February 10, 2022

Cross Docking: What it is & How it Impacts Your Brand

By Patrick Nemeth / Logistics & Fulfillment

Selling on Amazon 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, fulfillment, returns, and more. To make the distribution process as cost 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, Walmart, or Target.

Advantages of cross-docking

Cross-docking is a more efficient and economic 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 Texas, Oregon, and California, the brand can just send all their product to a cross-dock. The cross-dock can then group the inbound Texas shipment with other shipments headed to Texas 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.

Cross-docks with value add can offer additional benefits beyond transportation, as we will discuss more in-depth below.

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 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 organization, 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 jewelry to a cross-dock in plastic bags and the cross-dock then repackaging it in jewelry 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 categorize 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. There can be some potential risks of cross-docking since, from one perspective, you’re 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.

Another risk of cross-docking, according to Cyzerg, is that it requires detailed planning and coordination to run smoothly.

Cross-docking with Pattern

Businesses that partner with Pattern get complete access to our cross-docking services with value add. We don’t just get your products from point A to point B—we touch every single product that comes through our cross-dock and add value through the process. We perform rigorous quality checks, package products to help them sell better and improve the customer experience, and ensure every product meets the precise standards and requirements of the marketplace it will be sold on.

We send our brands detailed purchase orders so they know exactly how much inventory to supply to our cross-dock 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 palletize their products and ship them to us in bulk.

We unload the pallets, break them down, process them, and ship the products back out within 2-3 days. Because of our size, our shipping costs are astronomically lower than typical market rates. Since we handle all the logistics of ecommerce fulfillment, we give our brands more time to focus on what matters most. Even better? Cross-docking is just one small element of the ecommerce management services we offer our partners.

Interested in learning more about cross-docking with Pattern? Let’s start the conversation today.