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These ecommerce fulfillment mistakes will cost you: And what to do instead

Jan 18, 2024 - Alyssa Wolfe
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Each day, thousands of products are picked, packed, shipped and headed to countless customers. While most don’t think about the scope or what happens behind the scenes, it’s evident that fulfillment is a massive part of ecommerce. Moreover, customer expectations have changed – people want their items shipped low-cost or free and to arrive at their door swiftly. In other words, fulfillment has become a critical part of the customer experience.

It's easy for businesses to make any number of common fulfillment mistakes. However, there are ways to prevent and handle issues that arise. This article will cover frequently made ecommerce fulfillment mistakes and what to do instead.

Mistake 1: Outdated tech

Outdated technology has a variety of negative effects on the ecommerce fulfillment processes, including:

  • Inefficiency: Outdated systems may lack automation and optimization features, leading to manual and time-consuming processes. This inefficiency can result in slower order processing, picking, packing and shipping times.
  • Accuracy issues: Older technology may not have advanced tracking and inventory management capabilities. This can lead to inaccuracies in stock levels, order fulfillment and shipping, causing delivery errors and customer dissatisfaction.
  • Limited scalability: Older systems may struggle to scale with the growing demands of an expanding ecommerce business. This can result in bottlenecks and limitations in handling increased order volumes effectively.
  • Integration challenges: Compatibility issues with newer technologies and third-party platforms arise when using outdated systems. Lacking integrations hinders the seamless flow of information between different parts of the fulfillment process.
  • Higher maintenance costs: Maintaining and repairing outdated technology can be expensive. The costs associated with fixing issues and dealing with downtime can accumulate over time.
  • Security concerns: Older systems may lack modern security features, making them more vulnerable to cyber threats. This puts sensitive customer and business data at risk, impacting the overall security of the fulfillment process.
  • Customer Experience: Slow and error-prone fulfillment leads to delays in order delivery. This negatively affects the customer experience, potentially leading to customer dissatisfaction, negative reviews and a loss of repeat business.
  • Lack of real-time visibility: Outdated technology may not provide real-time visibility into inventory levels, order statuses, and shipping updates. This lack of visibility can hinder decision-making and responsiveness to changes in demand or supply chain issues.
  • Competitive disadvantage: Ecommerce is a highly competitive industry, and companies using outdated tech may struggle to keep up with competitors who leverage modern, efficient fulfillment solutions. This can result in a loss of market share.

What to do instead

To mitigate these issues, invest in or work with a 3PL partner that uses modern technology infrastructure and integrated systems that offer automation, scalability, real-time visibility and enhanced security. This improves operational efficiency, provides better customer experiences and gives ecommerce retailers a more competitive position in the market.

Mistake 2: The wrong warehouse space

Warehousing is a critical component for ecommerce. Having enough space is essential for growth. However, it’s also important to have the flexibility to meet your business's demand ebbs and flows. Empty space can cost you, but you must remain adaptable to meet peak season demands.

Another common warehousing mistake is layout. Proper layout and management are a necessity for streamlined operations. High-volume products should be optimally located, making it easier to access them for packaging and shipping. Vertical space should also be used to your advantage, providing more storage while keeping areas open for better warehouse navigation, making picking, retrieval and fulfillment operations faster.

What to do instead

Maximize and optimize how you use your warehouse space. Start by assessing how it’s currently used and identify spaces not used in full. Then, do things like storing items by size, using vertical storage or removing obsolete inventory. Ecommerce businesses can also work with a 3PL service with the knowledge and expertise to help you optimize your warehousing operations.

Mistake 3: Poor inventory management

If you don’t have a handle on your inventory, it can affect your ecommerce business in numerous ways. For example, retailers with poor inventory management experience stockouts, overstock and shipping delays. Poor inventory organization may mean you struggle to find items in your warehouse. Other common inventory management issues include incorrect data, tracking discrepancies and the inability to meet fluctuating customer demands.

What to do instead

Use inventory management best practices. This means having the right software, a streamlined warehouse layout, setting periodic automatic replenishment (PAR) levels, forecasting, conducting stock audits and working with reliable suppliers.

Mistake 4: Lack of reverse logistics processes

Ecommerce brands that lack a clear returns policy and processes may find themselves deterring customers. Returns management has become a part of the fulfillment landscape – and how you handle it has a big impact on the customer experience. Consumers look for a clear policy before they purchase and want a seamless experience if they do. In fact, 89% of consumers are less likely to buy from a retailer after a bad return experience, while 97% will buy again after a positive one. Treating returns as an afterthought can cost you, making it essential to examine your process.

What to do instead

Implement returns management processes. Use returns management best practices to create a policy, implement a returns prevention strategy and a workflow for getting returned items back in circulation more quickly.

Mistake 5: Inadequate communication

Communication is key for efficient and streamlined operations. It also goes a long way in preventing customer, partner and stakeholder dissatisfaction. Ecommerce businesses must look at how they communicate throughout the supply chain, otherwise they can experience inefficiencies, errors and disruptions. Lack of strong communication can lead to:

  • Order errors: Inadequate communication between different departments, such as sales, customer service and warehouse teams, can lead to misunderstandings and errors in order processing. This may result in incorrect items being shipped, wrong quantities or shipping to the wrong address.
  • Inventory inaccuracies: Lack of clear communication can result in discrepancies between actual inventory levels and the information available to fulfillment teams. This can lead to stockouts, overstocks, and difficulties in fulfilling orders accurately.
  • Shipping delays: Lack of communication can cause delays in the processing and fulfillment of orders. Miscommunications between teams responsible for order processing, packing and shipping may lead to missed deadlines and longer delivery times.
  • Customer dissatisfaction: Inaccurate orders, delays, and poor communication regarding order status can contribute to customer dissatisfaction. Unhappy customers may leave negative reviews, and it can damage the reputation of the business.
  • Supplier relations issues: Communication breakdowns with suppliers can result in delays in receiving necessary inventory. Poor coordination with suppliers may lead to stock shortages, impacting the ability to fulfill customer orders on time.
  • Inefficient workflows: Lack of communication can result in inefficient workflows within fulfillment centers. Without clear instructions and coordination, employees may struggle to prioritize tasks, leading to slower overall processing times.
  • Returns and refunds issues: Poor communication can affect the handling of returns and refunds. If there is a lack of clarity on return procedures or if customer service is not adequately informed, the process may be prolonged, impacting customer satisfaction.
  • Quality control problems: Failure to communicate quality control standards can lead to the shipment of defective or substandard products. This can result in returns, additional costs and damage to the brand's reputation.
  • Forecasting challenges: Insufficient communication between sales and inventory management teams can hinder accurate demand forecasting. This may lead to overstocking or understocking, impacting the ability to meet customer demand efficiently.
  • Low employee morale: Poor communication within fulfillment teams can affect employee morale and job satisfaction. Clear communication of expectations, goals and feedback is essential for maintaining a positive work environment.

What to do instead

To address these issues, businesses should invest in robust communication channels, implement integrated systems and establish clear protocols for information sharing among different departments involved in the fulfillment process. Effective communication enhances coordination, reduces errors, and improves overall efficiency in the fulfillment chain.

Mistake 6: Inefficient packaging practices

Poor or inefficient packaging leads to damaged products, customer complaints and a higher number of returns. It can also create higher carrier costs, especially with excess packaging materials that lead to a higher DIM weight. Packaging and the unboxing experience have become an important part of the customer journey. Consumers want it to be memorable and engaging.

What to do instead

Optimize your packaging materials, processes and shipping costs while also creating a personalized brand experience for customers. Ensure that your packaging is recognizable and that it arrives damage-free.

Assessing and optimizing your fulfillment operations

Assessing your fulfillment operations to prevent common mistakes is crucial – otherwise it can cost you time, money, labor and resources. Working with an expert 3PL for ecommerce fulfillment has numerous benefits. To find out how Cart.com can optimize fulfillment, contact us today.

 

 

 

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