Fulfillment is an integral component of any Ecommerce business. The one common misconception that people have about fulfillment is that it is a deliver-and-forget task. In reality, fulfillment is much more than that and there are certain nuances that a business should take note of. When neglected, it can leave a bitter taste in your customers and drive them away sooner than you can apologize to them, which is why it’s important to give equal care and attention to the fulfillment choosing process. To avoid falling into the pitfall of having a horrible fulfillment service, we recommend paying attention to these 5 commonly underlooked mistakes.
In today’s Ecommerce landscape, many consumers expect businesses to deliver their packages with the speed of light. “Today’s goods, tomorrow’s delivery” is the mindset, and anything lesser than that constitutes a less than satisfactory experience. Oftentimes, a tardy or slow delivery is attributed to the warehouse’s location. The further away a warehouse is to the consumer, the longer it takes for the package to reach their hands. This is why a business needs to choose a warehouse based on the location and proximity to its customer base. A warehouse that is located in the heart of the city can easily access multiple locations compared to a warehouse that is situated on the edge of town or on the outskirts of the city.
Some businesses realize the importance of proximity but make the mistake of basing proximity on themselves instead of customers, meaning they pick a fulfillment center that is closer to them and not the customers. It may seem tempting to do that, given the closer a warehouse is to you, the easier it is for you to keep track of their service and performance. But you should remember that the fulfillment experience ultimately affects your customer more so than yourself, thus it is advisable to prioritize selecting a fulfillment center or warehouse that is situated closer to the customers instead.
Returns happen for many reasons. Despite a business's best efforts to minimize these instances, they do happen from time to time. Returns expend time and effort, which translates to a loss of revenue. Therefore, a fulfillment center should be adept at handling returns as they are with fulfillment and delivery to minimize the time spent on handling the matter. Ensuring customers a smooth-sailing process in returning is also key to maintaining customer satisfaction. Several traits of an effective returns management include demonstrating a clear understanding of the returns policy, streamlining the return process for customers, and developing proper metrics to assess the returns in order to identify the underlying issues behind them.
Another thing for a business to note is risk management policy. A huge reason people outsource their fulfillment to third-party logistics is due to the risk management that they provide. Should an unforeseen accident or natural disasters strike your inventory, fulfillment centers are obligated to bear the loss, this is known as the carrier’s liability. There are limitations to the compensation, however, the idea is you want to go with a fulfillment center that offers the best coverage possible.
Nothing is worse than poor inventory management. The lack of synchronicity between warehouse and retailers, supply and demand, business owners, and fulfillment centers will result in massive opportunities and revenues lost. Imagine a mismatch between the orders placed vs. your actual stock count. Or failing to account for seasonal demands when restocking your items. Even the error of overstocking or understocking could be fatal to both the business and the fulfillment center. Knowing how to properly manage your clientele’s inventory is key to ensuring both parties will continue to have a pleasant relationship in the long run.
A good fulfillment center should provide its clients access and transparency to key metrics to ascertain the performance of their goods and vice versa. Some examples of key metrics are item stock count, turnover rate, rate of return, time to receive, revenue per unit, and backorder rate. Inventory management is tough work, but there is no reason for the fulfillment centers or businesses to fall short in the area given the vast amount of information they can tap into. Communication is key, and if both the business and the centers can leverage these key metrics and collectively work together to address the shortcomings, synchronicity can be achieved.
It’s important to maintain communication between business and fulfillment centers, but it is also equally important to communicate with your customers too. Consumers want to be kept in the loop of their package, this means processing their order efficiently, providing them with tracking numbers, updating them when their package has gone through several checkpoints or processings and giving them approximations on delivery timings.
If a customer’s package is suspected to be lost in transit or damaged, the fulfillment center needs to be able to address the matter in a competent, prompt, and professional manner. Learning how to troubleshoot issues and managing damage control is vital to retaining your customer base.
We’ve all heard of the saying “Never put all your eggs in one basket.” Your relationship with your fulfillment center is an evergoing process that is constantly evolving and changing based on the Ecommerce landscape. Here are some reasons you should diversify your fulfillment centers.
Sometimes you may find that your current center no longer aligns with your business vision or their performance may be lackluster, which is why it’s important for you, as the business owner, to constantly diversify your list of centers to ensure you have other centers to outsource your fulfillment if it ever comes down to that. Or you are looking to expand internationally and your current fulfillment center does not provide international fulfillment. Perhaps you would like to evenly distribute your stocks between several fulfillment centers so that the business can effectively answer overwhelming demands by getting multiple centers to deliver, which is much more beneficial than depending on one fulfillment center only and facing the risk of manpower shortage, which will lead to disgruntled customers. In conclusion, although diversifying your list of fulfillment centers may be costly, the benefits far outweigh the costs in the long run, which is why we advise doing so.
Fulfillment is the backbone of any successful business, and great importance should be given to the matter to ensure that it is not overlooked because when you have a great fulfillment service, your customer base will naturally be pleased too, which eventually translates to growth and bigger revenue in the long run.
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