Fulfillment is a critical element of e-commerce, with activities ranging from processing, storing, packaging and shipping orders to customers. A well-planned fulfillment strategy can save you time and money to focus your efforts on more profitable and productive areas of the business. However, fulfillment is easier said than done.
With industry changes, customers have more choices in the buying process. Many companies sell the same products, allowing customers to shop around for the best price and delivery time.
While you may not be aware of any fulfillment challenges yet, you'll need to recognize what is and isn’t working when pressure is placed on your team to fulfill orders faster. If you want to ensure operations run smoothly, consider these common e-commerce challenges, plus ways to overcome them.
1. Incorrect Orders
Imagine getting a call that your customer received the wrong order. Not ideal, right– but this happens more often then you think when operations are unorganized.
Order accuracy is a critical metric that you should continuously monitor and strive to improve. To calculate it, divide the total number of orders you’ve fulfilled correctly by the total number of orders fulfilled. Then, multiple that number by 100.
To give an example, if you’ve fulfilled 500 orders, but 50 of them were incorrect, then your order accuracy rate is 90% (i.e. 500 - 50 = 450 / 500 x 100 = 90%).
While reaching 100% is not always realistic, you should aim for an order accuracy rate of 98% or higher since it has a direct impact on customer satisfaction.
If you notice your order accuracy rate lowers as your business scales, you may want to look into a partner to assist with areas, like pick and pack fulfillment. Many pick and pack partners take quality assurance measures to ensure what was ordered is what was picked. This includes checking everything from the order to the packaging to the label before shipping it out.
2. Shipping Costs
Nearly 25% of e-commerce businesses say that shipping costs are the biggest challenge in their supply chain. That’s not surprising, considering businesses face increasingly-demanding pressure to deliver orders faster for little-to-no cost.
Businesses that struggle to meet rising customer expectations risk being left behind by competitors who are able to consistently meet these requirements. So, what can you do?
Some e-commerce businesses:
- Increase product prices to cover costs for shipping. In this case, the customer pays.
- Increase product prices to cover half the costs of shipping. In this case, both parties pay.
- Pay the full price of shipping for customers. In this case, you pay.
- Offer a discount code to certain customers for free shipping. In this case, you pay, but offset the cost of shipping all orders.
- Offer a discount code for orders over a certain amount. In this case, you pay, but offset the costs of shipping by increasing the average order size.
To remain competitive without draining money on shipping, many e-commerce businesses are outsourcing their operations to a fulfillment partner.
When you work with a fulfillment partner that has access to a global distribution network, you get lower shipping rates and shorter delivery times because they’re sending larger quantities of orders from multiple vendors at once. They can store your products at their facilities, and help you determine the right packaging and shipping method for your business. Plus, a provider with multiple facilities can ensure that your products get to your customers quickly.
3. Poor Integrations
Your e-commerce platform serves as your storefront, but there’s more going on behind the scenes to handle everything from orders to returns. Unfortunately, not every storefront integrates directly with your existing software, making it difficult to track inventory.
If you’re using a complex set of systems, it can slow down the time it takes to fulfill orders, frustrating both employees and customers. Some challenges you may experience include:
- Inconsistent data flow between processes and systems.
- Limited reporting capabilities.
- Time-consuming and labor-intensive operations due to manual data entry and transfer.
- Poor handling of inventory, resulting in inaccurate forecasts.
- Inaccurate customer information.
If you’re looking to update your technology stack, a fulfillment partner can help with set up. But since no two e-commerce businesses have the same needs, look for a fulfillment partner that can plug directly into your processes without disruption or delay.
4. Inefficient Returns
Did you know the average return rate for online purchases is 20 to 30%?
While returns can be costly, it’s an important service you provide for your customers. In fact, free returns and exchanges are cited as the number two reason consumers are more likely to shop online. If your return policy is working against you rather than for you, it may be time to reevaluate your processes.
Instead of having items sit in storage after a return is made, quickly restock those items for resale. Failure to do so will throw off inventory levels, making it difficult to know what is and isn’t available.
If you’re a small- to medium-sized e-commerce business, you may have one or two people handling returns. But that approach isn’t scalable as your sales volume increases. You need a team in place to handle returns and restocks.
An experienced fulfillment partner can help you find a return policy that works for you and your customers. When evaluating your options, look for a partner that has the infrastructure in place to handle a high volume of returns quickly.
Get Started With GLF for E-Commerce Fulfillment
If you realize the fulfillment process is taking away resources from other areas of your business, it may be time to consider outsourcing to a pick and pack partner.
With 20 years of experience in e-commerce fulfillment, GLF takes pride in offering transparent pricing, unmatched reliability and personalized services. For more information, contact us today.