Coming from a fulfillment company, it’s too tempting not to call eCommerce fulfillment the “heavy lifting” essential to running a successful brand that brings customers back again and again. There’s truth in that, though, because proper fulfillment protects revenue and improves satisfaction levels to help quality products scale.
On the other hand, poor fulfillment can ruin the customer experience no matter how good your products are. Delays, damage, and incorrect orders generate enough frustration that your shoppers are simply going to go elsewhere next time. Companies need to know the warning signs of poor fulfillment so that they can determine when it’s time to reevaluate their eCommerce fulfillment operations or partners. Here are a few red, flashing “danger” signs that operations sometimes overlook.
It delays scaling
Fulfillment shouldn’t get in the way of your operations. Unfortunately, most eCommerce companies have seen fulfillment do just that over the past few years. Uncertain sourcing, slow and expensive containers, shifting demand, and sporadic partner delays created a supply chain that needed to be dynamic if it wasn’t going to eat every ounce of revenue. That’s true in times of lean and plenty.
Good fulfillment operations respond by allowing you to scale up or down as you need. That means access to shelf space when things are going well, or the ability to only pay for physical space inventory uses as you reduce stock. If a fulfillment operation can’t support additional inventory or if you’re spending money to store air, it may be time to reevaluate your options and look for partners flexible enough to adapt.
Shrinkage impacts orders
ECommerce shrinkage is an ongoing threat throughout the sales process. Inbound goods can be damaged in transit, or a pallet might be light. Receiving and the putaway process can harm products when they’re dropped, stored poorly, or teams use the wrong equipment to handle them. Incorrect orders going out the door impact inventory levels, while correct orders can be damaged in transit if packed improperly.
That’s shrinkage at every turn. Fulfillment operations should have plans, processes, and training to minimize that. High shrinkage is an unnecessary cost if you fulfill in-house, showing where you need to invest significantly. For outsourcing, your partners should make you whole for any losses they cause and have plans to address it. Shrinkage costs sales immediately and reduces the likelihood of repeat business because who wants to buy again from the company that sent broken things or the wrong stuff.
Evaluate your shrinkage and see if it is costing you high return fulfillment costs and yields lower customer lifetime values, it’s time to make a significant shift.
Always overseeing the outsourcing
Operations managers have more on their plate than nearly anyone else in an eCommerce operation. You’re managing labor, inventory, loads, maintenance, and plenty of daily activities in warehouses and offices. At the same time, you’ll be talking with carriers and railheads, negotiating rates, and finding suppliers for all the small equipment and materials that orders and teams need.
These demands scale with order volume, which is why many companies start outsourcing fulfillment. The trick to having a happy operations lead is outsourcing to a partner who doesn’t need babysitting. You deserve a partner that works with carriers for you and enables you to automate the shipping selections. Orders are accurate and packaged correctly, protecting products and your brand. When ops schedules a container or freight delivery, the fulfillment warehouse should have a team to receive it and accurately get it in inventory counts.
You should define your needs and trust the 3PL to get it done. If it isn’t, or if you constantly have to ping them to ensure that directions are followed, they’re not a good fit. Watch your customer reviews for comments about shipping. Look at your return volume and reasons. And make a few spot purchases to test the 3PL’s fulfillment. If you, as a customer, wouldn’t be happy with what arrives, it’s time to start looking elsewhere.
Fulfillment is frustrating
While many indications on the usefulness of fulfillment can vary, outsourcing should improve your operations and avoid daily headaches. The most significant indication that you may need to outsource fulfillment or switch 3PLs is that you and your operations teams are frustrated by current processes. When you end most days discouraged and anxious or feeling trapped, it’s time to reevaluate your current eCommerce fulfillment services.
Look for a partner or bring things back in-house, so your team feels confident in fulfillment. Orders power everything in eCommerce, and fulfilling them must always support growth and the potential to capitalize on new opportunities.
About the author
Jake Rheude is the Vice President of Marketing for Red Stag Fulfillment, an eCommerce fulfillment warehouse that was born out of eCommerce. He has years of experience in eCommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.