Whether you run a marketplace behemoth or an up-and-coming eCommerce brand, there’s one thing you can’t avoid. Shipping costs.
Rising fulfillment costs remain a cloud over eCommerce businesses, sapping up as much as 18% of every dollar earned. To make the situation even more complex, 62% of shoppers expect fast, free shipping and are willing to back out of purchasing if they consider fulfillment too slow or expensive.
Consequently, the hunt is on for a consistent way to drive down fulfillment costs without sacrificing quality.
Depending on your business circumstances, your solution could come in the form of zone skipping. In this post, we’ll cover the ABCs of zone skipping and how to implement this shipping strategy to workaround sky-high fulfillment fees and drive your business forwards.
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Zone skipping is the process of delivering large amounts of packages (either a truckload (TL) or less-than-truckload (LTL)) to a carrier’s parcel hub, bypassing specific zones on the way. The parcel hub is nearby to the packages’ end destination, making it an efficient parcel delivery option.
Many retailers and eCommerce brands engage in zone skipping because the practice of skipping carrier zones allows them to save cash on shipping expenses and get goods to customers faster and easier with less product damage.
Each carrier will have its rules and processes for zone-skipping services. However, there are some typical steps you can expect. These are:
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Zone skipping can be a great way to increase your store’s fulfillment capacity, speed, and profitability. However, it’s not for everyone. Let’s run through some instances when zone skipping makes sense and when it’s best to seek an alternative fulfillment approach:
When to consider zone skipping:
If you process hundreds of orders or more daily, zone skipping could work for your business. This is because the more orders you can send to a zone in one shipment, the more you can save per parcel.
Zone skipping works best for businesses whose orders come from a set number of regions with a country rather than dispersed across the territory. This setup allows for bundling parcels into a TL or LTL shipment bound for a specific carrier station. For example, if you sell in the UK and receive orders from Manchester, Birmingham, London, and Cardiff so you can ship to hubs in these areas near your customers.
If you’re hoping to test more carriers, zone skipping can help you do it. You can use a different carrier for each zone you serve to assess their capabilities, making zone skipping a quick and easy way to find your match.
Zone skipping isn’t a good idea if:
Zone skipping provides opportunities to monitor parcel movements efficiently. But depending on the route length and carrier used, parcels can go days without being scanned once split according to their zone and in transit. Also, some carriers don’t provide updates on the first part, “line haul” of the zone-skipping journey, reducing your visibility. So, if you need updates on the hour, every hour zone, or very regular notifications, zone skipping won’t meet your needs.
Peaks and troughs in your sales are normal, but if you have huge, unpredictable slumps, zone skipping may not work out. This is because you need a significant shipment size to fill a TL or LTL continuously. So when your store can’t make the order volume your carrier has agreed to ship, you’ll have to wait to fill it, which could cause delays.
If you don’t outsource your fulfillment, there may be some set-up costs to implement the appropriate transport management solution and IT integrations with partner carriers to track parcels and monitor operations.
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If you decide zone skipping could be a profitable shipping method for your business, the next stage is to get your set up right for maximum efficiency and productivity. Let’s break down the steps to take:
The first task on zone skipping to-do list is to identify all the areas you ship to and consider which ones lend themselves to this fulfillment method. Don’t forget to run each potential region the criteria (high order volume, steady sales, and order origins concentrated in certain regions). Remember, you not only be able to fill a TL or LTL but also ship to a particular town, region, or city as a load should be cheaper than shipping the parcel solo.
For example, say you sell from the East coast in the US, and many of your orders come from the West coast; it could be a zone-skipping prospect. If you have sufficient order volume and the cost of using zone shipping is considerably less than shipping the product individually.
Top tip: The more zones you can skip, the larger the cash and time savings you stand to make. So, double-check your potential routes.
Your sortation system will play a critical role in how smoothly your zone-skipping strategy plays out. So put your best forwards.
Analyze past sales and customer data to understand how many orders you expect to process per hour. Once you have this information, implement sortation tools that’ll allow you to sift through to goods quickly, even during peak times. For example, some equipment that can help you sort through high-order volumes include:
The good news is there are more carriers in the market than ever. But to find those well-equipped to execute zone skipping and has experience in handling eCommerce orders, you’ll need to do some digging. Speak with existing carriers to understand whether they offer this service. Also, explore to help filter through the options, only entertain carriers that:
If you choose to execute zone skipping in-house and partner with carriers, having a fulfillment process and station built for speed and efficiency is essential. Here are a few key resources to have:
Perhaps you’ve looked at the costs and work involved in executing zone skipping in-house and don’t find them appealing. No problem, there’s a workaround. Outsource your zone skipping activities to a 3PL to cut the learning curve and lengthy setup. As a standard, the 3PL you choose should have:
Zone skipping can be an excellent opportunity for high-growth eCommerce businesses to save cash, simplify operations, and drive efficiency.
However, remember, zone skipping isn’t right for every business.
Before you dive in, get familiar with the traits needed to do well with zone skipping and explore other fulfillment options to make a solid assessment.
If you decide to proceed with zone skipping, only use it in the areas that make sense, considering the cost-saving vs. time and effort required. And if you’re in a hurry to see results without placing pressure on your team, outsource! An optimized fulfillment strategy awaits, so get started today and watch your business transform.
Need to get your business ready for zone skipping? Learn how MyFBAPrep can make the process easy.