Think about the last time you ordered something from an online store. Did you have an unpleasant delivery experience? Was your package lost, late or damage? Are you distrust to buy from that seller again?
If so, you are not alone. 30% 0f customers say they will never shop directly from a retailer again after a negative delivery experience. Preventing unsatisfied Customers comes down to one thing, establishing an appropriate order fulfillment strategy.
What is order fulfillment in ecommerce?
Fulfillment is a key concept in logistics, is the process of storing inventory, picking, packing products and shipping online orders to customers.
Fulfillment is essentially putting customer’s orders together; it starts once an order is placed until it is delivered. This process can be completed in-house by your ecommerce company or outsourced to a third-party cross-border logistics provider or use a drop shipping company.
Therefore, Companies that have implemented it, have to coordinate the whole process since products leave the warehouse until they reach the client.
To understand the impact of this process end to end, bear in mind that when outsourced to a logistics company the following actions must be performed to fulfil an order:
- Create the strategy to be carried out
- Receive the merchandise
- Process orders received
- Packaging and labeling
- Make its distribution and final delivery
- Manage returns
Fulfillment not only comprehends managing all these actions, but also seeking the greatest efficiency and agility for orders’ delivery.
There are a few ways to determine your order fulfillment strategy:
The first variable to consider is the business size and order volume. How many SKUs (products bar code) does your business sell? How many orders are you currently shipping every month? How many orders do you estimate you will be shipping next month or even next year? It is important to make sure your ecommerce fulfillment strategy can scale along with your business.
The second variable is evaluating sales channels and technology. How are you selling your products on-line? Are you selling them through an ecommerce platform or on an ecommerce website? Which ecommerce platform are you using? Through a marketplace or both? Your fulfillment strategy should complement and support your online sales channels, especially from a technology standpoint.
The third variable is location. Are your customers located in a certain region? Or are they spread out across the country? These are of the most important aspects that should be considered as inputs for your fulfillment strategy.
Last variable is customization needs. Are your products made to order? Is customization a key selling characteristic of your brand? If you sell items that are custom made, especially gifts wrapped or extremely fragile, you may want to choose a pragmatic approach to handle the entire supply chain.
What Fulfillment options are available?
When online businesses fulfill orders themselves it is called self-fulfillment or merchant fulfillment. However, other fulfillment options may be better for your business such as outsourcing it to a third-party logistics company -that will take care of inventory orders as well as the fulfillment process- or use a drop shipping company.
In addition to these concepts, logistics experts point out the existence of micro fulfillment, which comprehends those small logistics operators who work around large cities to be able to deliver the requested products to the final consumer, complying with all processes efficiently. Through it, customer satisfaction increases even in areas, which can be difficult to work with because of urban’ s routes characteristics and / or high population density.
How to manage it properly?
It is essential to have specialized software that properly supports and tracks the whole process, getting data in real time to handle management decisions. Depending on the Industry, Company size and business strategy, many Companies consider that it is better to outsource the service and get the benefits from specialized professionals. Furthermore, the following practices have to be considered and reviewed periodically:
- Offer adequate training to staff.
- Set warehouses location strategically based on the main routes activity.
- Improve picking routes.
- Learn to anticipate the most common problems.
Which are the main benefits for outsourcing the service to a logistics company?
The main benefits are the following:
- Increases the company’s productivity as the order fulfillment process is more agile improving workers time & coordinate.
- As specialized software is used, customized with best practices, logistics operations are more effective.
- Costs reduction due to minimizing rework and order re-processing, avoiding unnecessary expenses.
- When ecommerce stores are applicable, international operators that manage the fulfillment process enable routes for international markets. This possibility increases markets coverage.
- Allows orders processing much faster and more efficient.
Having said that, there is no doubt concerning all the benefits offered by outsourcing logistics services, becoming its consideration an essential element for the supply chain in any business and an advantage against Competitors. Otherwise, ecommerce will never have the necessary resources dedicated to have efficient logistics solutions.
Finally, as customers are becoming more and more sophisticated, online stores have to meet their needs quickly and efficiently to loyalty them and, therefore, increase the company profitability.
Should You Use a Fulfillment Service?
Whether your business has already started in the e-commerce or you are still thinking about it, fulfillment is always a relevant topic to keep in mind. It is important to take all aspects previously mentioned into consideration before making any decision.
If you are self-fulfilling orders as a starting point for your ecommerce business, would you be able to keep up with orders if they are doubled, even tripled? Even if you can handle masses orders, would you be able to do it effectively and/or cost efficiently? Would you have enough space to store inventory? With thousands of ecommerce stores being launched every day, the fulfillment industry continues to grow.
Fulfillment is a vital part of both the ecommerce and customer experience, so it is important to make sure whichever fulfillment process you use is the best for your company. After all, customer satisfaction is what you are really looking for in the long run!
K-PARCEL, as a Logistics provider, its main objective is to offering logistics solutions to ecommerce for Companies that work from China to all southeast Asian countries and the rest of the world.
The two main lines of work of K-PARCEL are export or outbound and import or inbound from China all types of products, regardless of their weight, size or features.
At K-Parcel Advanced Fulfillment Center in Humen, Hong Kong, orders are efficiently handled, processed and consolidated according to final destination requirements. Due to this, fewer activities have to be done by last mile operators improving their costs and delivery quality.
For more information, contact our team at Project.Kparcel.Marketing@k-parcel.com