What are Retail Operations? The Ultimate Guide on the Best Practices for Streamlined Retail Operations Management for Online and Offline Retailers in 2023
Whether you sell on various eCommerce marketplaces or through conventional retail stores, retail operations are the motor that keeps your business running consistently. When you sell products to customers with the aim of providing them with a positive experience so you can generate sales and eventually profits, there are multiple processes involved in making sure it all happens smoothly and everything goes according to plan. This is to ensure that highly demanded products are always kept in stock, items can be located easily when an order comes in and products can be packaged and dispatched with ease. When a company’s retail operations are running at their optimum capacity, both the store and its customers benefit, leading to an optimistic sentiment among both parties. In this blog, we will take a look at what retail operations are, the functions they provide, the challenges associated with them, and 8 ways to help you streamline your retail store operations. What are Retail Operations? Retail operations comprise all the processes involved in the day-to-day operations of running a retail business. This includes tasks such as order fulfillment (learn about retail fulfillment), inventory management, adjusting your online store or warehouse layout, accounting, customer support, sales, returns management, and much more. Because retail operations are necessary for the smooth running of a retail business, efforts need to be made to streamline them wherever possible. This could include optimising your storage space so that products can be identified and accessed more efficiently, eliminating various bottlenecks, and ensuring products are packaged and dispatched in a timely manner. Essentially, retail operations commence the moment a purchase is made and a person goes from a lead to a direct customer of the business. All the tasks involved in making sure they get their order and have a good experience is classified as retail operations. [contactus_uth] Key Roles Involved in Retail Operations Management Inventory Management The quantity of goods that are on hand for customers to purchase at a retail establishment is known as inventory. This inventory needs to be constantly monitored and replenished so that items do not go out of stock (It is taken care of under stock replenishment). Conversely, future demand needs to be forecasted accurately to prevent over-ordering of certain products. Inventory management varies between online and offline stores. While online stores generally store their products in fulfillment centers where a vast amount of tasks are automated, physical stores generally rely on staff manually taking care of these procedures. Customer Service While some businesses have separate eCommerce customer service and eCommerce operations teams, many companies mix the two activities. For instance, a lot of people who work in physical retail stores conduct customer service work like guiding consumers to the products they're looking for, while in online stores, this is taken care of by website navigation features or chatbots. A retail operations specialist can also search the inventory supply for specific product models and address consumer concerns, among other customer-specific duties. The customer care representatives who work in the store or corporate office may also be under the direct administration of a retail operations manager. Order Processing Whenever an order comes in, it can either be accepted or rejected by the store, depending on the availability of the item or the capability to deliver it to the desired location. Oftentimes, this is done automatically through various software solutions. However, a company can also have dedicated staff that monitors each order as it comes in and manually makes a decision whether they want to go through with it or not. Order processing should be done instantly so that products can be identified, packaged and dispatched as soon as possible. If not, customers could be left waiting without a confirmation, which will result in them having a poor experience. Payment Acceptance The approved modes of payment are another aspect of retail operations management, as is the way it is handled at checkout. Nowadays, point-of-sale (POS) systems are used by retailers who have physical stores. The good news is that most POS systems will assist with inventory management in addition to processing payments. Standard operating procedures (SOPs) will be used for all aspects of handling cash and credit card payments in order to reduce human error. Managers and supervisors must make sure that all employees are knowledgeable of and skilled in using the company's SOPs. Administrative Tasks Many behind-the-scenes operations are conducted during administrative tasks. Before issues emerge, a store or eCommerce website requires the best upkeep. Every time a customer visits, they must have an efficient and consistent shopping experience. Any negative encounters, such as broken product links or unsuccessful payments, can leave a customer with a terrible impression. Training of the staff must be done to a high standard. There must be consistency in everyday activities, whether it be in the documentation of stock receipts or the management of money. Checklists and training procedures must be used, followed and continuously evaluated. Staff who interact with customers or provide online support must receive service training and be familiar with SOPs. Main Challenges Associated With Retail Store Operations Finding the Appropriate Pricing Both eCommerce and conventional retail are highly competitive industries. In order to capitalize on demand and convert interest into sales, sellers need to identify a pricing niche that their products can successfully fall into. If products are priced too low, you risk reducing your profit margins and if they are priced too high, customers will gravitate towards cheaper alternatives. Therefore, thorough research needs to be conducted in order to determine the pricing strategy that will work best for your business. Providing Tailored Experiences Along with product selection and pricing strategies, the in-house shopping experience is also highly prioritized by consumers. More individualization and customization need to be provided so they can have the best possible experience. Customers demand a customized online shopping experience with pertinent product recommendations and concentrated marketing efforts. However, they also anticipate having more alternatives so they can tailor their purchases to their own specific needs. Retailers must devise strategies to identify and appreciate loyal customers. However, they also need to find ways to make new clients feel valued. The latest personalisation trends must be followed so you can capitalize on providing customers with exactly what they are looking for. Enabling Consistency Across Multiple Channels It goes without saying that capturing a portion of the eCommerce and conventional retail market, ideally through omnichannel retailing, is essential for a retailer to succeed. Those with weak or nonexistent internet exposure will lag behind as more consumers shift their purchasing habits towards eCommerce. Selling across multiple sales channels is desirable for even the smallest firms. Physical retailers who disregard online shoppers do so at their own risk. Numerous retail locations and channels can provide a number of advantages. However, enterprises pursuing this route will also face fresh difficulties. The more channels, procedures and people that are involved in operations, the harder it is to maintain consistency and this can also result in increased prices, errors and mishaps. Retaining Quality Employees Today's workers expect more for their efforts, just like today's customers. The wage range for retail sales workers is usually on the lower end. Because of this, some of the greatest rates of employee turnover is in the retail sector. When employees are engaged, they have an increased likelihood of sticking with a particular company. Everyone has various motivations, but nobody wants to continuously work on monotonous, readily automated chores that don't add any value for a salary they aren’t happy with. Effective involvement can be challenging for management and HR. To increase staffing and employee retention, the appropriate strategies and incentives must be identified. Managing Inventory and Other In-House Tasks Inventory is a critical component of retail operations. It is what enables customers to purchase items from your business so you can break even and start to turn over a profit. However, managing inventory, especially if you sell across multiple channels, can be a hassle and come with a range of challenges. You need to make sure that every SKU is stocked at appropriate quantities based on factors such as demand, seasonal relevance, price, storage space they occupy and much more. If there is a shortage of a product in relation to its demand, it can cause negative sentiment among customers. Conversely, if a product is overstocked, it can lead to increased storage costs and eventual obsolescence. You need to conduct forecasts and ascertain the appropriate amounts of inventory to store during a given time frame. 8 Best Practices to Solve the Challenges and Streamline Your Retail Operations in 2023 Automate Tasks Wherever Possible Source Automating some of your retail operations will optimize your daily administrative tasks, making it simpler to maintain accurate inventory records and assist in guiding future purchasing decisions. While keeping track of inventory using extensive spreadsheets can seem like a tempting prospect, it can soon spiral out of control. It takes time and you run the risk of making business decisions that are poorly informed and subject to blunders. Instead, integrate all of your inventory and point-of-sale systems so that laborious tasks are taken care of. With the use of top-notch software, you can gain access to features like inventory reporting, automated replenishment orders and low-stock notifications. Additionally, when a product is sold, received, or returned, inventory management software reliably syncs your data across channels in real-time. Consolidate Your Online and Offline Selling Efforts Source Before making an online purchase, customers generally prefer to physically inspect the products. Hybrid shopping, which is a combination of online and offline shopping, is the main purchasing method for 27% of customers and 36% of Gen Z, which is more than any other generation and indicates that it will only increase in the future. Despite trends toward increased internet shopping, 72% of customers still use physical stores as their primary means of shopping. Retailers must accommodate client preferences for both online and in-person purchases to ensure they have a positive experience and that all their requirements are met. Streamline Your Inventory Management Procedures Source Managing your inventory in an organised manner can make the difference between the success and failure of your retail operations. It pays to invest in a comprehensive inventory management software that can handle all your inventory-related requirements. Systems for inventory management will assist your company in providing accurate and live inventory updates. They can additionally provide capabilities for efficient demand planning and forecasting. This enables you to identify demand using the relevant data and restock the appropriate products whenever you need to. You can also monitor your financials in real-time if your inventory management and accounting data are integrated into a single system. Optimize Returns Management Source Retailers lose a vast amount of revenue in sales each year as a result of returns. Returns don't necessarily signify the end of the customer's relationship with your company. Instead, refunds present a chance to further comprehend the needs of your clients and give them a flexible solution. Take advantage of the chance to find out more about the precise product details your buyer is looking for. You can also provide customers with the option of getting a gift card in exchange for the returned items so that they can decide to purchase anything else at a later time to entice them to use your business again. Simplify Your Checkout Process Source The rate of online shopping cart abandonment in the retail sector is approximately 76%. Additionally, a drawn-out and challenging checkout procedure is to blame for 18% of all cart abandonments. You can encourage customers to click "purchase" and complete their orders by optimising your checkout procedure. Additionally, for retailers that sell at physical storefronts, using a mobile POS system enables store workers to accept payments anywhere in the store, practically eliminating checkout lines. Customers benefit from a quick checkout process thanks to line-busting techniques by having shortened waiting times, simpler payment procedures and reduced complexity. Learn more about Checkout Page Optimization here. Organise Your Warehouse Layout Source Any online and offline retailer will want to have a well-organized warehouse, whether they are storing a product in-house for long periods of time or providing same-day or next-day delivery. One suggestion is to locate more commonly bought commodities near packing and processing units. Although it might seem obvious, this is frequently ignored. Management should also collaborate with the personnel and supervisors in the warehouse. The business can benefit from employee ideas for time and labour-saving product storage layouts. A tidy, well-maintained stockroom will be beneficial to all enterprises, even the smallest ones, as products can be located, packaged and dispatched faster and more efficiently. Identify and Reward Recurring Customers Source Repeat customers contribute immensely to the success of any business, so your company should monitor who they are and reward them for their patronage. Utilize online account analytics and loyalty programmes to keep track of your customers. Make sure to tailor offers and rewards in accordance with data on each person's purchasing preferences. Use social media, email and SMS to send clients personalised communications about new product launches and promotions. You can also offer them gift cards or discounts for items that they require to show that you appreciate their business. Hasten Your Order Fulfillment Source Customers in today’s retail sector demand speedy delivery of their purchases because of the growth of same-day and next-day delivery from not only eCommerce behemoths like Amazon but also from the majority of companies that seek to be competitive. In order to be on equal footing, your business must offer quick and hassle-free deliveries. Workflows for order processing and fulfillment can be automated to speed up the procedure and minimise human errors. Even if you depend on the postal service, you should try to speed up the process from your side as much as you can. This will enhance customer satisfaction and increase the probability of repeat purchases, and positive feedback and word-of-mouth marketing. Conclusion: How WareIQ can Help Improve Your Retail Operations Retail operations encompass a wide range of activities that are crucial for the success of a retail business. Effective management of inventory, staffing, marketing and customer service can help to increase sales, improve customer satisfaction and ultimately lead to a more profitable business. Therefore, it is imperative that your business puts in the time and effort to analyse, assess and improve all the tasks involved in retail operations so that you can reduce costs, effort and time, and provide your customers with an exemplary experience. If you need assistance with streamlining your retail operations, look no further than WareIQ. WareIQ is an eCommerce fulfillment company that specialises in tasks such as order fulfillment, inventory management, returns management and much more. The company has emerged as one of the fastest-growing options in India and provides its clients with a vast pool of resources and technological solutions to tackle every requirement. Some of our services include: Inventory Management: Our specialized WMS offers real-time alerts and the capacity to automate a number of processes.Fast Order Fulfillment: We provide reliable same-day and next-day shipping alternatives through our partnerships with the largest shipping companies in the world. Product Storage: With our assortment of dark stores and fulfillment facilities available across India, we can hold your products wherever you need them.Personalized Packaging: We provide specialized custom packaging options that can be adjusted to meet your needs.Returns Management: We handle returns and safeguard you from any repercussions that may follow. Retail Operations: FAQs What is the main purpose of retail operations?The main purpose of retail operations is to manage and coordinate the day-to-day activities of a retail business, including inventory management, staffing, marketing and customer service. The goal is to increase sales, improve customer satisfaction and ultimately lead to a more profitable business. What are some key components of retail operations?Some key components of retail operations include:- Inventory management- Staffing- Marketing- Customer service- Order processing How does inventory management impact retail operations?Inventory management plays a crucial role in retail operations as it involves keeping track of products in stock and forecasting future demand. Maintaining an optimal level of inventory is crucial, as having too much can lead to stockpiling and wasted resources, while having too little can result in stockouts and lost sales. Effective inventory management can help to reduce costs, increase efficiency and improve customer satisfaction. What is the importance of customer service in retail operations?Customer service is a vital component of retail operations as it helps to build customer loyalty and increase sales. Providing excellent customer service can help to create a positive shopping experience for customers, which can lead to repeat business and positive word-of-mouth advertising. Additionally, addressing customer complaints and issues in a timely and effective manner can help to maintain customer satisfaction and prevent negative reviews and a bad reputation. How can technology be used to improve retail operations?Technology can be used to improve retail operations in various ways. Some of them are listed below:- Automating inventory management and tracking- Enhancing customer service through chatbots and AI-powered virtual assistants- Improving marketing efforts through data analytics and personalization- Streamlining staffing and payroll processes- Enhancing the in-store shopping experience through digital displays, mobile apps and other digital technologies
January 27, 2023
5 Easy Steps to Find and Choose a Fulfillment Center for eCommerce Sellers in 2023
eCommerce as an industry comprises many different processes that are involved in multiple business facets. However, the main goal is to get customers to purchase your products and deliver the items to them, so you can eventually make back the money you spent on research and development, production, marketing, and order fulfillment. In order to carry out all these tasks seamlessly and without any overlap or conflicts of interest, there needs to be a secure location where multiple processes can happen without any external constraints. For instance, most eCommerce companies require a storage facility where they can keep their inventory to prepare for upcoming fulfilling orders throughout the year and also has the necessary infrastructure in place to organise, locate, pack and dispatch inventory whenever a new order comes in. Fulfillment centers not only accomplish these things but can also have multiple other benefits for your business. In this blog, we will take a look at the meaning, benefits, and 5 ways to choose a fulfillment center for eCommerce. What is a Fulfillment Center? A fulfillment center is a type of storage facility or distribution center where inventory is received, stored, and then packaged and ultimately shipped to customers every time an order is confirmed. These centers are used by companies that sell goods online for multiple applications, such as D2C, B2B, B2C and more, to handle the logistics of getting products to customers in a timely and efficient manner. Fulfillment centers are often operated by third-party fulfillment companies that specialize in order fulfillment and logistics. Additionally, they also run some impressive technology behind the scenes, such as WMS software, automated processes, SKU tracking facilities, and much more. This helps with inventory management and makes sure that all your products are stored in their respective locations so that they can be easily accessed and identified when an order comes in. While fulfillment centers enable regional and nationwide order fulfillment, a new wave of fulfillment centers, termed micro fulfillment centers or “dark stores”, have emerged as a smaller-scale alternative that enables hyper-local fulfillment and sub-30-minute deliveries by using the same philosophy that fulfillment centers operate on, just scaled down to a more localized level. [contactus_lilgoodness] Why Should eCommerce Businesses Use a 3PL Fulfillment Center? Streamlines Monetary Spending Fulfillment centers allow retailers to store and ship large quantities of products at a lower cost than if they were to handle fulfillment in-house. A large part of it is due to the bulkiness and scale of the inventory stored, which aids retailers in getting large discounts for the amount of total storage space they acquire. Additionally, many other important fulfillment services, such as picking, packing fulfillment service and shipping services, take place within fulfillment centers, reducing the need to spend money on doing them, either in-house or externally. All these factors together contribute to an improved use of financial resources since partnering with a fulfillment company and using their fulfillment centers is a single, recurring expense. Takes Care of Inventory Management and Storage Fulfillment centers use advanced technology to quickly and accurately pick, pack and dispatch products, which can help increase efficiency and reduce errors. The use of WMS software in most fulfillment centers also helps with improving inventory management processes by optimizing storage locations based on factors such as size, dimensions, value and nature of individual products. Items can also be grouped together to make the best use of the available storage space. This helps increase storage capacity and enables you to store your products in an easy-to-identify and accessible way. Improves the Overall Customer Experience Fulfillment centers can help you offer faster shipping times and a wider range of delivery options, which can improve customer satisfaction and loyalty. Additional services, such as branded packaging, order tracking and returns management, can also be in place, depending on the company’s offerings, making sure that customers have a one-of-a-kind experience when they purchase an item from your store. Due to the optimization of many fulfillment services, transit times and errors will also be cut short, adding to the enhanced experience that customers will have. Provides Increased Flexibility In many fulfillment centers, you can choose from a variety of fulfillment-related services, from kitting and assembly to returns processing and inventory management, to create a customized fulfillment solution that meets their specific needs. Many companies also offer flexible payment schemes where you only need to pay for the facilities you use. This can help your business seize control of its expenses and help it get assistance in the areas where it really needs it, while saving money in other areas where you don’t need any external help. You can also focus on their core business, such as marketing and customer service, while the fulfillment center handles the logistics of getting products to customers. Offers Enhanced Scalability Fulfillment centers can accommodate your growth and can handle an increase in orders during peak seasons due to their ability to ascertain the most efficient way to store inventory. Additionally, most companies provide multiple fulfillment centers so you never have to worry about running out of storage space. Many companies also equip their fulfillment centers with the necessary tools to help with scaling up operations in terms of inventory management, storage, and order fulfillment. Because of this, your business can seamlessly scale its eCommerce operations while also making sure that quality and organization are maintained. Choose a Fulfillment Center for eCommerce With These 5 Easy Steps Step 1: Get the Business Data like Product Dimensions & Weight, Required Storage Space, Current Daily Order Volumes, Demand Centers, etc. Ready Source When you choose a fulfillment center for eCommerce, it is important to provide your prospective 3PL company with all the information they need to give you a proposal for their list of services and a quotation for what they are offering. Because fulfillment centers will be the primary storage facility for your inventory, from where they will be dispatched and eventually delivered to customers, you need to supply data such as your entire product catalog, current order volume and sales figures, estimated demand for a specified future time period, historical inventory data and more. Additionally, you will also need to mention more nuanced details about the products you are planning to store, such as their dimensions, value, price, weight and more, so the fulfillment center provider can successfully ascertain how much storage space you’d require and the facilities you’d need. Step 2: Shortlist Storage or Warehouse Location(s) that Optimizes the Speed of Delivery Source It is important to conduct some research and identify which regions the majority of your orders are coming from. This will allow you to choose a fulfillment center for eCommerce that is in close proximity to your customers so that orders can be delivered faster and more cost-effectively. Many companies provide storage networks that span various regions and metropolitan areas, so knowing where you need to ship your items will give you a good idea of where they need to be stored. You should also determine the scale of your inventory and whether it will need to be stored across multiple fulfillment center locations or if just one will suffice so you can preemptively gauge what your storage costs will be and take the necessary steps to reduce them. Step 3: Identify Your Business Requirements Source Not all fulfillment centers offer the exact same facilities. While most of them offer basic storage units and other relevant technology, such as WMS software and product tracking capabilities, some provide more meticulous features and specialised services for specific types of products, such as heavy machinery for bulky items, cold storage for perishable goods and storage bays that can store hazardous materials. If you deal in unconventional products or require a specific type of service, it is important to understand the steps your storage facility needs to take in order to store them securely and preserve their shelf life. Step 4: Examine the Quality and Pricing Quotations of Various Fulfillment Services Source Fortunately for sellers, there are many competing companies vying to participate in providing storage facilities and other services. While choosing a fulfillment center for eCommerce, it is important to get offers and pricing quotations from multiple options so you can compare them with your own requirements, and short term and long term goals. For instance, a company may have the facilities you need right now but may not have good enough scalability. Thus, choosing such a company will be based on your own sales numbers and expansion prospects. Conversely, there are companies that also provide a wide range of features so you need to analyse whether you would actually use those services or be better suited opting for a cheaper company that provides the right balance of essentials. Step 5: Choose the Fulfillment Center and FC Locations That Aligns with Operational Goals in Terms of Cost and Scalability Source The last step involved in choosing a fulfillment center for your eCommerce business is actually shortlisting a company and biting the bullet. We have already highlighted the importance of their services coinciding with your objectives, so you should only make this decision after careful deliberation. If all goes well, you can use the same company for years to come and can take its assistance with scaling your services. On the flip side, if you just need an urgent storage facility that doesn’t break the bank, you can identify an option that fits the bill. Either way, make sure to choose one that can fit your current warehouse capacity and that can provide additional facilities in the future if and when you need them. This will help you have a good relationship with the company and also prevent the need of searching for one again in a hurry. Conclusion: Utilize WareIQ’s Nationwide Fulfillment Center Network to Enhance Your Services Fulfillment centers play a crucial role in the eCommerce industry by helping retailers handle logistics and improve customer satisfaction. By utilizing the benefits that fulfillment centers offer, you can streamline their operations, save money and increase revenue. By offloading most logistics and distribution managemen tasks to fulfillment centers and the 3PL companies that operate them, you will also have more time and freedom to explore different retail options, launch new products, and market existing ones. Keep in mind that not all fulfillment centers are the same and there can be major disparities in the scope and applications of the facilities they offer. Compare your requirements with the services your prospective 3PL company offers and choose the one that coincides with your vision the best. If you need access to a nationwide network of fulfillment centers with all the bells and whistles, consider partnering with WareIQ. WareIQ is one of India’s fastest-expanding eCommerce fulfillment companies. eCommerce fulfillment is our bread and butter and we help our clients get exposure to success by giving them access to multiple facilities. Some of them are listed below: Nationwide Fulfillment Center Network We offer a pan-India storage network of fulfillment centers and dark stores that aid in your products being stored in close proximity to areas of high demand, ensuring that orders are always fulfilled on time. Intelligent Inventory Placement We provide AI and ML-based recommendations to help you get the most out of every SKU by storing them specifically where they are likely to be sold. Product Categorization To improve your sell-through rates, we can intelligently classify your SKUs depending on their performance, demand and other variables. Outstanding Forecasting Techniques We assist you with demand forecasting using past data so that you can adjust your inventory levels more effectively. Automated Stock Replacement To guarantee that your best-selling products are constantly in stock, we offer automated stock replenishment alerts that can be customised according to your preferences. Choose a Fulfillment Center for eCommerce: FAQs What are some of the factors to consider when choosing a fulfillment center for eCommerce?There are many factors to keep in mind while choosing a fulfillment center for your products. Some of them are listed below:- Location- Storage capacity- Shipping capabilities- Order processing- Returns management How do fulfillment centers work?Fulfillment centers receive products from manufacturers or distributors, store them in their warehouse and then ship them to customers when an order is placed. They typically use advanced technology and software to track inventory and manage orders. What services do fulfillment centers offer?Fulfillment centers typically offer a variety of services. Some of them are listed below:- Inventory storage- Product packaging- Order shipping- Returns management- Customer service How are items stored in a fulfillment center?Items are typically stored in a warehouse and organized by SKU or product category. They are often stored on shelves or in bins and retrieved using forklifts or other equipment. How do fulfillment centers handle shipping?Fulfillment centers package and ship orders using a variety of shipping carriers such as UPS, FedEx, and DHL. They also handle customs and import/export documentation for international orders.
January 25, 2023
Top 10 Best eCommerce Order Fulfillment Companies to Grow your Online Business in 2023
E-Commerce fulfillment is an important business component to ensure that orders are delivered to customers on time. Receiving inbound wholesale shipments, sorting stock, and shelving inventory for efficient picking and packaging before it gets to the customer's doorstep is all part of order fulfillment. Order fulfillment setbacks for startups and SMEs can harm their business and operational efficiency. As the company grows and attracts customers worldwide, creating an order fulfillment system has gotten more difficult. Customer satisfaction and income can suffer if the order fulfillment procedure is inefficient. As a result, the company's reputation is also affected. Read along to understand how eCommerce fulfillment companies and dropshipping fulfillment companies can help eCommerce & D2C brands to grow their business and list of top fulfillment companies for eCommerce. What Do eCommerce Fulfillment Companies Do? E-commerce fulfillment companies specialise in order processing and delivery. This procedure includes receiving and storing goods, processing orders, picking and packing, inserting packing slips, and eCommerce shipping. These companies use software that connects to the seller's website. Companies providing eCommerce fulfillment services inspect the products, pack them, and ship them to the consumer once an order is placed. They also help retailers with inventory management and tracking. Orders are also stored at eCommerce fulfillment facilities. eCommerce fulfillment services can be performed by third-party order fulfillment companies that will manage all of the eCommerce operations when an order is placed, allowing businesses to focus on marketing and product development. Order fulfillment helps startups/small businesses, and SMEs alleviate the burden of having a physical location or a dedicated storage facility to fulfill orders. [contactus_uth] Self-Shipping vs eCommerce Fulfillment - What is Right For You? [table id=10 /] What are the Benefits of Using Fulfillment Companies? Key benefits of using eCommerce fulfillment companies for the order fulfillment process include Remote inventory management: With the service provider's warehouses, businesses will not require dedicated physical storage spaces. For a flawless order fulfillment experience for the customer, fulfillment companies for eCommerce can be accessed on-demand or long-term at any preferred location.A shorter distance between source and delivery location: By shortening the distance between the product's source and the customer's location, eCommerce fulfillment centers can ensure speedier order fulfillment. Optimised storage: Businesses can easily store stock goods in areas with the largest volume of orders using eCommerce warehouse fulfillment technologies provided by the service partner. (Note that different types of eCommerce warehouses are used for different functions)Improving customer satisfaction: Positive feedback from customers about a speedy and flawless delivery process. Businesses may improve brand loyalty and promote repeat purchases by providing a pleasant client experience. Must-Have Features of eCommerce Fulfillment Companies When businesses partner with 3PL fulfillment companies for eCommerce order fulfillment, the following features should be provided with the help of an app integration for better order management: Warehousing: The fulfillment center should store and manage inventory and process them based on customer orders.Order Picking: When a customer places an order, the fulfillment center should promptly pick up the required order items from the warehouse to process them for delivery.Order Packaging: Once the required items are picked up from the warehouse, the fulfillment center should work on packing them appropriately to ensure that they arrive undamaged at the customer's location. If the customer has placed multiple orders, they should also work on clubbing all the SKUs to have a combined package created with a single shipping label to deliver it easily.Shipping: Once the order is packed and ready to go, they should have it shipped from the fulfillment center to the customer's location to ensure a quick delivery. Fulfillment companies for eCommerce should share real-time tracking details with the seller and the customer for order visibility.Returns management: In case an order is undelivered or is returned by the customer, the same should be processed by the eCommerce fulfillment center and accordingly added back into the business's inventory (if the products are undamaged and unused).eCommerce platform and multi-channel integration: Integration with all eCommerce platforms is critical for eCommerce fulfillment software. This ensures that no orders are overlooked, which leads to decreased customer satisfaction.Access to a customer portal: The software of fulfillment companies needs to provide a good platform for customers. Customers that order frequently may choose to use a customer portal to alter invoicing and delivery options, track order fulfillment status, and examine prior orders. This feature also helps detect anomalies, identify frequent returners, and other factors that can be looked into to improve logistics and customer satisfaction. Technology-driven 3PLs simplify businesses to integrate their online store with their system. This creates a two-way information flow, allowing business owners to monitor inventory levels in real time. They also have access to dependable, accurate, and transparent data. Top 10 eCommerce Fulfillment Companies for Growing Online Stores [Updated List for 2023] WareIQDHL FulfillmentShipBobDeliverrShipMonkFBA (Fulfilled by Amazon)Falcon FulfillmentRakuten Super LogisticsFedEx FulfillmentRed Stag fulfillment WareIQ Fulfillment Company Source WareIQ, one of the top fulfillment companies is a category-defining, best- in class full-stack eCommerce fulfillment tech platform (with inbuilt inventory planning, order management & shipping system) for modern brands to accelerate online sales/ expedite revenue growth & profits with same/next-day delivery. A few of the important features of WareIQ are as follows: Pan-India Fulfillment & Darkstore NetworkPlug & play with no minimumCompliant with Amazon Seller Flex, Myntra, Flipkart Assured & other marketplacesRegional Sourcing hubs to cut first mile costsIn-house managed warehouses – no outsourcingInventory & Network Planning ExcellenceBest-in-class AI models for sales forecasting & auto-replenishment triggersProduct segmentation according to product type (Regular, Non-Regular, Seasonal, etc.) to improve sell-through focusVertically Integrated Fulfillment Tech StackIntegrated with 20+ top marketplaces (national and international marketplaces) & D2C platformsIntegration with National, Regional and Hyperlocal couriers, covering 27k+ pin codesOne unified tech stack for OMS & WMSSupply Chain Productivity ApplicationsRTO Shield – 100% RTO protectionBranded Tracking – Create the BEST post-purchase experienceEngage – Alert customers on shipment status through Whatsapp, SMS, and EmailCustomer Feedback – Gather feedback, improve customer experience & trustWareIQ RushOffer same-day delivery at no MOQ or distance-based billingJump in revenue conversion up to 30%Near-zero RTO%NDR & COD Verification via WhatsappReduced Cost per Shipment (CPS) DHL Fulfillment Company Source DHL Supply Chain, a division of Deutsche Post DHL, introduced the India fulfillment network (IFN) to enable businesses to power their e-commerce business models by providing access to omnichannel distribution capabilities across major markets, according to a press statement. Through additional ready-to-use hubs, their fully integrated end-to-end fulfillment solution on a 'pay per usage' basis helps firms de-risk. Some of the features of DHL IFN fulfillment company for eCommerce are: One-view tech platform for processing orders, inventory management, order fulfillment & delivery to the end consumersNext-day delivery in over 80 citiesRange of B2B & B2C warehousing servicesSeamless logistics managementInventory optimisation, smoothing, and synchronisationIn-plant logistics; just-in-time inventory and Kanban replenishment of raw materials/components to manufacturingVendor-managed inventoryInbound handling, consolidation, and global distribution to outstations ShipBob Fulfillment Company Source ShipBob has no order minimums and aside from Amazon, has the largest network of domestic and international fulfillment centers on our list, allowing it to provide high-level distribution capabilities. ShipBob provides several eCommerce-related services. Businesses can obtain quick access to a variety of web integrations, eCommerce inventory features, and advanced filter capabilities. ShipBob, which has been in business since 2014, delivers great customer service and assigns each online business its dedicated account manager. Some features ShipBob has are Affordable pricingB2B fulfillment with EDI complianceItemized billing format for transparencyFDA-certified climate control and handlingFBA prep services Deliverr Source Deliverr is an excellent option for startups, especially if the majority of their customers are located in the United States. Deliverr, like Amazon Prime, offers 2-day shipping across several shopping channels. What sets them apart is their transparent pricing. Sellers may find out exactly how much their estimated spend will be by inputting product information into the cost calculator on their website. Deliverr has some drawbacks, such as the lack of return processing and subscription box kitting. Some of the features include: All-in-one fees include receiving and fulfillmentReal-time inventory and order trackingFree trials for limited SKUsFast-shipping tagsSmart algorithm to allocate inventory across Deliverr's fulfillment warehouse network intelligently ShipMonk Fulfillment Company Source ShipMonk's platform is tailored to match the business' scalability needed to accommodate growth. But they do not provide batch fulfillment services and require a minimum of $250 in pick and pack fees. ShipMonk has been around since 2014. ShipMonk specialises in B2C eCommerce, subscription boxes, and crowdfunding projects and offers a wide range of fulfillment services. They also provide access to a vast list of integrations from which to choose while assessing the best possibilities for your business. ShipMonk is recognised for its subscription fulfillment services, but that's only a small part of what they do for customers, and its services may be customised to meet their specific needs. Key features include: Amazon seller-fulfilled prime eligibilityOnline billing portalWarehouse automationRobust customisation & branding optionsTax benefits and cost reductions for volume importersNo setup or inventory receiving feesDiscounted shipping ratesClaims managementInternational order processingPhotos of packed orders before they’re shipped FBA (Fulfilled by Amazon) Source Because of its automatic Prime designation, FBA gives sellers better access to Amazon's over 150 million Prime subscribers. FBA is a good option for Amazon retailers since it handles all customer inquiries, administers returns and refunds, and automates order fulfillment, saving time. However, FBA's pricing and procedures are more complicated than those of many other fulfillment warehouses, particularly when selling large or heavy items, so do your study to avoid paying excessive fees. Its key features are: No order minimumsHandling all customer inquiries, refunds, and returnsFBA can fulfill non-Amazon ordersUses inventory pooling that groups identical products from different sellers Falcon Fulfillment Source Falcon is one of the leading eCommerce fulfillment & warehouse service providers specialising in health and wellness and cosmetics fulfillment and was founded in 2015. Falcon Fulfillment provides straightforward pricing and a simple platform to scale as your company grows. The company presently only covers the United States. Due to the 4,000 minimum monthly order requirement and the lack of overseas Warehouses, Falcon is a good choice for established eCommerce vendors who have their customer base in the US. Another disadvantage is that some integrations necessitate the use of ShipStation. Some of their features include: Live order editingCustom packaging optionsEco-friendly packaging optionsKittingReturns management Rakuten Super Logistics Company Source Rakuten Super Logistics provides packaging and shipping services and is one of the best eCommerce fulfillment services suited for enterprises. They also assist eCommerce sellers with marketing. As a company that serves enterprises, Rakuten offers personalized pricing quotes and tailors services to meet the needs of the enterprises. Rakuten does not have global fulfillment centers, specialised packaging, or DHL integration, despite being a favoured fulfillment provider for enterprises. Key features of Rakuten include: Tailored services for enterprisesIntegrated marketing services at additional costs1-2 day ground shipping in the United StatesSpecialty fulfillment centersKitting and subscription box services FedEx Fulfillment Company Source For international delivery and order management, FedEx Fulfillment is the best option. FedEx Fulfillment Services are modular and adaptable, allowing businesses to develop and customise options to meet their specific requirements. In the extremely competitive aftermarket and critical inventory business, FedEx Fulfillment Services offers a strategic advantage. The FedEx Global Distribution Centre (GDC) provides hub-based warehousing for both forward and reverse logistics, with the capacity, environment, and experience to store, organize, and ship orders when it's needed. FedEx, on the other hand, does not offer product-based batch fulfillment, and while there are no setup fees, it does levy account fees when orders fall short of the minimum requirement. Features of FedEx fulfillment are: Global footprintRange of eCommerce integrationsEasy-to-use platformExtensive delivery networkFast shipping and returns management Red Stag fulfillment Company Source Red Stag can handle a wide range of product orders, but it specialises in packing and shipping larger, heavier items. They have remarkable scalability, allowing them to fulfill the needs of both small and large businesses. Red Stag Fulfillment's extended services provide various elements that eCommerce business owners may make use of to assist them to get products to their intended destinations quickly and efficiently. Red Stag excels at handling complicated shipping requirements and heavy cargo. Key features include Video monitoringExcellent customer supportA pallet delivery systemSame-day shipping and order completion guaranteefulfillment warehouse networkExcellent scalability Costs and Challenges of Partnering with Fulfillment Companies Having an eCommerce fulfillment partner for order fulfillment does not require any upfront capital. While the costs of fulfillment services can vary based on the provider being chosen, most of their revenue comes from long-term storage costs. However, other associated costs include Setup feesWeight ChargesPackaging feesProcessing and Returns costsAccount ManagementCustomer Support costs Additional one-time costs for other things may also be a part of the fulfillment center fees. Examples are order cancellations, SKU labeling, barcoding, payment card processing, marketing inserts, product assembly, etc. A few challenges that businesses can experience when partnering with an eCommerce fulfillment center are Limited inventory of what the business ownsStock replenishments to the fulfillment centerThe upfront investment for services like warehousing and distributionBad service from the 3PL partner affects the business reputation 5 Questions to Ask While Choosing New 3PL Fulfillment Provider in 2023 You have to consider a bunch of factors while choosing a fulfillment provider. Here are some important questions to ponder before you make your decision: Does the eCommerce fulfillment company have a PAN-India presence? It is your key takeaway in partnering with a 3PL and cannot be compromised. For instance, WareIQ has a network that can cover 90% of cities in India with over a million population for next-day delivery. That’s the kind of presence you should look for. How easy is it to scale? Traditional 3PLs that have vertical integrations face certain limits in this aspect. A decentralized inventory network that WareIQ has, allows us to scale to new demand centers quickly. Does the fulfillment provider have minimum requirements or rigid contract sizes, terms, etc? You will find that most providers would have certain criteria which may not be favorable for all parties and at all times. A good provider must be flexible with client requirements. For example, WareIQ provides the option of micro-fulfillment where you can start with something as small as a single rack. Does the provider give technology-powered value-added services? In today’s data-driven world, analytics on inventory placement and supply chain can be extremely helpful in staying efficient and cost-effective in all our operations. WareIQ is able to provide the same with its in-house software platform. How easy is it to integrate your business into the supply chain of your 3PL partner? When you are shifting to your new partner, you might not want to wait for too long before the end-to-end flow is set up. A traditional 3PL firm might take from 3 to 6 months for the same. WareIQ is able to onboard new partners within a week! Why WareIQ should be your Preferred Fulfillment Company for eCommerce Business? WareIQ, is a leading provider of full-stack eCommerce fulfillment services in India for some of the most reputed brands in India. WareIQ, a fulfillment company for eCommerce offers a full-stack platform for eCommerce companies to enable same-day delivery and next-day delivery to customers – an Amazon Prime-like experience but accessible to everyone. The immediate and most important benefit you can get when you choose WareIQ as your preferred order fulfillment company is the ability to safely deliver your products across the country (including tier 2 and 3 cities) faster than ever before. It will give you the wings needed to provide an Amazon-level service. Beyond this, there are other interesting benefits. Once you hand over the management of eCommerce logistics to the right 3PL provider like WareIQ, you will be able to make time to focus on other important aspects of your business like brand marketing, launching new products, etc. The job of getting them to your customers is out of your concerns with a trusted partner.WareIQ platform is powered by cutting-edge technology that makes it super easy to track and monitor your orders in real-time.Features like smart inventory placement offered by WareIQ can further help your business drive sales on time at high-demand locations. [signup] eCommerce Fulfillment Companies FAQs (Frequently Asked Questions) What is an eCommerce fulfillment company?The component of your eCommerce company that involves operations after receiving an order till the delivery of that order to the end customer is known as eCommerce fulfilment. These include picking, packing, shipping, and delivery of product to the customer's door. What are the different types of Order fulfillment?Order fulfilment is divided into four categories: in-house, outsourced, dropshipping, and hybrid. Why should you outsource fulfillment to 3PL Fulfillment Companies?· Ready Infrastructure that can handle the ups and downs of your ecommerce operation· Processing orders efficiently· Focus on your core expertise to build your ecommerce business.· Reduce costs of ecommerce delivery· Get actionable information and best technologies· Expand your geographic footprint with warehouses across India· Leverage existing integrations to your advantage What is the Fulfillment cost?Fulfillment costs in warehousing are the total of all charges incurred throughout the process of moving merchandise from receiving to distribution.Fulfillment costs can include:i) Warehousing and storage costs: These are the expenses associated with storing and managing inventory, including rent, utilities, and staffing.ii) Picking and packing costs: These are the expenses associated with preparing orders for shipping, including labor, materials, and equipment.iii) Shipping and handling costs: These are the expenses associated with actually delivering orders to customers, including the cost of shipping labels, packaging materials, and carrier fees.iv) Return handling costs: These are the expenses associated with processing and handling returns, including labor, materials, and any restocking fees.Fulfillment costs are a key factor to consider when running an e-commerce business, as they can have a significant impact on your bottom line. It is important to carefully manage and track these costs to ensure that they are as low as possible while still providing a high level of service to your customers. How do we calculate fulfillment costs?Fulfillment cost per order = Total warehouse cost per order - total warehouse costs divided by annual orders shipped. Are there any affordable eCommerce warehousing options for small businesses?Yes, there are affordable e-commerce warehousing options for small businesses. Here are a few options to consider:i) Self-storage units: Renting a self-storage unit can be a cost-effective way to store inventory if you don't need a large warehouse space. This can be especially useful if you don't have a lot of inventory or if you only need storage on a temporary basis.ii) Shared warehousing: Some companies offer shared warehousing space, where businesses can rent space on a per-pallet basis. This can be a cost-effective option if you don't need a lot of space or if you only need storage on a short-term basis.iii) Third-party logistics (3PL) providers: Third-party logistics providers offer warehousing and fulfillment services at a lower cost than some larger fulfillment centers. They may be a good option for small businesses that need a more comprehensive solution.iv) Online marketplaces: Some online marketplaces, such as Amazon and eBay, offer fulfillment services for a fee. This can be a convenient option for small businesses that sell products through these platforms.By carefully considering your storage needs and shopping around for the best options, you may be able to find affordable e-commerce warehousing solutions for your small business. What are the best eCommerce warehousing companies?There are many e-commerce warehousing companies in India that offer a range of services. Here are a few companies that are known for their quality and reliability:i) WareIQii) Ecom Expressiii) Delhiveryiv) E-Courierv) GoJavasvi) XpressBeesvii) Aaj enterprisesIt is important to research and compare different companies to find the one that best meets the needs of your business. Factors to consider include the services offered, pricing, location, and reputation.
January 17, 2023
What is a Fulfillment Center? Top 10 Benefits of Using Fulfillment Warehouse for eCommerce Businesses in 2023
One of the most prominent challenges facing businesses looking to expand into the eCommerce space is identifying where to store inventory and how to implement a strategy to ensure that incoming orders are located, packed and shipped as soon as possible. While many big MNCs have tons of staff to help on this front, small businesses, oftentimes, do not have that same luxury. This is where a fulfillment center would make life tremendously easier for these companies. What is a Fulfillment Center? A fulfillment center forms a critical part of the supply-chain network and executes the entire process of order fulfillment, from receiving an order, locating it in the warehouse and processing it right through to its packing, loading, dispatch and transportation. It acts as a logistical hub, transporting goods from the seller to the customer. Fulfillment centers are used by both 1st party fulfillment services such as Amazon FBA and 3rd party fulfillment services, such as WareIQ. A Fulfillment center works efficiently to deliver orders received by online customers within the stipulated time. In doing so, it manages the fulfillment process on behalf of eCommerce firms which is critical for their success. A fulfillment center is a warehouse or distribution center that is used to store, pick, pack, and ship orders for e-commerce businesses. These centers are essential for the efficient and timely delivery of products to customers, and play a crucial role in the success of e-commerce companies. There are several types of fulfillment centers, each with their own unique features and capabilities. Some centers focus on small, lightweight items that can be easily shipped, while others specialize in handling large or fragile items. Some centers are fully automated, with robots handling the picking and packing of orders, while others rely on human labor. [contactus_lilgoodness] How Does a Fulfillment Center Operate? As mentioned above, a fulfillment center acts as a hub for all logistical activities needed to transport a seller’s goods to their customer – this is referred to as the order fulfillment process. Since numerous factors are involved in fulfilling orders and warehouse management, the minutia is often swept under the carpet and ultimately causes severe problems such as supply-chain bottlenecks.With 3PLs, the inventory is stored in its fulfillment center. Upon receiving an order from a customer, the products are selected, packed and shipped. B2C orders are delivered directly to the customer’s address, while B2B orders (large volumes, mostly) are shipped to large-sized retailers.When a seller outsources its requirements to a 3PL fulfillment company, it can focus on other critical business functions. In contrast, a 3PL handles its inventory and ecommerce logistics, including order-receiving, packing, loading, shipping, negotiating transport rates, reducing fulfillment costs, managing order returns, warehouse management and handling scale efficiently. Top 10 Benefits of Using a Fulfillment Center for eCommerce Businesses Listed below are 10 significant reasons why eCommerce businesses should use a fulfillment center: Ability to Focus on Core Business Although the tasks of order management and shipping are crucial for success, they can be easily outsourced to a 3PL fulfillment center. Not only can clients benefit from the expertise of the 3PL but they now have more time to focus on their core business tasks such as marketing, expanding their product portfolio and refining existing ones, without the burden of having to manage customer orders on their own. Benefit from 3PL Fulfillment Expertise Collaborating with a fulfillment company makes your entire process seamless – they are the experts in the field and outsourcing your inventory storage, packing, loading, dispatch (etc.) helps you gain from their expertise. Logistics and distribution, especially in today’s global markets with complex ecosystems and processes, is a challenging and, often an overwhelming task for any seller. Outsourcing this to 3PL experts that handle these complex processes efficiently on a daily basis, is the correct way to go – your business will gain immensely from their expertise and know-how. Utilize Inventory Outsourcing & Reduce Operating Costs Unless a seller operates a company of some scale, the task of managing an entire warehouse becomes expensive and cumbersome. Outsourcing this task to a fulfillment center is far more efficient. eCommerce firms almost always start small and have limited space e.g. garages, basements etc. Outsourcing your inventory to a fulfillment center helps to reduce operating costs. Online businesses get access to inventory space without any upfront investment in infrastructure. Often, the prudent time to make the shift is also once scale starts kicking in. Benefit From an Increase in Scalability 3PL company and their fulfillment centers are connected with global supply-chain networks and equipped with significant resources to manage scale. With the number of online shoppers only slated to go higher, you benefit from their international expertise and can scale your business globally. With this scale, you can also take advantage of storing your inventory in as many fulfillment centers as you require and can efficiently manage your inventory across all of them using the tools that 3PL companies often provide. Benefit From an Extensive Network of Warehouses 3PLs have an elaborate network of warehouses and fulfillment centers and often follow a hub-n-spoke model. This means they are closely located to your customers. Therefore, the lesser distance your cargo has to travel, the lesser the delivery time and cost. Don’t forget that customers today are bred on super-speed shipping, free shipping and discounted shipping. Access to a larger network of fulfillment centers means that you can strategically store your inventory closer to areas of high demand or near transport hubs for easy shipping. Access to Modern Technology Quite expectedly, 3PL companies that operate fulfillment centers invest big dollars into cutting-edge software systems to improve their efficiency. eCommerce firms benefit from this without the CapEx required or hiring resources to operate it. These advanced software solutions can track and manage inventory across platforms and selling channels, and can automate multiple processes involved in warehouse management to mitigate any errors or miscalculations that could occur. You can also read on warehouse automation technology. Utilization of Economies-of-Scale Fulfillment warehouses operate on a tremendous scale, manage hundreds of clients and work across multiple shippers and transporters. Therefore, they also benefit from economies of scale and can negotiate discounted rates across their operations including packing materials, assets, warehouse space, software and staffing, not to mention shipping rates, which account for up to 70% of fulfillment costs. Access to Bulk Discounts Since 3PLs operate on a global scale, they benefit from it - bulk delivery discounts, zone-based shipping rates and frequent pickups are just some advantages of scale. Additionally, 3PL firms like WareIQ partner with multiple shipping providers and always suggests the fastest and cheapest options so firms can consistently save money on a massive scale. This provides an incentive for firms to partner with 3PL companies and use all the advantages that come with it. Access to Professional Customer Service While customer services is an important aspect of eCommerce retail, sellers can also take advantage of better customer service when they opt for a 3PL fulfillment center. If sellers face any issues, they are just a call, message or email away from getting them resolved. Additionally, many 3PL companies offer outsourcing facilities for customer support so sellers can transfer this enhanced customer support to their customers which will result in increased satisfaction. Access to Customized Packaging eCommerce customers only experience their product when it arrives at their doorstep and a damaged or messy package isn’t going to cut it. Fulfillment centers offer customized packaging solutions that keep packages attractive and fresh - an important element in building customer satisfaction. Sellers can choose how they want their packaging to look and can highlight their brand rather than sending shipments in a bland box or package. Access to Data Analytics Modern logistics management software used by 3PLs tracks, collects and mines data that is generated across the entire fulfillment process. This results in deep insight for managers who can use this as the bedrock for decision-making, thereby leading to more efficient planning and implementation. These tracking facilities are generally available across multiple fulfillment centers and a variety of selling platforms to keep sellers well informed about their inventory at all times. Also read: Hot to choose fulfillment center for E-commerce? Fulfillment Centers vs Warehouses: Differences and Myths Busted There are innate differences between the two and the roles each plays in fulfilling customer orders. While a warehouse simply stores inventory, a fulfillment center manages the process of ordering and delivering products to customers on time to ensure customer satisfaction. Sellers stock their inventory in 3PL fulfillment centers, situated across numerous locations. This reduces delivery times and costs. Long-Term vs. Short-Term Storage The main objective of a fulfillment center is to manage the entire process from customers placing orders till the order is successfully delivered whereas a warehouse is a storage location that is just one piece of the entire gamut of operations that a 3PL conducts. Ideally, inventory should not sit in a fulfillment center for more than 30 days since this is long-term storage and attracts higher storage fees. The seller and 3PL must communicate regularly about stock levels, re-order levels, and maintain appropriate levels of inventory based on the frequency of orders and time taken to reach customers so that out-of-stock problems don’t arise. Range of Operations While a warehouse often remains inactive since it is used primarily for stocking inventory, a fulfillment center provides comprehensive solutions and is constantly abuzz with activity, including: Receiving, packing, loading and dispatching ordersReceiving and stocking inventoryPreparing order documentation and shipping labelsKitting products (if required)Processing order returns Comparatively, activity in a warehouse is limited to receipt and dispatch of inventory. Order Pickup Frequency Since a fulfillment center gets out orders immediately on receipt, they work with several shipping companies so that goods are picked up at least once a day and often more. This ensures order delivery within the time windows promised to the customer. Often, the orders have specified delivery times (e.g. same-day, 24-hr, 2-3 days etc.) and an eCommerce fulfillment center will have various cut-off times based on order details. Warehouses, however, schedule less frequent pickups regardless of the delivery speed specified by the customer since this enables them to stay cost-effective. They also use freight companies that adhere to pre-defined pickup windows. This can often cause delays and is also inflexible. Why Do You Need a Fulfillment Center for Your Business in 2023? It's difficult to provide recent statistics on fulfillment centers for ecommerce, as the industry is constantly evolving and changing. Here are some general statistics that can prove why fulfillment centers are important for your business in 2023: According to a 2021 survey by eMarketer, around 57% of global ecommerce sales were fulfilled through third-party logistics providers, such as fulfillment centers.In 2021, the global fulfillment center market was valued at around $155 billion and is expected to grow at a compound annual growth rate of around 10% through 2026.In the United States, the ecommerce fulfillment market is expected to grow at a compound annual growth rate of around 15% through 2025, driven by the increasing demand for online shopping.According to a 2021 survey by eMarketer, the most popular fulfillment method for ecommerce businesses was shipping orders from their own warehouse (used by 49% of respondents), followed by using a third-party fulfillment center (used by 32% of respondents). Few of the reasons you need an eCommerce fulfillment center are mentioned below: Speedy Delivery Since a fulfillment company works with several shippers, their shipments are picked up at least once daily, ensuring timely deliveries. Complete Automation Modern fulfillment centers use updated technology throughout the fulfillment process so that their ecommerce clients can track order processing, inventory movement (etc.) in real-time. Improved Scalability While scaling up is the goal of every business, its mismanagement can have disastrous results. Today’s fulfillment centers are modern giants with numerous resources that tackle scale comfortably and professionally. Focus Retention Managers in eCommerce firms must focus on strategic tasks that scale the business and maintain profitability e.g. product management, marketing and customer service. Tasks like order fulfillment and inventory handling can be easily outsourced to 3PLs. Best Tips for Inventory Management Using Fulfillment Centers Modern eco-systems and borderless markets exert inordinate pressure on online resellers. 3PL fulfillment warehouses are masters at optimizing inventory management. Some of the best ways you can use them are suggested below: Reduce Costs via Cross-Docking & Wave-Picking Using cross-docking decreases handling as well as storage time and enables firms to manage warehouse inventory seamlessly. Wave-picking is another method of tackling complex shipping systems. Both reduce carrying costs and shipping costs. Stay Atop Your Supply Chain Several glitches can often disrupt an otherwise smooth supply chain. While events are sometimes unavoidable, understanding your supply chain enables you to stay on top of mishaps that sometimes throw things off-kilter. Re-Modify Your Floor Plan Often overlooked due to their simplicity, efficient floor plans are still a proven strategy to increase efficiency. However, supply and demand are forever fluctuating and floor plans should be adapted according to the situation. Minimize Pilferage Employee monitoring and security measures help minimize pilferage, and the results are often highly beneficial. This enables companies to minimise inventory shrinkage and loss due to such incidents which can have a negative impact on the company. Track Product Success Optimized inventory management means you can track sales of each product. Using this data, firms gain insights into their inventory movement. For example, the bestsellers can be stored in places where it is easier to locate, replenish, and ship out. You can follow a similar method to monitor your top clients and their orders. Similarly, you can identify your laggards and minimize their stock levels or even phase them out entirely. Utilize Inventory Management Systems If you are still using legacy inventory software, you are bound to struggle. The modern, automated software systems of today, with their large data-crunching abilities, cloud connectivity, real-time data processing and insight-generation using AI and ML tools, enable you to manage your inventory quickly and efficiently. Minimize Shrinkage Shrinkage is a fancy term for breakage, damage and theft. Select a fulfillment company that offers a zero-shrinkage policy which means that once the fulfillment center confirms and records your products, all items will be accounted for. If products go missing or get damaged on their watch, they have a reimbursement policy. What Are the Top Challenges with Fulfillment Centers and How To Solve Them in 2023? Delayed Shipping With eCommerce behemoths like Amazon increasing customer expectations with their same-day delivery and free shipping, all eCommerce companies are expected to match up. If your warehouse or fulfillment center or your specific business model cannot do so, you risk customer dissatisfaction. Due to capacity constraints and labour shortages, fulfillment centers may struggle to keep up with the increased demand for storage and shipping. Solution: Partner with multiple last mile delivery companies Customers expect fast and reliable shipping, so it's important for fulfillment centers to have multiple shipping carriers and routes available to ensure timely delivery. Regularly reviewing and improving fulfillment processes can help to ensure that orders are accurately and efficiently picked, packed, and shipped, leading to a better customer experience. Limited Locations If your eCommerce company doesn’t have an elaborate network of strategically placed fulfillment centers that minimizes the distance and time taken for deliveries, it will result in extended delivery times. The resulting customer dissatisfaction would be inevitable. Solution: Partner with third-party logistics (3PL) providers Working with a 3PL fulfillment provider can help to alleviate some of the challenges that fulfillment centers face concerning slow delivery or free shipping, as they have a wide network of warehouses and fulfillment centers spread across the country that allows them to store inventory closer to the customes Complicated Fulfillment Software While using modern, automated fulfillment software is a great strength of using a fulfillment center, they can often be complex and intimidating for eCommerce companies to deal with. Poor integration will also confuse and the results are potentially disastrous. Solution: Use a fulfillment software like WareIQ that offers a unified experience WareIQ's smart fulfillment platform allows eCommerce companies to manage all logistics operations directly from a single platform. WareIQ's fulfillment software also provides easy, plug and play integrations with 200+ eCommerce softwares. Quality Control Ensuring that orders are accurately and efficiently picked, packed, and shipped can be challenging, especially for centers with high volumes of orders. Any errors or mistakes can lead to customer dissatisfaction. Solution: Focus on quality control Implementing quality control measures, such as regular training and inspections, can help to reduce errors and mistakes in the fulfillment process. Damaged Goods & Return Inefficiency For eCommerce firms without physical locations, returned or damaged items are received back at their fulfillment center. But, if your fulfillment center doesn’t efficiently manage the order-return process, the costs are tremendous e.g. irate customers, restocking expenses and inventory losses. Solution: Implement returns management processes Developing clear and efficient processes for handling returns can help to streamline the returns process and reduce the burden on fulfillment centers. Labor Shortages Fulfillment centers often rely on large numbers of workers to pick, pack, and ship orders. If there is a shortage of available labor, it can lead to delays and reduced efficiency. Solution: Invest in automation Automation can help to improve efficiency and reduce the reliance on labor, which can help to address capacity constraints and labor shortages. Inept Customer Service We live in uber-competitive times and customer satisfaction is the most important metric in building a sustainable eCommerce business. When you use a fulfillment center, they are typically responsible for your customer service. However, if they don’t handle this efficiently by deploying omni-channel options, you risk aggravating customers. Solution: Improve customer service at fulfillment centers Fulfillment centers should have knowledgeable and helpful customer support teams in place to assist with any issues or concerns. Customers also appreciate being able to track their orders, so it's important for fulfillment centers to provide accurate and up-to-date tracking information. Out-of-Stock Costs While this will probably never go away completely, the trick is to minimize it. If not, your customers will discover other options. If your fulfillment partner doesn’t deploy the best practices in inventory management along with you in projecting demand patterns, your stock-out costs could burn a deep hole in your profits. Solution: Seek out cost-saving opportunities Fulfillment centers can look for ways to reduce costs, such as negotiating better rates with carriers or implementing energy-efficient technologies and also use inventory management software like Inventory LogIQ to reduce out-of-stock and overstocking situations. Security and Loss Prevention Fulfillment centers handle large amounts of inventory, which can make them vulnerable to theft or damage. Implementing security measures and loss prevention strategies can be costly and time-consuming. Solution: Increase security Fulfillment centers can invest in security measures, such as surveillance cameras and secure storage areas, to reduce the risk of theft or damage. You can also keep a look at the challenges faced in eCommerce fulfillment in 2023 here. Conclusion: Why is it in a Business's Best Interest to Partner with a Fulfillment Center in 2023? Ultimately, the benefits are significant for sellers that partner with a fulfillment center to handle their fulfillment. A 3PL becomes your trusted business ally and supports your business growth. The business can then focus more on refining its product and promoting it rather than worry about inventory management and order fulfillment. One such company that provides fulfillment centers and a host of other products is WareIQ. WareIQ, is the leading provider of full-stack eCommerce order fulfillment services for some of the most reputed brands in India. WareIQ offers a full-stack platform for eCommerce companies to enable same-day delivery and next day delivery to customers – an Amazon Prime-like experience but accessible to everyone. WareIQ is one of the very few fulfillment tech companies in the world that have same-day delivery service for their customers under their product “WareIQ RUSH”. With a superior WMS platform, WareIQ handles the entire range of warehouse operations in the eCommerce fulfillment process, ranging from inbound and outbound logistics such as scanning and quality checks, 100% accurate pick and pack, multi-channel inventory management etc. At the same time, WareIQ customers reduce logistics costs and increase shipping speed due to better negotiations with shipping partners, economies of scale, scope in warehousing, strategically placed warehouses and data-driven decision making. WareIQ’s customers save resources that are typically spent on establishing infrastructure. We offer you the flexibility to store inventory in one of several fulfillment centers as per your business needs. Our team’s expertise in logistics and our extensive warehousing network across India enables greater influence during negotiations, resulting in volume discounts for our clients. [signup] Fulfillment Center FAQs (Frequently Asked Questions) What is a fulfillment center?A fulfillment center is a facility similar to a warehouse, where 3PL fulfillment service providers store, process and ship products owned by online & offline retail businesses. They handle the logistics that are required to complete an order to the end customer's door as well as returns. What is the difference between a warehouse & a fulfillment center?A warehouse’s function is only to store products for a longer duration, whereas a fulfillment center's role is to efficiently meet customer shipping expectations starting from storing inventory, packing, shipping, managing returns etc. Does WareIQ have its own fulfillment center?WareIQ has a pan-India network of 40+ fulfillment centers, micro-fulfillment centers, warehouses & urban dark stores located close to customers. Is a fulfillment center capable of handling all types of products?No. If you're selling perishable goods, you'll need a fulfillment center with a cold storage facility. If you're selling heavy-duty tools or industrial equipment to businesses, you'll need a fulfillment center that can meet safety requirements and offer customized packaging. WareIQ provides both cold storage facility & customised packaging to its customers in the food & beverages categories like Epigamia, lil’goodness and much more & in the pharmaceuticals category like Gynoveda. Is a fulfillment center capable of handling a big volume of orders?Yes. A fulfillment center specializes in just that. Fulfillment centers are massive facilities with automated processes and a large, skilled staff to manage the needs of many eCommerce companies. Can we get real-time updates from fulfillment centers?You certainly can! When eCommerce businesses need to provide customers with real-time updates on the status of their orders, they need the fulfillment center and shipping company to do the same. WareIQ has a branded tracking page of its own where the customers get real time updates via mails, messages, whatsapp etc. Can a fulfillment center provide 1-day and 2-day delivery?A fulfillment center is capable of providing 1-day and 2-day delivery as well as even speedier delivery options, as long as the fulfulfillment companies offer these services. Do fulfillment centers handle inventory management?Yes. Most fulfillment centers, such as the ones offered by WareIQ, use advanced Warehouse Management Software (WMS) to provide inventory management and automates many aspects of warehousing processes.
December 22, 2022
Top 5 Challenges in eCommerce Fulfilment and Solutions To Overcome Them in 2023
The global eCommerce industry was estimated at USD 14.30 trillion in 2021 and is expected to grow to USD 58.74 trillion by 2028 at a CAGR of 26.55%. (2022-2028). The events of 2020 and 2021 did nothing more than stoke the flames. In the first half of 2020, eCommerce's retail market share grew at the same rate as it had over the previous five years. By 2024, global eCommerce revenues will increase to $6.4 trillion. So there is a sizable market there that could be profitable. Companies are reacting. According to McKinsey survey results, firms worldwide have sped up customer interaction digitization by nearly three years. Even some offline companies with physical stores are expanding into the online marketplace. Consequently, there is also a consistent rise in competitiveness. As they adjust to the most recent eCommerce trends and work to build a digital experience that meets customers' increasing expectations, eCommerce businesses are confronting challenges in eCommerce fulfilment. Other challenges in eCommerce fulfillment include preserving website security, increasing website traffic, and preserving client loyalty. In this post, we'll examine some typical obstacles that newly established eCommerce companies and those seeking to increase their online presence encounter. We'll focus more on how you can overcome these challenges and solutions to challenges faced in eCommerce fulfillment. What Is eCommerce Fulfilment? To put it simply, eCommerce fulfillment is fulfilling online orders by delivering to the right customer at the right address. When a customer orders your goods in your online retail shop, you must deliver them within a specific time frame and at the agreed-upon price. eCommerce fulfillment includes the entire procedure of sending an order to a consumer after it has been placed online. This part of the supply chain is responsible for receiving and managing inventory, order delivery, selecting products, putting them into boxes, shipping them to the customers' preferred locations, and handling returns. Any online retail business must succeed in eCommerce fulfilment. In addition to saving you time and money, a well-thought-out and expertly-managed logistics strategy also streamline your online retail operation by increasing your market reach. Furthermore, to maintain their competitiveness and develop consumer loyalty, an efficient fulfilment system is essential for eCommerce enterprises to maintain their competitiveness and build consumer loyalty. Why Is eCommerce fulfillment Required? The two-day (or even next-day) shipping alternatives are now standard for consumers. As a result, timely and efficient shipment is vital. Your business may need help delivering goods on time when your fulfilment procedure could be more reliable or convenient. You must get their stuff to them on time to please your customers. Consequently, the most crucial aspect of your organisation is eCommerce fulfillment. You must streamline and improve your order fulfilment chain to keep your company's online and physical components in sync if you want to deliver exceptional customer service and guarantee that clients return to your store for repeat business. What Leads to Challenges in eCommerce Fulfillment? 5 Biggest Challenges in eCommerce Fulfilment in 2023 and Solutions to Challenges Faced in eCommerce Fulfillment What are some typical problems with eCommerce fulfillment, and how can these be solved? To prevent costly mistakes and to be as effective as possible, it is necessary to deploy a cloud-based order management system (OMS) and automate all procedures involved in picking, packaging, and delivering an order. We've listed some of the most typical challenges in eCommerce fulfillment and their solutions. Inefficient Inventory Management Source With a well-organized structure, it's easier to avoid falling into the trap of satisfying every single customer's request and making unrealistic time commitments. An internal warehouse management system could result in improper product management and calculations, making the seemingly straightforward operation of fulfilling orders impossible. Your customers expect that the product is available when they place a purchase. However, if they don't get it right away, they lose faith in your organisation and stop giving you business. So try something different rather than handling things internally. With an efficiently managed inventory management system, brands can overcome various challenges in eCommerce fulfillment. Solution Take into consideration hiring a dependable partner to handle your order fulfilment needs. A fulfillment center that offers inventory management can be the ideal all-in-one solution because this is their area of expertise. The warehouse management system uses technology to track pertinent data and guarantee that your inventory is well-managed and always up-to-date, which helps overcome challenges in eCommerce fulfilment. You can use inventory optimization tools like Inventory LogIQ to mitigate the top most challenges in eCommerce fulfilment. Damaged or Lost Items During Transit Nothing is more discouraging than spending a whole week anticipating the delivery of an exciting new item only to discover a box full of wrong or damaged things inside. However, if you perform an excellent job of rectifying their condition, customers will be more willing to attempt ordering from your store again. If broken products are replaced regularly, the cost of doing so can rise quickly, and responding to customer service requests might turn into a second full-time job. In addition to providing the consumer with a replacement free of charge, you must also pay for any shipping expenses and reply to their messages politely and immediately. Try something new rather than the headache. Damaged and lost inventory are one of many challenges in eCommerce fulfilment. Solution The first step in the remedy is to make things right with the client immediately. Usually, this entails replacing their lost or broken belongings and giving them the benefit of the doubt. Additionally, you could provide future discounts to entice customers to come back and do business with you. To resolve this issue, you must enhance your packing and management best practices rather than only reducing them. Use sturdy containers to prevent the contents from being crushed. It's critical to ensure the containers you use to sustain the weight because they get stacked and tossed around. Verify that you are correctly loading pallets, adhering to the weight restriction, and not allowing products to protrude over the edge. By storing inventory in the proper condition, you can overcome eCommerce fulfilment challenges. Inefficient Warehouse Picking Operations Source There are many reasons why warehouse picking operations can be inefficient: Lack of a clear system: Without a clear system in place, pickers may waste time trying to find products or may pick the wrong items, leading to delays and errors.Poor layout: If the warehouse layout is not optimized for picking, it can lead to wasted time and effort as pickers need to travel longer distances to reach products.Lack of technology: Without the use of technology such as RFID or pick-to-light systems, pickers may have to rely on manual processes, which can be slow and prone to errors.Inexperienced pickers: If pickers are not well-trained or experienced, they may be slower and less accurate, leading to inefficiencies in the picking process.Large product variety: If a warehouse has a large variety of products, it can be challenging for pickers to locate and pick the correct items efficiently.Poor inventory management: If a warehouse does not have accurate inventory records, it can lead to pickers wasting time searching for products that are out of stock or in the wrong location.Limited storage space: If a warehouse has limited storage space, it can be challenging to organize products in a way that makes them easy to locate and pick.High volume of orders: If a warehouse has a high volume of orders, it can be challenging to keep up with demand and maintain efficient picking operations. Solution Use an order picking system: An order picking system, such as a pick-to-light or pick-to-voice system, can help to streamline the picking process and improve accuracy.Implement zone picking: Zone picking involves dividing the warehouse into different zones and assigning specific tasks to each zone. This can help to reduce travel time and improve efficiency.Use RFID technology: Radio-frequency identification (RFID) technology can be used to track the location of products in the warehouse and streamline the picking process.Implement batch picking: Batch picking involves grouping orders together and picking them in a single pass through the warehouse. This can help to reduce the number of trips that pickers need to make and improve efficiency.Use pick carts: Pick carts can be used to transport orders through the warehouse, reducing the amount of time and effort required to pick orders.Train pickers: Providing training and resources to pickers can help to improve their efficiency and accuracy.Review and optimize layout: Reviewing the layout of the warehouse and optimizing it for the picking process can help to improve efficiency and reduce travel time.Use automation: Automation, such as conveyor systems and robots, can be used to help with the picking process and improve efficiency. Delay in Shipping Schedule Delay in shipping schedule is one of the biggest challenges in eCommerce fulfillment. According to a McKinsey study, 46% of customers abandoned their shopping carts due to excessively long delivery times or a lack of information. There are several reasons why there may be delays in shipping schedules from a warehouse: Lack of inventory: If a warehouse does not have the necessary inventory on hand to fulfill an order, it can lead to delays in shipping.Inefficient processes: If a warehouse has inefficient processes for picking, packing, and shipping orders, it can lead to delays in getting orders out the door.Limited shipping options: If a warehouse only offers a limited range of shipping options, it may be difficult to meet the needs of customers who require faster or more specialized shipping services.Poor communication: If there is poor communication between the warehouse and other parts of the organization, it can lead to delays in getting orders out the door.Incorrect address information: If an order has incorrect address information, it can lead to delays in shipping as the warehouse tries to resolve the issue.Inclement weather: Inclement weather, such as snowstorms or hurricanes, can disrupt shipping schedules and lead to delays.Labor shortages: If a warehouse is experiencing labor shortages, it can lead to delays in getting orders out the door.Equipment failures: If warehouse equipment such as conveyor systems or forklifts break down, it can lead to delays in shipping. So timely communication is good regarding delivery dates and a fulfilling experience, particularly if your buyer has consented to receive status updates on their preferred communication channel. Solution Updates on time- Let customers know when their orders are received, packed, sent, ready for delivery, and delivered. In the event of a shipping delay, make sure to inform the customer and provide the new anticipated delivery date. When the item is returned, you can ask the customer to review their shopping experience (but wait to ask about the goods). Give more than just a tracking code- Ensure the "Orders" area of the buyer's account displays the most current shipping status with timestamps. Shipping Location Limitation Finding the ideal house in the perfect location for your purposes is similar to locating a top-notch eCommerce fulfilment facility for your clients. How soon your products reach clients is significantly influenced by where your eCommerce fulfilment facilities are located. There are several potential reasons for shipping location limitations which leads to challenges in eCommerce fulfilment: Legal restrictions: Some countries have laws or regulations that prohibit the import of certain types of products. This can limit a company's ability to ship to those countries.Logistical challenges: Shipping to certain locations may be more challenging due to factors such as distance, transportation infrastructure, or customs clearance requirements.Cost: Shipping to certain locations may be more expensive due to factors such as distance, transportation costs, or customs fees.Limited distribution network: A company may only have a limited network of distributors or partners in certain locations, which can limit its ability to ship to those areas.Lack of demand: If there is not enough demand for a company's products in certain locations, it may not make financial sense to ship to those areas.Limited resources: A company may not have the resources or capacity to ship to certain locations, either due to a lack of warehouse space or a lack of staff to handle the eCommerce shipping process.Safety concerns: In some cases, shipping to certain locations may pose safety risks for employees or products, leading a company to limit its shipping to those areas. Solution To ensure that your products reach your clients as soon as possible, select the best eCommerce 3PL provider with several warehouse locations. How can you locate a partner compatible with your clients and business? Choose a fulfilment partner with warehouse locations that match your clients' areas after researching to learn more about them. Remember your international customers. If you conduct international business, you require a fulfilment partner who can optimise international courier/shipping for both cost- and time-effectiveness. Working with a fulfilment facility that can ship products everywhere you need them and is near water is something we strongly advise. There are several ways that a company can address shipping location limitations: Work with a third-party logistics provider: A third-party logistics (3PL) fulfillment provider can help a company to overcome shipping location limitations by handling the logistics of shipping to certain areas.Establish partnerships or distribution networks: A company can establish partnerships or distribution networks in areas where it is currently unable to ship directly, which can help to expand its reach.Invest in logistics infrastructure: A company can invest in its own logistics infrastructure, such as warehouses or transportation assets, to improve its ability to ship to certain locations.Review and optimize shipping processes: A company can review and optimize its shipping processes to reduce shipping costs and improve efficiency, which can help to make shipping to certain locations more viable.Expand product offerings: A company can expand its product offerings to include items that are in high demand in areas where it is currently unable to ship.Utilize e-commerce platforms: A company can use e-commerce platforms to sell and ship its products directly to consumers in certain locations, bypassing traditional distribution channels.Work with a customs broker: A customs broker can help a company to navigate customs clearance requirements and other logistical challenges when shipping to certain locations. Conclusion In a nutshell, there are several challenges that companies can face when it comes to eCommerce fulfillment, including: Managing inventory: In eCommerce, it's important to have a clear understanding of what products you have in stock and where they are located. This can be a challenge if you have a large number of products or if your inventory is spread across multiple warehouses.Fulfilling orders quickly: Customers expect their orders to be fulfilled and shipped quickly, so it's important to have efficient processes in place to ensure that orders are picked, packed, and shipped out in a timely manner.Dealing with returns: eCommerce businesses need to have a system in place for handling returns and exchanges, which can be a time-consuming and costly process.Meeting customer expectations: Customers expect a high level of service when it comes to eCommerce, so it's important to be able to meet their expectations in terms of order accuracy, delivery speed, and customer service.Keeping up with demand: As an eCommerce business grows, it can be challenging to keep up with demand and ensure that you have enough inventory to meet customer needs.Managing shipping and logistics: eCommerce businesses need to be able to handle the logistics of getting orders to customers, which can be a challenge if you are shipping internationally or to remote locations.Integration with other systems: eCommerce businesses often need to integrate their fulfillment systems with other systems, such as their website, payment processors, and customer relationship management (CRM) software. This can be a challenge if the systems are not well integrated. Consumers are supreme in today's connected and technologically advanced world. They are always searching for the best opportunity they can find. As a result, eCommerce fulfilment has become an essential part of any online firm. This general word includes storage, inventory management, order fulfilment, and returns management. Effective eCommerce fulfilment implementation is required to provide excellent delivery experiences for your customers and get a competitive edge in the rapidly expanding worldwide market. How WareIQ Can Help You Solve the Challenges in eCommerce Fulfilment Services in 2023? Running an online store comes with its own set of difficulties. WareIQ does away with the requirement for logistics management to be one of them. We have teamed with several eCommerce businesses to simplify and expedite logistical procedures. WareIQ asserts that it uses cutting-edge technologies to deliver the most satisfying solutions. As a result, you may anticipate better order accuracy once we are on board, a clearer picture of the inventory and shipments with SLA badges, and more control over customer and shipping data. You may distribute your products to clients quickly and economically with the aid of WareIQ's extensive network of fulfilment facilities. A company that wants to expand should outsource fulfilment and logistics to a reputable 3PL company like WareIQ. WareIQ can provide you with complete supply chain fulfilment solutions so you can concentrate on the key growth drivers for your business. [signup] Challenges in eCommerce Fulfilment FAQs What are the challenges in eCommerce fulfillment?When a breakdown or blockage happens somewhere along the way, fulfillment issues develop. Before the invention and widespread usage of the Internet, businesses could frequently conceal ineffective fulfilment methods, but this is impossible with e-commerce.To summarise, the main challenges in eCommerce fulfillment include:i) Managing inventory and keeping up with demandii) Fulfilling orders quickly and accuratelyiii) Handling returns and exchanges efficientlyiv) Meeting customer expectations for service and deliveryv) Managing shipping and logistics, especially for international or remote ordersvi) Integrating fulfillment systems with other business systems such as websites, payment processors, and CRM software. What leads to challenges in eCommerce fulfilment?There are several factors that can lead to challenges in eCommerce fulfilment:i) Lack of visibility into inventory: If a company lacks a clear understanding of what products they have in stock and where they are located, it can be difficult to fulfill orders accurately and in a timely manner.ii) Poor order accuracy: If orders are not picked and packed correctly, it can lead to delays and customer dissatisfaction.iii) Inefficient processes: If a company's fulfilment processes are slow or inefficient, it can lead to delays in shipping and difficulty keeping up with customer demand.iv) Limited shipping options: If a company only offers a limited range of shipping options, it can be difficult to meet the needs of customers who require faster or more specialized shipping services.v) Lack of integration: If a company's fulfillment systems are not well-integrated with other systems such as their website and payment processors, it can lead to difficulties in processing orders and managing customer relationships.vi) Limited warehouse space: If a company has limited warehouse space, it can be challenging to store and manage a large volume of inventory.vii) Lack of scalability: As an eCommerce business grows, it can be difficult to scale fulfillment operations to meet increased demand. What are WareIQ's eCommerce fulfilment services?Outsourced logistics services involve managing one or more aspects of procurement and fulfilment activities, and WareIQ offers these services. In the business world, the term "3PL" refers to any service agreement that includes the storing or shipment of goods and WareIQ provides end-to-end fulfillment services ranging from warehousing, inventory management, shipping, seller enablement services, order tracking, RTO management, post-purchase applications etc.
December 21, 2022
When and How to Choose a Fulfillment Service for Shopify for Your D2C & eCommerce Business in 2023?
Shopify is one of the largest eCommerce marketplaces in the world. Consisting of a user base of around 2 million sellers across the world, the company provides a wide range of unique services and facilities, such as offering support for brick-and-mortar sellers, providing a vast catalogue of external and 1st-party apps and plugins that can enhance various facets of a company’s eCommerce operations, enabling well-designed websites through custom templates and editors, and much more. Additionally, Shopify offers its users the ability to opt for external fulfillment solutions for their own convenience. This is advantageous because many sellers may have an existing relationship with a fulfillment company, have all their data securely stored in their databases, and is accustomed to their prices, policies and user experience. Conversely, some sellers choose a fulfillment service for Shopify due to the multiple benefits associated with them, such as lower prices, access to vast storage networks, use of the latest technology, and more. In this blog, we will cover when you should choose a Shopify 3PL company, the benefits of partnering with them, and elements you should look at while making your decision. An Introduction to Order Fulfillment and Fulfillment Services for Shopify Order fulfillment comprises all the procedures associated with successfully delivering an order to the doorstep of the customer that ordered it. This includes identifying the appropriate product in the warehouse, packaging it, getting it ready for dispatch, shipping it to the customer’s destination and using a delivery partner on the ground to ensure it reaches its intended location. Thus, it is a big portion of the entire eCommerce process because, without order fulfillment, customers would not have any reason to purchase items online in the first place. Similarly, companies that provide all the above services and more are known as fulfillment services or 3PL fulfillment companies. Since Shopify provides 3 fulfillment options - automatic, partial, and manual - the last of which enables retailers to opt for their own Shopify 3PL company, you can choose which one would be the best option for your current business requirements. Fulfillment services can additionally provide many more services, such as a storage network, custom packaging, online integrations, and more. [contactus_lilgoodness] When Should You Look Out for a 3PL Fulfillment Service for Shopify? The top 6 situations in which you should definitely look out for a 3PL fulfillment service provider for fulfilling orders from Shopify are listed below: Erratic Sales Patterns Fluctuating demand and sales patterns can have dire impacts on even the most experienced eCommerce businesses. Sellers have to factor in many different things while choosing how much inventory they should have on hand for each SKU. If consumer demand is volatile and fluctuating constantly, you may not be able to gauge how many units you need to store, which will create uncertainty and could lead to overstocking or understocking. If you choose a fulfillment service for Shopify, you will instantly be able to monitor external conditions and utilize various tools to safeguard your inventory in such conditions. Reduced Financial Capabilities Not every business has access to a vast pool of capital. In fact, most of them have to be extremely careful with their finances. Because of this, they often get left behind when it comes to introducing the latest services and technology to their customers, which will diminish their brand’s reputation in the long run. However, if you partner with a Shopify 3PL company, you will get access to all of their features and technology, and use it effectively to fulfill orders and satisfy your customers. Periods of Excess Growth During various holiday seasons, such as Christmas and Diwali, when customers are most likely to make online purchases, your sales can flourish. However, if you aren’t prepared for the increased demand, you may find it difficult to keep up, which will eventually lead to errors and order backlogs. To actually appreciate and make use of appreciating sales, partnering with a Shopify 3PL company is a good option because they have the necessary infrastructure in place to tackle bulky orders and high demand. You can refer to this to avoid mistakes during the holiday season. Lack of Your Own Fulfillment Infrastructure Many eCommerce companies do not have access to their own fulfillment infrastructure, such as fulfillment centers, shipping carrier partnerships, last-mile delivery service personnel and more, which is obviously needed for successful order fulfillment. Most fulfillment providers supply all these options and some even let businesses choose the specific services they need. To keep up with each other, they also employ the latest technology and features, which will help your company be on the bleeding edge of eCommerce fulfillment. Difficulty in Omni Channel Order fulfillment If a seller on Shopify has a presence across multiple online marketplaces as well as traditional offline channels, streamlining the entire fulfillment process, including eCommerce warehousing, shipping, etc. or self-fulfillment becomes a difficult task to manage. Seeking to Prioritize Other Business Activities Even though order fulfillment is important, it isn’t the be-all and end-all of a company’s activities. Work also has to be done to research new products, refine existing ones, market them to the relevant audience, conduct audits and much more. For a company that is doing all these tasks on its own, it can get more than a little strenuous. Therefore, partnering with a Shopify 3PL company can alleviate the burden of order fulfillment from your plate, so you will be free to pursue more nuanced business activities. 5 Benefits of Partnering With a 3PL Fulfillment Company for Shopify Increased Efficiency 3PL fulfillment companies have the expertise and resources to handle all aspects of order fulfillment, from storage and inventory management to packing and shipping. This can help ensure that orders are fulfilled quickly and accurately, which can improve customer satisfaction and reduce the risk of returns or refunds. Additionally, every process will be streamlined and handled directly by the fulfillment company itself, so you rest easy knowing that everything is taken care of in relation to order fulfillment. Improved Scalability As your business grows and the volume of orders increases, it can be challenging to fulfill orders in-house. A Shopify 3PL partner can provide the necessary resources and infrastructure to handle the increased demand, allowing you to scale your business without having to invest in additional equipment or personnel. Make sure to choose an option that has future-proof facilities and technology, and you should be able to fulfill orders, regardless of how fast the volume increases. Reduced Costs Partnering with a Shopify 3PL service can help you save money on fulfillment-related expenses, such as storage, packaging and shipping. A 3PL can also provide bulk discounts on these services, further reducing your logistics costs and other. Additionally, outsourcing fulfillment to a 3PL can free up your time and resources, allowing you to focus on other aspects of your business that are also important, such as marketing, research and development and accounting. Enhanced Customer Satisfaction A Shopify 3PL company can provide additional services, such as custom packaging and gift wrapping, that can enhance the experience customers have with your business. They can also offer faster shipping options and provide order tracking information to customers, which can improve customer satisfaction and reduce the likelihood of returns or complaints. Most importantly, they ensure you are able to provide the most cutting-edge facilities to your customers, so you can stay relevant in relation to your competitors. Top 5 Factors to Consider While Evaluating 3PL Fulfillment Services for Shopify in 2023 Storage and Distribution Network Source It is important to choose a fulfillment service for Shopify that is conveniently located in regard to your business and especially, your customers. This will help ensure that orders are shipped and delivered quickly and efficiently, regardless of where they are placed from. Many 3PL companies have nationwide storage and distribution networks which will help you fulfill orders to remote locations just as easily as to large metropolitan areas. Range of Services Source Different Shopify 3PL companies providers offer different services, so it's important to choose one that can meet your specific criteria. For example, some providers may offer additional services like custom packaging and labeling, while others may only offer basic fulfillment services. You should also look for fulfilment services that can easily integrate into the existing framework used by other eCommerce businesses. For instance, when you sell on various eCommerce platforms, those linkages are crucial for seamless channel-to-channel logistics. This covers vendor management systems and B2B wholesale channels. Pricing Options Source A Shopify 3PL provider can have the best possible feature set and have every facility you need but if you cannot afford it or it bombards you with additional hidden costs, it may not be the option for you. Fulfillment services can vary greatly in price, so it's important to compare the costs of different providers to ensure that you're getting a good deal. Don't forget to consider any additional fees or charges that may not be included in the quoted price because they can contribute greatly to the amount you’d actually end up paying. Reputation Amongst Existing Clients Source It's always a good idea to do your research and read reviews from other businesses that have used the Shopify 3PL provider you are considering. This can help you get a sense of their reliability and customer service. It pays dividends to browse through their reviews on their own website and other online forums to get a sense of how they tackle existing issues and whether customers are satisfied with the resolutions they received. After all, since the company is going to be responsible for such a big part of your business, they should be answerable to you whenever you need any clarifications. Data and Analytical Infrastructure Source eCommerce, like other internet-based industries, is extremely data-driven. Data is used to identify how much inventory to order, predict future demand, ascertain the right target audience, identify which products are successful and which aren’t, determine why customers are abandoning their carts and much more. It is able to give you detailed insights that we just wouldn’t see without clear indication. Hence, it is important for you to choose a fulfillment service for Shopify that gives you access to a detailed suite of data and analytical tools so you can monitor key metrics of your business and its performance relative to where you want it to be. Conclusion: Why Should WareIQ be Your First Pick for a Shopify 3PL Fulfillment Service in 2023? Choosing a fulfillment service for Shopify can be a make-or-break decision for your eCommerce business. Shopify 3PL companies can be your gateway to increased sales, positive reviews and expansion to other markets. On the other hand, if you are struggling to tackle the increased load brought about by successfully selling and marketing your products, it may lead to negative sentiments among customers if orders are delivered incorrectly, delays occur and stockout situations arise. Shopify, one of the biggest online selling platforms on the market, can provide the publicity and visibility your business needs. However, this could work both for and against you, based on the type of experience you are giving your customers. Therefore, choose a fulfillment service for Shopify that closely resembles your desired objectives. One of the best options currently available is WareIQ. WareIQ has emerged as one of the leading eCommerce fulfillment companies in India. Having been founded in 2019 in Bangalore, Karnataka, WareIQ offers many conventional eCommerce facilities in addition to unique features that can result in skyrocketing customer satisfaction. Some of the key services we offer are listed below: Platform Integrations Shopify itself, as well as upwards of 20 other eCommerce marketplaces and online stores can be seamlessly integrated with WareIQ so you can view all of your crucial data from a single dashboard. Super-Speedy Delivery With the help of WareIQ Rush, you can deliver purchases to consumers the same day or the following day, improving their satisfaction with your business. Returns Management Returns are an unavoidable aspect of online shopping. Crucially, their detrimental effects on your company don't have to be. We fully manage your returns process and provide a number of precautions to protect your business and its products. Selection of Shipping Companies With more than 12 of the largest shipping companies in India in the nation as partners, WareIQ also provides an intelligent courier service allocator that chooses the quickest and least expensive shipping method for each order. India-Encompassing Storage Network We have a network of dark stores and fulfillment centers that spans the entirety of India. Additionally, you can manage your inventory and orders across all of them using our unique WMS. Suggested Read: Shopify Fulfillment: How to Fulfill Shopify Orders with WareIQ? Choose a Fulfillment Service for Shopify: FAQs How many fulfillment methods does Shopify offer?Shopify offers 3 fulfillment methods. They are listed below:- Automatic: The entire fulfillment process is automated.- Partial: Some tasks are automated and some are manually completed.- Manual: Most major tasks need to be done manually. What are some other popular online storefronts?There are many online selling platforms that are available. Some of them are:- WooCommerce- Magento- BigCommerce- Wix- Ecwid Does Shopify have a first-party fulfillment solution?Yes, Shopify does provide its own fulfillment services, known as the Shopify Fulfillment Network. However, it is only suitable for fulfilling Shopify orders and cannot integrate seamlessly with other platforms. How can fulfillment companies be added to Shopify?Fulfillment companies can be added to Shopify using the following steps:- Tap “Shipping and Delivery” under “Store” settings- Click “Add Fulfillment Service” under the “Custom Order Fulfillment” section- Enter the name of your custom fulfillment supplier in the form- Enter the email address of the company that handles your custom fulfillment- Press “Save” Can WareIQ fulfill orders for other online selling platforms?Yes, WareIQ can integrate and fulfill orders from multiple other online marketplaces and storefronts, such as Amazon, eBay, WooCommerce, Snapdeal, Flipkart and more.
December 14, 2022
Is FBA Profitable? A Detailed Analysis Of the Pros and Cons of Amazon FBA in 2023
Amazon is one of the largest eCommerce companies in the world. Having been initially founded during the expansive growth of the internet in the early 90s, the company has since blossomed into the international behemoth we have come to associate with. Having almost perfected its sales policies, marketing efforts and product listing procedures, the company set its sights on providing its own professional order fulfillment services, which came to be known as FBA, abbreviated as Fulfillment by Amazon. FBA inspires conflicting opinions among eCommerce sellers. Some appreciate its ease of use, taking on important fulfillment-related tasks and providing multiple services and facilities. Conversely, some also find it expensive to use and cumbersome to abide by the strict rules and regulations that are imposed on every product and seller. In recent years, with the onset of multiple 3PL fulfillment companies that provide all the capabilities and technological features that FBA provides, there is a serious question mark surrounding whether retailers should opt for FBA or an external fulfillment company. In this blog, we will provide answers to the question - is FBA profitable? - and also provide statistics to back up our findings. What is Amazon FBA? FBA, which stands for Fulfillment by Amazon, is Amazon’s first-party fulfillment service that oversees the fulfillment of every order for all retailers that have subscribed to it. FBA began offering its services in 2006 and provides multiple fulfillment and distribution-related services, such as product storage, inventory management, shipping, last-mile delivery, and more. FBA also has its own set of practices in regard to how they store products. For instance, they bundle together all products that fall into a similar category and price point. Additionally, retailers lack flexibility as to how their products are packaged, stored, and dispersed. Amazon FBA also subjects various preparatory guidelines as to how products should be packaged and readied for dispatch. If any of these guidelines are not followed, the respective items will instantly become ineligible for delivery. If the offenses are repeated multiple times, retailers can have fines and other penalties imposed on them, making it a slightly risky option for companies with few resources and small teams. [contactus_lilgoodness] Is FBA Profitable? A Statistical Summary An estimated 73% of Amazon retailers across the world use FBA to fulfill their orders.Amazon Prime members spent roughly $1,300 compared to just $700 dollars by Prime users, indicating that FBA increases the visibility of sellers by showcasing Prime badges on their listings.In India, the number of sellers using FBA increased from just 23% in 2017 to 47% in 2022.In most major countries, the amount of Amazon sellers that use Prime is steadily growing annually.There are currently more than 200 million Prime members across the world, so if you opt for Amazon FBA, your chances of generating sales from them will be higher. Is FBA Profitable? 5 Simple Ways to Ensure Success in 2023 Start Out Small The most successful way to be profitable by using Amazon FBA is to start out with small quantities of each SKU. This will allow you to test the waters and determine how much to order and store of each item. Some products may be more expensive but will be more slow-moving, requiring less of them to be ordered in bulk. Similarly, cheaper, more popular items will get sold faster, so they will require more frequent replenishment. Use Relevant Keywords Keywords are an important part of modern internet communication. It allows search engines to display the most relevant results based on your search query and is utilised by virtually all major websites and selling platforms. By using the appropriate keywords for each product, you can ensure that they rank higher than your competitors if a customer searches for that specific term or anything related to it. Prepare Your Products As mentioned previously, Amazon FBA has extremely strict and rigid protocols regarding the guidelines that products need to follow to successfully take advantage of FBA’s services. Failure to comply with these standards can result in a lot of inconvenience and even monetary penalties. Thus, it is important to go through the regulations in detail and ensure that every product meets them down to the most minute detail. Highlight Your Flagship Products Your flagship products are your company’s pride and joy. If they are targeted and promoted properly, they will be the number one earner for your business. Therefore, you should ensure that these crowned items are always in stock. You can also create additional space for them by removing slow-moving products from your inventory. You can also highlight these products on your company’s Amazon page and mention them on other products’ listing pages for increased visibility. Take Advantage of Amazon PPC Amazon PPC stands for Pay-Per-Click and is Amazon’s advertisement program. If retailers choose to opt for PPC, they will be able to run sponsored ad campaigns that will highlight any item that they choose. It is an invaluable tool to help your products stand out and gain additional visibility, especially in the hyper-competitive environment known as Amazon. Payments are imposed based on clicks rather than impressions, enabling you to win big if you have set up the ad just right. 5 Drawbacks of FBA To Assess the Question “Is FBA Profitable?” Heightened Fulfillment Expenditures Since Amazon FBA takes care of every fulfillment procedure, you will have to pay for the privilege. This includes tasks such as order processing, picking, packaging, dispatch, shipping and last-mile delivery. All these procedures together can add up, especially when Amazon imposes its own premiums on each one. Thus, for retailers on a tight budget, Amazon FBA is probably not the right option. Increased Storage Costs Inventory storage is a must for every eCommerce seller, as many companies do not have their own physical stores or offices where they can store their products. Instead, most companies rely solely on warehouses and fulfillment centers, which are provided by Amazon FBA. However, storage costs are some of the most expensive in the industry and once you opt for a certain amount of storage, you cannot instantly upgrade or downgrade your plan if you need to, adding to the increased costs. Presence of Supplementary Fees FBA is notorious for having multiple hidden costs that only plague retailers once they have actually subscribed to the service. In addition to conventional fees for fulfillment and storage, there are multiple other fees that are suddenly imposed without the discretion of retailers and if they want to continue to use Amazon FBA services, they have no other choice but to pay them. Some of these fees include referral fees, closing fees, label printing fees and more. Additionally, these fees can increase or decrease based on a variety of external factors not within the control of either sellers or Amazon. Loss of Input Due to Amazon aiming to provide a highly standardised experience for every FBA service, retailers lose most of their ability to provide their own inputs as to the way certain services and procedures are conducted. Additionally, the disputed cases of damaged or returned items, Amazon usually sides with its customers rather than its sellers, which can cause a lot of damage to smaller firms relying on thin profit margins. Reduced Flexibility Similar to the above point, sellers cannot implement any changes they desire. Everything, down to the packaging and unboxing experience a customer will have, is centred around Amazon itself and not the company the item was purchased from. Additionally, there are very few customization options and aspects that are within the seller’s control, so it can be a pretty unyielding experience. Is FBA Profitable? 5 Benefits of Using Amazon FBA in 2023 Increased Visibility Source Because FBA indicates fulfillment speeds by providing Prime badges on your listing pages, there will be increased trust and visibility amongst potential customers. Customers are often sceptical to purchase from retailers that don’t provide fast shipping or other features. Having the Prime badge next to all your product listings will instantly inspire them to purchase from your store more than if you didn’t have them, thus generating more sales. Ultra-Fast Delivery Source FBA set the now widely-used industry standard when it revolutionised order fulfillment with same-day and next-day delivery. It was so popular that in recent times, customers view it as a necessity rather than an added convenience. Through Amazon FBA, you can provide seamless same-day and next-day delivery options for every order, with the added bonus of having Prime badges displayed next to all product listings. Prime Label Source We have already spoken about the benefits of having a Prime badge next to your product listings but they cannot be stated enough. They act as an instant verification that orders will be handled and shipped within a certain time directly by Amazon. It is akin to having your order with you as soon as you purchase it because you know that it will be dispatched and shipped instantly, and given much higher priority compared to regular orders. Inventory Storage Source Amazon stores all of its FBA inventory in its own, officially run warehouses. Customers can be assured that all procedures relating to order fulfillment are handled directly by Amazon and not by any external service. Additionally, the warehouses are highly stacked with the latest technology and automation. Amazon handles processes like processing, picking, packing, dispatching, and shipping of all FBA orders. Customer Service Source Being one of the largest eCommerce firms has multiple perks for sellers that use Amazon FBA and customer service is one of them. Amazon offers some of the best customer care facilities in the industry, with highly trained personnel offering quick resolutions at every hour of the day. This will instantly make sure that your customers always have the best assistance when it comes to any query or issue. Conclusion: Why WareIQ is the Best Alternative to FBA in 2023 if FBA is not Profitable for Your Business? Amazon FBA is revered amongst many Amazon sellers that insist it has contributed to the success and efficiency of their companies but is FBA profitable? The answer can vary from seller to seller based on the industry they operate in, the types of products they sell, their business model, manufacturing costs, proximity to their customers and much more. However, Amazon FBA is widely heralded as one of the more expensive options in the fulfillment industry. This, coupled with its lack of flexibility, rigid regulations and harsh sentences for retailers that make minor errors make looking at an external fulfillment option worthwhile. They provide all the same features, more value-added services, and offer cost-effective pricing. If you need assistance with fulfilling your online orders, WareIQ can be the right solution for you. Also, you can read about how to create an effective amazon pricing strategy here. WareIQ is an eCommerce fulfillment company that was founded in 2019 and is currently based in Bangalore, Karnataka. The company provides a variety of eCommerce services, including product storage, inventory management, marketplace integrations, an in-house WMS, shipping aggregation, last-mile delivery and much more. A few features we provide that make us one of the best options to fulfill online orders are listed below: An India-encompassing on-demand fulfillment center and dark store networkA custom WMSIntegrations with 20-plus online marketplaces, including AmazonUltra-fast deliveryA partnership with multiple shipping carriersFBA preparation servicesHigher inventory turnover as a common inventory pool for sales through multiple channelsDedicated support to centrally manage returns claim management across marketplacesAvailability of inventory planning & optimization for higher product availability, and lower inventory holding costReady access to marketplace benefits such as Prime tagPick and pack servicesCustom appsAccess to Amazon’s first-party 24/7 customer serviceReturns management Is FBA Profitable?: FAQs When did Amazon introduce FBA in India?Globally, Amazon has offered FBA since 2006. However, the company only entered the Indian market in 2013 and FBA was offered straight away. What profit margins can sellers expect while utilising FBA?A profitability margin between 16% and 50% is power for the course by 52% of Amazon merchants. The majority of new Amazon FBA sellers can anticipate having a 10% profit margin. What are the various charges associated with FBA?The main fees imposed by Amazon for FBA are:- Inventory storage fees- Order handling fees- Distribution fees Can FBA be used to fulfill orders on other platforms?Yes, in theory, FBA can be used to fulfill orders on other platforms. However, the selection is extremely limited and does not have the same functionality as it does on Amazon itself. Can you fulfill Amazon orders with WareIQ?Yes, WareIQ enables you to integrate directly with Amazon and more than 20 other online marketplaces so you can import your existing data and have access to all your important order and inventory information in one digital location.
December 09, 2022
How to Sell on Amazon Without FBA? A Detailed Guide for Online Sellers in 2023
Amazon is the world’s largest eCommerce marketplace and has pioneered many of the technology and services most retailers and customers utilize and take for granted today, such as ultra-fast delivery, indicators that showcase delivery timelines, and much more. While registering to sell on Amazon is one of the main priorities of most online sellers, due to the instant visibility and brand recognition associated with it, not all vendors want to use Amazon’s in-house fulfillment solution - Amazon FBA - to deliver orders to customers. While there are many reasons for this, which we will touch on below, Amazon does provide the option to fulfill orders either by yourself or with the help of a 3PL fulfillment company. Due to the market being inundated with aspiring companies that seek to assist sellers with fulfilling their online orders, identifying and partnering with a 3PL company that closely resembles your goals and values is not a hard task. In this blog, we will touch on what Amazon FBA is, why sellers may not want to make use of it, what the available alternatives are, and a step-by-step run-through of how you can sell on Amazon without FBA. Introduction to Amazon and FBA (Fulfillment by Amazon) Amazon is a global eCommerce marketplace founded in 1994 in Belleview, Washington and is currently headquartered in nearby Seattle, Washington. Having emerged as the largest eCommerce company in the world, Amazon developed much of the technology and many of the online selling patterns that are now commonplace in the eCommerce industry. Although the business began eCommerce operations during the early 1990s internet boom, Fulfillment by Amazon (FBA), its first-party fulfillment service, wasn't offered until 2006. When Amazon first entered the Indian eCommerce sector in 2013, FBA was honed and developed a reputation for providing outstanding customer care among both sellers and consumers. But not everything is as perfect as it appears to be. Retailers are subject to frequent inspection if they are unable to adhere to all of the extremely stringent regulations and guidelines and must pay a comparatively high charge to use FBA services. Retailers who value flexibility and freedom, as well as those with the means to fulfill orders independently or through a 3PL fulfillment partner, a move that Amazon gives its sellers the possibility of doing through its Fulfillment by Merchant (FBM) service. [contactus_uth] 5 Key Deterrents to Online Retailers Using Amazon FBA in 2023 Lowered Control Over Inventory Management Due to Amazon imposing fines on merchandise that surpasses its storage timeline, sellers that store their products in FBA warehouses frequently struggle to add or remove items from their own assigned holding area. Because of FBA's rigorous storage regulations, retailers are less able to accurately predict the amount of inventory they will need over a specific time period and modify their stock levels in response to changing demand. Requirement for More Cost-Effective Pricing FBA has numerous useful capabilities but it commands a price that many merchants find prohibitive, especially smaller, more localized businesses that are already battling to retain their profit margins. It is also relatively pricey in comparison to industry standards, making it simple for sellers to identify significantly less expensive alternatives, which would be helpful if they just needed to employ the use of a few fulfillment solutions. Reduced Branding Capacity A bespoke branding experience is one of the primary ways businesses can leave an impact on their customers, in addition to the initial publicity they receive while ordering a product. However, customers will only see Amazon's logo while unboxing their products if they choose to work with FBA to fulfill your products. This allows Amazon to promote its own brand more effectively than that of its selling partners. It would be suitable to sell on Amazon without FBA if you wish to be in charge of your own packaging and highlight your own brand rather than Amazon's. Exposure to Rigid Policies Sellers are encouraged to conform to some of the most stringent SKU preparation prerequisites in the sector while using FBA. Retailers can be penalised for breaking any of the outlined rules. While it is Amazon's responsibility to regularise the delivery services offered by all sellers, standards like the Amazon Standard Identification Number System (ASIN), which requires that each product be given a separate label and be divided into multiple pallets, can lead to confusion and sharp price increases because multiple shipments require more storage space and transportation infrastructure than a single one does. Access to External Fulfillment Companies Amazon offers merchants the choice of FBM, which enables them to either complete orders independently or through a 3PL fulfillment business. Because their needs for order fulfillment are already being met by their 3PL partners, they are not required to pay additional costs to use FBA services. Due to the intense competition, these fulfillment providers encounter from other competitors, they typically offer greater facilities and flexibility than FBM, while also imposing significantly lower prices and providing more advanced technological facilities. Suggested Read: Is FBA Profitable? What are the Available Alternatives if You Want to Sell on Amazon Without FBA in 2023? Fulfillment by Merchant (FBM) A retailer can fulfill orders through Fulfillment by Merchant, which is a type of direct fulfillment option that gives retailers the chance to fulfill orders entirely on their own or through a 3PL logistics provider of their choosing. Direct fulfillment does not make use of the fulfillment services offered by the online shopping sites where sellers sell their products, such as Amazon. To give sellers more flexibility and a variety of options, Amazon’s FBM platform can be a good way to sell on Amazon without FBA. Generally, most 3PL companies offer a similar range of services as FBA, without the rigidity and red tape that make it a hassle at times. Seller Fulfilled Prime (SFP) With the use of Amazon's Seller Fulfilled Prime fulfillment option, sellers can choose to fill orders from their own warehouses and by using their own fulfillment processes. As an Amazon seller, SFP enables you to enjoy the sales advantages of having the Prime badge on your listing even if you choose to fulfill your own products, whether to maintain total control over the fulfillment and storage of your Amazon products or to avoid paying Amazon FBA and storage fees. If you choose to sell on Amazon without FBA, SFP enables you to fulfill all of your orders with quick, two-day delivery at no additional cost to the customer. Easy Ship The delivery service that Amazon provides to its sellers is called Easy Ship. eCommerce businesses can utilise Easy Ship to take care of processing Amazon orders as well as storing products in their own warehouses or by renting one. The customer's order is then picked up and delivered by an Amazon delivery executive. Additionally, Amazon handles customer service and returns for these orders. Amazon takes care of delivering orders from your warehouse to the customer. On the other hand, finding a warehouse for eCommerce retailers to keep merchandise could be challenging because it comes with additional effort and costs. Additionally, you must pick and pack orders in accordance with Amazon's strict regulations because failing to do so could result in penalties. Step-by-Step Guide to Using Amazon FBM Instead of Amazon FBA to Fulfill Orders Step 1: Choose an FBM Selling Model Source On FBM, Amazon provides two different selling plans: Individual: Every item you sell under the individual selling plan will be subject to a $0.99 share towards Amazon.Professional: For the professional selling plan, there is a recurring monthly fee that costs $39.99. Step 2: Create a Seller Account on Amazon Source Visit sell.amazon.com, select "Sign Up," and fill out the required fields with your contact information. The following list contains the details you need to create your Amazon seller account: Name of your companyCredit card informationAddress, phone number, website link (if applicable) and other contact details of your companyPAN and Aadhar card detailsBank account information for transferring sales revenueTax information Step 3: Upload Your Item Listings Source If you don't yet have the ideal commodity before you, undertake some market and product research to find lucrative products and the main demographic you can market to. You can also start directly listing your already-sellable goods on your company's Amazon channel. Use Seller Central's "Add Product" option to enter the product's details, including its title, description, keywords, images, videos, and SKU number, so that it can be traced along the supply chain and at the warehouse. Additionally, you must state that you use FBM on each and every one of your product listings. Step 4: Draw in Potential Clients Source The moment your item listings are active, you can work to increase the visibility of your products. Here are a few quick methods you can use to accomplish this: Offering Ultra-Fast Order Delivery: A merchant will be designated as seller-filled prime and display a logo on the appropriate product listing if they can deliver orders within two days. Customers' faith in the delivery process will grow as a result.Employing Sensible Pricing: Amazon offers a variety of pricing tools to assist merchants in determining the optimum price for their goods. Keep in mind that Amazon wants you to sell as many things as you can to benefit both of your accounts.Using Marketplace Promotions: Amazon gives merchants the choice to boost their product exposure through ad campaigns and sponsored product programs for a set charge. Step 5: Select Your Order Fulfillment Option Source If you've chosen FBM, you can pick between 2 order fulfillment options: In-House Fulfillment: With the help of this method, you can get all the order information directly from Amazon. After that, you must utilise your own internal picking, packaging and shipping processes to fulfill the customer's order while also making sure to include order tracking information.Outsourced Fulfillment: Order fulfillment through your chosen 3PL business is referred to as outsourced fulfillment services. They can access your Amazon order information if they have a WMS and can handle crucial tasks like storing SKUs and picking, packing, and shipping an order after it is verified. However, you should ask your chosen fulfillment partner for more information because only a select few businesses provide order-tracking capabilities on every parcel. Conclusion: Why You Should Consider WareIQ to Fulfill Amazon Orders Without FBA? Amazon has been responsible for many advances in eCommerce that have benefited retailers, customers, and other selling platforms. The widespread use of services originally introduced by Amazon is a testament to the company’s forward-thinking that was truly ahead of its time. However, the same cannot be said about Amazon FBA due to the increased amount of sellers that perceive it as inflexible and expensive. For many small and medium-sized sellers, the high costs, rigid regulations and frustrating penalties are too big a factor to be ignored and in many cases, can become deal breakers. Fortunately, the company does provide a couple of other fulfillment options that its sellers can take advantage of, so there is a respite for retailers that do not want to get entrenched in the Amazon ecosystem. If you need a fulfillment company that can enable you to seamlessly fulfill Amazon orders, among many other functions, WareIQ can be the perfect option for you. WareIQ is an eCommerce fulfillment company that was started in 2019 in Bangalore, Karnataka. One of our core differentiating factors from other providers is our comprehensive use of technology to take on most eCommerce requirements. Whether it is regarding warehouse automation to providing multiple marketplace integrations and everything in between, WareIQ’s platform is designed to make your life easier and offload strenuous fulfillment and distribution tasks over to us. We also provide various preparatory services for FBA and Seller Fulfilled Prime. Some of the reasons to partner with WareIQ to sell on Amazon without FBA are listed below: Seller Fulfilled Prime (SFP) Enablement Using Smart Technology: Utilizing smart technology, we can automatically map SKUs across different sales channels and bundle product combinations thanks to our API integrations, so you can update your item listings without worrying about eCommerce order tracking, fulfillment, and inventory levels.Avoiding Paying High Storage Fees: If your products aren't moving as quickly as you'd like, you don't have to stress about being charged long-term storage fees because of WareIQ's lack of storage penalties, unlike Amazon FBA.Taking Advantage of Using Amazon’s 24/7 Customer Support: SFP clients using WareIQ’s services will receive the same top-notch level of customer service that Amazon provides to all of its customers.Removing the Need to Split Shipments: You will no longer be required to pay a per-item fee for inventory placement services to guarantee that shipments go solely to one fulfillment center or pay to spread inventory among three fulfillment centers. Fulfillment by Amazon (FBA) Prep Services Pick and Pack: We have the capacity to fulfill 1 to 10,000+ orders per day using WareIQ's automated order fulfillment system, which guarantees effective and accurate picking and packing services. Additionally, you only pay for what you actually use so you will only be charged for 1 item if you send just 1 item in a given month.Amazon Product Compliance: Inventory could be refused, disposed of, or returned if Amazon-product preparation requirements are not followed and there may also be monetary penalties initiated for noncompliance. To avoid this, you can take advantage of WareIQ’s FBA preparation facilities so all your goods will comply with all Amazon regulations, from repacking to labelling.Hub and Spoke Transport: This method of streamlining the supply chain and lowering costs from the point of origin to the point of sale is advantageous. Our most typical arrangement involves bringing merchandise into our warehouse, relabeling it and then reorganising it for transportation to a variety of locations. We can also handle consolidations and deconsolidations to benefit from shipping discounts and make shipping generally simpler. Sell on Amazon Without FBA: FAQs What are the benefits of selling on Amazon without FBA?There are numerous benefits of selling on Amazon without FBA. Some of them are listed below:- Cheaper prices- More expansive distribution networks- More delivery options- Increased flexibility- Enhanced facilities What does Amazon charge for FBA?Amazon imposes various charges for using FBA based mainly on product categories in addition to storage capacity, shipment volumes and more. What is Amazon FBA preparation?Amazon FBA preparation is all the procedures that sellers need to follow in order to get their goods ready to be fulfilled by FBA. This includes the various regulations and requirements that are highlighted by Amazon. Any seller that fails to comply with the rules risks not having their products delivered. Can you use FBA to fulfill orders on other platforms?Yes, FBA can be utilised to fulfill orders on a select range of eCommerce platforms. Can you use WareIQ to fulfill Amazon orders?Yes, not only can you use WareIQ to fulfill Amazon orders but our custom WMS integrates directly with Amazon so you can consolidate, track and analyse all your order and inventory data.
November 30, 2022
Outsourced Fulfilment Guide: Benefits of Moving Away From Self-Fulfillment and Outsourcing Fulfilment Services To a 3PL Company in 2023
Operations related to fulfilment and logistics are among the most crucial and challenging aspects of running an online store. eCommerce businesses today face an even greater requirement to manage the fulfilment and shipping operations due to the increased complexity and mounting pressure to meet consumer expectations. Businesses frequently contract third-party logistics companies to fulfil orders (3PL). These businesses are also known as 3PL fulfilment services providers. Such businesses offer various services, including order fulfilment, inventory storage, processing, and product delivery. This frees up businesses from the concern of handling shipments and managing inventory. One method to ensure this crucial procedure runs smoothly and avoid the associated expensive blunders is outsourcing fulfilment services to a third-party logistics (3PL) company. This article overviews outsourcing fulfilment services, explains the benefits of outsourcing fulfilment services to 3PL providers, and how you can grow your business by outsourcing fulfilment services to 3PL service providers, such as WareIQ and gain shipping expertise to streamline this crucial aspect of operating an online store. What are Outsourced Order Fulfillment Services? Outsourced order fulfilment services are services a third party provides to handle specific aspects of the order fulfilment procedure, such as inventory storage, item packaging, or order delivery to clients. In addition, other services like inventory management, kitting, reverse logistics, and many others can be obtained by outsourcing fulfilment services to 3PL providers, depending on your order fulfilment requirements and the 3PL you choose to deal with. You must first sign a contract with a third-party logistics service provider (3PL), who will store your products for you in return for a monthly fee based on how much space they take up in their warehouse to keep them. Then you combine your eCommerce business with its inventory management system to help streamline the entire fulfilment process. When a consumer orders a product from your store, your 3PL partners get the order information to process and get it ready for eCommerce shipping. How Do 3PL Fulfilment Providers Operate? The order fulfilment process consists of five essential components. But first, let's examine what it is like outsourcing fulfilment services to a 3PL company. Product Receiving and Storage in Fulfillment Centers You can ship everything to your fulfilment service provider if you currently have goods on hand. After that, the manufacturer will send all upcoming inventory purchases directly to the fulfilment business. Usually, for the fulfilment company to get the items, you would provide them with your purchase order or the order confirmation from your supplier. Sorting The Received Stock Your order fulfilment service will oversee the entire inventory process after everything is set up. Receiving goods, organizing them, and storing them appropriately all fall under this category. Before transferring the goods for sorting and storage, the provider's representatives check them for damaged or missing materials. In addition, SKU numbers and barcode labels are frequently used to keep track of inventory location and levels. To ensure you maintain adequate inventory levels, inventory tracking also allows monitoring sales volumes and other information. Picking and Packaging Your products are prepared for order processing once they have been stored. Every time a consumer puts in an order, the fulfilment provider receives it and takes care of picking and packing. By integrating your POS system, order management programme, or eCommerce platform with the system of the fulfilment provider, order processing can be efficiently controlled. Processing Shipping Of Orders Your customers are placing orders; the fulfilment business must now choose, pack, and ship them. They'll ensure the right things are picked and packaged securely for shipping. Your orders will arrive on time and in good shape thanks to the fulfilment company's sealing of boxes, order weighting, and box labelling services, which will reduce the number of return requests. Additionally, if your fulfilment supplier receives bulk discounts they pass along, you can benefit from lower shipping expenses. Customer Returns and Customer Support There will inevitably be clients who wish to return anything in retail. The customer must order the product from the fulfilment company for refunds. Following receipt, they will examine the package and decide whether to grant a refund. You may then choose how you want the objects handled after that. For instance, by adding it back to your inventory, you may put it on sale. Additional Fulfilment Solutions The majority of fulfilment companies provide the services above; however, others go a step further by providing further services like: Inventory managementCustomer serviceProduct insurance 7 Early Signs When You Should Start Outsourcing Fulfilment Services to a 3PL Service Provider Once your eCommerce firm has grown, you will need to be outsourcing fulfilment services. The question is, when should you start outsourcing fulfilment services to a 3PL service provider? Delivery Performance Is Declining First and foremost, it's time for outsourcing fulfilment services if your delivery standards are declining. Following a bad delivery experience, 56% of customers will only revisit your store. You must take outsourcing fulfilment services into account if the rise in your order volume is causing deliveries to be made late or incorrectly. Whether it's a gradual increase as your business grows or a seasonal surge because of the products you sell, outsourced fulfilment companies have the knowledge, resources, and personnel to handle an increase in orders. As a result, you are ensured flawless deliveries each time, keeping clients satisfied and devoted. High Cart Abandonment Rates Logistics is one of the main reasons why carts are abandoned. However, a 3PL fulfilment service provider can stop your customers from departing because of slow delivery times and pricey shipping options by: Enabling a range of delivery cost and speed combinations; Allowing you to participate in programmes like Amazon Prime and Walmart Free 2-Day Shipping, which will enable you to satisfy clients who pay for rapid shipping subscriptions; Creating cost savings in shipping that can be applied to paying for the costs of free shipment. Your In-House Fulfilment Expenditures Are High Since the goal of operating an eCommerce business is to turn a profit, cost-cutting measures should always be considered. Your warehouse, personnel, shipping, and custom packaging costs increase along with the growth of your marketplace, inventory, and marketing fees. You can generate more revenue by outsourcing fulfilment services to 3PL service providers; delivering your goods as quickly and inexpensively as possible is a speciality of outsourced fulfilment companies, which can save you money on shipping immediately. Additionally, you'll pay less for employees, packaging supplies, and warehouse space. You Wish To Expand Your Business Ensure your fulfilment procedures are prepared for expansion if your online store is. In-house fulfilment might draw you away from these crucial jobs, incredibly when you're fulfilling more orders. In addition, managing numerous sales channels, more significant order amounts, and additional marketing activities takes time. By collaborating with a 3PL provider and outsourcing fulfilment services, you can free up more time for your business expansion objectives and eliminate the stress and time-consuming tasks associated with fulfilment. This means that when you are outsourcing fulfilment services to a fulfilment service provider, they will take care of all the operations, helping you to grow your business. You Lack Fulfilment and Shipping Knowledge You didn't establish an eCommerce business because you are an expert in fulfilment; instead, you did it because you identified a market niche, have strong selling skills, or are intimately familiar with your products. By outsourcing fulfilment services, businesses can have the expertise necessary to store, choose, and transport products most quickly and economically possible. However, while this knowledge is advantageous to your company, it can take time to acquire. You Seek To Be Qualified As Gold Seller Through emphasized fast shipping tags, preferred organic search ranking, and buy box eligibility, fast shipping programmes help small business owners. Use a fulfilment service that ensures eligibility for Amazon Gold Seller and other fast shipping programmes if you need help to meet the requirements for these programmes internally. Fulfilment and Shipping Seems Exhausting Tasks It's time for outsourcing fulfilment services if your day consists of packaging goods, printing shipping labels, and chit-chatting with the delivery person. We've even heard tales from vendors whose partners had threatened to leave them; although uncommon, it has happened and should be avoided. By employing a small company fulfilment service to manage your shipping while you devote your focus and time to expanding your business, you can start working on it rather than just running it. 5 Benefits Of Outsourced Fulfillment Over In-House Fulfilment in 2023 Scalability is frequently the secret to a business's success. Therefore, it is crucial to satisfy growing demands without compromising quality or efficiency. B2C and D2C businesses, but particularly small ones, can expand their operations by partnering with a third-party logistics (3PL) provider to overcome operations limitations to a certain extent. For medium to large business holders, 3PL providers offer the tools and knowledge required to support organizations in increasing their capacity for sales and clientele. Your business firm can grow to the size necessary to compete in the expanding market by collaborating with third-party logistics. Outsourced order fulfilment services are becoming increasingly popular, especially among medium and larger enterprises, for several reasons listed below. Rapid Business Growth Businesses frequently hire 3PLs to fulfil orders because they need more in-house space or staff to handle the essential duties. However, a lack of internal resources (or the money to invest in them) might impede small business growth. So instead, they can grow their operations by concentrating on marketing, product development, and other activities crucial to a company's success by outsourcing fulfilment services. Reduce Expenses and Save Money When outsourcing fulfilment services, businesses can also save money. When you start outsourcing fulfilment services, you don't need to hire full-time employees, buy or rent warehouse space, or buy equipment to support order fulfilment operations. Instead, you pay a tiny fraction of the price to a supplier with the necessary infrastructure and partners to handle everything on your behalf. You can cut costs on supplies and transportation by using 3PLs and fulfilment companies. Because of the increased volume they handle, they probably qualify for bulk packaging and postal discounts. Smaller businesses that run these operations internally deal with lower volumes, which may not be eligible for volume discounts. Obtain An Edge Over Competitors You can gain a competitive edge even when up against significant competitors because you can expand your firm without investing a fortune in logistics and warehouses. For instance, reducing prices might enable smaller businesses to compete by providing consumers benefits like free delivery, two-day shipping, hassle-free returns, and other benefits. However, these benefits are difficult to implement for smaller enterprises that handle fulfilment in-house due to high prices or the amount of staff needed to fulfil orders quickly. Obtain Fulfilment Expertise While you can claim industry expertise, logistics and order fulfilment may only sometimes fall under that scope. Businesses may take advantage of a crew skilled in all the areas necessary to keep their order processing running smoothly by working with third-party logistics providers. Expand Easily and Effectively It will be simpler for a company to adjust to market changes and seasonal demand if it can scale up and down as necessary. Therefore, utilizing fulfilment services and the adaptability and scalability that accompany them helps businesses grow and penetrate new markets. For instance, a company that wants to expand its operations to another area would need to rent warehouse space, make equipment purchases, and hire personnel to manage the facility. In contrast, a business that uses outsourced fulfilment can grow into a new location without spending money on equipment and warehouse space by locating a fulfilment service provider that provides the infrastructure and services required in the target area. Conclusion Finding the ideal 3PL as a fulfilment partner is one of many crucial considerations you will need to make to secure the long-term success of your company if you are thinking about outsourcing fulfilment services. The perfect 3PL partner will effectively support your company's expansion, act as an extension of your staff, assist you in navigating the logistics and supply chain complexity, and ultimately keep your customers pleased by getting their orders delivered promptly and precisely. Why Should You Outsource Fulfillment for eCommerce to WareIQ in 2023? Benefits Of Outsourcing Fulfilment Services To WareIQ As a technologically advanced 3PL, WareIQ uses its software throughout its fulfilment network to give customers real-time information on inventory levels and orders as they are chosen, packed, shipped, and delivered. Your inventory is stored at our warehouses, where the product is picked, packed, and dispatched. By contracting with WareIQ to handle your fulfilment needs, you may cut costs and time while maximizing customer satisfaction by exceeding their expectations throughout delivery. By outsourcing fulfilment services to WareIQ, a seasoned fulfilment partner, you can strategically execute inventory distribution across our locations to deliver your products faster and economically. Keeping inventory close to your customers helps reduce the shipping costs associated with shipping orders to far-off destinations. In addition, you can offer same-day or next-day express shipping options whether you ship from a single fulfilment centre or a number of them. WareIQ delivers data and analytics to assist you with everything from real-time reporting to better supply chain decision-making. We do this to give you visibility into our operations and performance and to hold ourselves accountable. We provide essential information such as which fulfilment centres you should stock, how long you have before running out of inventory, how promotions affect stock levels, the average cart value, shipping costs, and transit times for each shipping option, as well as your fulfilment costs per order and storage costs per unit. [signup] Outsourcing fulfilment services: FAQs (Frequently Asked Questions) What is outsourced order fulfilment?Employing a third party and outsourcing fulfilment services, such as inventory storage, item packaging, and order shipment, is known as outsourced order fulfilment. Why should I outsource fulfilment services to 3PL providers instead of in-house fulfilment in 2023?Using a 3PL provider to outsource fulfilment and logistics services can result in cost savings, give you access to cutting-edge logistics technology, and boost scalability, flexibility, and customer happiness. What characteristics should I check before outsourcing fulfilment services?Eight criteria to consider when selecting a fulfilment company-1. Speed of shipping.2. Where the fulfilment warehouses are.3. Software for order fulfilment features.4. Visibility and transparency.5. Packing preferences.6. Management of Returns.7. Costs. How WareIQ helps in expanding your business reach with nationwide spread fulfilment centres? There are many benefits of outsourcing fulfilment services to WareIQ. As a tech-driven fulfilment partner, WareIQ helps brands of all sizes deliver excellent customer service across channels. WareIQ centralizes logistics operations to exceed customer expectations and offers integrated solutions for order fulfilment, inventory management, and speedy shipping.A strong fulfilment network, technological solution, interfaces with virtual eCommerce platforms, marketplaces, sales and social media channels, and even B2B fulfilling capabilities contribute to WareIQ's ability to manage omnichannel fulfilment.Managing products, orders, customers, and shipping across all sales channels is easy. Even better, WareIQ offers same-day delivery through WareIQ Rush, which helps reduce cart abandonment and increases sales for transactions made directly with customers.
November 28, 2022
What is Return To Origin and Non-Delivery Report in eCommerce? Top Reasons For NDR in eCommerce and How To Reduce RTO With NDR Follow-Ups in 2023
The eCommerce sector has experienced tremendous growth recently, particularly in D2C businesses, because they have fundamentally altered the interaction between consumers and brands. The secure and prompt delivery of the merchandise inventory is the key priority of an eCommerce vendor. Unfortunately, however, delivery delays happen frequently. Occurrences include stopped shipments, delayed deliveries, incomplete addresses, customers unable to pay the COD amount, inaccurate addresses, or even customers who refuse to accept the delivery for their particular reason. Customers' worries may grow as a result. In e-commerce, return shipments can account for up to 20% of all shipments, according to a recent KPMG study. For orders that are paid in cash on delivery (COD), this cost increases to 40%. Even the most successful companies encounter many delivery exceptions each month. These delivery outliers may appear insignificant, but they can quickly snowball into missed deliveries and subsequent losses. There is a considerable likelihood that a delivery error will become a Non-Delivery Report in eCommerce and then an RTO. As a result, your company is left to suffer the weight of a loss that was mostly preventable. You might wonder how it might be avoided. Through management and strategic planning, as with everything in business. In more detail, let's examine the cause-and-effect cycle that delivery exceptions cause and its many attributes. What Do The Terms Return to Origin (RTO) and (NDR) Non-Delivery Report in eCommerce Shipping Mean? In e-commerce, a non-delivery report (NDR) is a notification that is sent when a delivery attempt for an email message has failed. This can occur for a variety of reasons, such as the recipient's email address being invalid or the email server being temporarily unavailable. When an NDR is generated, it is typically sent back to the sender of the original email message with details about the failure. This can help the sender to understand why the message was not delivered and take steps to resolve the issue. For example, the sender may need to update their email list to remove invalid addresses or retry sending the message at a later time. In the context of e-commerce, NDRs can be important for a variety of reasons. For example, if a customer has not received a confirmation email or shipping notification, they may contact the retailer to ask about the status of their order. If the retailer receives an NDR for the email they sent to the customer, they may need to take additional steps to ensure that the message is delivered or to communicate with the customer through an alternative means. To ensure successful delivery, the courier makes several efforts to deliver the package. First, orders are given the RTO status, which stands for Return to Origin, if they are canceled or after numerous unsuccessful delivery efforts. The order must now be returned to the original warehouse it was first sent from because, as the term implies, the purchase has effectively been reversed. It can then be reloaded in your inventory and sold once more there. In this last mile of delivery, many potential problems could arise and lead to failure. Incomplete deliveries result in a Return To Origin (RTO). In addition, customers may have a negative impression of your brand, significantly degrading their delivery experience. Because of this, firms should give Non-Delivery Reports in eCommerce much thought when planning their shipping operations. Read Here: How to Address Last-Mile Delivery The WareIQ Way. [contactus_uth] Top 8 Reasons For NDR in eCommerce Which Can Lead to RTO (Return To Origin) in eCommerce in 2023 The RTO and NDR can harm any organization's long-term growth and profitability. You now have a general understanding of how NDR and RTO operate in the eCommerce business. But to truly comprehend how each of them functions, we must understand the causes of the Non-Delivery Report in eCommerce, which might result in RTO of order. These are the principal causes of NDRs: Incomplete Or Incorrect Addresses A buyer can make a mistake when providing the delivery address. For example, a consumer may accidentally or unintentionally enter the wrong delivery address. This could make it difficult for the delivery employee to locate the customer's location, making it harder for them to finish the delivery. Incomplete Or Incorrect Customer Contact Another issue comparable to the above could arise if a customer unintentionally enters the incorrect phone number. Therefore, the delivery employee would only be able to reach the customer if and when they needed directions to the delivery location. As a result, the order would be designated as NDR. Unavailable or Unreachable customers Once the customer has received their order, it is only considered fulfilled. The order can only be fulfilled if the delivery person has any issues locating the delivery location or if the customer is there to accept the delivery when the delivery agent arrives at the customer's location. The order then needs to be fulfilled. To confirm the delivery location, the delivery person will attempt to phone the customer. However, the delivery agent would only be able to finish the delivery if the customer's contact number was reached. Rescheduled Delivery By The Consumer Customers can select a different day and time for delivery if they are present or need help to make payment at a specific time or on the day delivery is supposed to take place. This information should be given to the delivery agent at the delivery time, who would then update it as the basis of the Non-Delivery Report in eCommerce. Customer Refuses Delivery Suppose a customer is dissatisfied with the delivery process or the state of the product upon delivery. In that case, they may exercise their right to reject or refuse an order after making a purchase. This could be more pleasant for eCommerce companies, yet it frequently happens, especially with COD orders. Customers are more inclined to cancel a purchase when payment has not been made. Consumer Unable To Make The Payment With COD purchases, it's common for the customer to require additional time to prepare the delivery payment. As a result, deliveries are commonly late because delivery staff constantly interact with clients to secure the necessary payment. Also, the customer can either cancel their purchase or set an alternative delivery time. This is only possible who opt for cash-on-delivery courier services. Customer's Changing Opinion Customers can change their minds about their purchases, which is only one of the numerous benefits of digital purchasing. They can even do this after the package is delivered, which can frequently happen because customers often need to remember about their purchases until they arrive or receive a call from the delivery person. They could then proceed to cancel the order after declining the delivery in the first place. Falsified Delivery Attempt By The Carrier Agent Fake deliveries are one of the most troublesome Non-Delivery Report in eCommerce that brands come across. In this case, the order is still marked as a failed delivery even though the delivery employee did not attempt to deliver it to the customer's address. They may negatively affect the customer experience if not resolved swiftly and effectively. Suggested Read: Learn in detail about eCommerce Delivery Partners How to Reduce RTO with NDR follow-Ups to Decrease RTOs (%) in eCommerce in 2023? You already understand how damaging NDR and RTO can be to your company's brand and customer experience. Non-Delivery Reports in eCommerce must be handled carefully, with reasons previously indicated, if RTOs are to be avoided. A structured methodology and significant thought must go into handling NDRs. With the help of this procedure, you can handle NDRs autonomously, turning them into successful deliveries rather than RTOs. Implementing a basic system for NDR management follow-ups is required to manage the Non-Delivery Report in eCommerce industry. Determine Various NDR Causes There are many potential causes for an NDR (the most probable of which we've listed above). You may find out the best line of action by looking at these reasons for NDR in eCommerce. You can use it to determine which Non-Delivery Report in eCommerce have a high likelihood of succeeding and which have a high probability of repeatedly failing. Using this, you can handle NDRs accordingly. Encourage Consumer Participation Nothing irritates clients more than keeping their orders secret or needing to learn about order delivery. In addition, they want to ensure that their money has been well spent. You should contact clients based on the reason for a Non-Delivery Report in eCommerce to validate the cause and, more crucially, to gather information for a successful delivery. As a result, customers not only get to supply the necessary information directly, but they also get to feel involved in the delivery process, which can improve the experience. Monitor False Deliveries Delivery personnel who falsely mark an order as an NDR instead of attempting to deliver it are committing a sort of Non-Delivery Report in eCommerce, known as fake deliveries. These have a terrible impact on customer satisfaction and profitability because they increase the likelihood of RTOs. Due to no fault of their own, customers are left waiting for an order that never arrives and dealing with several delivery attempts. Making sure this number is maintained at a minimum can be accomplished by tracking phone deliveries among various carriers. Interact With Carriers A collaborative effort is necessary to ensure that the delivery of the Non-Delivery Report in eCommerce is successful. You must first receive notification of the NDRs from the carriers. Then, you must give the carrier the appropriate information after receiving it from the consumer for delivery. Any indirect communication with carriers or ineffective communication methods could also fail in the subsequent delivery attempt. How Can Technological Innovations Like NDR Management Software Solutions Contribute To Reducing RTOs? Source The four measures mentioned above are critically necessary for the fundamental management of NDRs to lower RTO%. However, you must use more sophisticated and technologically enabled resources if you want to reduce your RTO% as well as your NDR statistics significantly. You need specific features in NDR management solutions to automate the process of NDR management and quickly complete numerous follow-ups. An NDR management software solution is the first thing you need to have tied to your handy logistics toolbelt. Essentially, this system will assist you in automating and streamlining your NDR management workflow. Rapid NDR Updates Carriers are responsible for providing NDR updates, which they usually do in bulk after each business day. This implies that it takes a day to answer. Using an NDR management system with API connectors will ensure you get NDR updates in real time as they happen, which will speed up your response time. NDR Segregation With AI Support We included the various reasons for NDR in eCommerce previously. The easiest way to recognize and classify Non-Delivery Report in eCommerce to choose the most effective approaches to addressing them is through these causes. You should acquire an AI-enabled mechanism from an NDR management system that is set up to track NDRs according to the cause of the delivery failure. Automate Customer Communications The next step is to discuss these concerns with customers after you have sorted and classified various Non-Delivery Report in eCommerce according to their reasons (incorrect address, client unavailability, etc.). When NDR management software is used, clients are automatically contacted with questions about specific issues. These questions will specifically address the reason for the unsuccessful delivery. For instance, if the address is incorrect and an NDR results, a query will be issued asking for the proper address and the closest recognizable landmark. Optimizing Customer Response Time Automating these issue-specific queries can speed up the rate at which customers receive their inquiries and answers. Intelligent NDR management software will send simplified inquiries that ask for precise information, such as a backup contact number or the closest landmark to the delivery location, with multiple-choice or text-fill options. Real-Time Updating Carriers and Follow-Ups After Each Delivery Attempt You need to provide that information to the carrier as soon as you receive a customer response, and in record speed, no less. Only then can the delivery person attempt their subsequent delivery with knowledge. Your clients' responses can be automatically forwarded to carriers using an NDR management system to finish delivery. You must use equivalent caution in those rare cases where delivery reattempts fail despite following the specified Non-Delivery Report in eCommerce processes. Using an NDR management software entails following up with clients via automated conversations to find out why the delivery attempt failed and how it can go smoothly. Analytics-Based NDR Reduction Data gathering and analytics rely heavily on NDR management software. You can keep track of all your Non-Delivery Report in eCommerce over time to see what difficulties you might have overlooked and what issues the data suggests as remedies. You can detect fake deliveries by keeping track of NDRs and their causes. You can then take note of their most frequent occurrences and patterns. Then, with the help of your carrier and eCommerce NDR management software, you can start making deliberate efforts to reduce RTO with NDR follow-ups. Conclusion One challenge that is somewhat particular to Indian eCommerce operations is a high RTO percentage. As a result, brands must utilize data-driven management techniques to address specific problems. An NDR management system skillfully combines technology and logistics expertise to simplify workflow. This procedure prioritizes Non-Delivery Report in eCommerce based on their tendency to be resolved and targets NDRs according to their cause. Establishing a Non-Delivery Report in eCommerce system is fairly straightforward. Address the issues that have readily available solutions initially. Then, acquire data that will assist you in comprehending the more complicated concerns at the same time. Next, automate all predictable processes, then finish. An NDR management system, at its core, enables your company to communicate with customers more efficiently and enhance their post-purchase experience. How Does WareIQ Help Businesses Through Efficient Management of Non-Delivery Report in eCommerce in 2023? For managing Non-Delivery Reports in eCommerce, WareIQ features a reliable 3-step verification method. Verification of Non-Delivery Report in eCommerce by: IVR and SMS CallingWhatsApp Last-mile team manual verification eCommerce & D2C brands may handle Non-Delivery Report in eCommerce effectively by doing the following with WareIQ's Control Tower feature: Utilize our NDR dashboard to monitor eCommerce KPIs like NDR raised, reattempt requested, cancelled, and delivered, among others.Recognize the top 3 reasons for NDR in eCommerce and act right away.Get details for every order and respond to Non-Delivery Report in eCommerce immediately. [signup] NDR Non-Delivery Report in eCommerce FAQs What Does Non-Delivery Report in eCommerce mean?NDR, which stands for Non-Delivery Report in eCommerce, is a well-known acronym for B2B and D2C brands. An eCommerce business receives a notification from a courier service partner alerting them that a specific delivery has failed and providing information about the failed delivery. An order is only considered finished when it has been given to the customer after it has reached the last step of the delivery. How does Return To Origin and Non-Delivery Report in eCommerce operate?When processing a Non-Delivery Report in eCommerce, you must respond with "Reattempt" or "Return to Origin" and the necessary notes once the NDR has been raised. Return to Origin is the term used. An order is returned to the pickup site once the delivery service marks it as undeliverable after repeated tries. How may an NDR management system be set up in B2C and D2C eCommerce brands?Use the following methods to set up a system for Non-Delivery Report in eCommerce:1. React quickly; any delay in getting in touch with clients after the initial delivery attempt multiplies the likelihood of RTO.2. Utilize many channels to communicate with customers in NDRs, including manual and IVRS calls, emails, SMS, and notifications.3. Encourage call centre staff to turn Non-Delivery Report in eCommerce into successful deliveries.4. Choose better courier partners for upcoming orders using NDR data.5. Encourage customers to switch from cash-on-delivery to prepaid orders before delivery efforts are made. How can I reduce RTO in my eCommerce business?To reduce the return to origin (RTO) in your e-commerce business, you can take the following steps:Improve your order fulfillment process: Streamline your order fulfillment process to reduce the time it takes to process and ship orders. This can include automating certain tasks, such as packing and labeling, and using real-time inventory management systems.i) Invest in reliable shipping carriers: Choose shipping carriers that have a track record of delivering packages on time and accurately. Consider using multiple carriers to increase the chances of timely delivery.ii) Communicate with your customers: Keep your customers informed about the status of their orders and any potential delays. This can help reduce the likelihood of returns due to customer dissatisfaction.iii) Offer clear return policies: Make sure your return policies are clear and easy to understand. This can help reduce the number of returns due to misunderstandings or confusion.iv) Consider offering free returns: Offering free returns can make it easier for customers to return items, which can reduce the number of returns overall.v) Use tracking and delivery confirmation: Use tracking and delivery confirmation to ensure that orders are delivered to the correct address and to track any returns that may be made.By taking these steps, you can reduce the RTO in your e-commerce business and improve customer satisfaction.
November 25, 2022