March 2, 2023 – Fufillment company Skladon, which provides complete logistics for dozens of medium and large retailers, has been ranked in the prestigious FT 1000 for the second year in a row. The company moved up to 103rd place among Europe's 1,000 fastest-growing companies, and was the third-highest ranked of the ten domestic representatives.

The position in the FT 1000 was secured by Skladon primarily due to the constant growth between 2018 and 2021, on the basis of which the Financial Times evaluates the companies. Compared to the previous year, Skladon has improved by more than 100 positions, while it also seamlessly built on the years evaluated with the economic results from 2022, when it managed to increase its turnover by a further 18%. Skladon currently ranks among the top 3 Czech fulfillment providers, and in the past year it has expanded its client base with other major names such as Sportisimo, Wolt and Pepperfield. The growing interest in fulfillment shows that Czech retailers are gradually adopting the trend from abroad, where, according to Statista, more than 60% of companies outsourced their logistics in 2021.

„Repeatedly ranking in the FT 1000 is proof to us that a company that can adapt quickly and skillfully to a changing market can grow healthily even during such turbulent years. Being ranked as the third fastest growing Czech company is also a great honour for us, especially considering how many exceptional and rapidly growing companies are gradually emerging in our country. For us at Skladon, the dynamics of the last few years were also quite unexpected, but we have focused all the more on streamlining our services and making them as individual as possible for the benefit of our clients,“ says Konstantin Margaretis, CEO and co-founder of Skladon.

The ranking, which is compiled annually in cooperation with Statista, gathers representatives from a total of 34 European countries. Each of them has to meet pre-defined criteria, including a minimum turnover of €100,000 in 2018 and €1.5 million in 2021. The company must also demonstrate a minimum average growth rate, which for this year was 36.2%. Skladon achieved a compound annual growth rate of 147.5% in sales over the four years evaluated, thus meeting all the entry requirements for inclusion among Europe's fastest growing companies.

The overall winner of the FT 1000 this year was UK-based Tripledot Studios, a mobile games company, one of only seven companies placed in the entertainment and leisure category. As with last year, the ranking was dominated by companies of Italian origin, followed by German and British firms. Among the top-ranked Czech companies this year, along with Skladon, Driveto, a company providing flexible operating leases, and Love2Dogs, which focuses on the production of food supplements for dogs, also appeared.

Although the FT 1000 results were released as Ukraine enters its second year of conflict with Russia, the war situation has not yet had a chance to affect the companies' rankings this year. On the contrary, a factor that significantly affects the rankings is the long-term effects of the covid pandemic. Technology and e-commerce companies in particular have often benefited significantly from the covid lockdown and the forced transition of potential customers to the online environment, as evidenced by their abundant representation in the rankings. The full results of this year's survey can be found on the Financial Times website.

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Taste, authenticity, luxury gifts, goodness... combined with a strong brand and attention to detail. This is the short version of .pepper..field, a sustainable direct trade project dedicated to the sale of the world‘s most renowned Kampot pepper.

How does our client work with their product? What was the priority when establishing cooperation with a fulfillment partner? And why did they ultimately choose Skladon? Read the story, where individual approach plays a major role.

• .pepper..field: Tailoring logistics for a premium brand

ABOUT .PEPPER..FIELD

The .pepper..field company is the exclusive distributor of certified Kampot pepper in the Czech Republic and today also one of the largest global exporters.

The project started in 2018 in Cambodia and operates on the principles of 100% fair trade buying of pepper from 200 small farming families, helping local economic growth, self-sufficiency and technological development.

Connecting the delicious taste of pepper with doing good in Cambodia. This is .pepper..field.

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Handling a specific and fragile product made of natural material. Emphasis on packaging and ecology. Individual approach in logistics or maintaining a high customer experience…

This is just a fraction of the concerns that owners of the zKokosu company faced when deciding to outsource their logistics. How did it all work out and why did they choose Skladon? Read the story with a client who always upholds the motto „client first“ in all circumstances.

• zKokosu: Emphasis on quality and individual approach

ABOUT ZKOKOSU

Sustainable and ethical coconut shell products, made with love and respect for nature and animals. That's the shortest way to describe the product of zKokosu, our next client.

For founders, the alpha and omega is a strongly positive attitude towards the planet and the environmental situation, which is also evident in the company's mission: to breathe new life into coconut shells. After all, the business pillars speak clearly:

• Natural products instead of plastic.
• Supporting local producers and farmers in Vietnam.
• Recycling instead of burning and throwing away.
• Honest handmade work made with love instead of mass production.
• Raising awareness of the current environmental situation.

This is zKokosu – a project that has been created from the beginning with children's enthusiasm.

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Prague, November 25, 2022 – Skladon, one of the largest fulfillment providers in the Czech Republic, has again succeeded in Deloitte's international Technology Fast50 ranking this year. The competition annually recognizes the fifty fastest growing technology companies in the Central European region. This is the third time in a row that the Czech company has managed to rank in the list, but this time a few dozen positions higher than in 2021.

Almost 500 technology companies from 18 Central European countries have entered the 23rd edition of the competition. In addition to the main Technology Fast50 award, where Skladon took 20th place, there was also a purely Czech ranking, in which the company jumped to 6th position. The company's success proves once again that logistics outsourcing is an increasingly popular service not only in the world, but also in the Czech Republic. Gradually, it is also being used by larger players, which fulfillment often helps them to increase their logistics capacities during the busiest times of the year, such as the Christmas season.

"We perceive the renewed placement in an international competition of this format and cast as a huge success and a reward for what we work on every day. This year has been a great challenge not only for the logistics industry and I am proud of our entire team for overcoming it with honour and, moreover, with great plans for the future," comments Konstantin Margaretis, CEO and co-founder of Skladon.

The award ceremony took place at the Archa Theatre in Prague, just like last year. It was attended on behalf of Skladon by marketing assistant Monika Dobiasova and marketing manager Tomas Kohut, who accepted the award on stage. "Thanks to personal participation directly at the venue, surrounded by many other innovative and successful companies, one realizes the importance of such an award and the size of the whole event even more intensely. We see our placement in the competition primarily as a commitment towards our clients, with the aim of further individualizing our service to their needs," commented Kohut on his participation in the award ceremony.

To be nominated for the main Technology Fast50 ranking each year, companies must meet several criteria. The conditions for this year's edition have remained unchanged from the last, so companies must have reported operating revenues of at least EUR 50,000 in the last three years and operating revenues of at least EUR 100,000 in the current year. Skladon, which has managed to grow by 1,484% over the last four years, has thus easily met these requirements. The company plans to grow further in 2022, helped by its planned international expansion.

The full results of the Deloitte Technology Fast50 CE are available here and a recording of the ceremony, from media partner Seznam Zprávy, is available here.

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Naturalness, experience sharing, friendly atmosphere and e-commerce. This is how one could sum up the eCommerce BEERS community event, which brings together the Czech e-commerce scene every month.

How did the idea come about, who is behind it and what direction has the event taken over the course of almost a year? Or what is its goal, what are the rules of participation and what is the added value? Read on from the founders themselves.

LOOK FOR BEER BEHIND EVERYTHING

The eCommerce BEERS event was created, as the name suggests, over beer. Later co-founders Alena Barnova from MARIELI and organizer of the Women in Business conference, Marek Duda from Retino and Patrik Babinec from Skladon met at the same table. "The guys and I agreed at the time that in our Czech e-commerce scene, which is very diverse, there was no regular networking event where one could casually and directly educate and inspire each other with colleagues from similar businesses or industry specialists," Alena outlines the initial idea for the project. "I have been in e-commerce for over 7 years and I like to keep myself up to date, learn about new trends and innovative solutions. Ideally in the form of a dialogue and in a pleasant atmosphere. That is why we decided to organize an event in a similar spirit. An event with relevant people with whom we can exchange our experiences casually and mutually."

"The word is the word and in November 2021 we sat together at the first eCommerce BEERS event, where we were joined by the guys from mujkoberec.cz," continues Marek. "During the event, we had an informal chat over a beer about what someone is doing, what they are facing, what they are happy about and vice versa. And on this occasion we wanted to help each other," Patrik recalls. "I remember that during the afternoon, the idea came up that when e-shops don't go to networking events, they keep themselves in a kind of internal bubble. A bubble that prevents the business from moving forward," continues Alena. "This led us into a discussion about what format to give the event and in what direction to develop it further," adds Marek. "The result of our brainstorming was a mutual agreement to hold the event regularly on the first Thursday of the month and to expand the community with more interesting members. The next event in our Prague office, which was held in a Christmas atmosphere, already attracted more visitors, and since then the number has been growing organically," adds Patrik.

FROM PUBS TO COMPANIES INTERIORS

Gradually, the places also began to change. Initially it was intended to hold the events in local pubs, however, based on feedback and general interest from visitors, the venue began to move to the premises of participating companies. "In addition to the Ukrainian pub, where we wanted to make at least a symbolic contribution to the situation, eCommerce BEERS was gradually held at Ecomail and Legitas, at Grizly's warehouse, at Retino and at Skladon's distribution center," says Marek. The Retino event in particular was exceptional in terms of the number of participants. More than 150 e-commerce personalities attended, including the absolute top of the industry. André Kohout, a visitor to the event, also described it in his own words on his blog. "I went from a small eCommerce BEERS community event for about 30 people to an event where about 150 people came. For that I give a big up to all the organizers!"

"We still try to keep the individual meetings in the "pleasant with useful" mode. Each of the currently organising companies, when we manage to acquire their premises organically, has its own program. At our events, visitors can look forward to various case studies, panel discussions, warehouse tours, tastings of local products, etc. However, everything is limited so that the core of the event remains unchanged – casual and relaxed networking with good food and drink," emphasises Alena. "We are also planning purely leisure activities, where, for example, the August edition will take place on rafts while rafting down the Vltava River. Compared to other events, we are not afraid to go outside the Prague region, as evidenced by the events held in Olomouc or Ostrava."

WHAT'S NEXT?

"The future direction of the event is still evolving quite agilely, we are gathering feedback from participants and adding our own perceptions. In any case, we want to continue inviting more experienced e-commerce professionals from a variety of industries and company sizes, as everyone can contribute their own perspective. We want to continue to maintain the balance between e-commerce representatives and service providers, the monthly regularity and the variability of the program and venue. Only in this way are we able to maintain its added value and exclusivity," outlines the continuation of eCommerce BEERS Patrik. "In short, we don't want to turn the event into a massive marketplace," adds Alena. "And last but not least, to continue to build the community," adds Marek.

"As for the following events, there is a lot of interest in organizing and participating – we have already booked the space for 3 months in advance. As Alena said, we are planning to go down the Vltava River in August, and in September and October we will visit other e-commerce companies to follow up on previous events. Our concept is based on a professional program and networking, so we are adapting the venues and guests to it," says Marek.

HOW TO BECOME PART OF THE ECOMMERCE BEERS COMMUNITY

Registration for the eCommerce BEERS community is available on the brief landing page at ecommercebeers.com. Once registered, an email is then sent to the candidate prior to the event to sign up for the following event. "Capacity varies from event to event, so we find a staggered ticket registration system to be the fairest," reveals Alena.

CONCLUSION…

"We believe in community. There is a bigger and more personal space to meet people with the same mindset. And these are the people we want to spend our days together with, during which we enrich each other naturally," Alena, Marek and Patrik agree.

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In practice, online stores owners often ask us how onboarding a new client actually takes place, i.e. the process of transferring the logistics of the online store into our hands. No wonder, because the process consists of several steps.

What does this onboarding process look like? What are the ideal questions to prepare for from a logistics provider? Or how do we approach onboarding in Skladon? Read on in our article. An article that we had to generalize to some extent, because the competition never sleeps. Anyway, we offer you a general overview. 

HOW TO CHOOSE THE IDEAL FULFILLMENT PARTNER

However, let's take a step back for a start. This is the selection of the logistics partner itself, because this is where it all begins. Choosing the right one can save you both wrinkles and sleepless nights.

Whether you're at the stage where you've decided to hand over the logistics or you're further along – you're already in negotiations with your future partner(s), there are bound to be a number of questions running through your mind. In our experience, for example:

• How to choose your future fulfillment partner?
• What questions to ask to make the onboarding process and future cooperation as smooth as possible?
• What to think about and what to prepare for a successful cooperation setup?

For this purpose, we have prepared a cookbook called "Questionnaire for choosing the ideal fulfillment partner", which can be downloaded here. Start with a definition of your business specifics and expectations from future cooperation, supported by a thorough market research.

Catch everything in time and eliminate your concerns about logistics outsourcing. Try to banish thoughts of whether this kind of collaboration could damage your brand, or even more, jeopardize your business. Choose a partner that is tailored to your online store's needs with its internal setup, flexibility or logistics operations.

The output of our questionnaire will provide you with a comparison of the results of several fulfillment companies, i.e. the basis for your next logistics direction. More detailed information on how to use the questionnaire can be found here.

DOWNLOAD THE QUESTIONNAIRE

CHOOSING A FULFILLMENT PARTNER AND FIRST STEPS

Have you already chosen your logistics partner? Congratulations! However, as with recruitment, it remains to be seen to what extent your winner can turn their promises into reality. How capable is of making your logistics a real competitive advantage across the industry. Which should be the main goal of the cooperation.

Input data for the quotation

For the initial meeting, prepare for what is called an initial screening. Gradually you will be asked to answer your logistical figures, specification of existing solutions or needs tailored to your business. There's a reason for all of this – every client is unique, sends different types of products, has different requirements for warehouse operations, etc. The result of this screening is the sending of a customized quote.

* For the initial meeting, prepare for what is called an initial screening. Gradually you will be asked to answer your logistical figures, specification of existing solutions or needs tailored to your business. There's a reason for all of this – every client is unique, sends different types of products, has different requirements for warehouse operations, etc. The result of this screening is the sending of a customized quote.

** More information on pricing is available from the independent US portal fulfillmentcompanies.net.

To at least partially uncover the cards, during the initial screening you will be asked about the following areas:

• Specifications of your product
• Size and conditions of currently used warehouse space
• Special requirements for receiving goods
• Special requirements for storage and other handling
• Requirements for kitting
• Requirements for transport of goods
• Questions about packaging and filling materials
• Details on return logistics, etc.

Quotation

The quotation will tell you approximately how much you will be billed for each warehouse process in the model month. This brings us to one of the advantages of logistics outsourcing... namely that by doing so, you turn your fixed costs into variable costs, which in some cases leads to significant logistics savings. So if you decide to outsource your logistics, you will only pay on a monthly basis for the warehouse space you actually need and for the warehouse processes that were needed in that month. Regardless of your seasonality, marketing activities, etc.

In Skladon we send quotations, after receiving the above input data, in units of days. We also recommend follow-up meetings to our clients, during which we check, explain and, if necessary, optimize the quotation. 

* In addition to the absolute values, we also provide the final price in the model of the total price for shipping one shipment, according to the information you send. Which is a figure you can compare with your existing solution. If you don't know how much it currently costs you to ship one order, we recommend downloading our online calculator. We've written a full working guide with the calculator here.

DOWNLOAD THE CALCULATOR

STARTING THE ONBOARDING PROCESS

After both parties have agreed on a price offer, the onboarding process begins, or the complete handover of your logistics into the hands of the fulfillment partner.

At Skladon, we manage the onboarding process exclusively on a project basis, thus trying to avoid unexpected problems, time delays, discommunication, etc. We have a clearly defined process flowchart, a dedicated onboarding team of specialists or solutions for individual crisis scenarios.

Initial questionnaire and communication settings

The first step is to fill in the initial questionnaire – billing details of the online store including other contacts. We use the information provided to create a binding contract, for internal record keeping, setting up accounts with selected carriers, invoicing or for setting up accounts in the MySkladon client application.

* Once you have established an account with the carriers, you benefit from another advantage of logistics outsourcing. In the vast majority of cases, your account is structured under the logistics partner's account. In other words, you have access to volume discounts for shipping, which are generated by the accumulation of shipments from other online stores using the services of your logistics provider and the same carrier. These discounts can be up to 30% of your original amount.

It is important to set up a communication matrix from the beginning for a mutually agile, objective and effective cooperation. This is doubly true when onboarding a large client, where the structure is much more complex. The aim is to establish direct contact between the departmental liaison officers on both sides, who have detailed know-how in the field.

System connection

The aim of the system connection is to ensure a mutually error-free automatic data flow – i.e. between the online store and the fulfillment system of the provider. Here we highly recommend choosing a partner that has a wide range of add-ons, plugins or applications for online store platforms solutions. If you are running your online store on your own platform, the provider must offer you their API documentation for connection.

* TIP: Try to avoid outdated functionality and order transfer using exports etc. Reduce your manual "extra work" to a minimum and track your logistics online in the app, ideally in real time.

As well as the requirements for warehouse operations, the complexity in connecting an online store can be highly individual. Are you planning to sell your products through marketplaces? Do you operate multiple online stores? Do you want to test a future partner and start working with them to ship only a part of your product portfolio? What carrier products or payment methods do you offer? Do you plan to ship only to the Czech Republic or worldwide? After answering these questions, you will be informed immediately about the complexity and expected timeframe of the connection.

During the entire system connection process, you are ideally in contact with one IT onboarding specialist of the logistics provider. With a reliable partner, you do not have to worry about your technical ignorance. The complete process first takes place on a test interface, after monitoring and testing all of the above scenarios in parallel with the physical transport of your products to the new partner's warehouse, everything is then migrated to the production version.

OTHER CONDITIONS FOR STARTING THE COOPERATION

Initial training in the client app

Nowadays, a reliable fulfillment professional has technology and innovation hard-coded into their DNA. These, in addition to the above, also concern the applications through which they inform their clients about their complete logistics status. More advanced players in real time, 24/7 and on any device with an internet connection.

At Skladon, we use the MySkladon application for this purpose, which fulfils all of the above. During onboarding, we guide the client through the individual functionalities, i.e. managing their orders, inventory, receipts, returns or other admin options. In this way, our clients get a useful tool for their reporting, information for communication with their customers or a basis for further management of their warehouse management.

Setting up the packaging process

The packaging process can also be highly individual for online stores. Some online stores focus more on price, while others focus on eco-friendliness or premium packaging in an effort to improve their customer experience, increase customer retention or increase lifetime value. Some require only product insertion in packaging, others want to add package inserts, vouchers, gifts, dedications or other (personalised) extras. Some completely hand over the management of packaging materials to the new partner, while others require packaging their shipments in their own boxes or fillers, using branded tapes or stickers.

At Skladon, we are well aware of how important originality of packaging is for our clients. For this reason, we try to be as accommodating as possible. Before the first loading, we have a mutually agreed packaging procedure with each client, which is binding for us in future operations.

Another advantage of logistics outsourcing comes when the client decides to hand over the management of packaging material to us. They get quantity discounts on purchases, which work on the same principle as for transport, and they also do not have to manage their packaging account – they do not have to keep track of stock levels and subsequently order materials from their suppliers.

Setting up access and training in the ticketing portal

During the logistics outsourcing, sooner or later operational issues or requirements arise, such as cancellation of orders, changes in the content of already prepared orders, ordering pallet transport, etc.

Some of the competitors use e-mail, telephone or other communication channels for this communication, which leads to fragmentation of attention and subsequent inefficiency. At Skladon, we decided to communicate via a ticketing portal, where each client has an agent – a representative from our customer care team. A representative who knows the client's history, the most common requests and their solutions, specifics, etc., which are prerequisites for further time savings. Communication in this way is direct, other advantages are easy traceability or internal reporting, which serves as a basis for further motivation.

"During our cooperation, we also receive inquiries from clients about other departments, most often IT, logistics or finance. We don't transfer our clients anywhere and resolve the query internally. The result is a welcome direct communication without unnecessary delays," Veronika Vrábelová, Account Manager.

Physical movement of goods

Transfer of your goods from your existing premises to the distribution center of your logistics partner – another point to start a functioning cooperation. Whether just a part of your product portfolio or complete stock. Even from multiple warehouse locations of the online store. As a rule, the client has two options for the transport – to arrange it on their own or to use the offer of a new partner who is able to arrange it at a discount.

When communicating about the transport and subsequent first loading, a date is usually agreed upon to ensure staff capacity. The (special) storage requirements are communicated in advance, whether in terms of temperature or humidity, the ideal type of storage positions (shelf / pallet) or system options for storage positions (single / multi SKU positions*).

* Only one type of product can be stored in a single SKU position (e.g. red Kilpi T-shirt, size L), multiple types can be stored in a multi SKU position (e.g. 5 different brands of lipsticks). The reason for this is to save space and reduce the invoice price for storage.

COMPLETION OF THE ONBOARDING PROCESS

Handover to customer care

Once the above points have been completed, the final step comes next – the formal handover of the client to the assigned customer care agent who will be at the center of the client's future operations. In practice, this concludes the project for the onboarding team.

The functioning and communication with the fulfillment partner may differ significantly after the official start of the cooperation. "We make sure that the client always has a specific "officer". In general, we know that some of our competitors use (external) call centers, answering machines, voice robots, etc. for this purpose. We want to avoid this as much as possible, we believe in a personal and direct way of communication," Michael Vavřík, Account Manager.

Output onboarding questionnaire

Like any other project, the onboarding project needs to be continuously improved. This is doubly true when multiple members are involved in the process. And it is for this reason that we send an output onboarding questionnaire to graduates at the end of the onboarding process.

"During the completion of the output onboarding questionnaire, our clients have the chance to comment on individual departments or people they have come into contact with along the implementation journey. We map these opinions, report back to management and set optimization steps as a result," Tomáš Kohút, Marketing Manager.

Newsletters

One of the hallmarks of successful logistics outsourcing is the elimination of the client's need to physically visit the distribution center. However, at Skladon, we still feel the need to keep our clients informed of new developments, whether company news, from the distribution center or from the MySkladon app.

"We communicate changes and new features in MySkladon to our clients on a monthly basis. As a technology company, we operate on a sprint basis where we are constantly pushing our product. We communicate these improvements to our clients with a clear goal – to stay up to date and provide tips for working more efficiently with the application," Štěpánka Coblová, Quality Assurance Manager. "The same applies to communicating news from our distribution center that directly affects our clients," Lukáš Střalka, Warehouse Supervisor.

PERSONAL APPROACH AND EMPHASIS ON TECHNOLOGY – THE BASIS FOR CAREFREE ONBOARDING

In our article, we have shown how important it is to manage the onboarding of a new client in a project-based manner. The process usually involves multiple representatives from both sides, and everything is done in synergy.

"During onboarding, the client may feel that some of our questions are unnecessary or irrelevant. However, the breadth and detail of the information provided also determines the level and quality of the onboarding and subsequent collaboration," Max Kovář, Logistics Director at Skladon.

The onboarding process is all the faster and smoother if you choose a logistics partner for your future cooperation that is sufficiently experienced, has a broad team or technical background. Who takes a personal approach and is willing to adapt to your specifics. Only with this mind-set can you eliminate unnecessary delays, inconsistencies or barriers that can hinder your business growth.

"The connection of our online store with Skladon works great. I can recommend Skladon for their professionalism and great technological background. I can't imagine doing business without an external fulfillment center anymore," Vít Libovický, Mementerra.

For these reasons, we recommend a thorough market research from the outset, including preparation for the initial meeting. You want a partner that will be able to give you a logistical competitive advantage in your sector..

"The icing on the cake is that it is cheaper for us to logistics outsource than when we used to handle logistics internally with our own warehouse and warehousemen. After several months of working with Skladon, we can only say that our only regret is that we did not approach Skladon long ago," Martina Kovačová, co-founder of zKokosu.

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Looking for a comprehensive tool to easily calculate your total logistics costs in minutes? Do you perceive your logistics as costly and would you like to make it more financially efficient? Or are you thinking about the option of outsourcing your logistics but can't find a financial metric to compare with your current solution?

Find the answers to all these questions in our free online calculator.

THE WAY TO COST-EFFECTIVE LOGISTICS

We have prepared the calculator in cooperation with logistics auditors with many years of industry experience. You will find out, for example:

• What are your monthly costs for warehouse logistics (so-called intralogistics)
• What are your monthly costs for distributing shipments to your customers
• How much it costs you on average to handle and deliver an order
• How to handle one-off investments such as purchasing warehouse equipment or software
• How to account for your time or your employees' time

INSTRUCTIONS FOR USE

In the calculator, you will gradually come across cost items related to storage, packaging materials, labour or transport. Once you have quantified these, you need to assign a logistics cost ratio* – what percentage of the item falls under logistics costs.

* Example 1: You pay rent for a building in which you have your warehouse, but also offices with employees that fall into other departments. In this case, you need to proportionally separate the pure logistics space and the related costs.

Example 2: your HR employee spends time each month processing payroll documents. Again, separate his time spent on logistics-related tasks from the rest.

TIP: Not sure how to calculate some of these cost items or need additional information? Feel free to contact our sales representatives or download our e-book for everything you need.

The end result for you will be the total cost of handling and delivering one shipment, which consists of both intralogistics and distribution items. We recommend that you monitor this cost systematically over the long term or use it to compare it with the quotation offered by the fulfillment specialist.

GET CONTROL OF YOUR LOGISTICS COSTS

With our tool, you can uncover up to 60% of the costs actually incurred that are (not)attributable to logistics. Avoid the mistakes that logistics auditors often encounter with their clients when working in the e-commerce.

Effectively managed logistics is the base for the success of your business.

DOWNLOAD THE CALCULATOR HERE

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Receiving and stocking complete inventory, connecting and adapting to client's ERP system or logistics process setup in 3 months…

The final result?

Logistics with a significant reduction in the number of complaints, effective adaptation to (un)expected seasonal fluctuations or better communication with clients and customers. Read the story we started writing at Skladon in the late Summer and early Autumn of 2019.

• Kilpi: Infographics
• Kilpi: Our story

ABOUT KILPI

Kilpi, a brand of Ponature s.r.o., offers outdoor and sports fashion for the outdoors and the city, for sport and relaxation. By combining the name Kilpi (Finnish for ’Shield’) and the slogan ’Tested by North’, the company aims to provide customers with a true winter experience with its range. The winter products are complemented by summer gear, accessories and small items. 

The company currently employs 50 employees, has its own network of brick-and-mortar stores and an e-shop. Detailed information is available at www.kilpisports.com/en.

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It is well known that it is more financially advantageous to retain existing customers than to acquire new ones. That's why customer lifetime value (CLV) is an important metric and a great way to set company strategies, goals, budgets, improve processes, increase profits and ultimately the overall business growth of an e-commerce store.

Working with CLV is the hallmark of any modern e-commerce store. That's why it's crucial that your team has coded the concept and learned how to use it effectively.

Do you know the value of your customers?

A BIT OF STATISTICS AT THE BEGINNING

Peter Drucker, a well-known management consultant, once said: "What gets measured gets managed." With this statement, we will build on the first sentence of this article and contrast the values of existing and new customers.

According to YotPo, working with existing customers is undervalued. Yet their value represents a significant portion of e-commerce revenue. Therefore, a thorough work and analysis of their return rate is in order. The following figures underline all this:

• Returning customers make up only 15% of all your online shoppers
• However, returning customers account for 1/3 of all online shopping revenue
• The value of a returning customer's purchase is on average 3 times higher than a one-off purchase

Unfortunately, allocating the cost of acquiring new customers is more exciting to a large portion of e-shops than the cost of nurturing and creating long-term relationships with existing customers. This customer flow setup can also be described in an abstract way: e-shops are obsessed with clogging the entrance while the exit remains free-flowing.

WHAT IS CUSTOMER LIFETIME VALUE (CLV)?

Customer Lifetime Value (CLV) is the total revenue you receive from a customer over the lifetime of their relationship with your e-shop.

TIP: Do you want to know the profitability of a specific type of customer or the growth potential of your e-shop in the long term? Subtract from CLV the complete average cost associated with that type of customer, such as the cost of acquiring them, order clearance, shipping, customer care, and more. Find out which customer segments are most profitable for your business and adjust your corporate strategies accordingly.

HOW TO CALCULATE CUSTOMER LIFETIME VALUE?

CLV is a popular financial metric due to the simplicity of its calculation. To calculate customer lifetime value, use the following formula:

CLV = average order price* x average number of orders** x average customer lifetime***

* when determining the average price of an order, we recommend working with a minimum of 3 months, ideally longer

** per 1 year

*** information about how long the customer has been shopping on your e-shop (in number of years)

Example of CLV calculation: Jimmy Gray shopped at your e-shop twice a month. The average price of his order was €20. He has been shopping on your e-shop for 5 years, but last month he switched to your competitor due to repeated errors in the content of shipments. What is his lifetime value?

CLV = €20 x 24 purchases per year x 5 years = €2 400

The lifetime value in the case of Jimmy Gray is €2 400.

To calculate your customers' CLV, use our customer service KPI calculator. The calculator can be downloaded here.

DOWNLOAD THE CUSTOMER SERVICE CALCULATOR HERE

But how to work with this number?

TIP: Each variable in the formula acts as a lever. A change in one can significantly affect the other. For example, if you increase the price of your products, the average order price will increase. However, as a result, some of your customers will likely leave for cheaper competitors, reducing the average number of orders per year.

WHY WORKING WITH CUSTOMER LIFETIME VALUE IS IMPORTANT?

 

1. What you don't (re)measure, you don't improve

Once you start measuring the lifetime value of your customers and have a good understanding of the variables, you can start testing and finding more effective tactics around pricing, channel usage, marketing and more to continually reduce costs and increase profits for your target customer groups.

2. Easier acquisition cost decisions

When you know how much you make on average on your typical customer, you can adjust your customer acquisition costs to maximize profitability for the right customer segments.

3. Better planning

The more accurately you measure the lifetime value of your customers, the more accurate your future decisions about inventory, staffing, production capacity and other costs will be. For example, you will avoid problems associated with over-supplying your goods or, conversely, problems with selling out and keeping up with demand or competition.

BENEFITS OF MEASURING CUSTOMER LIFETIME VALUE

 

1. Extending customer retention

One of the main objectives of measuring CLV is to try to retain existing customers as much as possible and to minimize their defection to competitors. Tracking relevant data together with properly set customer segmentation usually leads to identifying the ideal customer profile and using effective tactics, not just marketing.

2. Increase the number of repeat purchases

By measuring CLV, you are determining the average number of visits your customers make to your e-shop. Be it annually or over its entire lifespan. You can then transform this data into building a strategy to increase your repeat purchase rate.

3. Increasing the value of sales

When pricing your products, working with their margins or analyzing competitor pricing is important. However, also look for a balance with the quality of the related service offered – customer care, delivery methods, quality of packaging, level of return logistics, etc. In any case, it is true that too rapid and significant price increases will discourage long-term customers.

4. Increasing profitability

You will only achieve higher CLV if you can build an e-shop that motivates existing customers to return and spend more per order. In general, higher CLV has a positive impact on your bottom line.

BARRIERS IN MEASURING CUSTOMER LIFETIME VALUE

 

1. Difficult to measure CLV

The deployment of appropriate software is essential for the measurability of CLV. Systems such as Enterprise Resource Planning (ERP) or Customer Relationship Management (CRM) offer automatic and detailed graphical reports to their users.

2. Generalisation of CLV

A generalized view of CLV cannot effectively identify room for improvement for individual customer segments. Therefore, a more thorough analysis and breakdown of data by customer size, loyalty and other variables is in order.

16 WAYS TO INCREASE CUSTOMER LIFETIME VALUE

There are plenty of tactics to increase lifetime value of your customers. We offer you 16 ideas to move towards higher CLV:

1. Loyalty or rewards programs

Incentivize and reward your customers for frequent purchases or when they reach a certain price per purchase. A good example would be sending a gift or discount on a popular product.

2. Customer experience

User-friendliness of your e-shop, multiple shipping or payment methods, fast and correct delivery of orders, pleasant real-time communication, but also, for example, an easy return process. Try to exceed your customers' expectations.

3. Guides and tutorials

Provide your customers with content for situations when they are unsure about a product they have purchased. This will improve the relationship with your customers. 

4. Engage your customers

Actively monitor all your customer interactions. This will improve the customer experience and increase customer loyalty. Take feedback into account in your advertising, customer care or sales itself.

5. Quality of customer care

Pay attention to the quality of your customer service. Try to find ways out of everyday situations. Up to 90% of customers take previous customer care experiences into account when making future purchasing decisions.

6. Customer Relationship Management (CRM)

Keep a history with your customers and build a relationship with them. ERP or CRM type systems automatically record a continuous flow of information across the entire customer lifecycle.

7. Customer feedback

Every negative customer experience or review should be addressed. Therefore, collect feedback regularly after purchase and improve your product and service based on them.

8. Invest in technology and software

Technology enables process automation and data centralization. Don't just rely on traditional tools like email, Excel spreadsheets, etc.

9. Up-selling and cross-selling

Try to convince your customers to buy a more expensive version of the product or to buy additional accessories.

10. Raising prices

Frequent or dramatic price increases cause customers to defect to competitors. Base your prices on those of your competitors or adjust your price depending on the quality of the service you provide.

11. Social networks

Reach customers where they spend their time. Consider your product offering and choose meaningful social networks for advertising. 

12. Quality of the shopping experience

Measure shopping cart abandonment rates and strive for higher conversion rates. A chaotic or cluttered e-commerce interface leads to lost customers. Use A/B testing to identify the most optimal solution.

13. Adhere to the delivery time

Clearly specify the delivery time in your terms and conditions and provide realistic delivery information. Do not try to match stronger competitors at any price. 

14. Overview of the current status of the shipment

Immediately after creating an order, send updates to customers with tracking information, contact information, etc., and keep him updated until the goods are delivered. In today's e-commerce world, this approach is an established standard. 

15. Easy returns

Try to make the process of returning and claiming goods as easy as possible. Define the procedures in detail in the terms and conditions.

16. Targeted content

Educate, engage and entertain your target customers. Use your blog, videos or practical online tools to do this.

LOGISTICS AS A TOOL FOR INCREASING CUSTOMER LIFETIME VALUE

As our recommendations already show, logistics play an important role in the dynamics and the amount of lifetime value of shoppers on your e-shop. Examples include a positive customer experience, transparent communication, speed of delivery, easy returns process and more. The quality of your logistics directly increases your business profit proportionally. Can you compete with the biggest and most technology-oriented online players?

Turn your logistics into a competitive advantage. At Skladon, we are logistically prepared and technologically equipped to exceed your customers' expectations. We are a professional and reliable logistics partner that offers you an easy and project-managed connection of your e-shop to our system, growth without high investments, conversion of fixed costs into variable costs, warehouse, staffing and process flexibility even for your seasonal peaks, personal approach of account managers, discounts on shipping and packaging material or a complete logistics overview in the client application MySkladon – in real time, online and 24/7.

Eliminate the daily hassle of operating and managing your own logistics. Get the space and the finances to increase your customers' lifetime value with us.

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Have you already decided to outsource logistics, such an important part of your business, to a fulfillment specialist? However, you find yourself in a new situation and you are faced with the question... "But how to choose one? What all should it meet to be the best option for my type of business?" Or do you just want to be sure that the questions you have in mind are relevant and complete?

Then we have prepared a questionnaire for you called "How to choose the ideal fulfillment partner". The material contains 50+ questions to ask a fulfillment service provider before the establishing of a mutual cooperation. Compare the options of each candidate and be confident in your final decision.

INSTRUCTIONS FOR USE

The questionnaire is designed in 3 logistics areas - reliability, safety and speed. Areas that are so important to your competitiveness and ultimately, the success of your business.

The individual questions are asked in such a way that they can be answered YES / NO. They are asked from your perspective, i.e. the perspective of an e-shop to a potential logistics partner. At the end of the questionnaire you will get a result about the suitability of the counterparty interviewed. By comparing the results of several logistics adepts, you will find out which one best fits your logistics-specific needs.

SAMPLE QUESTIONS FROM THE QUESTIONNAIRE

• Are you able to increase storage capacity in case of my growth?
• Is it possible to negotiate with you a binding service guarantee, the so-called SLA (Service Level Agreement)?
• Do you adapt to the (un)expected season peaks to ensure contractually agreed order handling?
• Do you offer premium services such as kitting, finishing, personalization, labeling, flyer insertion, etc.?
• Will you take care of my complete customs clearance, including all documentation?
• Do you offer discounts for shipping?
• Do you use security systems in your warehouse?

Get access to other questions. Do everything you can from the start to ensure that the cooperation with the logistics expert is really good, long-term and without unnecessary misunderstandings or problems. Download the questionnaire here.

DOWNLOAD THE QUESTIONNAIRE HERE

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Logistics is an integral part of every e-shop. The quality of its processes significantly contributes to the success of the business. Especially nowadays, when customers are placing more and more emphasis on accuracy and speed in the delivery of shipments or the originality of packaging. How can you turn your logistics into a strong competitive advantage?

IN-HOUSE VS. OUTSOURCING?

There are two possible ways. Either you decide to continue with your existing solution, which will require continuous optimization of individual fulfillment processes or adapt to your growth. For example, you will gradually encounter increased demands and costs related to labour, renting a warehouse with sufficient capacity or investing in a warehouse management system (WMS) and other physical warehouse equipment.

The second option is to switch to a fulfillment specialist, which is already adapted in its functioning to the current needs of the e-commerce world. This gives you a partner who is responsible for the quality of your logistics, so you can focus on other areas of your business.

HOW TO MAKE A DECICION?

The decision whether to continue to manage logistics completely in-house or to outsource it to an external partner is not an easy one. Our recommendation is: "Start by analysing your logistics costs." What to include in these costs? Read our e-book, which will guide you step by step to the most accurate result.

HOW TO COMPARE YOUR LOGISTICS COSTS WITH A FULFILLMENT PROVIDER?

At the moment of calculating your total logistics costs, you are also able to find out the price per shipment. That is the price you will pay for the handling and delivery of the order to the end customer. And this metric is the most ideal one to compare with the logistics outsourcing option. 

When comparing, also consider the other benefits that a fulfillment service offers. They are behind all the investment, time and other activities you would have to make to optimize your own solution. Add in discounts for shipping, packaging material or the fact that with a fulfillment specialist you only pay for the space needed for your goods and for the warehouse staff to work on your orders.

You can find more information, including practical examples, in our e-book, which can be downloaded here.

DOWNLOAD THE E-BOOK HERE

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