Amazon recently announced it will spend $800M to bring free, one-day shipping to Prime members. This is an indictment of our increasing inability to plan past our noses. Distribution companies have been fighting this costly next-day fight for years, often without directly assessing the increased costs to customers who require the service.
Failure to plan is simply a plan to fail. – Anonymous
Although I’m a Prime member, two-day shipping is still a luxury in my opinion. With the exception of fulfilling an order for a life-saving or a perishable item, it is hard to rationalize the urgency. While we may believe Amazon (and now Walmart < link >) can afford it, there’s no question customers will pay for the added costs. For B2B relationships such as a distributor and veterinary clinic, there’s virtually no need for next day shipments if reasonable forecasting and planning is done.
Zero quantity on hand is NOT an acceptable reorder point for 99 percent of all SKUs veterinary hospitals routinely replenish. – Kirk Augustine
Source: Fast Company, April 25, 2019. Link.
Also see: Be aware of accounts that eat your lunch, Animal Health Digest, May 7, 2019. Link.
Accounts with very high ship counts and a low shipment value will be profit-killing accounts. – Randy MacLean
INSIGHTS: Beyond the increased cost of goods, looms the issue of the environmental impact of adding more stress to our transportation infrastructures <link>. Drones and electric trucks may come along eventually, but fossil fuels power most deliveries < link >. Further, carriers such as UPS and FedEx add margin draining costs and do not invest in developing animal health solutions or rebuilding highways.