Fulfillment can be a challenging and frustrating part of running an ecommerce business. Fulfillment includes picking, packing, shipping, returns, customer service, and much more.
If you choose to do in-house fulfillment, there are many factors to consider, namely is this the best use of your time and resources. As your business grows, there will be a distinct time that it will be more cost effective and more efficient to outsource fulfillment to a third-party logistics (3PL) company. An established 3PL will be able to handle the bigger tasks that come with a bigger, growing product company. Ultimately fulfillment is a key aspect in customer service—getting the right products to your clientele, on time, and accurately. If you fall short of your customer’s expectations it could damage your brand and harm your reputation. Below are some of the biggest fulfillment pitfalls to avoid if you are doing it in-house, and how a 3PL might be able to help you to avoid them.
Lack of Systems
It might seem really straightforward, but there are many small tasks that go into the fulfillment process. Many startup teams, excited to get their products out to their first customers, often fall into the trap of beginning to fulfill orders before they have a good system set up.
Things you’ll need before you even begin fulfilling orders: an adequately sized fulfillment center to store your inventory, a proper working space that can accommodate the picking and packing and labeling, skilled personnel, and an area to both receive and ship out your goods. You will also need a few tech tools to help automate and track your fulfillment processes—inventory software, an electronic ordering system, and enough devices to make it all run smoothly, not to mention a robust IT network and people to keep it updated.
Time Management
You’ll need to hire a team to help fulfill your orders, and the last thing you want is to pay people for standing around if there are no orders to fill, or to have more orders than employees to get your products out. It is important to track your product sales flow, to review and consider the times of year when you are especially busy, or not busy at all. For example, many companies experience high-order demand around Christmas and holidays. Properly managing your team to be there when you need them, and be off when you don’t need them is a difficult job and one that requires attention to detail. You need to be realistic about your ability to meet the demands in managing this aspect of fulfillment.
Inexperience
You may not have any interest or experience doing fulfillment—but you’ll need to learn the ins-and-outs quickly if you plan to do it in-house. You may have to manage daily issues that arise when it comes to fulfillment, and finding solutions to new and unexpected problems; this will take time away from important duties. As your business grows, and your orders grow, you may require the expertise of a fulfillment specialist to help you. Without a skilled fulfillment team, you can suffer from inefficiencies and mistakes. On the other hand, finding the right 3PL for you can benefit your business greatly. You’ll gain them as part of your team, their experience and capabilities will work towards your success and growth, and you can focus on the core responsibilities of running your business.
Slow or Delayed Shipments
One of the biggest fulfillment mistakes you can make is neglecting your shipping process. If you take too long to get your products out of your warehouse and into the hands of your customers, your business will suffer. This is especially true in cases when there is a sudden increase in order volumes. Seasonal fluctuations in your product demand can cause a bottleneck in your shipping if you are not equipped to scale. If you only sell a few products each day, you may be able to manage with in-house fulfillment, however, if more people begin to discover your products and you realize that your sales each day are increasing significantly, you need to be able to scale to ship these items on time.
Another cause for slow or late shipments is when employees take unexpected sick time or when your staff goes on vacation. Along with ensuring that you can ship your products on time, you need to ensure that you have enough personnel to deal with higher demands.
Inventory and Shipping Errors
Poor data reporting can lead to inventory errors which might cause you to experience product backorders that leave your customers waiting for you to restock. Improper inventory management can also lead you to have valuable inventory sitting on pallets and taking up space in your warehouse.
Besides inventory problems, a common issue that can arise are orders being sent to the wrong address. There are many reasons for this occurrence, including technical glitches and simple human error. When it does happen, be prepared to do damage control. Once the problem has been rectified, it is important to locate the source and take the steps needed to ensure it doesn’t happen again.
It can be beneficial to outsource fulfillment to a 3PL because they are experts at getting in front of any potential inventory or shipping errors. These mistakes are easily avoidable with an established 3PL partner.
Time Sensitive Products
If you ship products that have an expiration date—like food, medicines, or other perishables—it can become difficult to keep close tabs on your inventory. It requires a robust management software system or fulfillment management service that can track the many variables you’ll need to keep up with. In either case, by trying to manage this yourself, your time may become restricted to finding and disposing of expired products, rather than the many other duties you need to attend.
Incorrect Product Information
Customer demands and expectations are higher than ever before. Some customers may abandon their cart if a page doesn’t load fast enough or products are labeled in an unclear way.
Product information errors are completely preventable, but it can require systematic processes and constant diligence. Customers are very unlikely to forgive businesses that do not provide relevant and accurate details and specifications about the products they want to buy. In order to keep customers who come to your seller platforms, be as clear and detailed as possible to give your customers the best idea of what they will receive. This may include product weight, measurements, usage instructions, detailed pictures, and accurate expectations of cost and shipping.
Bottom Line
It can seem like a big cost savings to do in-house fulfillment, but in the end the margin for error is high which can cost your company valuable customers and hurt your bottom line. It might feel daunting to research 3PLs, and you may feel that your fulfillment needs aren’t big enough yet to do so. But choosing the right 3PL partner to work with your brand, no matter what stage you’re in as a company, will give you access to experts in the field who already have systems in place to provide the best fulfillment and logistics. Without the daily fulfillment tasks on your plate, you’ll be able to better run your business and focus on your products.
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. Send us a note to connect about how we can help your company grow.
