As the eCommerce industry continues to thrive, businesses that participate in the supply chain must address how they will keep up with increased demand. Manufacturers, transporters, and warehouses are working overtime to meet consumer expectations.
In the best conditions, fulfilling online orders can be challenging. But these aren’t normal times. Here is what you need to know about eCommerce order fulfillment, some of the challenges companies are facing with it, and five secrets to success your business can use in fulfilling online orders.
What is eCommerce Order Fulfillment?
Fulfillment in eCommerce is the start-to-finish process of delivering an order purchased online to the customer. Simply put, a customer places an order on an eCommerce website, and the fulfillment process begins.
The retailer, supplier, or merchant is responsible for ensuring that the customer gets the product they ordered in the time promised. This can be accomplished in a variety of ways.
Direct-to-consumer fulfillment cuts out the third-party logistics provider. A retailer lists products o on their website. When a consumer makes a purchase, the item is shipped directly from the manufacturer or supplier to the customer.
eCommerce fulfillment involves the process of getting an order into your customer’s hands when you control the inventory. This part of the supply chain includes receiving and storing inventory, processing online orders, picking items, packing, and shipping items to the customer. If it sounds complex, it can be. But you can achieve success throughout this process by implementing the right improvements.
Challenges eCommerce Companies Face With Order Fulfillment
Whether you’re an established or emerging brand, it’s no secret that eCommerce fulfillment involves a lot of moving parts. Here are some of the most eCommerce fulfillment challenges that a business is likely to face.
1. Managing Inventory
If your warehouse’s inventory isn’t managed properly, your order fulfillment process has no chance of being efficient. You may not have the products in stock that customers order or will be unable to find them. These issues can cause delays and mean you won’t be able to meet your customer’s expectations. They can also lead to employee dissatisfaction and even some safety issues in the warehouse.
2. Slow Shipping
There is tremendous pressure for eCommerce businesses to offer fast shipping, such as one- or two-day delivery. Some eCommerce giants are even able to get products to customers on the same day! If your business can’t compete, it might be at a disadvantage.
3. Limited Shipping Locations
The location of your eCommerce fulfillment centers plays a critical role in determining how quickly you can get products into the hands of customers. Not all online retailers can afford to have a fulfillment center in every city. If your target audience is spread across a wide geographical area, this can be an ongoing challenge.
4. Using Complex Systems
Some online retailers are still using outdated systems that don’t allow the business to operate efficiently. This can result in order processing errors and slower fulfillment.
5. Handling Reverse Logistics
One aspect of eCommerce that many retailers fail to consider is reverse logistics. When people buy products online, a percentage of those are going to get returned for a variety of reasons (damage, bad description, wrong part, etc.). If your eCommerce business doesn’t have a plan for handling reverse logistics, this aspect of your business can be costly.
5 Secrets to Successful eCommerce Fulfillment
Now that you know what challenges you might face in fulfilling online orders, here are five ways you can achieve eCommerce order fulfillment success.
1. Align Your Fulfillment Process
Your entire eCommerce order fulfillment process should be standardized from start to finish. Begin by establishing your goals and making a list of your resources. If you are lacking in certain areas, you might want to consider outsourcing.
Many eCommerce companies use third-party logistics (3PL) providers to fill in some gaps. By making this effort to be transparent and consistent in your processes, you can reduce errors and improve the efficiency of your overall business.
2. Organize Your Warehouse
A messy and disorganized warehouse is going to be an unsafe and inefficient one. When you standardize your order fulfillment process, take the time to figure out how you are going to keep your warehouse clean and orderly.
Having inventory stored in the right place and with the right types of systems is a good place to start. You can also make sure employees spend time cleaning up areas and have efficient workflows that keep your operations running smoothly.
3. Make Communication a Priority
Communication is a vital component of any successful business. One of the ways you can make communication a priority is to have complete transparency throughout the supply chain.
You can achieve transparency throughout the supply chain by implementing technology solutions like RFID tags for inventory and asset tracking. When a customer places an order, they can get real-time updates on its order fulfillment status.
4. Deliver a Reliable Customer Experience
Today’s customers want a positive and reliable customer experience. 60% of customers worldwide claim they have stopped buying from a business due to a poor customer experience.
You can start by having thorough product descriptions on your website and accurate stock data. When you promise to deliver an item to a customer by a certain date, make sure you are true to your promise. And don’t forget about that transparency that gives customers the real-time updates they want about their order status.
5. Make Data-Driven Decisions
As you upgrade your eCommerce systems to improve processes, you will likely have access to more and more data about your business. Make sure you leverage that data to make better decisions. For example, a warehouse management system (WMS) will provide you with a wealth of insights about your customers, inventory, and picking and packing activities. You can use those insights to improve your order fulfillment process and your bottom-line results.
As an eCommerce or warehouse owner, you already know that fulfilling online orders can be challenging. Without an effective strategy, your customer experience and profitability can suffer. But, if you’re not an authority on fulfillment, you may face some common challenges. Fortunately, you can overcome them and achieve the best possible results with these simple tips.