Cross-Docking and Crowdfunding
Updated by Neil
Here we get to know about:
- How to deliver the rewards you promised to people whom you have promised money once your campaign is successfully over; your crowdfunding backers.
- One of the four methods of the fulfilment of orders is Crowdfunding. It is the most significantly used method with Crowdfunding Campaigns.
In this method of fulfilment, the manufacturer directly sends the products to your 3PL provider’s dock for shipping. These products simply cross the warehouse as they have already been sold. In that short span, the shipments are sorted, their end destinations are looked up, and then they are loaded for delivery.
Advantages of Cross Docking
The advantages of Cross Docking include:
- The efficiency is higher as the products move faster from the manufacturer to the customer who ordered the products while spending less time stocked up in warehouses.
- The products are not stored in warehouses which makes the management of inventory is simple.
- The labour costs incurred at warehouses are cut down as the products do not require being stored.
- The delivery time is cut short, and the turnover of products is higher as products spend less time (usually lesser than 24 hours) in transit.
- The handling of products from end to end is reduced.
- Quick delivery ensures customer satisfaction.
There are various other areas where ‘crowdfunding’ works very well:
- Flash Sales for e-commerce companies.
- For inventories that have a steady demand.
- With perishable products; for example, flowers.
Disadvantages of Cross Docking
- There are several disadvantages to using this method of fulfilment:
- The costs of starting up are usually high.
- The effective setting up of these enterprises requires a lot of careful planning and attention to management.
- The time-table is usually rigid, and it may not leave enough room for the supplier to repair issues. This means the supplier is more at risk, and they may not deliver on said time.
Crowdfunding Fulfillment Tips
Include Fulfillment in your Budget: You should always include ‘fulfilment costs’ while your crowdfunding campaign is in the planning stages. They might end up taking up a part of the operation costs if an estimate for these costs is not initially considered. It would help if you always considered the costs of packaging, posting, etc.
Create a Buffer for Unforeseen Expenses: Things might not always go according to your plans which may, in turn, lead to expenses unexpectedly increasing. You should include a buffer of sorts in your expense plans to cover unexpected changes in critical costs such as costs of production, input, or shipping.
Simplify your Rewards: As enticing as it may be to get creative with the kind of rewards you offer to your backers; you must always keep in mind that all of that comes at a price and it also complicates the whole process of fulfilment.
For Instance: Campaigns for apparel at times give rewards in the form of a variety of clothes in different designs and colours. When we add them to various clothing sizes, there suddenly is a spike in the number of different items that have to be manufactured and shipped.
Choices and rewards in a smaller set, in turn, make the entire process of product fulfilment much faster and easier.
Schedule Sufficient Time for Production, Packing, and Shipping: Experiencing ‘bottleneck’ is very common for processes of production. These phases should not cause any delay in your delivery to your backers. A good way to make sure that you deliver to your backers on time is always to include some extra time for the production, packaging, and shipment delivery. As a thumb rule, you should bake in 6 months to a year at your campaign end to deliver to all your backers.
Get Professional Help: You will have to work with at least one of the many third-party logistics providers that offer services for cross-docking. You could consider working in collaboration with a ‘specialist crowdfunding fulfilment partner’. They will try to make the process easier and will also help to ensure that your backers get delivered on time.
Among crowdfunding campaigns, crowdfunding is the most significantly used method. It is also a great alternative in other scenes, such as flash sales for e-commerce businesses.
You should include the cost of shipping in your fulfilment costs and also a buffer of sorts for critical expenses (production costs, inputs) while you are drawing up a budget. You should also add a time buffer to cover bottlenecks during production.
Don’t make the rewards overly complicated if you want the process of fulfilment to be smooth and think about getting help from a professional.