Top 5 Challenges in eCommerce Fulfillment and Solutions To Overcome Them in 2024

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 fulfillment.

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 fulfillment 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

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 fulfillment. Also read about shopify fulfillment and fulfillment of nutrition and wellness.

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 challenges in eCommerce fulfillment.

Inefficient Warehouse Picking Operations

There are many reasons why warehouse picking operations can be inefficient and is a big challenge in eCommerce fulfillment:

1. 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.
2. 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.
3. 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.
4. Inexperienced pickers: If pickers are not well-trained or experienced, they may be slower and less accurate, leading to inefficiencies in the picking process.
5. 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.
6. 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.
7. 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.
8. 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

1. 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 and help in overcoming this challenge in eCommerce fulfillment.
2. 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.
3. 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.
4. 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.
5. 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.
6. Train pickers: Providing training and resources to pickers can help to improve their efficiency and accuracy.
7. 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.
8. 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:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. Inclement weather: Inclement weather, such as snowstorms or hurricanes, can disrupt shipping schedules and lead to delays.
7. Labor shortages: If a warehouse is experiencing labor shortages, it can lead to delays in getting orders out the door.
8. 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 fulfillment facilities are located.

There are several potential reasons for shipping location limitations that leads to challenges in eCommerce fulfillment:

1. 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.
2. Logistical challenges: Shipping to certain locations may be more challenging due to factors such as distance, transportation infrastructure, or customs clearance requirements.
3. Cost: Shipping to certain locations may be more expensive due to factors such as distance, transportation costs, or customs fees.
4. 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.
5. 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.
6. 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.
7. 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 fulfillment partner with warehouse locations that match your clients’ areas after researching to learn more about them and this will help overcome this challenge in eCommerce Fulfillment.

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 fulfillment 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:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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:

1. 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 big challenge in eCommerce fulfillment if you have a large number of products or if your inventory is spread across multiple warehouses.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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 fulfillment 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 fulfillment and logistics to a reputable 3PL company like WareIQ. WareIQ can provide you with complete supply chain fulfillment solutions so you can concentrate on the key growth drivers for your business.

Challenges in eCommerce Fulfillment FAQs: (Frequently Asked Questions)

Supercharge your fulfilment with WareIQ now, contact our team.

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