Improving Your Growing eCommerce Business
If you are a small business owner of an eCommerce business, then you will be well aware that any order fulfillment is a very integral part of what you do. As your business starts to grow, then you may need to look into other ways of fulfilling orders, as doing so in-house may no longer work, depending on the level of growth that the business has.
During the pandemic, more and more people turned to shopping online than ever before. This means that eCommerce businesses needed to adapt and adjust to meet demand, as well as make sure that they could fulfill all of their orders. This, in many cases, led to needing an increase in warehouse capacity, as well as companies rethinking their supply chains.
It was quite amazing just how much online sales increased. The first few months of the initial outbreak of the virus led to an increase in sales of over 40%. This is a big shift on how people shop and as a result, it increases short and long term need and demand for warehousing or fulfillment centers, in order to meet demand. By being able to have warehouses or access to fulfillment centers in more places, it means that they were closer to customers and could fulfill demand in a more timely manner. In the US, during the first business quarter, right when the pandemic was in full swing, industrial leasing was at a record high. That was only taking into account the start of the pandemic, so it is easy to see how this will have grown and grown, as many people decide to stick with online shopping.
With the large surges in demand for shopping online and getting good online, it shows how and why businesses need to rethink different areas of their supply chain management. As a result, retailers might need to look to get extra inventory for products that are in higher demand, in order to meet demand efficiently.
Building up a lot of ‘buffer’ stock in your storage so that an eCommerce business can meet the high demand naturally means that there is a need for more industrial space, such as fulfillment centers. Put simply, if you are an eCommerce business, you need to have access to more fulfillment centers that are in more places, in order to best serve your customers and meet their needs. By investing time and money into distribution centers and parcel hubs, it can mean that there is minimal disruption, if something like this were to happen again. Along the same lines, by looking to increase options around transportation, so there is less of a need to rely on trucks, as well as using facilities that are more automated, it can help to reduce the impact of business when big events like the pandemic do occur.
Focus on customers
The pandemic has opened a lot of questions around online shopping, with so many options and competition. As an eCommerce retailer, you need to be staying on top in order to meet demand and be competitive. Many customers have latched onto the online shopping trend, but with patience being thin, there has been a big demand for people wanting swift and quick shipping, such as ‘next day’ or within two days. If you aren’t looking for ways to implement this in your own eCommerce business, then you could lag behind where your competitors are making it work.
If your eCommerce business doesn’t have the right kind of systems in place to meet these demands and consumer needs of instant gratification, then your customers will look elsewhere. For instance, consider investing in things that increase feelings of personalization and drive customer satisfaction, such as custom boxes and packaging. Doing so allows you to deliver a better customer experience. It is as simple as that. By improving your focus on your customers, you will be able to provide better and be better, which is what is going to help the business to grow.
When it comes to your inventory, being more efficient means that you take an approach with technology in mind. There are so many tools that are out there to help you now, from digital mapping to have more effective routes around the warehouse to save time, to increasing your dispatch cut-off time to later in the day, in order to make sure that you’re able to offer a better service. The eCommerce world is an evolving one, so you need to make sure that you have the right strategy for you to allow your business to keep growing over time.
When your eCommerce business starts to expand, or when you’re planning ahead for your business, you are likely to need to expand your eCommerce fulfillment strategy. The reason for this is that many businesses outsource their fulfillment to others, such as a third-party logistics company (3PL). In many cases, this could work out. Being a business owner, it is important that you understand how 3PLs work, so that you can make the most of your fulfillment and be able to scale and grow the business in the way that you want to.
What is third-party logistics?
3PL refers to outsourcing the logistics of your eCommerce business processes to a third-party company. This could include a variety of things, from management of inventory, to fulfillment, or warehousing, depending on your needs. By using 3PL, it means that providers allow eCommerce businesses to get more done, as there is more at their fingertips to access, with improved infrastructure and tools to automate different retail orders.
3PLs emerged as a result of the introduction and growth of eCommerce in the late 90s and early 2000s. In fact, the integration of supply chain into warehousing operations, as well as transportation services is what many people today will call 3PL.
The valuable services 3PLs offer
More than just shipping orders and providing storage for inventory, 3PL fulfillment services can vary quite greatly, depending on the third-party company that you choose. When you choose a 3PL, then there are some of the best services that come from choosing them.
All eCommerce companies need to manage their inventory. However, this can involve much more than just warehousing the products that you have. A 3PL will allow you to easily look at your inventory and then sync what you have in real-time, so you always know exactly what you do or don’t have as orders come in and refunds go out. This will also allow you to be able to order in what is needed and when, before any stock runs out.
Once the 3PL that you choose gets and stores your inventory, you will be able to check the amount that you have and see what has been sold each day. With this, you will have a clear idea of what is working well and what you have to ship out, whenever you need to know. Using these processes, you could even connect the technology of the 3PL to push sock counts in real-time to your online store, so that things come up as being out of stock immediately, leading to no errors and unhappy customers.
Any eCommerce business needs to be aware of the facts around shipping. It has been found that nearly 75% of shoppers expect to have delivery that is fast and affordable and that sometime requires recurring shipments. Nearly half of all online shoppers will abandon their cart because they get through to the payment process and find that the shipping costs are too high. Nearly a quarter of customers who go through to place an order then cancel when the shipping is too slow. So having efficient shipping at an affordable rate is vital for an eCommerce business. A big part of having such efficiencies to have an A&D scale digital indicator.
Many online retailers offer two-day shipping or a next day delivery option, as well as free shipping that may take a little longer. Whatever is chosen, it is clear that people will pay for someone to arrive more quickly, or they’ll happily wait as long as they don’t have to pay for it.
The benefit that a 3PL can offer you is the amount of warehouses and the warehouse locations that can make a difference to how fast and efficient your shipping is. By choosing to work with a 3PL, something like being able to offer two-day shipping for your customers is something that can be much more doable. 3PLs that are established are likely to have relationships with shipping companies and as a result, will be able to secure a deal for repeat custom. Bear in mind that the most cost-effective way to ship to customers is to have inventory in more places, so that each package doesn’t have as far to go.
If you are looking to save money for your eCommerce business but still want your business to grow, then looking into the different options available to you can make a big difference. Think about where your customers are located and what kind of fulfillment center is going to work best for them. When you focus on being fast and efficient for your customers, then it will be what keeps the business growing.
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