The Importance of Online Order Fulfillment in E-Commerce
More than 40% of a typical online store’s revenue is from repeat business. That statistic speaks to the importance of online order fulfillment in e-commerce.
As many sales experts will tell you, it’s easier and less expensive to keep existing business than it is to keep having to add new sales. For online sellers, winning repeat business is not only a function of the quality of the product, but also the overall distribution experience. This includes the delivery and receipt of the shipped product. By providing an extraordinary post sale experience, customers are more likely to come back and buy again. Plus they will recommend your online store to others. In order to provide this type of positive experience, it’s important for merchants to focus on the shipment and returns processes. Using a fulfillment services company is one way to successfully deliver the highest quality of customer service.
Why online order fulfillment should be a priority in your eCommerce store
Fulfillment should be a priority in your eCommerce store. It is also why you to pay attention to finding and partnering with a fulfillment center.
Here are a few reasons you’ll want to reconsider such a stance:
- You’re not a warehouse or shipping expert. What is your “core competence”? Is it warehouse logistics? Not likely. You got into whatever sort of eCommerce you do because you like to market and sell those specific goods. It could be just that you love to market and sell, but that is not happening if you refuse to relinquish control of inventory management, warehouse oversight, shipping and returns.
- The overhead can be brutal. Owning and operating a warehouse means real estate purchasing or renting, warehouse and shipping staff, maintenance and upkeep on buildings. Plus utilities, the list goes on and on. Opting for a fulfillment service eliminates them all.
- Are you going to ever sell? If part of your business plan is to someday sell that business, having a streamlined organization brings in much higher figures than one that has many moving parts (i.e. a warehouse, staff, and so on). To maximize earnings on the sale of the business, think fulfillment options.
- You enjoy lower fixed costs. Packing materials can be exorbitant and yet with a fulfillment company, those fixed costs are far lower than ever. In fact, you may find that you end up paying for what you use and nothing more. No longer do you have to make enormous investments in materials that you may not use for months at a time.
- The technologies in use by optimized fulfillment services are substantial. For example, if you are using multiple sales platforms or channels, they will usually be able to accept orders through most of them. You may find yourself even piggybacking off the knowledge and technologies a fulfillment service offers to grow your business. Their consultants can often work with you to setup operations. However, that is not where the relationship ends. You may be able to look towards growth in ways you never recognized before.
- Scalable growth – Once you work with a fulfillment service to optimize your warehousing, shipping and returns, you can begin to see how their services will grow with you, and without major changes or hurdles. Ramping up your activities will never come with excessive out of pocket costs that actually stunt growth.
- That point in the title – Naturally, the most important reason to relinquish the control that comes with outsourcing the warehouse management, shipping and returns to a fulfillment center is that it ensures optimal customer service. To understand that, we need to look at each issue individually.
The Benefits of a Fulfillment Center and Post-Purchase Satisfaction
Have you ever ordered something online? It is highly likely you’ll say yes. Now, have you ever been waiting much longer than you thought you should for that item to arrive? Maybe you didn’t wait too long but got a damaged item, or the wrong item? If so, did that taint the experience? What about customer service relating to the problem? Did they make it easy to return the product and get a replacement?
Issues that a fulfillment center partnership can help your eCommerce business to avoid or overcome effectively.
- They enhance order processing – The way that a fulfillment center operates ensures that your orders are usually processed, picked, packaged and shipped in a business day. This allows you to make that claim on sales pages and for buyers to know what to expect, which can lead to improved sales.
- Accuracy. Professionals who do nothing but pick and pack orders each day are less likely to lose track of things or make mistakes. They have protocols and systems in place and will offer you nearly flawless performance.
- Inventory issues. Nothing says unprofessional like the company that accepts an order only to cancel it because of inventory mistakes. With a fulfillment service, they are dedicated to keeping accurate inventory counts as well as noting inventory that may be damaged or unsellable. In fact, inventory and auditing is typically the arena of the fulfillment service and keeps that one item off your “to do” list and eliminates embarrassing gaffes with customers.
- Financial. Because they have existing relationships with the main shippers and carriers, they often receive discounts that are then passed on to you – even if you are not a volume shipper. According to FulfillmentCompanies pricing study, outsourcing can help you achieve an average of 24% off of retail rates or 31% off of express rates.
- Faster Delivery. In line with the previous point, having such relationships often means access to discounts on premium or enhanced shipping speeds, allowing you to extend low-cost, faster deliveries to buyers. Clients love faster shipping for less, too.
Closing thoughts on Fulfillment Centers and Customer Service
With just those few points, it is easier to understand the importance of fulfillment services as part of your business plan. Customers are more service oriented than ever and, though you might fear loss of control, you actually retain a much better level of control over client satisfaction which what matters in the rapidly changing world of eCommerce.