Order fulfillment challenges article and permission to publish here provided by Catherine Park.
If you run an online business, you definitely know that managing it involves many moving parts. Ecommerce order fulfillment is among these moving parts that most eCommerce retailers overlook. Your profitability, customer experience, and overall business growth suffer without effective fulfillment.
Interestingly, despite simplified order fulfillment, most online store owners still struggle with several challenges.
Outlined below are common fulfillment obstacles faced by online businesses and their solutions.
1. Slow Shipping Speeds
Changing customer behavior means that modern customers expect eCommerce businesses to pack and deliver their orders within the shortest time possible. While businesses may deliver their end of the bargain, some eCommerce fulfillment companies may not.
If your business relies on a disorganized and complicated eCommerce fulfillment company, you won’t meet your customer expectations. As a result, they will prefer buying from your competitor who delivers faster.
Since eCommerce businesses move fast, your order fulfillment services should match your speed. Ensure that you create a fast, efficient, and streamlined eCommerce shipping process. To achieve this, work with a fulfillment service provider who respects shipping timelines to meet customer expectations.
2. Constraints of Shipping Location
Like when buying your home, location is an important factor that stands out for eCommerce fulfillment. Location determines 3PL fulfillment prices and dictates how soon customers get their products. If you have fulfillment facilities close to customers, delivering their orders becomes fast. You will not only satisfy your customers but also reduce shipping costs.
On the other hand, if you have only one fulfillment center or multiple centers not strategically located close to your customer base, you should brace for slow deliveries. Another challenge closely associated with this is the lack of worldwide order fulfillment. This is a major problem, especially for businesses with global customers.
The perfect solution to this problem is working with fulfillment providers with multiple warehouses. This ensures that customers receive their orders quickly. As an eCommerce business owner, you should do thorough market research to identify where your customers reside before you choose your perfect Ecommerce Fulfillment solution. If you sell your products globally, partner with a global fulfillment firm for streamlined international orders.
3. Using a Complicated Fulfillment Software
Most eCommerce businesses have powerful platforms with integrated eCommerce fulfillment software to ease order fulfillment. However, if you have complicated software that is difficult to operate and your employees don’t find it intuitive, it can bring your entire business process to a stop. This slows down shipping speeds and frustrates your customers and employees.
The solution to this challenge is understanding your business needs and goals before integrating an eCommerce fulfillment software solution. Note that different software, be it multi channel or omni channel solutions, have varying features. For instance, some have additional marketing abilities and branding capabilities, while others focus solely on improving fulfillment speeds. Select a software that is easy to use, integrate, and meets your business needs.
4. Inefficient Ecommerce Returns
As more customers prefer placing their orders online, the rate of eCommerce returns increases. Statistics and predictions estimate that eCommerce returns or reverse fulfillments will surpass $550 billion by the end of 2020. This is 75.2% more than the total cost of eCommerce returns in 2016. Note that these figures don’t include restocking expenses and losses on inventory.
Unlike brick and mortar businesses with physical locations, returns from customers to eCommerce businesses end up at fulfillment centers. If you are not prepared to evaluate and restock these items, they will sit unrecognized in your storage centers. Since you can’t sell them before including them in your inventory, you won’t make profits from returned items.
The solution to this challenge also comes down to choosing an effective eCommerce fulfillment provider. Even with a good returns policy, such as free returns, it won’t be effective if your fulfillment provider doesn’t deliver returns timely. Delayed returns affect both your customer experience and profit margins. Choose a fulfillment provider with enough infrastructure, manpower, and ability to handle high volume returns.
Backorders occur when items are unavailable due to more customer orders than the amount currently available on the inventory, even though new items will be available eventually. Unfortunately, most customers aren’t ready to wait. As such, they start searching for these products from your competitors. Fortunately, proper warehouse management can eliminate the occurrence of backorders.
Backorders can affect your business negatively, and you should avoid such occurrences by using previous purchase patterns to predict possible future trends. For instance, you can stock up sweaters during winter and cold months and scale down during warmer months. You should also diversify your product suppliers. With this, if one supplier runs out of stock, you can source from another supplier to fulfill your orders.
During these situations, ensure that you communicate with your customers openly. Explain to them the cause of delays and when they should expect the new inventory. You may offer discounts for those who place orders in advance. Most customers will accept delays if there is a convincing discount.
6. Damaged Products
UPS, FedEx, and USPS, the three leading U.S couriers, delivered almost 13.5 billion packages in 2018. Interestingly, approximately 11% of these deliveries were damaged. This means an estimated 1.5 million packages were damaged. This can lead to major revenue loss in the following ways:
· Repairing or replacing damaged products
· Managing product returns
· Offering discounts on next purchases
· Labor on customer service, such as following freight claims and filing insurance
· Damaged brand reputation
· Inspection and disposing of returned items
· Loss of customers and potential referrals
While accidents happen, eCommerce businesses should do everything possible to mitigate product damages. For instance, besides adhering to eCommerce fulfillment principles, businesses should improve product packaging. This includes using sturdier boxes, cushioning fragile products from interior walls, and no over-packing.
With continuous eCommerce businesses growth, businesses should brace for various challenges associated with eCommerce fulfillment. Outlined above are just but a few common order fulfillment challenges that businesses face and their solutions. However, increasing purchase volume and changing customer expectations exert more pressure on supply chain and fulfillment operations.
Businesses should find ways of adapting accordingly.