Finding Profits in Your Marketing Supply Chain
November 2008
Shipping and warehousing costs represent a relatively small percentage of any overall marketing budget. That's the primary reason why corporate marketers and advertising agency production managers have traditionally not taken advantage of the cost savings that are possible when it comes to these functions.
This is a common mistake and a costly one because proper management of the marketing supply chain can save companies up to 30% when it comes to the shipment of ads, billboards, point-of-sale items and newspaper inserts. In an increasingly difficult economic environment it almost goes without saying that these potential cost savings-which are, after all, really lost profits- can no longer be ignored.
How can companies like yours realize these savings? Here are some tips:
- Direct vendors to use a single shipper so
you can take advantage of price reductions based on freight volume;
- Leverage freight spending to control escalating fuel
surcharges which can represent 25% or more of a marketer's
total shipping budget;
- Assign a third-party freight forwarder to
coordinate and consolidate shipments that are headed to the same
destination-this can cut your costs by up to 20%;
- Eliminate unnecessary and expensive rush freight shipments -
so long as it meets your requirements, always seek out the most
economical option;
- Use technology to boost visibility and efficiency thus reducing man hours and labor costs.
Marketing production teams are also eager to let suppliers handle the shipping and logistics management of below-the-line materials such as premium items and promotional literature, but this can be a costly mistake as well.
Multiple brand teams typically choose their own suppliers and when these suppliers handle shipping, goods are purchased on prepaid terms. This means that the freight expense is built into the product's cost. Marketers, however, may not realize that their suppliers can receive steep freight discounts and that they don't always pass these savings along to their customers. By shifting payment terms to collect, marketers can control freight earlier in the chain thus saving money and improving service. What's more, proper logistics management of below-the-line items can ensure that orders are accurate which is critical in an industry where tight deadlines are more the rule than the exception.
The most important thing to understand is that shipping functions that are difficult for multiple brand teams to handle are routine tasks for an experienced freight management partner who is in a position to supervise all freight activity.
Thank you.
Brian Harvey
Executive Vice President, Axis Global Logistics