BUSINESSWEEK ONLINE : NOVEMBER 20, 2000 ISSUE
BUSINESS WEEK E.BIZ -- SPECIAL REPORT

How to Deliver?


Established retailers are learning what e-tailers already know:


Distribution centers designed to deliver truckloads of merchandise to stores don't work for a single shirt going to a home. That means either building a new online fulfillment system or hiring someone else to do it. Here are the pros and cons of both:


Build it yourself

Pros: Control is the key. You know exactly how much your fulfillment system can deliver and that it will be dedicated solely to handling your own products.

Cons: A state-of-the art warehouse and delivery system starts at about $20 million. Most companies have spent so heavily on marketing that they can't afford to make the investment.


Hire someone else

Pros: You don't have to invest millions building your own system, and you can save even more through volume discounts that an independent fulfiller serving many clients can negotiate with carriers like Federal Express.

Cons: It's difficult to predict demand, so if it spikes, the fulfiller may not be able to handle your orders. It's even worse when the fulfiller's clients all have peak seasons during the same time of year--Christmas.



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EBIZ Cover Image, link to ebiz table of contents
EBIZ Contents for issue dated Nov. 20, 2000


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