A home shopping television network is an ideal way to sell a product in high volumes, quickly. Once you sign a deal, however, you need the fulfillment know-how to protect your relationship with the network and make sure your operations are ready for order spikes ranging anywhere from 25,000 to 100,000+ orders per day.
HSN and QVC are both part of the Liberty Interactive’s stable of retail brands, but both operate separate TV channels. More shopping networks are popping up, but these are the biggest.
Brands leverage HSN and QVC as part of a diversified sales channel strategy. But direct response TV (DRTV) requires unique order fulfillment solutions. For example, they don’t want to air an infomercial and sell 500 units; they want to sell 10,000 a day, at least – and fulfill these orders fast.
Many brands are aware of the high sales potential of home shopping networks, but not all understand the operational coordination that is required to work with these networks. This article will share a high-level overview of what is involved in drop-shipping orders to the home shoppers.
After the Deal is Signed
Both HSN and QVC have their own distribution networks that they can use to fulfill orders. When they handle your storage and shipping, you’ll need to meet very strict rules for preparing and shipping product to these distribution centers. If you don’t follow their routing guides precisely, you could incur costly chargeback penalties.
For some product types – for instance larger products – the network may choose not to receive and ship the product itself and, instead, have you drop ship the product directly to the consumer from your own facility. Once a drop shipping contract with the network is signed, your operational team – including administration, warehousing production, and customer service – will prepare and coordinate with the networks before, during, and after the campaign.
If you’ve never done drop-shipping with one of the big networks, you need to know that there is a low tolerance for errors. These networks are interested in providing the highest level of service to shoppers, and accurate, on-time delivery is a big part of that. Poor fulfillment service by the drop shipper reflects badly on them. If you are inexperienced in this area, you may want to consider outsourcing to a company like Amware Fulfillment that has a successful drop shipping track record for DRTV companies and is recommended for order fulfillment solutions by the largest home shopping channels.
Fulfillment Center Locations
Product dimensions, weights, and your fulfillment center location(s) will be used by the networks to calculate transportation costs. Although orders will ship on the shopping channel's freight account at a discount, it is in both parties' best interest to reduce transit distances to reduce shipping costs. Using a partner with a national fulfillment center network makes sense for these types of campaigns where there is high velocity and a low number of SKUs. Also, purchases on TV are often impulse buys. These consumers want the product quickly, so it helps to have warehouses nearby.
Each network has a unique combination of parcel carriers they choose to work with, so your operations will need to have multi-carrier labeling and shipping capabilities. It is critical to coordinate volume spikes with carriers to prevent shipment delays associated with equipment shortages.
Inventory Quality Control
As a drop shipper, your team is trusted to meet the quality standards the home shopping networks have established: inventory quantity and quality, as well as accurate and timely orders fulfilled within the deadline. On large or new campaigns, an inventory auditor from the network will typically be dispatched to your fulfillment center to conduct an "in-house inspection” of your order fulfillment solutions. Essentially, they want to validate that there are systems in place to achieve the required quality standards.
Another level of quality control involves sending samples to the network that mimic what would be sent to the consumer. This sample will be used to confirm if the product arrives in pristine condition with the correct selection of packing materials. During the production of the actual batch, it's critical to use the same packaging as the sample. If you don’t, then shipping prices may differ from those already negotiated. For instance, if your sample shipped in a 5” by 7” box but the box size for your consumer orders is slightly different, you might receive a chargeback to cover any added transport costs.
Turnaround times vary by contract; however, speed is encouraged. Rush orders must ship the same day and, usually, there is a maximum window of two calendar days. Weekend order fulfillment is possible depending on the campaign air-date. Order-to-ship cycle time is major issue to HSN and QVC so drop shippers need to plan labor to meet the potential throughput. That’s not easy when demand is hard to predict.
Sending Ship Confirmation Files
Shipment confirmation data is what the networks use to trigger the charge to the customer's credit card account. Don't do all the hard work and forget this key piece of inter-business communication. Depending on the network, different data files may be transferred to update the shipment status used by the network's customer service agents.
This is a key requirement and networks need this data within 24 hours. If you or your 3PL partner don’t have the systems expertise to do this correctly and quickly, this kind of fulfillment project is not right for you. Your safest bet may be to work with 3PL already recognized and authorized by the network. These providers go through an approval process that includes the ability to seamlessly exchange data files.
Customer Service & Returns
“Refused" or "Undeliverable" returned shipments can be sent back to the shopping networks, or they can ship back to the drop shipper’s warehouse. Returns must be processed quickly and order status must be communicated to the network's Customer Service team, which will arrange credit and communicate with the customer.
Working with an Expert in Order Fulfillment Solutions Shopping Networks
Home shopping networks can be a lucrative part of a multi-channel sales strategy. But the fulfillment challenges for this channel are significant. That why working with a DRTV fulfillment specialist like Amware Fulfillment is a good idea. They bring:
- Know how. You don’t need to be the expert. They can advise you of the exact steps to take based on their experience with the channel.
- Speed. They can move through the steps for set-up and compliance much faster than a 3PL unfamiliar with this channel.
- Scalability. Chances are a 3PL experienced in DRTV fulfillment will have facilities across the country to speed delivery times and reduce parcel shipping costs.
To learn more about how to master the operational aspects of selling through home shopping networks, contact Amware to start a conversation.