What Ecommerce Brands Need to Understand About Cross-Docking Today
Written by Sean Walsh, Director for Pattern Australia
Selling on marketplaces today isn’t as simple as manufacturing goods and sending them directly to customers. There are many logistical factors that brands need to consider, including packaging, shipping, fulfilment, returns, and more. To make the distribution process as cost efficient and time-effective as possible, products often pass through cross-docks.
In the context of marketplace ecommerce, cross-docking is when shipments rapidly pass through an additional stop, or cross-dock, to more quickly and efficiently arrive at their final destination. Cross-docks group together pallets of different products with similar destinations to cut shipping costs by sending in bulk. This process can also aid in preparing raw products for grouped selling. Products often pass through cross-docks between their original warehouse or manufacturing plant and their final sales channels like Amazon or Myer.
Advantages of cross-docking
Cross-docking is a more efficient and economical way to get many different shipments to their appropriate locations. In a cross-docking arrangement, brands will only need to send their shipments to one place — the cross-dock — instead of breaking up their pallets and making small shipments across the country or world. Since cross-docks handle shipments for many different brands, they can efficiently group and ship several pallets from different brands to their appropriate location at once.
For example, instead of one brand making several small shipments to Adelaide, Brisbane, and the Gold Coast, the brand can just send all their product to a cross-dock. The cross-dock can then group the inbound Brisbane shipment with other shipments headed to Gold Coast and so on.
Another benefit to cross-docking is speed. Cross-docks don’t store products; they turn them around to their final destination within 1-2 days. This simplifies the supply chain and helps brands avoid storage costs, risks, and logistics.
Types of cross-docking
Most true cross-docks simply receive shipments and quickly send them on to their final location. Other cross-docks have a value add. Instead of just bringing in a product and quickly shipping it, these cross-docks perform a service or otherwise add value during the process of cross-docking.
Between taking the shipment apart and putting it on pallets to different destinations, a cross-dock with value add may perform quality checks, add a UPC for Amazon organisation, repackage it, or otherwise prepare the product to improve the customer experience or ensure it meets the marketplace standards and requirements.
One example of this service is a brand sending jewellery to a cross-dock in plastic bags, where the cross-dock repackages them into jewellery boxes. Cross-docks with value add may also package a few complimentary products from the same brand and sell them as a set, like selling a dog toy in a pack with a treat that goes inside the toy.
Despite the additional efforts, cross-docks with value add still execute this process very quickly to get the outbound products to their final locations as soon as possible.
Another way to categorise cross-docking is by pre-distribution cross-docking and post-distribution cross-docking. In the former, products are sorted and prepared based on pre-determined instructions. The inbound product’s final destination is known as soon as it leaves the manufacturer or supplier. In the latter, products stay at the cross-dock until the final destination is known, which gives retailers more time to make smarter shipping decisions based on inventory and demand.
Potential downsides of cross-docking
In general, cross-docking can be beneficial to all brands selling any type of product. However, there can be some potential risks associated with cross-docking as it requires detailed planning and coordination to run smoothly. From one perspective, cross-docking can run the risk of ‘putting all your eggs in one basket’. Stock isn’t being held to be sent to various locations as sales dictate, but rather immediately being sent in bulk to selling channels like Amazon.
This risk is mitigated when working with a partner knowledgeable about ecommerce selling patterns. If you know a certain number of units will sell on Amazon, it’s less risky to allocate that many to the channel.
The power of a specialist cross-docking partner
Working with an ecommerce acceleration partner like Pattern can help ensure that products don’t just get from point A to point B. Partners like Pattern will perform rigorous quality checks, package products to help them sell better and improve the customer experience, ensuring every product meets the precise standards and requirements of the marketplace where it’s being sold. Pattern also sends brands detailed purchase orders, so they know exactly how much inventory to supply to cross-docks and when. This takes the guesswork out of the process, making it easy for brands to make data-backed decisions on how much product to allocate to each sales channel. Rather than having to coordinate several different shipments to different locations, our partners simply palletise their products and ship them to us in bulk, where they are unloaded, broken down, processed, and then products are shipped back out within 2-3 days.
By working with an ecommerce acceleration partner that can support a brand’s cross-docking processes, Australian businesses have the logistics of ecommerce fulfilment managed for them. This gives brands more time to focus on what matters most – driving product innovation and growing sales.
For more information on Pattern and our ecommerce acceleration services, please visit: https://au.pattern.com/