With tips from JTL for perfect inventory management
Anyone who sells and ships products also has to ensure careful storage and smooth shipping. But how does smart warehousing work? How can you optimize your processes? How do you avoid overstock? And how can fulfillment services support you with this?
In this episode, Felix Ullrich, Technology Partner Management at JTL-Software, and Doreen Ewald, Delivery Solutions Lead from the eBay logistics team, provide answers to these and many other questions.
Listen in and find out how you can take your warehouse logistics to the next level with the right strategies!
**Important links**
- https://www.ebay.de/verkaeuferportal/verkaufen-bei-ebay/partner?srsltid=AfmBOopwrC_fnDL3YYg6_3GTp-wc6sPskz3-jF4PA9tcMLBaxlM9UgsE
- https://community.ebay.de/
- https://m.facebook.com/cookie/consent
- https://www.ebay.de/verkaeuferportal/news/podcast
- https://www.ebay.de/verkaeuferportal/versand/logistik-programme/ebay-logistik
- https://fulfillment.jtl-software.com/
- JTL-SoftwareWarehouse management - JTL-Software
- JTL-SoftwareMultichannel - JTL-Software
**Mentioned podcast episodes**
- https://open.spotify.com/episode/0rfM8am5AJ4Jo0o6POH2f4?si=KG7MLDKIRPWFdtwncXgYng
- https://open.spotify.com/episode/0EZu8irhIcZxMqkTWzQLhE?si=F50MlLLGSDiG8rW_H2AH7w
- https://open.spotify.com/episode/2zZ9GHSvYbVRPBNAP3Y4D0?si=Q7zhBUqcSJ-utA8Y9zuZDg
** Chapter markers **
- 00:00:00 to 00:02:41: Intro
- 00:02:41 to 00:09:19: How important are warehouse logistics and fulfillment services?
- 00:09:19 to 00:11:25: When does fulfillment pay off?
- 00:11:25 to 00:12:54: How does JTL integration at eBay work?
- 00:12:54 to 00:19:46: Dos and don'ts of warehousing
- 00:19:46 to 00:27:35: Tips on inventory and shipping processes
- 00:27:35 to 00:31:05: How will warehousing change in the future?
Lisa: No one in retail can get around the topic of warehouse logistics, because almost all of you, no matter how big your business is, have to store products, and as your company gets bigger and bigger, the question arises: where do you put the goods? One option that takes a lot of work off your hands and can optimize your warehouse and shipping processes are fulfillment services. What exactly that is, how you can take your warehouse logistics to the next level with it, and which solution is best for your business, you’ll hear now.
Felix: And a classic other mistake is overstock, meaning a classic too-high level of inventory. To put it briefly: this means that if sellers, for example, think: okay, look, my best-selling product is on sale right now, so I’m going to buy thousands of units of it, and then it doesn’t sell fast enough, then we have a really serious capital tie-up, meaning we have significantly less cash flow, we also have too much warehouse space, which we may need, blocked, and that leads to too much warehouse space and money being tied up that we could actually use better.
Lisa: Welcome to "Alles top. Gerne wieder!", the eBay podcast about retail and e-commerce. I’m Lisa Haak. As you already heard in the intro, today is all about warehouse logistics and fulfillment services. That’s why I have two guests in the studio today who know this topic inside and out. Felix Ullrich is Technology Partner Manager at JTL-Software, a software company that also offers, among other things, a fulfillment solution as well as its own warehouse management system. Felix handles partners and internal processes on a daily basis. For example, he manages existing partnerships and ensures the technical integration of new partners. Hi, Felix!
Felix: Hi Lisa, thanks for the great intro. I’m really happy to be taking part in this exciting podcast episode today, and I’m also looking forward to the hopefully great topics we’ll be discussing.
Lisa: And my colleague Doreen, Delivery Solutions Lead at eBay, is also a real expert in shipping and logistics. At eBay, she makes sure that for as many of your items as possible, you can also offer a suitable shipping option on eBay.de. Some of you may already know her from our podcast series "Let’s talk about Versand" at eBay, where we of course covered the topic of shipping in great, great detail. If you want to listen again, you’ll find the links in the show notes as always. So, hi Doreen!
Doreen: Hi Lisa, hi Felix! I’m happy to be back today and to give, but also receive, some exciting insights.
Lisa: Great, then let’s jump straight into the topic: warehouse logistics. Why is functioning warehouse logistics so important for sellers, and does size actually matter?
Doreen: I’ll jump in here, Lisa, you already mentioned it earlier: basically all sellers have to store goods in order to get them to the customer. Why is functioning warehouse logistics so important? Especially when, at some point, not just one marketplace but also the shop and several markets need to be served, it’s super important, for example, to always have the stock correct. I’ll first refer to the eBay marketplace, of course: if mistakes happen there, it simply leads to transaction cancellations, which in turn has a negative impact on service status. All of that can be avoided, and you can simply ensure that short processing times, meaning from the order to handover to the shipping provider, run smoothly and that no mistakes happen or delays occur.
Lisa: Also a very good explanation of why your job at eBay is so important. So you probably also know very well, Doreen, how eBay best supports warehouse logistics.
Doreen: As for support in warehouse logistics: what applies directly to sellers, we’ll come back to later. In general, though, I’d always recommend that anyone who can should use the eBay Starter Program if they’re new here or just getting started. The colleagues there simply have every tip ready, including on logistics. So you’re in great hands there, and I’m sure, Lisa, that we’ll link it in the show notes.
Lisa: We always link everything here in the show notes!
Doreen: Everything — ah okay, so I won’t say anything more about the show notes. You’ll definitely find everything there. When we then have sellers who are a bit further along, for example those taking part in the Pro Trader program, they face completely different challenges. They’re exactly at the point where they have to grow. Either they grow out of the setup they currently have, meaning they make the investment themselves, so more warehouse space, staff, other additional software, or they simply look around: what else is out there on the market? That’s where, for example, eBay Fulfillment by Orange Connex comes in. But one small tip I always have that works well is the eBay Academy, for example. Really everyone can inform themselves there according to their needs, pass on trainings or information to employees, just to stay up to date. Every commercial seller has access to it, and I can only recommend it!
Lisa: That’s a great recommendation. Felix, let’s come to you. I touched very briefly in the intro on what JTL does. But can you give our listeners a little overview of how JTL supports sellers in their work?
Felix: I’d be very happy to. Yes, at JTL we like to say we offer an all-in-one solution for e-commerce. That means our sellers at JTL can offer everything for their online business, from the ERP system, which we call JTL WaWi, the heart of JTL, to their own shop and checkout system, through our marketplace interface, which also includes eBay, all the way to their own warehouse management system, which we’ll talk about again later, including their own shipping — an online retailer, male or female, can offer everything for their online business. In numbers, JTL currently has over 50,000 customers, and we have over 500 partners who also make the daily work of these sellers much easier. That means the whole projects are also partly supported by our partners and, of course, facilitated by partners like eBay. And thanks to these numbers and also our partners, we can now proudly say that we can also process every tenth shipment domestically through JTL, in the B2C sector, and thanks to the warehouse management software, our JTL WMS, and the fulfillment area, we also have major customers who actually ship over 3,000 parcels a day, and yes, I’m happy to tell you more about it today.
Lisa: That sounds like good process optimization, especially for customers who’ve grown to the size where they need it.
Felix: Right, yes.
Lisa: Felix, you have a fulfillment network at JTL. Can you tell us a bit more about this fulfillment network?
Felix: Yes, very, very gladly. Our fulfillment network, which we also call JTL FFN for short, is middleware that gives sellers and online retailers the option to outsource their logistics to a third party, meaning a logistics service provider. I always think it’s very important to emphasize that this middleware, in this context, is not just suitable for JTL. That means any shop or ERP system can be connected directly via it as an interface, which of course can also make it much easier for other online retailers using other systems to make use of fulfillment services. To make that even easier, we also have something called the warehouse search. I like to call it a little marketplace for fulfillers, because online retailers can really choose the right one from over 130 fulfillment service providers we’ve vetted. Among others, eBay by Orange Connex is also listed there, so sellers can contact them too, exactly.
Lisa: You mentioned middleware several times just now. That’s a term that means a lot to me in my professional context, but maybe not to all listeners. What is middleware? Very simply put.
Felix: I can break it down very, very simply: middleware is simply a connection so that two systems can communicate. So if we were to say, for example, that eBay and JTL need to communicate, it requires middleware, and that makes it possible for the systems to talk to each other.
Lisa: That was a very nice, very simple explanation. We always throw around a lot of technical terms, so let’s talk about the second technical term, fulfillment service. Would you like to explain in more detail what exactly makes a fulfillment service?
Felix: So with fulfillment, I always try to describe it using the standard use case in online retail. To put it very simply: we all know it — an order comes in, then the order is sent to the ERP system of an online retailer, and then normally to the warehouse. There it is picked, packed, and shipped in the picking process, and that is basically the standard process we have. With fulfillment, exactly this last part is the case: from the moment an order would be sent to the warehouse, instead of arriving with us, it is forwarded directly to a logistics service provider. In other words, they take over the classic logistics tasks, right through to further services. In fulfillment, these are called value-added services. They’re responsible for expanding the spectrum of classic logistics tasks, for example by taking over returns, complaints, or even by having fulfillment providers offer key accounting packages for their customers. Ultimately, you could say that, depending on the logistics service provider, fulfillment can take over all goods-related information and communication activities right through to the final satisfactory fulfillment of the order — or, in short, warehouse logistics is handed over to a pro.
Lisa: To me it sounds a bit like once you reach a certain size, you can’t really avoid thinking about fulfillment or fulfillment services, if it probably goes beyond your own capacities. But for whom — from your experience — is such a fulfillment service suitable?
Felix: The thing is, I always say personally that this can’t be answered with 100 percent validity because it really depends very individually on the use case. In other words: depending on how the seller grows, how big the seller is, at some point they naturally have to decide: fulfillment, yes or no? What can be said with a very high degree of certainty is that the further the company grows, the more difficult and demanding the logistics processes naturally become, and it becomes much harder or more challenging to handle them. At the end of the day, that leads to us having a higher order volume. For example, we have significantly more products on offer. This also leads to the fact that we need more know-how in the warehouse, we need more staff, we may have peak times for seasonal products. We have to further optimize the structures, and that’s where, in my understanding, it starts: okay, do I need fulfillment now, yes or no? You have the option of tying up capital and, of course, investing, meaning renting or buying warehouse space. Personally, I can always speak very positively about fulfillment, because our customers have simply had very good experiences with it. So those who use their own warehouse as sellers usually also have an additional fulfillment service for other online retailers. So they combine it a bit, to put it as an example. Let’s say we have an eBay seller who, for example, also sells a seasonal product, which I briefly touched on earlier, like umbrellas, which simply have a certain peak season in the year, and we may also have to scale our warehouse up there, logically. If you used fulfillment, in my opinion you would have a significant relief in staffing, especially during peak times. Also around Black Friday and the Christmas business, staff is often hired in, simply on a temporary basis, let’s say. That means we simply don’t have personnel costs here. Time is saved because we can continue to focus on our day-to-day business, meaning the online business, and the logistics service provider generally handles the whole logistics much more efficiently, and we can potentially achieve higher customer satisfaction.
Lisa: That all made total sense, and I think it’s also a good consideration for sellers who are watching us right now to think again about where I’m at. How are my processes set up, and could a fulfillment service simply help me optimize here? Felix, we talked a bit about the fact that you’re a partner of eBay and connected to eBay. You also mentioned Fulfillment by Orange Connex earlier. As an eBay partner, you’re connected to our interfaces. Can you say a bit about what that includes, how you’re an eBay partner, and for which functionalities?
Felix: Correct, yes, very, very gladly! So it’s like this: eBay is actually one of our longest-standing partners, if not the longest-standing partner. So we have a very nice and very long partnership with you, which we’re always very happy about. For us it’s like this: we have a marketplace module called JTL easy auction. That’s responsible for enabling marketplaces like eBay and others to be connected. As you just correctly mentioned, the eBay interface is also connected through it. That means eBay sellers can very easily, with support from us via the JTL Guide — we also have a forum that has grown very large over time — connect and install eBay themselves very well in the end, or rather set it up, and through that the systems can communicate with each other. So you can list products on eBay, you can maintain stock levels in eBay and, of course, in relation to eBay Fulfillment by Orange Connex, it’s also the case that through our fulfillment network you can, in theory, connect the right fulfiller or the direct eBay fulfiller to optimize your business even more. Yes!
Lisa: Very nice! When we talk about warehousing and fulfillment services, it sounds very much like there are quite a few dos and don’ts, or things that may hold me back, or things that can help my business move forward. Let’s talk about those dos and don’ts. From your point of view, what are absolute dos when it comes to warehousing?
Felix: Yes, there are actually many things you can do right or wrong. My absolute favorite do is the area of supply chain management. I am absolutely convinced that if stock in the warehouse is not continuously monitored in all phases, then if we don’t know what’s happening with our stock, with our items in the warehouse, warehouse logistics simply cannot run efficiently or effectively. That means you should always know — as a rule you have it in the ERP system or also in inventory control in the background — what is happening with the stock. That’s why information transparency is also very important in supply chain management. Employees who work with certain systems should, logically, also have the ability to access important information everywhere in the required areas, and that already makes life much easier. On the other hand, we have the don’ts. A classic don’t in my opinion is, for example, that especially in smaller companies or also in small-parts storage we try to mix multiple SKUs in containers in order to save space, for example. I can say this plain and simple: I think that’s total nonsense, because it frustrates employees, unfortunately increases pick times, may lead to picking errors, and you have to search much longer, so I’d rather invest more warehouse space than save in the wrong place. Then there are inefficient picking routes, which is something you’d actually think about when starting a warehouse, but that often isn’t the case. A lot of time is lost picking in the warehouse because of wrong walking routes, items placed in the wrong spots, depending on how you work in the warehouse. Especially if you have a chaotic warehouse setup, it’s simply important to know how I can optimize pick times and also walking routes. And of course we don’t want our warehouse employees to get frustrated because their times are bad. And another classic mistake is overstock, meaning a classic too-large inventory. To explain briefly: if sellers, for example, think, okay, look, my best-selling product is on sale right now, I’m going to buy thousands of units of it, and then it doesn’t sell fast enough, then we have a really serious capital tie-up. That means we have significantly less cash flow, and on top of that we have too much warehouse space blocked that we may need, and that leads to too much warehouse space and money being tied up that we could actually use better.
Lisa: You’ve painted two very nice pictures in my head. One is like a Pac-Man field where the Pac-Man guy is trying to find the right things in the warehouse.
Felix: Yeah, pretty much.
Lisa: And the other is definitely a little money monster that eats up the reserves if you don’t put enough effort into your warehousing. A lot of technical terms have come up again, and they’re all very understandable for us. But maybe, Doreen, can you explain again how you explain a pick and pack list when you meet sellers?
Doreen: Well, of course we’re happy to explain that to sellers too, but I try to explain it in a way that my child would understand, and I’d simply say: a pick list is actually nothing more than the shopping list for a warehouse employee. Really well written down, well structured, so that walking routes are optimized, etcetera. Ideally they are electronic. Of course there are still companies and warehouses where it may also be on paper. However, there is of course technical support for that. What is a pack list? Ultimately it’s the checklist when packing, so that the right product really does get packed and shipped in the right parcel to the right customer. The matching is of course electronic within the warehouse, ideally supported by scanner technology.
Lisa: Now I’m curious how you’d explain "warehouse management system" to your child.
Doreen: Listen: I’d simply say it’s like the conductor of an orchestra in logistics, coordinating the flow of products in the warehouse and from incoming goods to shipping. The important thing here is to check whether efficiency is there, whether clarity is there, inventory is managed, demand is forecast, so where are the goods leaving, what’s coming in? Warehousing is optimized. Ultimately, it creates harmony in logistics.
Lisa: That sounds very harmonious. Very nice! I’d like to give our listeners a few tips for scaling, more specifically concrete steps to get the optimum out of warehousing.
Doreen: Felix, you’ve already... I mean, anyone who’s been listening, and I assume our sellers have, has already taken in so much. That’s why I brought three very concrete things. You already touched on it, Felix, you have to be a bit careful when balancing this, namely consolidated deliveries. That means if I have one ordering process and then an incoming delivery, I can simply bundle purchases, take volume discounts, and thereby also save transport costs for the delivery. But now comes my favorite metric in the warehouse, namely keeping an eye on inventory turnover rate. Do I even have the lead time? What does my sales forecast say, what do I need to influence at that point? That then leads me to simply say: increase this metric, namely inventory turnover. You can do that through special promotions, by reducing stock. Of course you can use the eBay marketing tools, the coupons, coupon options we offer, and eBay ads for that. Based on that, you can then of course look at where it makes sense, either completely if you’re already at that point, or partially to outsource storage and shipping, namely to a fulfillment service provider, for example eBay Fulfillment by Orange Connex. The nice thing is, though, you don’t have to do it for your entire portfolio, you can also just do it for part of it, for example, and the advantage here is the classic one: you benefit from the volume discounts that a fulfillment service provider gets with the shipping carriers.
Lisa: Outsourcing sounds super advantageous, but one question I would immediately ask is, what happens when you outsource and something goes wrong? Because at eBay I depend a lot on everything working in my shipping processes and on meeting my criteria there somehow. What happens then?
Doreen: Well, I can of course only speak for eBay Fulfillment by Orange Connex, but the way it is there is that if something really should go wrong, because it is an official partnership and our global eBay fulfillment partner, we grant seller protection. That means if something is late or arrives damaged, eBay takes over the logistical defects at that point. And what’s exciting is that if it’s used in full, eBay also provides support in the clarification cases. That means if there is a delay or damage, eBay takes over at that point.
Lisa: That sounds very worry-free. Before we move on to topics like inventory and shipping, I want to know from you out there whether you already use eBay fulfillment services? If you’re listening in the Spotify app right now, you can share your experiences directly via the questions-and-answers function in the app. Just drag the slider up from the bottom edge of the app and you’re good to go. Or simply write to us in the eBay Community or on our Facebook page "eBay for Business Deutschland". We’d also love your feedback on the podcast and, of course, a like or a subscription. Felix, when we talk about warehouse logistics, we can hardly avoid one topic: inventory. It’s annoying and time-consuming for many sellers, but it’s part of it to regularly check your stock levels. Is there help with the inventory topic when it comes to fulfillment services?
Felix: Yes, inventory is of course a super important topic for all online retailers, whether they handle their own logistics or outsource it. Anyone who spends a little time with fulfillment will very quickly also find out that the seller is legally obliged to carry out an inventory, no matter where their goods are located, and if an external service provider does it, then of course they have to perform it as a service. The way it is here is that fulfillment services don’t just support this, they do it and have to do it. So they take over the inventory in full. That means once stock from my own warehouse or later directly from the supplier is sent to the logistics service provider, from the moment the stock is booked in, it is said that the logistics service provider has what’s called warehouse authority. That means they are the ones who control the stock; in other words, when an order comes in, stock levels decrease, and exactly at that point inventory is so important. Later, when you also carry out an inventory, for example, only the fulfillment service provider also has the opportunity to make error corrections, meaning to do a stock booking plus one again. In the end, because everything has to be stored elsewhere or is stored elsewhere, the fulfillment service provider therefore also handles the inventory for its customers and offers it completely as a service. And as you can hear, that’s of course super convenient for the seller. They can continue to focus on their actual business, which they already know how to do, with fulfillment, and the inventory is taken care of too. So it really can’t get much better.
Lisa: Yes, it really sounds like a huge relief to have someone else handle that. You just mentioned booking goods in. By that you mean goods receipt in fulfillment, right?
Felix: Yes!
Lisa: How does that work? Do I just send my stuff somewhere?
Felix: So, in goods receipt in fulfillment, the way it works — let me project it onto the JTL case now in the classic sense — is that it runs with us like classic logistics should run. In other words, we talk about supplier orders. That’s actually a common term too. In other words, the goods arrive. In our system we already have the supplier order on file, then we book the orders in, the items are received into stock, sorted into storage locations, I’d say, or simply moved on. The important thing here is that goods receipt in logistics should always be booked in using barcode support. That means every item should be scanned, because that allows us to cross-check the supplier order in real time, and also make sure everything is actually there. Of course, there are differences depending on what’s delivered: if pallets are delivered, it’s usually more spot checks. You can’t inspect every single one of 1,000 items, but the important thing is simply that it happens. Then, if nothing else is requested, the most common case in logistics for goods receipt is that it is then stored according to the principle of chaotic warehousing. That’s also the case with our JTL_WMS, the warehouse management system, and another aspect that I think is also very important for goods receipt is free goods receipt — that’s what we call it at least — which simply means that there should also be the option to book items in manually. So I can again make a nice connection to inventory. If we didn’t have that option, we couldn’t make inventory corrections either. One thing to note here is that it has to be barcode-supported, meaning there has to be an EAN, GTIN, or something else with which we can uniquely identify an item, and then we can book it in quite simply.
Lisa: You just talked about chaotic warehousing, even though everything actually runs very organized. Can you maybe explain once more what chaotic warehousing is?
Felix: Sure, I can do that too. So, with chaotic warehousing, we’re basically talking about exactly what the word already says. It’s stored chaotically, meaning you simply look at where storage locations are free, and then the goods are stored there. Since we track everything and know where our items are — we’re back to supply chain management here — and that is of course scanned against the storage location too, we can always track in our system where the items are. Of course there are a few other systems, but I think that would go too far now.
Lisa: True. Once everything is stored, we naturally hope that at some point everything will also be shipped. Let’s talk about shipping, because a fulfillment service takes care of that too.
Felix: Right, it would definitely be good if it gets shipped, otherwise that would be inconvenient. But yes, the shipping process is actually very simple and straightforward. I already briefly explained it in that use case. From the moment it’s in the warehouse, the picking, picking-and-packing process begins, and I’d say, from my understanding, once it’s at the packing table, meaning the goods are packed and labeled — so a shipping label from the appropriate shipping provider, say DHL, Hermes, etc., is attached — that’s when the shipping process begins, and the fulfillment provider also takes over that in full. That means they are responsible for shipping with the relevant carrier, meaning the shipping provider, depending on what was agreed, and possibly also a freight carrier if the goods are larger. But at the end of the day, it always reaches the end customer pretty well and quickly. Yes.
Doreen: I’ll just add one quick thing: the smart part is the nice thing, and I think this is the very best part. As soon as either the label is created, depending on which process step is defined, the tracking number, meaning the tracking ID, is automatically uploaded. So both on eBay of course and on the other marketplaces too — meaning things like it’s late, not transferred, etc. — we completely exclude that here, because we know exactly at which point the handoff basically takes place.
Lisa: Very nice, thank you very much, Doreen. You said earlier, or I said earlier, that one of your jobs at eBay is that different shipping methods are offered for different categories or things we want to send. What different shipping processes do we offer at eBay and therefore also at JTL?
Doreen: Well, it’s a bit difficult to talk about just one or a limited set of shipping processes, because eBay is one of the world’s largest online marketplaces. Just to remind you briefly: 132 million buyers worldwide, 190 markets. Of course there are different needs. To cover those too, we simply have a wide variety of shipping options, national and international, really from a small economy... inexpensive shipping product in a letter format, for example, the standard is of course parcel with tracking, etc., to express delivery — then again national and international — everything is included. That applies both to the listing process and the shipping process. Depending on whether you’re already working with a tool like JTL or not, you can do this either on the eBay marketplace or with the technical partner.
Lisa: That’s probably important, Felix, for the many customers you have, that there’s just flexibility and a large portfolio I can access, right?
Felix: Yes, that’s definitely super important. Especially with regard to shipping methods, our ERP system also always gives you the option to select the label accordingly. So if you use fulfillment with eBay, for example, there’s a specific area that switches over, which naturally means the corresponding label gets printed out, depending on which eBay program you participate in. So basically every seller can use everything they should be able to use when working with eBay and JTL, for example. Yes.
Lisa: Very nice! Then let’s try to take a little look into the future together. E-commerce is currently changing many different processes, among other things due to the progress of artificial intelligence in many products or things that we also offer as an eBay marketplace. What changes can you imagine for warehouse logistics in the future, including through artificial intelligence?
Felix: Yes, for me the area of AI is one of the most fascinating and interesting areas we currently have, especially in e-commerce. Slowly but surely, really a lot of solutions are popping up out of nowhere, which can then also be provided by partners. Personally, I’ve focused a bit on demand forecasting, which I currently find very exciting, ehm, something we already touched on briefly with overstock. And here the situation is that we simply have one or two solutions that have contacted us recently, gotten in touch with us, and are eager for JTL customers, in the sense that they can make the work even easier for them. Especially in the warehouse. And here it looks like we really have the area of purchasing forecasting, meaning forecasts for purchasing, which can be modeled very, very well using AI, but also additionally through machine learning. That means, in this area, I’d say the only "disadvantage," so to speak, of such a solution is that you always have to let it run for a few months — we say around three to six months, or until a solution really gains traction. But then it’s the case that this technical solution, through AI and machine learning, can simply analyze exactly what sales cycles we have. It can respond to seasonal cycles and then, let’s say, predict or suggest exactly when you should reorder which products or product categories, so that A, you definitely don’t have any overstock, meaning too much stock, in the warehouse, but B, you always have goods available. So the exact opposite evil of overstock is simply that we no longer have anything in stock and can no longer serve our customers. Which in the worst case leads to customers buying somewhere else, which of course we don’t want, and it’s simply super exciting because there’s so much you can do with it. I’ve already seen a few, let’s say, mocks where you could really see how it works, and it’s just a super exciting field, and I think a lot more is coming that will make things much easier.
Lisa: We’re all very excited about that together. Doreen, can you tell us a bit more about new developments at eBay that are coming our way?
Doreen: Hmm, so not exactly a new development, but machine learning models too — I’ll just say AI as the umbrella term — of course, classic: the majority of shipments that go out and are sent have a tracking number, and they go from one postal code to the next, and we know which shipping providers are behind them. That means transit-time forecasts, for example, and delivery data are something that just keeps getting better in terms of prediction. I do still have one thing I brought along that is new and that we’re introducing right now, which may not be quite as AI-driven, but is super convenient and time-saving. That’s why I definitely want to mention it: if you’ve already noticed, we’re currently completely overhauling the returns processes at eBay. That’s an iterative process running over several months, and the next thing that’s coming is a topic that has already been rolled out in part: DHL returns. There, commercial sellers will have the option to store their DHL login details on eBay so they can use their own rates for returns. That’s not AI, and it’s not magic either, but it’s technology that has to be implemented, and it simply makes the goods receipt process super easy, and that closes the loop. Super easy to directly assign the item again and determine what the original order on eBay was.
Lisa: Super exciting! I think in this podcast episode we’ve already had mega, mega many pieces of information for sellers, and anyone who knows our podcast knows that when we’re nearing the end, we always finish with our question: what did you last buy on eBay? I’ll start with Doreen, because you already know this one. Then you can take a quick moment to think, Felix. Doreen, what was your last purchase on eBay?
Doreen: I just checked again quickly, and I hope our delivery driver at home will forgive me, because I ordered bog garden soil. For anyone who doesn’t know what that is or what it’s for: if you have a berry garden and want to plant cranberries or blueberries there, you need bog garden soil, and of course I ordered that on the marketplace.
Lisa: It’s also exciting what you keep learning about your colleagues in this podcast. Okay, Felix, what was the last thing you bought on eBay?
Felix: Yes, something pretty classic that I actually buy on eBay almost all the time and also bought most recently are simply batteries for my watch. I have a hybrid smartwatch that needs a new battery every three months, a special kind that you can’t get in a supermarket, and I actually order those every time, thanks to the best price-performance ratio on eBay.
Lisa: Very nice, then we’re looking forward to your new batteries in the watch. Yes, many, many thanks to both of you for the interesting insights into the world of warehouse logistics and fulfillment services. I think it’s super exciting to hear what all will develop in this area, what is already possible today, and where we can create optimization for our sellers. So many, many thanks to both of you, and hopefully see you again soon!
Doreen: Thank you, and many thanks for the technical behind-the-scenes support from you, Felix.
Felix: Gladly, yes, also from my side. Many thanks to both of you. It was a super exciting podcast episode. I hope we were able to tell the listeners something great and new, maybe also teach them a bit about everything related to warehouse logistics and fulfillment. And yes, it was great being with you!
Lisa: Thank you very much.
Felix: And a classic other mistake is overstock, meaning a classic too-high level of inventory. To put it briefly: this means that if sellers, for example, think: okay, look, my best-selling product is on sale right now, so I’m going to buy thousands of units of it, and then it doesn’t sell fast enough, then we have a really serious capital tie-up, meaning we have significantly less cash flow, we also have too much warehouse space, which we may need, blocked, and that leads to too much warehouse space and money being tied up that we could actually use better.
Lisa: Welcome to "Alles top. Gerne wieder!", the eBay podcast about retail and e-commerce. I’m Lisa Haak. As you already heard in the intro, today is all about warehouse logistics and fulfillment services. That’s why I have two guests in the studio today who know this topic inside and out. Felix Ullrich is Technology Partner Manager at JTL-Software, a software company that also offers, among other things, a fulfillment solution as well as its own warehouse management system. Felix handles partners and internal processes on a daily basis. For example, he manages existing partnerships and ensures the technical integration of new partners. Hi, Felix!
Felix: Hi Lisa, thanks for the great intro. I’m really happy to be taking part in this exciting podcast episode today, and I’m also looking forward to the hopefully great topics we’ll be discussing.
Lisa: And my colleague Doreen, Delivery Solutions Lead at eBay, is also a real expert in shipping and logistics. At eBay, she makes sure that for as many of your items as possible, you can also offer a suitable shipping option on eBay.de. Some of you may already know her from our podcast series "Let’s talk about Versand" at eBay, where we of course covered the topic of shipping in great, great detail. If you want to listen again, you’ll find the links in the show notes as always. So, hi Doreen!
Doreen: Hi Lisa, hi Felix! I’m happy to be back today and to give, but also receive, some exciting insights.
Lisa: Great, then let’s jump straight into the topic: warehouse logistics. Why is functioning warehouse logistics so important for sellers, and does size actually matter?
Doreen: I’ll jump in here, Lisa, you already mentioned it earlier: basically all sellers have to store goods in order to get them to the customer. Why is functioning warehouse logistics so important? Especially when, at some point, not just one marketplace but also the shop and several markets need to be served, it’s super important, for example, to always have the stock correct. I’ll first refer to the eBay marketplace, of course: if mistakes happen there, it simply leads to transaction cancellations, which in turn has a negative impact on service status. All of that can be avoided, and you can simply ensure that short processing times, meaning from the order to handover to the shipping provider, run smoothly and that no mistakes happen or delays occur.
Lisa: Also a very good explanation of why your job at eBay is so important. So you probably also know very well, Doreen, how eBay best supports warehouse logistics.
Doreen: As for support in warehouse logistics: what applies directly to sellers, we’ll come back to later. In general, though, I’d always recommend that anyone who can should use the eBay Starter Program if they’re new here or just getting started. The colleagues there simply have every tip ready, including on logistics. So you’re in great hands there, and I’m sure, Lisa, that we’ll link it in the show notes.
Lisa: We always link everything here in the show notes!
Doreen: Everything — ah okay, so I won’t say anything more about the show notes. You’ll definitely find everything there. When we then have sellers who are a bit further along, for example those taking part in the Pro Trader program, they face completely different challenges. They’re exactly at the point where they have to grow. Either they grow out of the setup they currently have, meaning they make the investment themselves, so more warehouse space, staff, other additional software, or they simply look around: what else is out there on the market? That’s where, for example, eBay Fulfillment by Orange Connex comes in. But one small tip I always have that works well is the eBay Academy, for example. Really everyone can inform themselves there according to their needs, pass on trainings or information to employees, just to stay up to date. Every commercial seller has access to it, and I can only recommend it!
Lisa: That’s a great recommendation. Felix, let’s come to you. I touched very briefly in the intro on what JTL does. But can you give our listeners a little overview of how JTL supports sellers in their work?
Felix: I’d be very happy to. Yes, at JTL we like to say we offer an all-in-one solution for e-commerce. That means our sellers at JTL can offer everything for their online business, from the ERP system, which we call JTL WaWi, the heart of JTL, to their own shop and checkout system, through our marketplace interface, which also includes eBay, all the way to their own warehouse management system, which we’ll talk about again later, including their own shipping — an online retailer, male or female, can offer everything for their online business. In numbers, JTL currently has over 50,000 customers, and we have over 500 partners who also make the daily work of these sellers much easier. That means the whole projects are also partly supported by our partners and, of course, facilitated by partners like eBay. And thanks to these numbers and also our partners, we can now proudly say that we can also process every tenth shipment domestically through JTL, in the B2C sector, and thanks to the warehouse management software, our JTL WMS, and the fulfillment area, we also have major customers who actually ship over 3,000 parcels a day, and yes, I’m happy to tell you more about it today.
Lisa: That sounds like good process optimization, especially for customers who’ve grown to the size where they need it.
Felix: Right, yes.
Lisa: Felix, you have a fulfillment network at JTL. Can you tell us a bit more about this fulfillment network?
Felix: Yes, very, very gladly. Our fulfillment network, which we also call JTL FFN for short, is middleware that gives sellers and online retailers the option to outsource their logistics to a third party, meaning a logistics service provider. I always think it’s very important to emphasize that this middleware, in this context, is not just suitable for JTL. That means any shop or ERP system can be connected directly via it as an interface, which of course can also make it much easier for other online retailers using other systems to make use of fulfillment services. To make that even easier, we also have something called the warehouse search. I like to call it a little marketplace for fulfillers, because online retailers can really choose the right one from over 130 fulfillment service providers we’ve vetted. Among others, eBay by Orange Connex is also listed there, so sellers can contact them too, exactly.
Lisa: You mentioned middleware several times just now. That’s a term that means a lot to me in my professional context, but maybe not to all listeners. What is middleware? Very simply put.
Felix: I can break it down very, very simply: middleware is simply a connection so that two systems can communicate. So if we were to say, for example, that eBay and JTL need to communicate, it requires middleware, and that makes it possible for the systems to talk to each other.
Lisa: That was a very nice, very simple explanation. We always throw around a lot of technical terms, so let’s talk about the second technical term, fulfillment service. Would you like to explain in more detail what exactly makes a fulfillment service?
Felix: So with fulfillment, I always try to describe it using the standard use case in online retail. To put it very simply: we all know it — an order comes in, then the order is sent to the ERP system of an online retailer, and then normally to the warehouse. There it is picked, packed, and shipped in the picking process, and that is basically the standard process we have. With fulfillment, exactly this last part is the case: from the moment an order would be sent to the warehouse, instead of arriving with us, it is forwarded directly to a logistics service provider. In other words, they take over the classic logistics tasks, right through to further services. In fulfillment, these are called value-added services. They’re responsible for expanding the spectrum of classic logistics tasks, for example by taking over returns, complaints, or even by having fulfillment providers offer key accounting packages for their customers. Ultimately, you could say that, depending on the logistics service provider, fulfillment can take over all goods-related information and communication activities right through to the final satisfactory fulfillment of the order — or, in short, warehouse logistics is handed over to a pro.
Lisa: To me it sounds a bit like once you reach a certain size, you can’t really avoid thinking about fulfillment or fulfillment services, if it probably goes beyond your own capacities. But for whom — from your experience — is such a fulfillment service suitable?
Felix: The thing is, I always say personally that this can’t be answered with 100 percent validity because it really depends very individually on the use case. In other words: depending on how the seller grows, how big the seller is, at some point they naturally have to decide: fulfillment, yes or no? What can be said with a very high degree of certainty is that the further the company grows, the more difficult and demanding the logistics processes naturally become, and it becomes much harder or more challenging to handle them. At the end of the day, that leads to us having a higher order volume. For example, we have significantly more products on offer. This also leads to the fact that we need more know-how in the warehouse, we need more staff, we may have peak times for seasonal products. We have to further optimize the structures, and that’s where, in my understanding, it starts: okay, do I need fulfillment now, yes or no? You have the option of tying up capital and, of course, investing, meaning renting or buying warehouse space. Personally, I can always speak very positively about fulfillment, because our customers have simply had very good experiences with it. So those who use their own warehouse as sellers usually also have an additional fulfillment service for other online retailers. So they combine it a bit, to put it as an example. Let’s say we have an eBay seller who, for example, also sells a seasonal product, which I briefly touched on earlier, like umbrellas, which simply have a certain peak season in the year, and we may also have to scale our warehouse up there, logically. If you used fulfillment, in my opinion you would have a significant relief in staffing, especially during peak times. Also around Black Friday and the Christmas business, staff is often hired in, simply on a temporary basis, let’s say. That means we simply don’t have personnel costs here. Time is saved because we can continue to focus on our day-to-day business, meaning the online business, and the logistics service provider generally handles the whole logistics much more efficiently, and we can potentially achieve higher customer satisfaction.
Lisa: That all made total sense, and I think it’s also a good consideration for sellers who are watching us right now to think again about where I’m at. How are my processes set up, and could a fulfillment service simply help me optimize here? Felix, we talked a bit about the fact that you’re a partner of eBay and connected to eBay. You also mentioned Fulfillment by Orange Connex earlier. As an eBay partner, you’re connected to our interfaces. Can you say a bit about what that includes, how you’re an eBay partner, and for which functionalities?
Felix: Correct, yes, very, very gladly! So it’s like this: eBay is actually one of our longest-standing partners, if not the longest-standing partner. So we have a very nice and very long partnership with you, which we’re always very happy about. For us it’s like this: we have a marketplace module called JTL easy auction. That’s responsible for enabling marketplaces like eBay and others to be connected. As you just correctly mentioned, the eBay interface is also connected through it. That means eBay sellers can very easily, with support from us via the JTL Guide — we also have a forum that has grown very large over time — connect and install eBay themselves very well in the end, or rather set it up, and through that the systems can communicate with each other. So you can list products on eBay, you can maintain stock levels in eBay and, of course, in relation to eBay Fulfillment by Orange Connex, it’s also the case that through our fulfillment network you can, in theory, connect the right fulfiller or the direct eBay fulfiller to optimize your business even more. Yes!
Lisa: Very nice! When we talk about warehousing and fulfillment services, it sounds very much like there are quite a few dos and don’ts, or things that may hold me back, or things that can help my business move forward. Let’s talk about those dos and don’ts. From your point of view, what are absolute dos when it comes to warehousing?
Felix: Yes, there are actually many things you can do right or wrong. My absolute favorite do is the area of supply chain management. I am absolutely convinced that if stock in the warehouse is not continuously monitored in all phases, then if we don’t know what’s happening with our stock, with our items in the warehouse, warehouse logistics simply cannot run efficiently or effectively. That means you should always know — as a rule you have it in the ERP system or also in inventory control in the background — what is happening with the stock. That’s why information transparency is also very important in supply chain management. Employees who work with certain systems should, logically, also have the ability to access important information everywhere in the required areas, and that already makes life much easier. On the other hand, we have the don’ts. A classic don’t in my opinion is, for example, that especially in smaller companies or also in small-parts storage we try to mix multiple SKUs in containers in order to save space, for example. I can say this plain and simple: I think that’s total nonsense, because it frustrates employees, unfortunately increases pick times, may lead to picking errors, and you have to search much longer, so I’d rather invest more warehouse space than save in the wrong place. Then there are inefficient picking routes, which is something you’d actually think about when starting a warehouse, but that often isn’t the case. A lot of time is lost picking in the warehouse because of wrong walking routes, items placed in the wrong spots, depending on how you work in the warehouse. Especially if you have a chaotic warehouse setup, it’s simply important to know how I can optimize pick times and also walking routes. And of course we don’t want our warehouse employees to get frustrated because their times are bad. And another classic mistake is overstock, meaning a classic too-large inventory. To explain briefly: if sellers, for example, think, okay, look, my best-selling product is on sale right now, I’m going to buy thousands of units of it, and then it doesn’t sell fast enough, then we have a really serious capital tie-up. That means we have significantly less cash flow, and on top of that we have too much warehouse space blocked that we may need, and that leads to too much warehouse space and money being tied up that we could actually use better.
Lisa: You’ve painted two very nice pictures in my head. One is like a Pac-Man field where the Pac-Man guy is trying to find the right things in the warehouse.
Felix: Yeah, pretty much.
Lisa: And the other is definitely a little money monster that eats up the reserves if you don’t put enough effort into your warehousing. A lot of technical terms have come up again, and they’re all very understandable for us. But maybe, Doreen, can you explain again how you explain a pick and pack list when you meet sellers?
Doreen: Well, of course we’re happy to explain that to sellers too, but I try to explain it in a way that my child would understand, and I’d simply say: a pick list is actually nothing more than the shopping list for a warehouse employee. Really well written down, well structured, so that walking routes are optimized, etcetera. Ideally they are electronic. Of course there are still companies and warehouses where it may also be on paper. However, there is of course technical support for that. What is a pack list? Ultimately it’s the checklist when packing, so that the right product really does get packed and shipped in the right parcel to the right customer. The matching is of course electronic within the warehouse, ideally supported by scanner technology.
Lisa: Now I’m curious how you’d explain "warehouse management system" to your child.
Doreen: Listen: I’d simply say it’s like the conductor of an orchestra in logistics, coordinating the flow of products in the warehouse and from incoming goods to shipping. The important thing here is to check whether efficiency is there, whether clarity is there, inventory is managed, demand is forecast, so where are the goods leaving, what’s coming in? Warehousing is optimized. Ultimately, it creates harmony in logistics.
Lisa: That sounds very harmonious. Very nice! I’d like to give our listeners a few tips for scaling, more specifically concrete steps to get the optimum out of warehousing.
Doreen: Felix, you’ve already... I mean, anyone who’s been listening, and I assume our sellers have, has already taken in so much. That’s why I brought three very concrete things. You already touched on it, Felix, you have to be a bit careful when balancing this, namely consolidated deliveries. That means if I have one ordering process and then an incoming delivery, I can simply bundle purchases, take volume discounts, and thereby also save transport costs for the delivery. But now comes my favorite metric in the warehouse, namely keeping an eye on inventory turnover rate. Do I even have the lead time? What does my sales forecast say, what do I need to influence at that point? That then leads me to simply say: increase this metric, namely inventory turnover. You can do that through special promotions, by reducing stock. Of course you can use the eBay marketing tools, the coupons, coupon options we offer, and eBay ads for that. Based on that, you can then of course look at where it makes sense, either completely if you’re already at that point, or partially to outsource storage and shipping, namely to a fulfillment service provider, for example eBay Fulfillment by Orange Connex. The nice thing is, though, you don’t have to do it for your entire portfolio, you can also just do it for part of it, for example, and the advantage here is the classic one: you benefit from the volume discounts that a fulfillment service provider gets with the shipping carriers.
Lisa: Outsourcing sounds super advantageous, but one question I would immediately ask is, what happens when you outsource and something goes wrong? Because at eBay I depend a lot on everything working in my shipping processes and on meeting my criteria there somehow. What happens then?
Doreen: Well, I can of course only speak for eBay Fulfillment by Orange Connex, but the way it is there is that if something really should go wrong, because it is an official partnership and our global eBay fulfillment partner, we grant seller protection. That means if something is late or arrives damaged, eBay takes over the logistical defects at that point. And what’s exciting is that if it’s used in full, eBay also provides support in the clarification cases. That means if there is a delay or damage, eBay takes over at that point.
Lisa: That sounds very worry-free. Before we move on to topics like inventory and shipping, I want to know from you out there whether you already use eBay fulfillment services? If you’re listening in the Spotify app right now, you can share your experiences directly via the questions-and-answers function in the app. Just drag the slider up from the bottom edge of the app and you’re good to go. Or simply write to us in the eBay Community or on our Facebook page "eBay for Business Deutschland". We’d also love your feedback on the podcast and, of course, a like or a subscription. Felix, when we talk about warehouse logistics, we can hardly avoid one topic: inventory. It’s annoying and time-consuming for many sellers, but it’s part of it to regularly check your stock levels. Is there help with the inventory topic when it comes to fulfillment services?
Felix: Yes, inventory is of course a super important topic for all online retailers, whether they handle their own logistics or outsource it. Anyone who spends a little time with fulfillment will very quickly also find out that the seller is legally obliged to carry out an inventory, no matter where their goods are located, and if an external service provider does it, then of course they have to perform it as a service. The way it is here is that fulfillment services don’t just support this, they do it and have to do it. So they take over the inventory in full. That means once stock from my own warehouse or later directly from the supplier is sent to the logistics service provider, from the moment the stock is booked in, it is said that the logistics service provider has what’s called warehouse authority. That means they are the ones who control the stock; in other words, when an order comes in, stock levels decrease, and exactly at that point inventory is so important. Later, when you also carry out an inventory, for example, only the fulfillment service provider also has the opportunity to make error corrections, meaning to do a stock booking plus one again. In the end, because everything has to be stored elsewhere or is stored elsewhere, the fulfillment service provider therefore also handles the inventory for its customers and offers it completely as a service. And as you can hear, that’s of course super convenient for the seller. They can continue to focus on their actual business, which they already know how to do, with fulfillment, and the inventory is taken care of too. So it really can’t get much better.
Lisa: Yes, it really sounds like a huge relief to have someone else handle that. You just mentioned booking goods in. By that you mean goods receipt in fulfillment, right?
Felix: Yes!
Lisa: How does that work? Do I just send my stuff somewhere?
Felix: So, in goods receipt in fulfillment, the way it works — let me project it onto the JTL case now in the classic sense — is that it runs with us like classic logistics should run. In other words, we talk about supplier orders. That’s actually a common term too. In other words, the goods arrive. In our system we already have the supplier order on file, then we book the orders in, the items are received into stock, sorted into storage locations, I’d say, or simply moved on. The important thing here is that goods receipt in logistics should always be booked in using barcode support. That means every item should be scanned, because that allows us to cross-check the supplier order in real time, and also make sure everything is actually there. Of course, there are differences depending on what’s delivered: if pallets are delivered, it’s usually more spot checks. You can’t inspect every single one of 1,000 items, but the important thing is simply that it happens. Then, if nothing else is requested, the most common case in logistics for goods receipt is that it is then stored according to the principle of chaotic warehousing. That’s also the case with our JTL_WMS, the warehouse management system, and another aspect that I think is also very important for goods receipt is free goods receipt — that’s what we call it at least — which simply means that there should also be the option to book items in manually. So I can again make a nice connection to inventory. If we didn’t have that option, we couldn’t make inventory corrections either. One thing to note here is that it has to be barcode-supported, meaning there has to be an EAN, GTIN, or something else with which we can uniquely identify an item, and then we can book it in quite simply.
Lisa: You just talked about chaotic warehousing, even though everything actually runs very organized. Can you maybe explain once more what chaotic warehousing is?
Felix: Sure, I can do that too. So, with chaotic warehousing, we’re basically talking about exactly what the word already says. It’s stored chaotically, meaning you simply look at where storage locations are free, and then the goods are stored there. Since we track everything and know where our items are — we’re back to supply chain management here — and that is of course scanned against the storage location too, we can always track in our system where the items are. Of course there are a few other systems, but I think that would go too far now.
Lisa: True. Once everything is stored, we naturally hope that at some point everything will also be shipped. Let’s talk about shipping, because a fulfillment service takes care of that too.
Felix: Right, it would definitely be good if it gets shipped, otherwise that would be inconvenient. But yes, the shipping process is actually very simple and straightforward. I already briefly explained it in that use case. From the moment it’s in the warehouse, the picking, picking-and-packing process begins, and I’d say, from my understanding, once it’s at the packing table, meaning the goods are packed and labeled — so a shipping label from the appropriate shipping provider, say DHL, Hermes, etc., is attached — that’s when the shipping process begins, and the fulfillment provider also takes over that in full. That means they are responsible for shipping with the relevant carrier, meaning the shipping provider, depending on what was agreed, and possibly also a freight carrier if the goods are larger. But at the end of the day, it always reaches the end customer pretty well and quickly. Yes.
Doreen: I’ll just add one quick thing: the smart part is the nice thing, and I think this is the very best part. As soon as either the label is created, depending on which process step is defined, the tracking number, meaning the tracking ID, is automatically uploaded. So both on eBay of course and on the other marketplaces too — meaning things like it’s late, not transferred, etc. — we completely exclude that here, because we know exactly at which point the handoff basically takes place.
Lisa: Very nice, thank you very much, Doreen. You said earlier, or I said earlier, that one of your jobs at eBay is that different shipping methods are offered for different categories or things we want to send. What different shipping processes do we offer at eBay and therefore also at JTL?
Doreen: Well, it’s a bit difficult to talk about just one or a limited set of shipping processes, because eBay is one of the world’s largest online marketplaces. Just to remind you briefly: 132 million buyers worldwide, 190 markets. Of course there are different needs. To cover those too, we simply have a wide variety of shipping options, national and international, really from a small economy... inexpensive shipping product in a letter format, for example, the standard is of course parcel with tracking, etc., to express delivery — then again national and international — everything is included. That applies both to the listing process and the shipping process. Depending on whether you’re already working with a tool like JTL or not, you can do this either on the eBay marketplace or with the technical partner.
Lisa: That’s probably important, Felix, for the many customers you have, that there’s just flexibility and a large portfolio I can access, right?
Felix: Yes, that’s definitely super important. Especially with regard to shipping methods, our ERP system also always gives you the option to select the label accordingly. So if you use fulfillment with eBay, for example, there’s a specific area that switches over, which naturally means the corresponding label gets printed out, depending on which eBay program you participate in. So basically every seller can use everything they should be able to use when working with eBay and JTL, for example. Yes.
Lisa: Very nice! Then let’s try to take a little look into the future together. E-commerce is currently changing many different processes, among other things due to the progress of artificial intelligence in many products or things that we also offer as an eBay marketplace. What changes can you imagine for warehouse logistics in the future, including through artificial intelligence?
Felix: Yes, for me the area of AI is one of the most fascinating and interesting areas we currently have, especially in e-commerce. Slowly but surely, really a lot of solutions are popping up out of nowhere, which can then also be provided by partners. Personally, I’ve focused a bit on demand forecasting, which I currently find very exciting, ehm, something we already touched on briefly with overstock. And here the situation is that we simply have one or two solutions that have contacted us recently, gotten in touch with us, and are eager for JTL customers, in the sense that they can make the work even easier for them. Especially in the warehouse. And here it looks like we really have the area of purchasing forecasting, meaning forecasts for purchasing, which can be modeled very, very well using AI, but also additionally through machine learning. That means, in this area, I’d say the only "disadvantage," so to speak, of such a solution is that you always have to let it run for a few months — we say around three to six months, or until a solution really gains traction. But then it’s the case that this technical solution, through AI and machine learning, can simply analyze exactly what sales cycles we have. It can respond to seasonal cycles and then, let’s say, predict or suggest exactly when you should reorder which products or product categories, so that A, you definitely don’t have any overstock, meaning too much stock, in the warehouse, but B, you always have goods available. So the exact opposite evil of overstock is simply that we no longer have anything in stock and can no longer serve our customers. Which in the worst case leads to customers buying somewhere else, which of course we don’t want, and it’s simply super exciting because there’s so much you can do with it. I’ve already seen a few, let’s say, mocks where you could really see how it works, and it’s just a super exciting field, and I think a lot more is coming that will make things much easier.
Lisa: We’re all very excited about that together. Doreen, can you tell us a bit more about new developments at eBay that are coming our way?
Doreen: Hmm, so not exactly a new development, but machine learning models too — I’ll just say AI as the umbrella term — of course, classic: the majority of shipments that go out and are sent have a tracking number, and they go from one postal code to the next, and we know which shipping providers are behind them. That means transit-time forecasts, for example, and delivery data are something that just keeps getting better in terms of prediction. I do still have one thing I brought along that is new and that we’re introducing right now, which may not be quite as AI-driven, but is super convenient and time-saving. That’s why I definitely want to mention it: if you’ve already noticed, we’re currently completely overhauling the returns processes at eBay. That’s an iterative process running over several months, and the next thing that’s coming is a topic that has already been rolled out in part: DHL returns. There, commercial sellers will have the option to store their DHL login details on eBay so they can use their own rates for returns. That’s not AI, and it’s not magic either, but it’s technology that has to be implemented, and it simply makes the goods receipt process super easy, and that closes the loop. Super easy to directly assign the item again and determine what the original order on eBay was.
Lisa: Super exciting! I think in this podcast episode we’ve already had mega, mega many pieces of information for sellers, and anyone who knows our podcast knows that when we’re nearing the end, we always finish with our question: what did you last buy on eBay? I’ll start with Doreen, because you already know this one. Then you can take a quick moment to think, Felix. Doreen, what was your last purchase on eBay?
Doreen: I just checked again quickly, and I hope our delivery driver at home will forgive me, because I ordered bog garden soil. For anyone who doesn’t know what that is or what it’s for: if you have a berry garden and want to plant cranberries or blueberries there, you need bog garden soil, and of course I ordered that on the marketplace.
Lisa: It’s also exciting what you keep learning about your colleagues in this podcast. Okay, Felix, what was the last thing you bought on eBay?
Felix: Yes, something pretty classic that I actually buy on eBay almost all the time and also bought most recently are simply batteries for my watch. I have a hybrid smartwatch that needs a new battery every three months, a special kind that you can’t get in a supermarket, and I actually order those every time, thanks to the best price-performance ratio on eBay.
Lisa: Very nice, then we’re looking forward to your new batteries in the watch. Yes, many, many thanks to both of you for the interesting insights into the world of warehouse logistics and fulfillment services. I think it’s super exciting to hear what all will develop in this area, what is already possible today, and where we can create optimization for our sellers. So many, many thanks to both of you, and hopefully see you again soon!
Doreen: Thank you, and many thanks for the technical behind-the-scenes support from you, Felix.
Felix: Gladly, yes, also from my side. Many thanks to both of you. It was a super exciting podcast episode. I hope we were able to tell the listeners something great and new, maybe also teach them a bit about everything related to warehouse logistics and fulfillment. And yes, it was great being with you!
Lisa: Thank you very much.
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