March 26, 2018
It’s no surprise that consumer expectations change over time — the biggest one being the expectation that Amazon Prime has created around faster delivery times.
Temando polled over 1,000 online shoppers and 270 retailers to determine the number one thing consumers are willing to pay for when it comes to delivery: speed. Express Shipping (1-3 days) is a priority for 51% of consumers and Same-Day Shipping (1 day) is a priority for 49% of consumers.
In fact, this is one of the most frequently questions we receive.
“How can I get Prime-like fulfillment and delivery WITHOUT having to pay for expedited shipping options?”
So how do you do it without using Amazon? You can use regional carriers for greater coverage, but the key to a Prime-like experience and network boils down to simple geography.
Single Facility Model
Looking at the U.S., there are 9 states that account for 51% of the entire population, and these areas are likely home to many of your customers. The top four are California, Texas, New York and Florida, which poses an interesting challenge since they are very spread out. Let’s start with California. The state’s main logistics hub is the Inland Empire, with close proximity to the Port of Los Angeles and the Port of Long Beach. The average transit time to end-customers from our fulfillment center in Mira Loma is 3.48 days.
Two Facility Model
Now we’ll consider what your coverage looks if you add a second fulfillment center to the mix. California and Texas are the largest states, but Florida is the most populous, so using a fulfillment center in the Inland Empire and a fulfillment center that can reach a portion of Texas and Florida is a good strategy. For example, if you use a fulfillment center in Mira Loma, CA, and one in Millington, TN (close to the largest FedEx hub and comes with an added bonus of later shipping cutoff times), Prime-like coverage expands. By adding a second location, you can reduce the average transit time by almost 1.5 days.
Three Facility Model
You get the gist by now — more fulfillment locations mean reduced transit time and better coverage. By adding one more to the mix, Jonestown, PA, you can create a fulfillment network that serves 93% of the U.S. population in 1.7 days via ground shipping through national carriers (like UPS and FedEx). Customers that fall outside the 93% can be reached with expedited shipping options for a complete Prime-like experience.
Keep in mind that the Prime-like coverage demonstrated above only takes into consideration the targeted delivery areas. To be an eligible Seller-Fulfilled Prime sender, companies must adhere to the KPIs listed below (we offer a Prime Fulfillment solution to help with this).
Seller Fulfilled Prime SLAs:
- Feedback Rating: 94% on Premium Shipments
- On-time Delivery Rate: Greater than or equal to 92%
- Valid Tracking Rate: Greather than or equal to 94%
- Cancellation Rate: Less than or equal to 1%
- Buy Shipping Rate: Greater than or equal to 95%
- On-time Ship Rate: Greater than or equal to 99%
- Cutoff Time: 2PM EST to ship same day
For help creating a Prime-like fulfillment strategy, fill out the form below!