parcel Service (UPS) has also entered the fray with the introduction of its UPS Internet Tools. The product suite includes UPS Tracking, which allows customers to track their packages off a seller's Web site; and UPS Quick Cost Calculator, which enables customers to determine the shipping costs for their purchases and view all possible shipping options.

Telebyte, Inc., a provider of data communications connectivity solutions, has announced its intent to introduce a system called DeliverNextDay.com, an Internet-based business-to-business express fulfillment system. Vendors using the service can place a button on their Web sites linking to the DeliverNextDay.com site. Customers can then place and track orders online 24 hours a day. Orders placed during the business week before midnight Central Time can be delivered by 10:30 (Central Time) the following morning. Companies using the service are informed automatically when inventories are in need of restocking.

Another start up that opened its doors for business this year is iShip. The company, which offers a Web-based shipping service designed specifically for e-commerce, is targeted at companies with relatively modest shipping needs, such as small Web stores. iShip offers an array of information on shipping rates, services and package delivery status from different shipping carriers. Web merchants can choose the appropriate service for each package according to their needs. The company's Sell It tools, designed for online sellers, allow merchants to offer potential buyers accurate shipping estimates by allowing them to enter their ZIP codes and preferred carriers. iShip then creates a hyperlink that merchants can paste right into their online item descriptions. When shoppers click on the link, iShip.com asks them to provide the remaining information (beginning with their ZIP or postal codes). Buyers can then see a table of shipping alternatives and can evaluate their choices.

The tracking option is an important consideration with Web-based sales, even more so than with traditional catalog sales. Previoulsly, people who ordered products via paper catalogs expected and accepted a certain amount of waiting for their orders, and they knew they could check their order status using the same toll-free number they'd used to place the order. In a climate where "Internet time" moves even faster than the mind of the average Netizen, we want to place orders immediately and we want our packages as soon as we log off (well, almost). We're still not particularly convinced that the individual answering our toll-free call is going to have knowledge of our Web transactions (for good reason…historically, in most cases, they won't). Electronic consumers are impatient and still not completely trusting of a system in which we place orders without the help of human intervention. As a result,customers today are more likely to want to track packages than their mothers who, 25 years ago, would order new spring drapes from the Sears catalog.

Add Free Shipping To The Mix
The buzz in the e-commerce world, especially this holiday season, is free shipping. Many online stores have very little in terms of product to differentiate themselves from one another, so one method of doing so is superior customer service. A second method is superior shipping options. Some companies have taken this latter method to the extreme, and made shipping free. L.L. Bean did it with their catalog sales long ago, and it's one of the elements that helped make them so successful. An alarming (or wondrously plentiful, depending on which side of the e-commerce fence you're on) amount of sites have shown up this holiday season boasting free shipping, usually for orders that total over a certain amount. It's strong incentive to both get consumers to your site and get them to spend more while they're there.

How are these companies doing it? By rolling the shipping costs partly into their product prices, and partly by absorbing them into their own bottom lines. But if free shipping ups traffic and pulls market share, it's an experiment well worth carrying forth past the holiday season, if it can be made economically viable.

Despite 25 years of new technology, while I wait for my new sweater I'm in the same situation as my mother, waiting for her new periwinkle blue window sheers in 1974. But thankfully with a less silly hairdo.

Tracey S. Roth welcomes your comments at troth@tmcnet.com.

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