Remember the most recent time you purchased something, and the product didn’t show up, showed up late or was damaged. Did you ever make a purchase from that seller again? According to some research, nearly 40% of customers say they’ll never shop again with a company after they’ve had a bad delivery experience.
Most people choose to work with Amazon since the company already has a solid structure for accepting and shipping orders in a timely fashion. This can be a problem for someone who has to handle the shipping on their own, but Amazon FBA makes sure that gets taken care of from Amazon’s end.
Keep this in mind as you choose to structure your own online business. More business owners than ever are turning to Amazon FBA because Amazon handles fulfillment completely, taking these delivery concerns off your plate. Order fulfillment refers to the process of getting, packaging, processing, picking and shipping orders.
A third-party fulfillment services provider or partnering with Amazon FBA is critical for developing an effective order fulfillment strategy. This builds customer loyalty and causes people to feel trust in your business.
There’s no way to determine a one-size-fits-all all fulfillment strategy, but there are numerous important things to keep in mind when deciding how to scale fulfillment for the online store.
Many people turn to Amazon FBA for selling a high volume of orders because researching on your end means you can hand over much of the fulfillment to Amazon’s processes.
The total volume of products you sell, and your total monthly volume of orders plays a significant role in identifying the fulfillment solution right for you. Low order volume can assist with the cost-effective nature for you to maintain your fulfillment in-house instead of outsourcing.
If you can sell a limited volume of products and only handle shipping a few orders each week, you likely don’t need a warehouse system for management or a full inventory.
However, if your order value is slowly increasing or if your business is growing quickly, you can tap into the power of the customers already visiting Amazon’s website and use this to your advantage in selling your products.
Order fulfillment management that already works with your existing eCommerce platform makes things much easier, which is why Amazon FBA is a leading way for third-party sellers to get involved.
When partnering with Amazon FBA, you can ensure that the fulfillment options are aligned specifically with what customers have come to expect. Since many people are familiar with the Amazon brand and have a high level of trust in it, when it comes to selling your business you can leverage the power of experienced and knowledgeable business brokers to list your company for sale and obtain a buyer request sooner rather than later.
The support of an experienced business broker is instrumental in outlining a strategy for you to sell your company as soon as possible and receive maximum compensation for the profits you have worked so hard to build.
In the world of eCommerce, order fulfillment starts once the customer’s credit card is charged. Order fulfillment is about your business getting the product to the customer’s doorstep or mailbox in a timely fashion.
While it sounds simple, order fulfillment can be one of the most complex parts of the eCommerce process. eCommerce fulfillment involves supply chains, delivery drivers, modes of transportation, and a host of other issues that require you to coordinate across multiple businesses. Getting it right is crucial to the long-term viability of your business, since delayed or damaged packages can turn customers away instantly.
eCommerce fulfillment is the process of picking, packing, and delivering products to customers. It also involves:
It’s a complex process because it has so many moving parts. Fulfilling orders efficiently means becoming experts at:
Here are three proven strategies for eCommerce fulfillment. You can:
The good news is that whatever you pick, the option can be customized to meet the specific needs of your eCommerce business.
Let’s start with In-house fulfillment. That’s when your company fulfills orders within your warehouse and handles shipping. This is common in brick-and-mortar shops that also have an online store and plenty of room to store inventory.
This is also a popular option for businesses that do not have high inventory volume and maintain lean operations. It’s possible your company could qualify for lower shipping costs if you sign up for bulk postage services.
A downside to this approach is it can be very labor-intensive and time-consuming.
Dropshipping is a popular option in eCommerce. It involves forwarding orders from your online store to your supplier, who ships directly to the customer on your behalf. With Dropshipping, your company doesn’t need to store inventory since the supplier manages the entire process once a sale has been completed. Your company can generate profits by paying lower, discounted, or wholesale costs to your supplier, and this method involves low startup costs.
eCommerce businesses that sell imported goods often rely on the Dropshipping model, but domestic companies can as well. The downside of dropshipping is you give up all control over your order fulfillment. Be certain your supplier is a reliable one. Damaged or lost orders can be disastrous for your business.
Another option is third-party logistics, also known as a 3PL, where you hire a provider to manage the entire fulfillment and shipping process as well as your supply chain. A 3PL will provide services that include:
Fast-growing startups often rely on 3PLs since they lack the resources to store, pack, and ship inventory. Outsourcing the process gives your team more time to focus on other aspects of the business., such as sales and marketing. 3PLs are also popular because they typically have supply chain management expertise.
The downside is you’re at the mercy of how efficiently this 3PL operates.
Since customers have plenty of choices today, they’ve come to expect fast and reliable shipping. A flawless order fulfillment strategy is crucial, regardless of whether you’re a new eCommerce business operated by one owner, or a large, well-established business. If your competitors get order fulfillment right and you don’t, that’s a big problem.
Even the most successful online businesses have at times stumbled when it comes to order fulfillment. That’s why it’s important to know the Common Order Fulfillment Issues that can frustrate businesses, and how to solve them.
Some of the most frequently occurring order fulfillment problems can include:
If you’re encountering these challenges, you need to immediately reevaluate your order fulfillment process. If you’re doing it on your own, consider partnering with a third-party fulfillment provider with experience in your niche field and advanced management systems and fulfillment software.
Consider using multiple shipping partners, while also adopting a backup logistics plan. Another major benefit is to offer customers real-time tracking that keeps them informed about where their package is.
To stay competitive, order fulfillment often comes down to speed and accuracy in order delivery. Because the world of eCommerce is so competitive, online shops are now expected to deliver packages promptly and flawlessly. To do otherwise risks losing customers to rival businesses with more sophisticated operations.
Order fulfillment has become a key competitive differentiator between successful and struggling online businesses. It can be challenging to manage direct-to-consumer eCommerce product replenishment to keep up with orders, but that’s what’s expected of your company. While challenging, there are proven methods for overcoming these issues in strategic ways.
The bottom line is this is all about your customers, who are going to be disappointed at best and likely angry if items are listed as being available online but are out of stock. If this happens multiple times, and with multiple paying customers, the lack of proper inventory accuracy will badly tarnish your brand reputation and erode customer trust in your shop. Significant revenue can be lost if transactions are not realized because of problems in maintaining inventory.
On the other hand, if you’re tracking your inventory, you’re likely to have an edge over a sizeable percentage of your competitors. A study by Zippia found that roughly 43% of small businesses in the U.S. don’t track their inventory.
The failure to maintain accurate inventory levels can result in the need for backorders, which delays the fulfillment process while simultaneously increasing the cost of order fulfillment. It can also lead to partial order fulfillment, where only part of an order gets shipped. This also increases your shipping costs.
Lack of adequate inventory is often the result of poor warehouse management. That can create plenty of other problems, such as:
Every error that gets made can lead to a lost customer and declining revenue.
With the eCommerce industry flourishing and experiencing rapid growth, companies will inevitably be looking for new technology to streamline the process. It’s already one of the top priorities for retailers today, as the eCommerce world continues to attract new shops on a regular basis, and the competition gets stronger to stand out.
What most eCommerce businesses recognize today is that if they get order fulfillment right, their entire business will be on the right track and more likely to be successful. It’s how you keep customers happy.
So, what should online businesses start doing to prepare for the future of eCommerce fulfillment? Here are several trends shaping the future of eCommerce Order Fulfillment.
Assume that customer expectations will only get stronger for their online shopping experiences. Faster order deliveries will be one of their top priorities.
While this isn’t a new trend, the most successful businesses understand they need to stay ahead of the curve, since whatever was wowing a customer a month ago can quickly become standard and ordinary as technology improves the shopping experience.
A Forrester study showed that in 2019, customers expected deliveries in 5.7 days. Today it is 2.5 days on average, and projections are that within the next 5 years, customers will be expecting a delivery speed of 1.5 days on average. That’s a huge shift.
Customers are more demanding today when it comes to delivery speed expectations. That’s why a lot of eCommerce businesses today are investing in third-party logistics providers (3PLs) or selling on Amazon and using Fulfillment By Amazon or Amazon Multi-Channel Fulfillment (MCF) for their proven expertise.
Today, customers are purchasing products across a growing number of channels. That’s having a major impact on eCommerce fulfillment. People now shop on brand websites, eCommerce marketplaces, and social media stores. That means online shops need a multi-channel presence and the ability to handle shipping regardless of the channel.
Some businesses are finding it hard to handle the challenges and complexity of multi-channel order fulfillment. Outsourcing their logistics operations to a 3PL or FBA/MCF can be a smart place to start.
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