Most people believe that e-commerce is all about ideas and innovation. That might be true to some extent. However, if you ask an e-commerce expert or someone who has been in this field, they would say that it is actually about order fulfillment.
In today’s fast-paced environment, customers are becoming increasingly impatient. If they want something, they want it right away. While fulfillment may not be the most desirable aspect of the e-commerce strategy, it surely is the most important.
What is Order Fulfillment?
Order fulfillment is not a single process but a collection of different procedures and practices that include storing, retrieving, packing as well as shipping—whether it involves delivering bulk quantities to another company or dispatching a product directly to the doorstep of an individual customer.
Until the product is delivered to the customer, the business cycle cannot be considered complete. What this implies is that the fulfillment process is one of the most vital aspects of your e-commerce business. Successful implementation of the fulfillment process requires skills, expertise, and experience.
Fulfillment strategies for e-commerce businesses
Every e-commerce business needs a rigorous order fulfillment strategy. This becomes even more important when the owner of the business is seeking expansion and growth. Without an effective delivery strategy and a robust supply chain mechanism, no business can think of becoming a big player in the e-commerce arena.
In order to achieve fulfillment goals, sound planning is a must since it allows businesses to develop the required procedures, systems and infrastructure. It also enables them to put together a team of professionals who can put the plans into action.
In the article below, we will discuss four fulfillment strategies for your e-commerce business that can prove to be highly successful in the long run.
1. Location, location, and location
As the saying goes, the three most important aspects of an effective fulfillment strategy are location, location, and location. It doesn’t matter if you don’t maintain and operate a traditional store, the location aspect is equally important for your e-commerce business. One of the most important considerations when shipping consignments to customers is the place where you are going to ship them. Your operational profits and customer satisfaction hinge on the cost of making the delivery, and the speed with which the order reaches its destination.
Customers are most concerned about the delivery cost they will have to incur, and also the swiftness with which they can get their hands on their orders. Therefore, being close to your target market will allow you to make swift deliveries without increasing your shipping costs. For example, if your customers are all based in the urban areas, it will make no sense to have your warehouse in a rural location. Having access to your target market will allow you to cater to their needs on a timely basis, without incurring high costs.
2. Use technology to your advantage
These days, a wide range of software is available in the market that you can integrate with your businesses’ e-commerce platform. They allow you to manage all your orders in a smooth and orderly manner without the need for manual entries. And the best thing is that the process is fully automated, allowing you to save heaps of time.
This is how this software typically works: as soon as a customer places an order online, you will receive an instant notification allowing you to retrieve the item, pack it, and dispatch it to the customer within no time. Once that is done, you can enter the tracking information on the e-commerce platform so that the same can be shared with the customer. Apart from that, the software will also allow you to keep track of your inventory at any given point in time.
Every e-commerce business should make use of the latest technologies and achieve a high level of integration between its own order booking and fulfillment systems so that the end-user can be offered a satisfying experience.
3. Consider free shipping
Modern-day e-commerce businesses are constantly striving to reduce delivery time. Same-day deliveries have become more and more common as customers are not willing to wait for their orders for even a single day. At the same time, it is a challenge for e-commerce companies to decide what to charge for delivery services simply because there is no formula that can allow them to establish a uniform rate for all kinds of deliveries.
Shipping costs money so it can become a burden on businesses if they start offering it for free to customers. However, as a strategic move, you may calculate your average shipping cost for all products, and then incorporate it into the price of the products. The prospect of getting free delivery will likely improve the buying experience for your customers. Moreover, if you are offering free shipment, more and more potential customers will be inclined to check your page and place an order.
An important consideration when offering free shipping to the customer is the value of the order. If you are dealing with high-value products or selling bulk quantities, delivering free of cost should not be an issue. On the other hand, free shipping is usually not feasible for products with a low price tag as the cost of delivery might be higher than the price of the product in most cases. And if you incorporate the delivery cost into the price of the product, the resulting increase in final price may make you lose your competitive edge. So these are all the factors that need to be considered before you can waive off the delivery price.
4. Choosing the right Fulfillment Model
There are many factors that affect your choice of the fulfillment model – i.e. your overall fixed cost, the nature of your product, and the volumes you are selling.
Your first choice is the in-house order fulfillment. This involves the business running its own fulfillment process from A to Z. This strategy is often used by small sellers who choose to deliver their own products in the vicinity. Start-ups also prefer this type of fulfillment. The problem with this type of fulfillment is that it takes a lot of time and energy of the businesses as they need to maintain dedicated facilities and hire additional staff for these operations.
The other option is to secure the services of a third party. Third-party services are usually hired by a small and medium-sized business that doesn’t have the time and resources to handle packaging and shipping. Thus, they decide to outsource these operations to companies that specialize in this field.
The final word
Contrary to what it seems, the fulfillment process associated with e-commerce businesses is a complicated one. If you are new to this field, you will face many unexpected challenges that will not only eat up your time and resources but also distract your attention from your primary business goals. If truth be told, only a handful of businesses around the globe could boast that they have developed their own distribution networks. The majority of new businesses simply have no idea about fulfillment. They do not even know where to begin. With all the complexities associated with the shipping process, understanding the ins and outs of it can be overwhelming.
Most people who start e-commerce businesses have financial goals or personal milestones in mind. The delivery process is not part of the initial aspirations associated with becoming an entrepreneur. However, the fulfillment process is something that can have a big impact on the overall success of the business. For any e-commerce business, providing swift, affordable and timely deliveries to the customers should be on top of the priority list. Not having the right strategy will cause unnecessary delays in your deliveries. Your customers will have to wait needlessly and ultimately, it is your business that will suffer.