phase v fulfillment

Why Getting Order Fulfillment Right Is Critical to the Success of Your E-commerce Business

Why Getting Order Fulfillment Right Is Critical to the Success of Your E-commerce Business

The right order fulfillment solution is what bridges your e-commerce store and your customers. 

In today’s world, if a customer places an order but does not get the goods, it is considered a failure. And if that happens repeatedly, your online business risks losing customers and getting a bad reputation.

So, getting your logistics up to speed, including partnering with the right order fulfillment partner, is vital to the growth of your e-commerce business.

Whether you need pick and pack services, kitting and assembly, hassle-free order return processing, or an end-to-end order fulfillment solution, you must ensure it delivers value to you and your customers.

Consumers’ Expectations Are Changing

Customers want not only free shipping but also fast delivery. The so-called “Amazon effect” is indeed setting in and putting pressure on e-commerce retailers. 

Customers’ hectic schedules allow them to be picky about delivery options and even which e-retailers they purchase from. As an e-commerce business, you must evaluate such signals and pay attention to the trends to remain competitive. 

Take a look at the data surrounding customer expectations for shipping.

  • 59% of online shoppers claim that free delivery improves their shopping experience.
  • 55% of consumers expect a flexible, free, and easy returns process for online purchases.
  • Free delivery motivates over 80% of internet users to shop.
  • In the US, 48% of customers abandon any online purchase during the checkout process due to extra costs, including shipping and taxes.

Thus, reading into these trends, it becomes clear that smooth and cost-effective order fulfillment should be your priority. In fact, customers no longer see free shipping as a perk; it is now a necessity.

More Reasons Why You Need Robust Order Fulfillment

Of course, for most e-commerce store owners, the primary drivers for more streamlined order fulfillment are customer demand and expectations. The benefits, however, do not stop here.

Cost Optimization

Shipping is expensive, and it is a cost that you must assume as an online business. Whether you do it in-house or outsource it to a third-party e-commerce fulfillment partner, you can expect to cover the following:

  • Packaging costs (boxes, wrapping paper, labels, and tape)
  • Fulfillment fees, including labor costs
  • Optional costs, including insurance or custom declarations for international parcels
  • Overheads if you are handling order shipment in-house.

Thus, depending on the size of your e-commerce business, such costs can quickly add up and affect your profit margins. For this reason, you must decide which strategy works best for your business.

If you are a small online store with just a couple of daily orders, it makes sense to handle them yourself. 

But as you grow your e-commerce business, you have to handle higher volumes and process more customer returns while ensuring fast service. At this point, operating shipping in-house might become less viable, and you might want to consider contracting third-party order fulfillment services.

Reduction of Returns

In the United States, just 21% of customers are willing to wait for products to arrive late because of problems in the supply chain. In fact, the rate of returned orders is correlated with how quickly customers get their purchases, particularly if they paid for expedited shipping.

Suppose a customer orders a birthday present and pays for next-day delivery, but the order fails to reach them on time. They spend some hours trying to chase it up but to no avail; then, it appears on their doorstep two days later (or two days after the birthday.)

What does the customer do? They return the item, which incurs an extra cost to your e-commerce business. What is worse, you are likely to lose this customer for good.

Maintaining Positive Brand Reputation

Often, your customers absolutely love your e-commerce store, but they are not fans of the shipping provider that you choose to work with. You might think that you found the most cost-effective option and that it makes sense from the financial perspective, but your customers do not share the same sentiment.

If you get repeatedly called out via social media for late deliveries, damaged parcels, or no-shows, your shipping partner could be to blame. However, in your clientele’s eyes, you are the one responsible for it.

A poor reputation, especially in the era of TrustPilot and social media backlash, is something you cannot afford as an e-commerce retailer. It can actually result in dramatic customer churn rates. 

After all, a 5% increase in customer retention can bring 25% to 95% higher profits to your online store, meaning that you have to find a sweet spot when it comes to balancing the cost of an order fulfillment company and the potential reputation damage.

Automation and Efficiency

It takes the right processes, systems, and technology to deliver orders in a way your customers genuinely appreciate. As an e-commerce business, you are busy sourcing new products, rolling out marketing campaigns, and expanding your operations.

Order fulfillment is essential to the overall customer experience, but to thrive in this area, you need a specialized service. E-commerce order fulfillment providers come with readily available solutions that can automate the entire shipping process.

They also provide their staff, technology, and data management systems, allowing you to become more profitable in the long term.

Conclusions

Many believe that e-commerce is about selling a niche product and, in this way, winning a substantial market share. While offering something different is important, more than anything, other factors can play a role as well. 

E-commerce companies are now competing on personalization, impeccable customer service, and ultra-fast shipping methods, which can all offer a real edge.

Ready to impress your customers with unmatchable delivery solutions from the number one order fulfillment company? 

At Phase V, we work across all industries, from apparel and clothing to household items, electronics, and health products. Our unbeatable experience and customer-centric approach mean that you can depend on us to provide hassle-free fulfillment and tech-driven 3PL services that add value to you and your customers.

Contact our team now and let us create a tailor-made fulfillment plan for your e-commerce business!