Effective Ecommerce Fulfillment Is the Holy Grail of Online Retail

Order Fulfillment Can Make or Mar an Ecommerce Business

Ecommerce Fulfillment
Ecommerce Fulfillment. Terry Williams / Photographer's Choice / Getty Images

To understand ecommerce fulfillment, hear your customers say,

"I ordered this and I received that."
"I ordered three weeks ago, and I have still not received it."

"I received the iPhone, but its screen was cracked."

"I sent in the Samsung phone for repair two months ago but, despite innumerable reminders, no one is able to give me a definite date when I will receive the phone back."

These are the kind of statements that terrify ecommerce businesses.

When left unresolved, they can sound the death knell for any business -- ecommerce or otherwise.

But therein lies the existential dilemma for ecommerce. To begin with, people expect better prices, if not "deals" in online purchases. That shaves the profits of many ecommerce businesses to single-digits. So how would they be able to afford outstanding and personalized customer service? It's precisely this problem that's led to many ecommerce outfits turning infeasible.

Akin to physical retail, ecommerce works on maximizing visitors to their store. But unlike physical retail, an ecommerce merchant cannot simply hand over the merchandise to the customer over the counter. The goods need to be packed and shipped, often across state and national boundaries.

As if that was not enough, issues dealing with returned goods, or reverse logistics in general can be especially irritating for ecommerce businesses, as they do not have a physical location where goods can be returned.

Here are two important trends that will help you better understand issues pertaining to ecommerce fulfillment:

  • Third Party Logistics

    Online businesses are fueled by efficiency. As ever-improving technology and devices work better, even business processes need to improve. This necessitates specialization as a way of life -- which presents a compelling rationale to outsource ecommerce logistics.

    Third party logistics providers are now available across boundaries. They can not just deliver with a high degree of accuracy, but also manage costs to the point where in-house logistics becomes illogical.

    Yet another driver for outsourcing logistics is the fact that most ecommerce businesses do not have the scale where they can afford the huge costs of cutting edge ERP (Enterprise Resource Planning) software required to remain competitive. And as computing goes increasingly mobile, the investment in latest technology is only bound to increase. This makes a compelling case for large format, multi-location, specialist third party logistics providers.
  • Reverse Logistics

    Many ecommerce businesses would prefer to wish away the need for reverse logistics. As if the strain of creating and fulfilling demand was not enough, ecommerce professionals have to find means to deal with goods that move in the reverse direction -- from the customer to the business.

    There are many drivers of reverse logistics, such as returned, undelivered, and damaged goods. But not all reverse logistics is driven by error or accident. For instance, in the case of exchange-offers, ecommerce businesses actual fuel the need for reverse logistics.

    However the business model of a reverse logistics unit is quite different from that of the logistics and fulfillment unit. To learn more about how a reverse logistics unit performs, read the article -- What is reverse logistics?

Effective Ecommerce Fulfillment

For fulfillment to be effective, an ecommerce business must pay attention to all of these:

  • Speed

    The goods must not just get there. They must get there in time, every time.
  • Accuracy

    The goods must get there, but not just any goods. The exact goods that were ordered must get there.
  • Scalability

    Sure you can get the goods there now, but as you grow will your ability to fulfill grow with you?
  • Surge

    The holiday season and other occasions cause surges in shopper traffic. You have probably ensured that your website withstands the surge, but does your fulfillment? Or will the Christmas gift be delivered after Christmas?