IWFS dramatically decreases web fulfillment costs
IWFS drives down the costs of web fulfillment by leveraging existing retail assets.
Traditional distribution center fulfillment requires significant investment in infrastructure and systems in order to establish operations and setup inventory. Ongoing costs in terms of staffing and maintaining operations can also be significant.
Outsourcing is an option, but this does not eliminate the costs, only transfers them to a third party and reduces the retailer's options in managing its own program.
According to studies on retail web programs, web fulfillment will cost an average of 10% of sales when running at full capacity with high volumes. At under capacity or lower volumes, costs can rise significantly.
With IWFS, no additional infrastructure is required as the retail store is fully leveraged to fulfill web orders.
Order load balancing ensures that stores do not get swamped with orders. For the majority of retailers, retail stores will only be required to fulfill a few orders a day, taking only a few minutes each from existing store staff.
As a result, web fulfillment costs are reduced by 85% over traditional distribution center fulfillment.
No additional inventory required
With IWFS, there is no need for a separate web inventory, reducing carrying costs and making inventory available to both online and offline channels. Lost sales due to stock outs are dramatically reduced without the additional costs of moving inventory between channels.
IWFS reduces shipping costs
Shipping costs are a significant part of web fulfillment. Most retailers will have to shoulder a portion or all of the shipping costs in order to attract customers.
Since most web orders will be filled from a store close to the client, IWFS reduces transportation costs by reducing the distance orders must travel to reach web shoppers.