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As shipment continues to be a big problem during these times, shipping cargo in good time, conditions and at the right price continues to be a problem. This paper concerns itself with analyzing the current situation in shipment of cargo in the country, how shipment delays affect retail shops and customers. The paper explains how shipments affect retail stores, through the potential and the realized effects of shipments. Some of the factors that have been analyzed in this paper are; shipment sizes, costs involved, and the timing of the shipments and losses due to delayed or lost shipments. Based on the conclusions drawn from this report, a number of recommendations are made for those in the business of shipping to ensure that merchandise is shipped in good time, in good order and at a reasonable cost.
How Shipments Affect Retail Stores
Shipment is a term used to describe the deed or act of shipping wares or goods. The term is also used in reference to the mass of goods or load that is shipped jointly. Shipping similarly has various meanings. It can be a substantial procedure of moving goods and load, through roads, air, and on sea. Shipment is also used to refer to just the transportation of wares by a sea vessel. Land (by road) shipping is done by trains or by trucks. Whether one plans to use air or sea shipments, land shipping is regularly still obligatory to move the wares from its source to the port (air or sea) or from the port to its target. The term "shipments" in this paper is used to refer to the actions rather than the mass. The process of shipment is currently faced with numerous problems in the county. Having to fight for cargo, retail stores are out-bidding each other to get the limited cargo space on vessels, going as far as paying double or thrice what they used to pay twelve months ago (Clifford 2010).
Regardless of the skyrocketing costs, the many retail stores are receiving their cargo weeks overdue. With these problems, retail stores are having a torrid time. Even with the rising cost, they are not sure if and when they are going to obtain the space or the cargo. Even though it might appear like the fight for space means that retail stores are expecting higher sales, nothing can be further from the truth. Most retail stores are citing the shipping troubles as a massive problem at an instance when retail sales are frail and user confidence is fading (Clifford 2010). The problems ultimately push the cost of shipments high and the retail stores are forced to cut down their profit margin and passing the cost to the consumers. The delays also put the retail stores at the risk of loosing business. This paper in general is an analysis of how shipments affect retail outlets. It is important to note that the term affect as used does not only refer to negative effects but also positive ones.
Statement of the Problem
Shipment on its own has a significant effect on retail stores. Since shipments dictate the flow of goods in the market, this in turn affects the rules of demand and supply and it has serious effects for the retail store. This paper will examine the potential and the realized effects of shipments on retail stores.
Shipments determine and dictate the influx and flow of products in the market, which intern affects the price and sales rates. Getting products in the right time plays a key factor in reliance of shipment as a means of obtaining goods and products in the market. The sales rates get affected the moment a delay occurs. This happens in most cases when customers' orders were on waiting. This also leads to waning consumer confidence and it might prove disastrous to the store in the end. Delays also could cause shortages in a product if many retail stores are affected by the delay. This will push the price upwards.
Some retailers have been forced to spend a lot more in order to get their shipment in time. Extra spending on the shipment cost affects the overall income and expenditure plans of the retailer. It may have an adverse effect on the gross profits of the retailer too. It may even force the store to raise the retail price of the affected goods to cover the cost and this could affect sales negatively. Another problem faced by the retailers is that, one has to be in a company that has a contract with the shipping companies if not extra, an extra fee is charged and this affects the retailer's profits too. These shipping companies' charges may vary from retailer to retailer, depending on the quantity and type of products being shipped. A method known as Vary by Quantity shipping is used to assess any variables in the shipping charges. The method is specified to look at the total number of the goods or products in a cart and not at any other variable. It is ideal for the creation of shipping charges that change only when a specified quantity is attained (Clifford 2010).
Determining the amount to be shipped is at times, somewhat challenging. This is because it is usually dependant on the demands and purchases. The more the demand and sales, the more demand for shipment. The variability in demand has a big impact on the shipment and distribution strategy. A steady supply of the products and at the right time, keeps the business up, steady and running. A problem do exists only when an order for a shipment had been made, but before the goods are dispatched, its demand falls. This may lead to the retailer incurring huge losses if no ready market can be found. The frequency of making an order also depends on the demands of the customer. It makes no scene to have an order for a new set of shipment when an old stock still lies at the store.
Higher supplies ideally should reflect higher demand and sales. When shipment are made without any regulating parameter, over stoking or under stoking can occur, depending on the status of the retail business. It is important to note that early shipments can be as equally bad as the late the shipments. This is in terms of shelf life, storage problems, early request for payment, etc. Some organizations have set penalty clauses laid in their contracts to cater for late delivery and the impact that it can have in case of line stoppages. Delivery is a very important aspect of supplier-retailer development, and products performance can only be achieved if orders and requirements are clearly agreed and communicated (Lariviere 2010). When the shipment comes or is delivered late, it does affect the sales pattern of the retail stores greatly, and employees may get negatively affected too. They may get unmotivated, thus paralyzing the operations, or make the jobs done late at the retail stores. The delay in delivery may also have an effect on the products being shipped. They way go bad or expire if they are perishable. Customers may also withdraw their orders, resulting into losses, by the retailer.
Damaged or Lost Shipments
In situations where shipment is damaged or lost the shipping companies, take the full responsibility. This is as laid down in their contract agreement. Mostly the insurance companies come in to compensate the retailer. The retailers do not incur and losses in this scenario. This only takes effect when the products are still in the custody of the shipping companies. The distribution of shipment may take time. Delayed distributions time may be cut short by adopting direct shipment type of service. It provides that, the shipments be delivered directly to the retailer who made the order, bypassing distribution centers and the warehouses. This helps the retailers reduce or avoid the expenses of operating a distribution center and reduction in the lead-time. The direct shipment is commonly used when the retail stores require fully loaded tucks, which implies that the transport cost is not reduced by ware housing.
Having looked at how shipment affects the retail stores both positively and negatively, caution should always be taken to avoid the negatives one. Strengthening on the positive effects, builds up gains and profits, this in turn, calculates to the overall development of a country's economy. The entire negative effects are centered on breaking of retailer-customer trust, attaining losses, collapse of retail stores and decrease in production. The working together and in comfort-ability, of retailers and the shipment companies, may help alienate the negative effects. Adopting exclusive distribution methods, which is the use of a single retail outlet for the goods and products in any given geological area, can help in the speedy and safe delivery of prestigious products. Time as a factor, determines when the products reach the stores, this can be improved by proper communication between the parties. This helps to reduce the delays or early arrival of products. The positive effect of shipment do translates into profits, establishment of good will, increased input, and output, and an improvement in production. All these transcend dawn to an overall development of a given community. Despite the pros and cons of shipment is has remained to be the major means of having access of products from abroad.
Proper shipping method should be put in place to avoid discrepancies in the retail stores. This may involve laying down multiple parameters that helps to determine whether a customer's order is eligible for the shipping service or not. Some of the parameters may include; shipping zones detection, which defines the geographical areas where products cannot or can be delivered, warehouses, which gives an insight on what products will be not or will be shipped by this shipping method of choice and the user groups, which defines which customers cannot or can choose a shipping method at checkout. It is always considered a good idea to set up and review these parameters prior to the creation of a shipping method.