In this post, you will learn all about optimizing ecommerce fulfillment in 2022.
We will explain:
Ecommerce order fulfillment is the whole process behind delivering products to customers after online orders.
It consists of inventory management, order processing, picking and packing items, and shipping products to customers.
Fulfillment is not only about preparing and packing orders. A well-organized ecommerce fulfillment warehouse helps your business run smoothly.
As more and more businesses are turning to ecommerce, the quality of order fulfillment and logistics affect the way customers choose which company to buy from.
Superb ecommerce fulfillment guarantees that an online order was delivered to the customer safely and efficiently.
The quality of fulfillment has become a way for online businesses to stand out from their competitors.
Here are the top reasons why quality ecommerce fulfillment is important:
For many companies, the growth of ecommerce is a huge opportunity for profit.
However, more sales also mean that companies must add more items to their warehouses, hire more staff, and put more effort into making sure orders are shipped correctly.
The average cost of fulfilling an online order is 70% of the average order value, when overhead, returns, labor costs, and other expenses are calculated.
Efficient inventory management, warehouse space allocation, order processing, and other fulfillment procedures lead to fewer unnecessary costs.
A smooth ecommerce order fulfillment process also reduces the number of returns and other costly mistakes.
When you run an ecommerce business, the way you meet your customers’ needs affects the size of your customer base and the number of sales.
Offering a pleasant ecommerce order fulfillment experience is a way to obtain more customers and keep them satisfied.
When a customer orders a product, they expect to receive the item as fast as possible. The more you manage to meet their expectations, the more they will choose your online store over your competitors.
Reliable order fulfillment procedures give your customers the assurance that the orders will be delivered fast and with no damage. This increases customer loyalty and encourages shoppers to buy more in the future.
Nowadays, customers will judge your online store based on the way you fulfill the orders.
Customers always expect to receive a complete order without any damage, and with no delays. If you wish to have a good reputation in the ecommerce world, order accuracy is one thing to focus on.
If you fail to keep up with customer expectations, they will turn to your competitors, causing harm to your company’s reputation.
Investing in the quality of ecommerce order fulfillment services will help you maintain the reputation of a reliable business.
Ecommerce fulfillment is more than just packing orders and shipping. When done right, it helps online businesses run smoothly and stand out from the competition.
Here are the key segments of ecommerce fulfillment services:
Checkout is the first component of the ecommerce fulfillment process.
It is the point where a customer visits an online store, adds items to their shopping cart, and places an order.
The order is then sent to the company’s POS system.
It is important to note that successful order fulfillment planning needs to start before the customer adds products to the cart.
Before you can ship orders to customers, you need to have inventory.
Businesses use different types of inventory management options such as micro ecommerce fulfillment centers, regional fulfillment centers, or even local stores.
Keeping the inventory up to date is essential for the success of any online business.
Mistakes in inventory management lead to unhappy customers and lower retention rates.
Inventory also needs to be properly organized with factors such as stock turnover and product expiry dates in mind.
When an online customer places an order, the fulfillment center starts picking and packing the items for delivery.
Order processing includes getting the right products together, packing the items, and preparing the shipment for the delivery pickup.
It can also include details on packing materials that should be used, or any instructions when it comes to custom packaging and additional inserts.
In the end, a shipping label is added to the package.
Once the order processing is done, the order has to be shipped, using the most appropriate shipping method.
In this phase, either a driver picks it up from the fulfillment center, or it is prepared for in-store pickup.
Some sellers use only one shipping carrier such as USPS, while others require more options.
Usually this is due to different product sizes, specific shipping requirements, and the need to ship internationally.
Some companies use a logistics provider to finalize ecommerce shipping fulfillment.
Returns are a significant component of ecommerce fulfillment.
More than 60% of online shoppers will review a return policy before they decide to place an order.
Allowing customers to return online orders in a fast and convenient way is a sign of good customer service.
A functional returns strategy requires returns processing and an up-to-date inventory management solution that ensures customers will get their money back shortly.
When a product is returned and appropriate to restock, inventory should be instantly updated so other ecommerce fulfillment channels could run smoothly.
Take a look at six ways you can optimize your ecommerce fulfillment strategy:
Optimizing ecommerce fulfillment in order to meet your customers’ expectations can be a rewarding investment.
Take a look at some of the most popular options among online shoppers:
Since BOPIS requires serious inventory management organization, it turns stores into fulfillment centers. BOPIS also requires additional staff training since the staff is expected to organize pickup, while still offering great customer service.
By early 2021, it was offered by 50.7% of top retail chains. Customers are now approaching deliveries with safety in mind, and this is a critical point for companies to introduce curbside pickup.
Unfortunately, there are many retailers that are not set up to provide same-day delivery due to the high costs of such fulfillment operations. Expectations are also constantly rising, and many shoppers need even more to be happy so they expect on-demand delivery.
It is very important to inform customers about the expected delivery time and to respect the promised timeline. Almost 24% of online shoppers would drop the order if delivery dates were not provided.
You can use anything from lockers to local corner shops and partner retail stores.
Using the latest technologies can streamline fulfillment procedures by dealing with and optimizing the following components:
The right software will help you make use of existing resources such as your locations and staff to perform segments of fulfillment such as packing orders, allocating deliveries based on inventory, in-store deliveries, and more.
Optimizing fulfillment with technology will help you build customer loyalty by offering accurate and efficient deliveries and pick-ups.
When you decide to optimize your fulfillment processes with technology, first you need to digitize and connect your fulfillment center, retail, delivery, and CRM teams and their databases.
Ideally, all the systems and technologies behind your fulfillment operations should be unified, with all the data available on a single platform. This will allow you to manage fulfillment in a cost-effective way.
More localized services bring benefits such as more speed and lower costs.
Focusing on hyperlocal ecommerce fulfillment requires perfect inventory management and logistics.
At any point, you must know:
If you do it correctly, doing fulfillment services on the local level will enable you to provide same-day or even two-hour delivery.
Hyperlocal fulfillment depends on technology to make sure that fulfillment centers can deliver the right orders at the right time.
Technology will enable your business to always display and offer accurate options.
If a product is located in a local fulfillment center, you can offer same-day delivery or pickup.
By providing accurate shipping information, you will gain a stellar reputation when it comes to delivery.
Deciding whether to outsource to a third-party ecommerce fulfillment business is one crucial question for ecommerce businesses.
Outsourcing ecommerce fulfillment can fall anywhere between using a dedicated fulfillment center and expanding and using additional centers.
There are a large number of ecommerce fulfillment providers out there that are focused on providing superb fulfillment services.
For example, Amazon has become the standard for satisfying customer expectations.
Ecommerce fulfillment pricing models differ among providers.
Ecommerce businesses that don’t want to deal with fulfillment often choose marketplaces as a solution, since they eliminate the need for a website and help companies outsource everything.
Although using marketplaces is convenient, it comes with one big disadvantage.
At the end of the day, businesses have no customer data or any kind of performance stats they could use to improve marketing efforts and build loyalty.
If you are considering using 3pl ecommerce fulfillment, there are several benefits you should know about:
Using software to automate ecommerce order fulfillment operations will improve your:
Automating order fulfillment for ecommerce will provide your shoppers with a creative range of shipping options.
When repetitive tasks are automated, staff can focus on more significant points that bring more value. Automation cuts out a large portion of staff inefficiency and allows you to scale and provide some in-demand shipping offers such as same-day delivery and free delivery.
It can also guarantee that inventory stats are accurate across different channels, which leads to higher delivery performance and greater customer satisfaction.
Automated ecommerce fulfillment solutions guarantee that everything is being done in the most logical way. It will help you improve speed and efficiency while reducing costs.
Data collection and analysis is one of the best ways to improve your ecommerce warehousing and order fulfillment procedures.
Some of the simple data points that companies keep track of are the inventory on hand, product size, quantity shipped, order data, etc.
In order to see your operations on a granular level, you need to identify and measure the most important KPIs for your business.
KPIs will help you evaluate your current performance, target points for improvement, and measure the effectiveness of the improvement measures you already introduced.
Take a look at three important ecommerce metrics that could help you measure and improve fulfillment services:
Now that you’re aware how to optimize ecommerce fulfillment, you can go beyond that.
Here are the nine free guides that will show you exactly what we do to optimize the last mile and dominate delivery logistics.
1. How you can drive MORE sales with Local Delivery
2. Elevate customer experience with Frictionless Fulfillment
3. Fourth Party Logistics: Should You Use It for Your Business?
4. Biggest challenges for ecommerce delivery and how to SOLVE THEM
5. How to use delivery management software to offer same-day delivery
6. Upselling and Cross-Selling with Delivery: Is It a Myth? Or Reality?
7. The Impact of COVID-19 on Last-Mile Delivery EXPLAINED
8. How to Achieve Last Mile E-Commerce Success: Step-By-Step Guide
9. How to build trust with customers via e-commerce delivery
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