Pick & Pack is a phrase that you will commonly come across while researching fulfillment services.
In this post, we will help you understand why Pick & Pack is so important, the difference between the two and what it costs generally.
While many of today’s fulfillment companies offer both pick and pack as a service, there is a distinct difference between the two.
In an ecommerce business, you will first send inventory to a warehouse of your choosing. This is where fulfillment process begins.
Pick refers to the process of selecting items from your inventory and sorting them into appropriate orders. This is done by the warehouse teams in the fulfillment center, who will physically process each item that you sent. It is carried out by specialized workforce who are called pickers.
Every time you generate a sale, the eCommerce software will send a work order to the warehouse, which will include the quantity and the item. This is called a picking list. The picker follows the instructions on his screen and picks up items from your inventory and puts them in the correct box.
In a nutshell, pick is the process of getting individual items from where they are stored.
Packing, on the other hand, refers to the process of grouping items into separate orders and generating shipping labels for them. The packing list is generated by the software based on the picking list that was sent. For this, warehouse staff will group together your individual items into separate orders and package them into the appropriate boxes with the materials chosen by you.
Think about your parcel as a tiny drop in an ocean of inventory that’s stocked in every warehouse and fulfillment center around the world. Now picture an employee who sets out each day to find out a single item from this sea of inventory. Inventory with SKU numbers that are mirror copies of one another. Inventory that can be as small as a hair accessory.
The chances of them picking the wrong item is very high, no matter how efficient they are or what kind of picking system they use. What happens when they pick the wrong item? It triggers a chain of events which will end in a disgruntled customer sending you stinkers and breathing down your neck. It delays the entire fulfillment chain. You are dealing with refunds, bad reviews and chargebacks even.
What’s worse is that you continue to pay for storage despite the 3PL’s manual error. That’s why Pick and Pack is important. It is a vital cog in the fulfillment wheel that keeps the entire supply chain running smoothly.
Shipping mistakes will always happen, but the frequency of such errors can be drastically reduced if you choose a fulfillment company which has a low error rate in picking and packing.
Here are some of the benefits of pick and pack
Speed – Many 3PLs have a flawless system in place for pick and pack, where orders are processed the same day, sometimes within hours. These may be simple manual picking, where skilled and experienced pickers bring down the error rate to a minimum, or automated pick and pack systems where barcodes and RFID tags help speed up the entire process.
Now, even drones and AI-powered bots are used to speed up this process. Specialized robots and automated systems like these, combined with experienced pickers can vastly improve pick and pack rates. This in turn improves your delivery speed. Customers can expect error free deliveries in as less as two days.
Efficiency – The efficiency of the 3PL you choose to work with will directly impact your overall expenses. Advanced pick and pack systems like zone picking, which uses the principle of allocating workstations based on the warehouse layout can help reduce errors and increase pick rates.
This also reduces labor costs and increases profits by optimizing the process to fit your budget and goals. The more efficient the pick and pack workflow, the lesser will be your storage costs.
Customer experience – There’s not a single customer who would want to deal with error ridden order processing. This reflects in bad reviews and feedback that can damage your brand image. So, it is important to partner with a 3PL fulfillment which can provide you with an error free pick and pack experience. One that will meet all your KPIs and provide timely order processing.
There are various processes by which a 3PL completes pick and pack. Here are the most common ones.
Manual picking – Small businesses with limited products will prefer to manually pick. This is also called discrete picking where you only pick one order at a time. The advantage is that the scope for manual error is greatly reduced. The downside is the time taken to complete each order and the low output per head.
Zone picking – Zone picking uses a step-by-step process that eliminates errors while increasing productivity. This is based on the principle that all orders in a specific area (zone) of the warehouse are distributed to a picker, who will work on completing all the orders in that zone. Separate teams of pickers are assigned to different zones.
Batch Picking – Batch Picking is a process where one set of SKUs in an order are collected together before moving on to other SKUs in the same order. For example, if an order has 3 x earrings and 2 necklaces, the picker will pick 3 earrings from different locations and only then move on to the 2 necklaces. This process is less time-consuming than Zone Picking.
Wave Picking – This is a hybrid of batch, discreet and zone picking. In wave picking, orders of multiple sizes are collected together at scheduled picking times, that are called waves.
This is not an exhaustive list, and 3PLs may use different processes as per client requirements. The pick and pack process can also be industry specific, such as retail, FMCG or ecommerce.
Related Post: Ecommerce Fulfillment Guide
Some 3PLs prefer to break down the various fulfillment costs of their service. In this case, there will be separate fees for receiving, a one-time set up charge and a distinct pick and pack fee.
The pick and pack fee generally are a flat rate for picking the first item in the order. Additional items are charged extra. The price depends on the number of orders the service processes each month. The more the orders, lower the cost.
For instance, ShipMonk’s pick and pack fees range from $1.8 to $3 for the first pick and $0.35 to $0.75 for additional picks. You might be wondering why a 3PL charges so much for pick and pack. Well, as we said, pick and pack is the cornerstone of the order processing workflow.
Why does a 3PL charge so much for pick and pack you wonder? There are several investments that go into creating a smooth order fulfillment system. These include technology, software, hiring skilled workforce, training new workforce, salaries, infrastructure, warehouse costs, costs for materials, quality control and recurring expenses.
It’s only fair that a 3PL charge a proportion of these costs for pick and pack.
The efficiency of your Pick and Pack (3PL) partner can make or break your business. So not only must you choose the right one, but work closely with them to ensure they meet your delivery and service level expectations.
We hope that this article has given you a better understanding of what pick and pack entails, how it can benefit your business, as well as the costs involved in the process.