10 Common eCommerce Fulfillment Challenges
As the owner of an eCommerce business, you already know there are a lot of moving parts when it comes to running your business. While it may often be overlooked, order fulfillment is one of the most essential parts.
Without effective eCommerce fulfillment, your customer experience and profitability can suffer. But, if you’re not an expert in fulfillment, you may find yourself facing big challenges trying to handle it yourself. Or, you may have turned to a fulfillment provider that that just isn’t cutting it. Don’t worry, you’re not alone—many eCommerce businesses struggle with fulfillment.
Here are some of the most common obstacles other businesses just like yours face all the time, and what you can actually do about it in your own organization to overcome them!
eCommerce Fulfillment Challenge #1: Slow Shipping Speeds
When modern consumers buy from eCommerce businesses, they’re expecting their package to arrive on their doorstep quickly. If you’re relying on an eCommerce fulfillment process that is disorganized and complicated, your shipping timelines won’t be in line with the demands of your customer base—which means next time, they’ll simply go to the competitor that can get them what they’re looking for faster.
eCommerce businesses move fast, so eCommerce fulfillment services need to move at the same speed—if not faster! So, to create a fast, streamlined, and efficient eCommerce shipping process, you need to work with a fulfillment provider who can guarantee the shipping timelines your customers are expecting! How? This brings us to eCommerce fulfillment challenge #2…
eCommerce Fulfillment Challenge #2: Shipping Location Constraints
Just like buying a house, when it comes to eCommerce shipping, there’s one major factor that often rises above the rest: location. Why? The location of your eCommerce fulfillment centers will dictate how quickly your products can get to your customers.
The closer your order fulfillment facilities are to the end customer, the shorter the distance your products have to go to get there—which means faster eCommerce shipping that will satisfy your customers (and lower shipping costs). But, if you only have one fulfillment center, or have multiple fulfillment centers that aren’t strategically located near where your customer base is, it can drastically slow down shipping timelines.
Another common constraint on eCommerce shipping is the lack of reliable global fulfillment. This is a huge problem because in 2018 alone, an estimated 1.8 billion people worldwide purchased goods online. When your customers are spread across the world, your eCommerce fulfillment needs to be too—and if it isn’t, you’ll be missing out on tons of potential customers!
A fulfillment provider with multiple warehouses can ensure that your products get to your customers quickly. It’s important to do market research on where your customers are, then choose a fulfillment provider with warehouse locations that match. Even more importantly, if you sell worldwide, you need to a fulfillment partner that has the capability of streamlining international shipping for not only speed of delivery but cost effectiveness too.
eCommerce Fulfillment Challenge #3: Using a Complex eCommerce Fulfillment Software
Many eCommerce businesses have an amazing product and big, powerful eCommerce platform—but are leveraging an eCommerce fulfillment software behind-the-scenes that just isn’t cutting it. If you’re using a complicated software system that is nearly impossible to implement, difficult to actually use in your daily workflows, or is unable to integrate with your other business apps, it can bring your business processes to a halt, slow down your shipping speeds, and frustrate both employees and customers.
It’s important to understand what your needs and goals for eCommerce fulfillment software truly are. When it comes to eCommerce fulfillment software, each is a bit different and includes various features—for example, some offer more branding potential and additional marketing capabilities, while some are solely focused on speed. So, be sure to select an eCommerce fulfillment software that is easy to implement, use, and seamlessly integrate with any other platforms and apps you’re already using.
eCommerce Fulfillment Challenge #4: Lack of Branding Opportunities
There are millions of eCommerce businesses out there trying to sell products online, which means you need a way to stand out from the competition in the eyes of your consumers. Delivering your products in generic packaging certainly won’t help you out in this area. Boring brown boxes create an un-engaging, boring, impersonal customer experience that does nothing to build brand recognition.
Use eCommerce fulfillment as a marketing tool! Why is this a valuable investment? Modern consumers want to engage with brands who can offer personalization and care about developing a deeper connection with their customers. When a custom-tailored box arrives on their doorstep, it’s fun and exciting! This pleasant customer experience will make them want to buy you from again and again.
Plus, showcasing your brand will help your packaging stand out in a sea of boring brown boxes on doorsteps or in a mailroom, helping to further amplify the reach of your company!
eCommerce Fulfillment Challenge #5: Inefficient eCommerce Returns
In the U.S. alone, it’s estimated that eCommerce return deliveries will cost $550 billion by 2020, which is 75.2% more than the cost of returns in 2016. This number doesn’t even include restocking expenses or inventory losses! As an eCommerce business without a brick-and-mortar location, items your customers send back will likely end up back at your fulfillment center.
However, if you aren’t prepared to quickly accept, evaluate, and restock these goods, they’ll simply sit in storage and be unrecognized as current inventory. This means they can’t be immediately resold, which prevents you from making revenue from these returned items.
Consumers value a free, simple return process—in fact, free returns or exchanges are cited as the number two reason that makes consumers “more likely to shop online.” But, even if you have a great return policy in place, if your eCommerce fulfillment providers can’t actually carry it out, it won’t mean anything to your customers.
Besides negatively affecting your customer experience, this can also negatively affect your profit margins. Managing the “return and repair” process accounts for 10% of total supply chain costs, but if the supply chain gets stuck due to inefficiencies, it can reduce profits by a whopping 30%. The bottom line? It’s essential to choose an eCommerce fulfillment provider who has the fulfillment processes, infrastructure, and manpower in place to handle a high volume of returns quickly.
eCommerce Fulfillment Challenge #6: Free Shipping Expectations
Today, 75% of consumers expect free shipping when they make an online purchase. This is due in large part to big eCommerce retailers like Amazon and Walmart which have made it the norm. These retail giants, of course, can afford to take the hit for free shipping, but for startups and small and medium-sized eCommerce businesses, offering free shipping can be brutal on the budget.
First and foremost, you may consider increasing the price of your product just enough to cover free shipping. It may sound counterproductive, but many people don’t notice a small price increase (but they will notice a shipping cost). The Wharton School of Business even shows that free shipping that saves a customer $6.99 is more appealing than a discount that cuts the purchase price by $10.
If a product price hike is out of the question, you might consider offering free shipping on orders over a certain amount, offering free shipping on two or more items, or offering free shipping at certain times of the year (such as when you’re busy and money isn’t an issue). A recent TFL blog even shows you how to calculate your free shipping threshold.
eCommerce Fulfillment Challenge #7: Damaged Products
In 2018, the three leading U.S. couriers (USPS, UPS, and FedEx) delivered approximately 13.5 billion packages. Of those, 11% were damaged or mis-delivered. That’s nearly one and a half million lost or damaged goods! This can result in a major loss in revenue when all factors are considered:
- Managing product returns
- Replacing or repairing the product
- Offering a discount on the next order
- Spending labor on additional customer service, including filing insurance and freight claims
- Handling the inspection and repair (or disposal) of returned items
- Suffering damage to the brand's reputation
- Losing customers and referrals
Accidents happen, however, eCommerce retailers need to do everything they can to mitigate damage or suffer the consequences. Much of this comes down to the packing process. Considerations should include choosing a sturdier box (check out our blog, Six Types of Custom Packaging for Your Business for more on different types of boxes that are available), wrapping items individually within one box, cushioning items from interior walls, avoiding overpacking, and preventing moisture damage by wrapping items in a plastic bag with silica gel packets.
Read more about preventing package damage here. And of course, you could just always unload packing and shipping to a reputable eCommerce fulfillment center...
eCommerce Fulfillment Challenge #8: Abandoned Carts
As an eCommerce retailer, you know the drill: A customer fills up their online shopping cart with merchandise and then clicks away as soon as it’s time to buy, leaving all those items unpurchased. According to the Baymard Institute, nearly 70% of shopping carts are abandoned! The three most common reasons cited for cart abandonment are:
- Additional costs too high (shipping, taxes, etc.)
- Being forced to create an account
- Complicated checkout process
Looking at the reasons for cart abandonment, the solutions seem pretty clear. Create an easier online checkout experience; don’t force people to create an account; and be upfront about additional fees so they’re not blindsided upon checkout. you might consider a flat-rate shipping system to provide the fee upfront. Or, allow them to enter their zip code before they’ve progressed to the checkout so that the shipping costs can be calculated prior to checkout.
eCommerce Fulfillment Challenge #9: Poor Customer Service
70% of companies say it’s cheaper to retain a customer than acquire one, while others have suggested that the cost of acquiring a new customer can be as much as seven times more expensive. Unfortunately, research estimates that companies could be losing as much as $62 billion each year due to poor customer service. And today, with so many eCommerce companies vying for the attention of the same people, providing good customer service is critical.
While not all eCommerce companies can afford to hire staff to be waiting by the phone to answer customer questions, they can at least provide an easy ordering experience online and offer a way for customers to get questions answered (email responses should be within the next business day).
An artificial intelligence-enabled chatbot to answer basic questions can also be installed on the website. Finally, the tried-and-true method of a robust FAQ section on your website can work like a charm. It’s all part of delivering a superior customer experience.
eCommerce Fulfillment Challenge #10: Backorders
A backorder, of course, is when an item is not available because there are more orders for the item than there is inventory currently available—but new inventory will be available from the supplier eventually. However, most customers don’t want to wait (especially if they can find the same product through another online merchant). So, they’ll look elsewhere, costing you the sale.
No retailer wants to be overstocked, but backorders can cost you business. To reduce backorders, you need to take a look at past purchasing patterns in order to predict future trends. As a simple example, this may mean stocking up on sweaters in the colder months and scaling back in the warmer months. Another option is to diversify your suppliers; this means if one supplier is out of stock, you can turn to a different source to fulfill your order.
You should also always be honest and open with the customer about what’s causing the delay and when you expect to have the item in. You may consider offering a discount if they still place their order; many people will accept a delay if they’re receiving a worthwhile discount.
Finally, if you work with an eCommerce fulfillment center that uses powerful eCommerce fulfillment software, you can often leverage their intel to gain insight that will help you to better manage inventory to eliminate or reduce backorders once and for all.
Overcome the Challenges of eCommerce Fulfillment with the Fulfillment Lab!
It’s time to say goodbye to simple warehouse, pick, pack, and ship that only presents challenges for your eCommerce business and hello to the future of fulfillment—the Fulfillment Lab. Our innovative eCommerce fulfillment services include:
- Fast, reliable global eCommerce fulfillment
- Expedited shipping options with delivery guaranteed in 3 days or less
- Proprietary, easy to use Global Fulfillment Software™
- Access to our 14 fulfillment centers (2 domestic and 12 international)
- Customized packaging for limitless branding potential when it comes to shipping boxes, coupons, labels, inserts, and more
- Full visibility into the end-to-end fulfillment process
- Dynamic integration with every major eCommerce system
- Options to add white and private label products to your existing line to build your brand and increase the profitability of each sale
With these eCommerce fulfillment services, you can overcome the obstacles of fulfillment with ease. The result? Higher profits, happier customers, and less headaches for you!