Managing inventory and order fulfillment separately for a B2B and B2C business can over-complicate operations. Combining both into one operation with...
Two-Day Shipping or One-Day Order Processing: What Wins?
Two-Day Shipping or One-Day Order Processing: What Wins? - ecommerce order fulfillment | 3PL Warehouse
There’s often a debate on the best way to get goods to customers and meet their demands while still promising something realistic. You can’t give away the store, but you do need to put in a little effort to make the customer happy. When trying to decide between two-day shipping or one-day order processing, what wins with customers?
When it comes to shipping, that’s often claiming a two-day shipping window, but a quick Google search will lead you to thousands of disappointed people because packages seemed late, even if they technically weren’t.
The issue is with the process, not shipping, and that’s a big mess that can get you into trouble. Shipping only happens after an order is processed, which customers almost never see or realize. So, if you want to get things to people faster, you can approach the issue by solving either a shipping or processing approach.
Each has its own advantages and requirements, so let’s look at which might be best for you.
Promising two-day shipping to your customers is a wonderful way to stand out and get on the same level as giants like Amazon. Unfortunately, it’ll put many of the same demands on your warehouse as those larger operations face.
Two-day shipping is all about the speed of your warehouse. As soon as your team gets an order, they need to start picking, packing, and sending it to your customer. This will mean clear cut-off times on your website and channels for when two-day shipping applies.
Buyers are going to read “two-day shipping” as a promise to receive their packages in two business days or two-to-three standard shipping days. To meet this promise, you’ll need a few things:
- Standardized warehouse practices to run every operation efficiently
- Clear time windows, such as only promising two-day shipping on that day when an order is placed before 5 p.m.
- A large warehouse and team
- Complex warehouse management system that automates order processing and prioritizing packages with these shorter turnaround times
- In-depth warehouse planning and structuring to streamline operations such as getting common goods closest to packing stations and limiting two-way traffic in your aisles.
It’s a big investment, but you can also get significant gains. One of the biggest considerations is that it can reduce cart abandonment as 26% of online shoppers say slow shipping is the main reason they abandoned a purchase. More than half also note that delivery time is among the most important factors for making a purchase.
The risk here is that your customers are expecting two-day shipping as well as fast order processing. This is where you need to be very transparent. Customers need to know that the two days are when the product leaves your warehouse and arrives at their door, not when they click “buy.” Many companies address this by providing an estimated arrival date and then following up with an email once the product is shipped.
Compared to two-day shipping, think of one-day processing as something that happens on the back end where your customers have less visibility. However, it can still make a significant impact on their happiness.
One-day shipping is your ability to verify a purchase order and process the payment, then create a warehouse shipment order for your team to start packing. By doing this in one day, your team is quickly starting on orders and moving them out the door.
This prevents your customers from waiting for days, weeks, or even months before the package ships. This can be especially frustrating because, as a customer, you won’t get shipping information or estimates from the carrier before then, so you’re just left hoping the company is handling your order and hasn’t forgotten you.
Order processing includes a variety of warehouse and storefront actions starting with taking the order from a customer and processing their payment. It also includes verifying that you have inventory in your warehouse to fill the order and setting aside inventory items for each order. It requires staff and software working in unison, and new platforms can automate a lot of these actions to make it easier for you to improve processing speeds.
Even better is that many processing tools are part of larger warehouse systems, so you can secure multiple improvements for your operations when you pick up warehouse systems designed to boost your processing. On the other hand, this means achieving one-day processing will require you to have the ability to invest in better software and a team who can use it effectively in both your sales and warehouse operations.
Choice: What Will Your Customers Understand and Demand?
Trying to choose between two-day shipping and one-day processing? There’s only one thing that matters in your decision: your customers.
You need to prioritize what will make your customers happy, encourage them to buy from your store multiple times and keep satisfaction levels high. The choice is often about what you can market and explain as well as what issues your customers currently have. Here are two of the chief consideration elements:
- Do people complain that it takes too long to get confirmations or that it takes weeks before an order ships and they get a tracking code? Then, consider investing in systems to offer one-day processing.
- Do they want packages immediately and often cancel an order before a product arrives because of these delays? Now, it’s time to prioritize the big investment to meet two-day shipping requirements.
If you need help, ask your customers. Explain the benefits of each by asking what customers have a problem with or what they would like to see. Turn your questions into positives (i.e. How important is it to you to get a shipment tracking code from UPS by the next day?). You can also explain the benefits and ask your sales team what they think will give them the biggest boost for approaching customers.
The best-case scenario is to grow in a way that offers both. Offering this combo ensures that customers are getting orders as quickly as possible and keeps your systems running smoothly. If you’re struggling to see how you can afford to expand software and teams to meet these demands, consider speaking with 3PLs in your area. They typically will offer both and can help you with a variety of fulfillment issues, while often reducing costs.
When it’s not possible to do both, pick the one your customers will appreciate most and work to share this news so they can see it as a big win for their favorite brand.