Fulfillment Services — Benefits, Challenges Of Fulfillment
A key part of developing a revenue-based model is to implement an appropriate pricing strategy. “Understanding the full costs of fulfillment can be difficult, but you need to understand the costs in order to price at a profitable margin,” adds Tolliver-Nigro. “Fulfillment is an entirely different business from printing or prepress, with different rules, requirements and cost structures.”
Part of the challenge for printers is that most of the costs incurred by fulfillment services do not arise from producing something, as they do with printing. “When you offer fulfillment, you’re charging for your time, space on the floor, and the tracking, monitoring and reporting associated with the service,” she says. “These are things printers are notorious for under-valuing. But there are costs associated with these activities and, to make a profit, you need to know what they are.”
Being successful with fulfillment service entails a level of engagement with the customer that goes beyond the typical print transaction. That’s both good and bad news for printers.
On the one hand, this deeper level of engagement can increase customer loyalty, making clients who are satisfied with your services less likely to shop around for other vendors.
“Offering fulfillment programs can set up a long-term revenue stream for a graphic communications company and help make the client slightly less price sensitive,” she contends. It also, however, requires the printing company to gather a lot more information from the customer in advance of setting up the fulfillment solution for a specific client.
Some Solid Questions
In “Diversifying With Value-Added Services,” Tolliver-Nigro recommends that salespeople ask customers the following questions to lay the groundwork for a customized fulfillment program:
Who is ordering your materials (sales offices, distributors, retail outlets, etc.)? How often?
What is the volume of pieces requiring storage? Generally, how many units are being ordered at a time?