At first glance, shipping and order fulfillment might seem like a simple, uncomplicated task. You print a label, stick it on a package, and then hand it over to your carrier to be delivered to your customers. However to anyone involved in the order fulfillment industry knows it is much more challenging than that. It is one of the most important components of a supply chain and can be a nightmare to manage if you don’t know what you are doing.
Imagine thousands of products going out in hundreds of orders to just as many customers, all involving different shipping carriers, costs, and delivery times. When your business grows, it becomes exponentially harder to manage shipping and ecommerce fulfillment smoothly. It’s important to implement best practices to ensure that issues don’t arise—like stockouts, wrong item being sent, damaged products, delayed shipments, returned or incorrectly addressed items, or items that get left on the shelf and never sent at all. Any hiccups in this process can damage a business’s reputation and hurt future sales. Some fulfillment issues are bound to happen, but by adding corrective action quickly will be the key to minimizing any harm. One of the best ways to do that is to outsource your order fulfillment to a third-party logistics provider (3PL) that has the expertise, size, scale, and capability to make ecommerce fulfillment as efficient and cost-effective as possible.
Here are the six most challenging aspects of order fulfillment and a few suggestions to help ensure your process is as smooth as possible.
International Order Fulfillment
In today’s global marketplace, ecommerce fulfillment services have become more complicated because many ecommerce businesses face the challenge of shipping their products to countries all over the world. International shipping involve and a hefty amount of paperwork in order to get products out of the country they are coming from and then into the country that they are being delivered to. Taxes and customs fees will be incurred, and may be different for each country that you ship to. Shipping times will be extended due to extra time needed at the ports, for customs and other government agency inspections, both foreign and domestic. Because of this it is imperative to work with both fulfillment partners and shipping carriers that have experience delivering products to the countries that you ship to. They should have experience in handling all the paperwork, taxes, customs forms, and should be able to tell you the total cost and delivery time involved in getting your products to your customers. By ensuring that you are working with carriers with the knowledge and experience for international fulfillment you can avoid many of the challenges that arise from global order fulfillment.
Possibly the most crucial and also challenging aspect of order fulfillment is making sure that your customer experience is optimal from the moment they place their order to the moment it arrives at their doorstep. If they have a good experience they are likely to become return customers or recommend your products to their network. In order to make their experience great, you need an order fulfillment system that is as smooth as possible. The first step is to reduce the possible errors that can occur in the fulfillment process. These errors are spread throughout the supply chain; the most common are incorrect picking, wrong packing, misprinted labeling, and missed delivery time. Any of these errors may seem small, when there’s only one within a batch of 1,000, but to that one customer it might mean enough to write you a bad Yelp review, or discontinue buying your products. Because of this, it is important to train your staff so that they are best equipped to handle any issues that might arise. They should understand that even a small issue can lead to losing a customer and damaging your brand. You should invest in automation and integrated fulfillment systems (warehouse management, inventory management, etc.) as the use of these tech tools can help to eliminate human errors. You need to know that if a customer has an issue that it will be handled with as much care and concern as possible. It is important to remember that you need the customer more than they need you, since they have other options available to purchase their products within the market—and customers are likely to choose the one that gets their orders to them without any issues.
Communication with Customers
In today’s ecommerce world it is important to keep your customers updated about the status of their orders. You should update the customer when their order is moving through each step of fulfillment: from order confirmation, to packing and shipping, to carrier pickup, to delivery. This is especially important once an order has shipped; customers like to track their orders so you should provide them with a tracking number from your shipping carrier. Make sure that they are sent the correct shipment tracking code. Wrong tracking codes create a lot of unnecessary confusion. Test the code before you send it to the customer. By investing in fulfillment software that is capable of automating the tracking process you can improve communication with your customers and lessen the burden on your customer service department so they won’t be inundated with customers calling or emailing and asking where their order is and when it is going to arrive.
Fulfillment By Amazon is an incredibly efficient operating model, but may not be the best choice for your business needs\. The challenges with FBA are obvious to most all who use the program now and even those who are considering it. Because of Amazon’s omni-presence and virtual reach, many feel they need Amazon FBA for obvious reasons. In reality, the decision is not black and white. You will need to determine the right solution for your growing brand — one that gives you reach and flexibility, while doing it cost effectively. As previously mentioned, the Amazon’s Seller Fulfilled Prime (SFP) program gives you the same access to Amazon Prime Members, but more flexibility to scale and reduce operational costs. Also, you can read our overview of the advantages and disadvantages of all Amazon fulfillment options: FBA, SFP
For any product based company, shipping can be one of the most challenging and costly aspects. In the never ending search for greater profit margins, shipping is often overlooked as an area where costs can be reduced, and profits boosted. Below are nine methods to reduce overall shipping costs, some are simple and some more complex. If you work with a 3PL (third-party logistics provider) they should be able to help you implement some of these, or at least be a sounding board to help you make the best decisions on shipping rates for your business.
If you have a product listed on your ecommerce site and promise it will arrive by a certain date, you need to deliver on what is essentially a guarantee to your customer. In order to do that you need to make sure that you have the proper inventory available for each product that you carry. An easy solution is to invest in a good inventory tracking system, and automated ordering system. And to properly limit any product stocking or ordering issues, you’ll need to integrate your ecommerce shopping cart with your inventory management system. This will allow you to trust that if an item is out of stock, the order will not be processed, or at the very least the customer will be notified that there will be a delay in the expected delivery time. Investing in these automated systems will let you spend your time on other, high level aspects of the business, not alerting customers to the number of products you may or may have in stock.
Establishing a fulfillment services operation that has zero errors is not realistic, but with the right planning and systems in place you can eliminate some of the most common issues that may arise. Working with a third-party logistics provider (3PL) is a great way to provide a seamless ordering experience for your customers, and take the hassle out of managing the logistics and fulfillment process yourself. If you are still fulfilling your orders yourself, take the time to ensure that you have the right systems in place and reduce the chances of any costly mistakes happening.
Do you need help with your order fulfillment process? Send us a note to connect about how DCL Logistics can help your company with fulfillment. You can read DCL’s list of services to learn more, or check out the many companies we work with to ensure great logistics support.