Two-Day Shipping or One-Day Order Processing: What Wins? - ecommerce order fulfillment | 3PL Warehouse
Ecommerce Fulfillment Best Practices: Avoid Liabilities Efficiently
Your fulfillment can go from being a liability to becoming a strategic advantage. Learn more about ecommerce fulfillment best practices and the benefits of an efficient process.
When you run a direct-to-consumer (D2C) brand, you have to juggle a lot of responsibilities. There’s product manufacturing, marketing, sales, web development, accounting, and much more. And it’s easy to put order fulfillment on the backburner –that is, of course, until it becomes a liability.
However, with the right best practices, your fulfillment optimization can go from being a liability to becoming a strategic advantage –offering many benefits to set you up for long-term success with the most efficient operations.
Learn more about ecommerce fulfillment best practices and the benefits of an efficient process, right here.
Ecommerce fulfillment best practices: Three key pillars
Did you know that 46% of consumers ranked reliability as one of the top attributes they look for when choosing a brand or retailer to purchase from?
Visibility, trust, and reliability are vital to building loyal D2C ecommerce relationships, and it all starts with your fulfillment process. Along with the right tools and software, we’ve identified three key best practices, or “pillars” when it comes to your ecommerce order fulfillment.
- Fast shipping
A good, seamless ecommerce fulfillment process requires pinpoint visibility, insight, and transparency into your inventory for the most accurate results, so you never oversell.
And none of this is possible without the right tools in place.
A good end-to-end fulfillment system gives you the right visibility and allows you to find faster ways to ship orders –from the right place, at the right time, so you can meet your customers’ expectations and scale your operations. But first, you need to look out for your liabilities.
Ecommerce fulfillment best practices: Avoiding liabilities
Brands are under constant pressure to live up to the Amazon standard. With Amazon now shipping a majority of their orders within two days or less, your customers have become accustomed to lightning-fast delivery times, no matter where they live.
In fact, 40% of customers say that delivery times greater than 3 days would prevent them from following through with a purchase. 53% of shoppers say that speed of delivery is an important factor when deciding to make an online purchase, so much so that 80% of customers look for same-day delivery options.
Amazon now has 110 fulfillment centers within the US alone. How can your fast-growing D2C brand compete with Amazon for customer experience? By all accounts, you can either join them and utilize FBA (Fulfillment by Amazon) for your fulfillment strategy or build your own unified fulfillment network.
Some disadvantages to using FBA include:
- Expensive FBA fees
- Long-term storage fees
- Higher return rate
- Strict product prep guidelines
- Commingled inventory
- Your sales and customer data is now Amazon’s data
- No inventory visibility
Perhaps you’ve decided that Amazon FBA is not a fit, but at the same time, you know that you cannot open 100+ fulfillment centers to service your customers. Your brand is growing, and you may see fulfillment as a bottleneck to your growth.
Have you noticed any of the following lately?
- Long shipping times to customers
- Increase in shipping upgrades to premium services (second-day air, next-day air)
- Increase in shipping costs
- Bad customer reviews
- Concessions to customers for late shipments
- Canceled orders due to stock-outs
If so, then you need to start by rethinking your fulfillment strategy to turn what is a liability into a competitive advantage with the right best practices to get you there.
Ecommerce fulfillment best practices: Creating an FBA-like experience
An easy way to achieve the best practices and efficient process you’re after is to create an FBA-like experience.
As you look to scale your fulfillment operations and create an FBA-like experience, there are two things to consider: your location and your technology stack.
Many business owners treat fulfillment as a necessary evil, but we’re here to say that it can actually grow your business. There are tons of 3PL companies out there, and each of them has specific areas where they excel. You’re not locked into a choice between fulfillment by Amazon or in-house fulfillment.
There are many options available for brands to manage their fulfillment operations, but finding the right platform and partner that has the flexibility to build your own fulfillment network is key to building a solid FBA-like experience.
Ecommerce fulfillment best practices: 5 benefits of an efficient process
An efficient order fulfillment process can do wonders for your business. With better operations, you can cut shipping times, reduce costs, lead to better reviews, and help you to manage your inventory. With all this in mind, let’s dive into these benefits so you can use fulfillment to your strategic advantage.
1. Reduce costs
One of the main issues with fulfillment is that a lot of companies simply…start doing it. They don’t have inventory stored in a specific way, nor do they have special printers for shipping labels. Many people even take their items to the post office instead of arranging a pick-up. Fulfillment becomes, essentially, an afterthought. This can lead to a lot of lost time, lost revenues and increased labor expenses.
As counter-intuitive as it sounds, outsourcing fulfillment can save money. Yes, there are storage fees, order processing fees, and account maintenance fees. However, there are three major differences that offset prices:
- Postage rates are often negotiated by the third-party logistics company to a much lower rate.
- Packing supplies are ordered in bulk, dropping the cost of supplies used per shipped unit.
- You’re partnering with experts who are much more efficient at pick and pack than you can possibly be.
Storage fees can be expensive at first, but often, the alternative is to find a storage unit or use extra space around your office. Either way, real estate is expensive. Fulfillment companies tend to buy land in low-cost areas or use much bigger buildings, meaning their cost per square foot is much lower and they can pass the savings along to you.
2. Customize the experience
Online shopping is convenient but impersonal. You miss out on some of the personal and tactile experiences that make people remember your brand. In ecommerce, your customers don’t have to fight traffic, but they’ll also never say, “their store smelled like strawberry perfume and the cashier was so nice to me.”
Brick and mortar stores naturally surround you with items laid out in a certain way, with subtle factors like lighting and shelving affecting your mood. Customer service reps come up to you and are engaging. They get to know you as an individual.
How can you work around this in ecommerce? If you streamline your fulfillment processes and find that you have extra time, you can use that time to improve the overall fulfillment experience.
For example, you can include custom thank you notes, gift-wrapping, or scented tissue paper to help to personalize the experience. Similarly, you can work on creating upscale custom packaging for a premium unboxing experience. Or add marketing inserts based on what you think each customer will buy. Limited-time coupons for similar items, in particular, are a good way to get repeat customers as well.
3. Retain more customers
Order fulfillment can have a huge impact on customer satisfaction and retention. In fact, consumers today are expecting better service when they order online –and this includes free and fast shipping times.
- 41% of consumers are willing to pay a charge for same-day delivery
- Nearly a quarter (24%) of shoppers said they would pay more to receive packages within a one-or two-hour window of their choosing.
- Difficult returns can scare off as many as 52% of your customers. This number reaches 67% for millennials (ages 25-34).
- More than 70% of consumers cite convenience (77%) and free shipping (72%) as their top reasons to shop online.
These efforts can cost you, but how do you deliver?
Fast shipping with easy returns is, admittedly, a high hurdle for ecommerce companies. You either need to ship orders out the same day you receive them or outsource fulfillment. In any case, the major opportunity here is that fast, reliable shipping with easy returns sets you apart from other retailers that cannot clear that hurdle.
Key drivers that keep customers happy and help to strengthen your brand are:
- Free shipping (who doesn’t love free shipping?)
- Fast delivery (less than two days is considered fast these days)
- Speedy handling of issues (such as lost, delayed, or damaged shipments)
- Free and easy returns (so they don’t have to think twice)
4. Keep a pulse on valuable data
When you fulfill orders on your own, it’s hard to track data. After all, you have to manually update your own inventory records or design/purchase an inventory-tracking system. Either way is suboptimal.
Inventory data is a goldmine when you know what to do with it. Having that level of visibility into what you sell and when allows you to:
- Forecast sales
- Restock before you run out of inventory
- Gather data on which types of items are popular
There have been a lot of articles that explain how you can use inventory data to improve your business. And oftentimes, you don’t need exotic metrics or detailed reporting. You simply need to watch the numbers that matter and get a feel for trends as they happen. Inventory levels, for example, are data you should keep a pulse on.
5. Gain more time for other parts of your business
Done well, smart ecommerce fulfillment processes can have a lot of positive downstream impacts on your business. Even without outsourcing fulfillment, streamlining fulfillment will allow you to reallocate labor and funds to other areas in the business. That could mean customer service, research and development, or another value-added area. The possibilities are endless.
Deep down, fulfillment is a support function. Seldom is fulfillment a strategic advantage in isolation. However, as a time-consuming process improvement can be, small changes such as the ones listed here can free up a lot of time and money.
Ecommerce best practices: fulfillment as your competitive advantage
Fulfillment isn’t merely a task that must be completed to stay afloat. It is a key function of your business that can be tweaked and improved to save you time and money. Whether you perform fulfillment in-house or outsource it entirely to a Top 3PL, fulfillment can become your strategic advantage.
Saving time and money alone allows you to reallocate time towards more value-added activities. Yet improving your fulfillment processes can provide benefits beyond just that. You can customize your customers’ experiences, retain customers, upsell products, and gather crucial market research data for future projects.
ChannelApe provides a flexible unified platform that top D2C brands have used to create a single customized network of top 3PL companies across the globe. The unified platform gives you a central hub for all of your order fulfillment activities and is flexible enough to operate on your own terms. Unlike Amazon FBA, you will have end-to-end visibility into your complex supply chain so you can avoid liabilities.
As your fulfillment operations partner, ChannelApe will turn your fulfillment strategy from a liability into a competitive advantage.