A company is transitioning its fulfillment strategy from direct consumer shipment to shipping through an intermediary. Which of the following impacts can be expected?
A company is transitioning its fulfillment strategy from direct consumer shipment to shipping through an intermediary. Which of the following impacts can be expected?
When a company transitions from direct consumer shipment to shipping through an intermediary, it usually needs to store products before they are shipped to end consumers, which often leads to higher warehousing costs. The intermediary process typically involves consolidating shipments in a central location, necessitating additional storage space and management, thus increasing warehousing expenses.
Transitioning from direct consumer shipment to shipping through an intermediary can be expected to result in lower transportation costs. Direct-to-consumer shipment involves shipping individual orders directly to customers, which can be more expensive than shipping in bulk to an intermediary, such as a retailer or distributor, who then handles the final delivery to customers. By consolidating shipments to fewer locations, the company can take advantage of economies of scale and negotiate lower transportation rates.
Lower transportation costs.
B: Direct shipment means small consignments which leads to higher the transportation costs when using an intermediary it does not mean to reduce the transportation cost but it means consolidating the shipments or need a waiting area (warehousing) so it will increase the warehousing cost