Effective Ecommerce Fulfillment Is the Holy Grail of Online Retail
Order fulfillment can make or mar an ecommerce business
Frequent e-commerce fulfillment customer complaints include: receiving the wrong item, delayed or missing shipments, damaged or defective items, and other questions concerning returns and refunds, among other issues. These types of complaints can overwhelm e-commerce businesses. But when they are left unresolved, they could sound the death knell for any business—ecommerce or otherwise.
Therein lies the existential dilemma for e-commerce. To begin with, people expect better prices, if not "deals" in online purchases. That shaves the profits of many e-commerce businesses to single-digits. So how would they be able to afford outstanding and personalized customer service? It's precisely this problem that's led to many e-commerce outfits turning infeasible.
Akin to physical retail, e-commerce works on maximizing visitors to their store. But unlike physical retail, an e-commerce merchant cannot simply hand over the merchandise to the customer over the counter. The goods need to be packed and shipped, often across state and national boundaries.
As if that was not enough, issues dealing with returned goods, or reverse logistics, in general, can be especially irritating for e-commerce businesses, as they do not have a physical location where goods can be returned.
Two Crucial Trends to Better Understand Pertaining to E-commerce Fulfillment Issues:
Third Party Logistics: Online businesses are fueled by efficiency. As ever-improving technology and devices work better, even business processes need to improve. This necessitates specialization as a way of life—which presents a compelling rationale to outsource e-commerce logistics.
Third-party logistics providers are now available across boundaries. They can not just deliver with a high degree of accuracy, but also manage costs to the point where in-house logistics becomes illogical.
Yet another driver for outsourcing logistics is the fact that most e-commerce businesses do not have the scale where they can afford the huge costs of cutting-edge ERP (Enterprise Resource Planning) software required to remain competitive. And as computing goes increasingly mobile, the investment in latest technology is only bound to increase. This makes a compelling case for large format, multi-location, specialist third party logistics providers.
Reverse Logistics: Many e-commerce businesses would prefer to wish away the need for reverse logistics. As if the strain of creating and fulfilling demand was not enough, e-commerce professionals have to find means to deal with goods that move in the reverse direction—from the customer to the business.
There are many drivers of reverse logistics, such as returned, undelivered, and damaged goods. But not all reverse logistics is driven by error or accident. For instance, in the case of exchange-offers, e-commerce businesses actual fuel the need for reverse logistics.
However, the business model of a reverse logistics unit is quite different from that of the logistics and fulfillment unit.
Effective Ecommerce Fulfillment
For fulfillment to be effective, an e-commerce business must pay attention to all of these:
- Speed: The goods must not just get there. They must get there in time, every time.
- Accuracy: The goods must get there, but not just any goods. The exact goods that were ordered must get there.
- Scalability: Sure you can get the goods there now, but as you grow will your ability to fulfill grow with you?
- Surge: The holiday season and other occasions cause surges in shopper traffic. You have probably ensured that your website withstands the surge, but does your fulfillment? Or will the Christmas gift be delivered after Christmas?