Fulfillment Tips for Ecommerce Entrepreneurs

If interested in starting a new business venture and not sure what, it might be wise to consider an ecommerce website. According to analyst Sucharita Mulpuru of Forrester Research, consumers are projected to spend $327 billion toward online shopping by 2016 — a 62 percent increase from 2011.

As shoppers continue to flock to websites on their computers and mobile devices, the retail landscape will continue to shift away from brick-and-mortar to the Web. Individuals from a variety of backgrounds have found success starting an ecommerce business. Many come from a design background, others from traditional retail stores. Conceptually, running an online shopping business is very similar to managing a traditional retail store: bring customers to your storefront, carry products that shoppers want and provide excellent customer service and support.

However, many ecommerce business owners overlook one aspect of running an ecommerce business: order fulfillment. When attempting to turn first-time online shoppers into longtime customers, an improperly packaged order or errantly shipped package can lead to new shoppers never returning.

To improve your order fulfillment and effectively scale operations as your business grows, focus on the following.

Create A Fulfillment Baseline

Knowing how well you process orders today can help you decide where to focus your additional efforts. Start by benchmarking the metrics that matter most to your operation. For example, if you promise customers orders are same-day shipped, measure order turnaround time, the time from order placement to shipment. Likewise, measuring your return rate, percentage of orders that are returned by the customer for any problem, can help you determine if orders are being processed too haphazardly.

Invest In Technology That Can Improve Lagging Processes

Once you identify potential weaknesses in your fulfillment operation, it’s important to invest in resources to fix the problems. When investing in technology, ensure that you can justify the investment. If you are pulling your hair out over inventory discrepancies, it’s probably time to invest in an inventory management application and barcoding equipment. Likewise, if you are having difficulties with getting orders processed, you can build a dashboard that prioritizes orders based on when they need to be picked up for shipment.

Hire Specialists As Your Team Grows

While technology can help you improve managing orders and maintaining a valid inventory, your employees are ultimately responsible for executing. As you begin to hire employees specifically to process orders, pick merchandise and pack it for shipment. It’s important to have workers specialize in each aspect of fulfillment. These individuals will not only become specialists at their job, but they will also be your best bet to improving as you continue to grow. Ask these workers how they could do their job better and what it would take for improvement. Likewise, you can compensate or incentivize workers for both individual efficiency increases and for bringing new ideas to the table.

Know When To Outsource Portions Of Fulfillment

It’s important to know when to ask for help with fulfillment. If it’s holding back the growth potential for the company, you should consider outsourcing fulfillment of specific or all merchandise in your inventory. Many online shopping cart solutions can integrate directly with third-party logistics (3PL) operations to send orders directly to outsourced distribution centers. This allows you to focus on your website, marketing projects and building customer service teams. To take it a step further, you could also connect with drop shippers for certain merchandise. Like 3PLs, drop shippers manage fulfilling your orders, but unlike other outsourcing options, drop shippers also own your inventory. This can be a good option if you don’t want to invest in buying-up high-margin merchandise.

Above all, always keep in mind your end goal as an online merchant: provide an exceptional service and product to your customer. Exceptional fulfillment is an important aspect of a great customer experience, and continually improving will not only reduce your costs, but keep your customers happy.

Michael Koploy

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