In a world of competition, you must choose the right fulfillment service provider for your business. In addition, businesses need to scale with their growth and deliver excellent customer experience by delivering products effectively.
E-commerce has made it easy for any business owner to reach customers worldwide with just one click. However, the challenge comes when they are faced with inventory management, shipping budgeting, and international shipping and customs issues.
Nowadays, most businesses use e-commerce platforms like Amazon, which automatically handle product deliveries on their behalf. However, not all small businesses have access to such services due to their limited capital investment capabilities or lack of technical expertise in handling complex logistics operations.
Here are some top challenges that a business may face in 2022 with E-commerce fulfillment services.
Pressure on Pricing
It’s a pressure that never goes away. You need to be able to offer a competitive price, or at least as good as your competitors. But for e-commerce fulfillment services, this is an even more challenging task because you may have noticed that every other company offers the same promise, “We will do everything for you.”
So how can you differentiate an ideal fulfillment provider from everyone else? Well, two things set them apart from others in this space:
- Firstly, a professional fulfillment provider will be flexible with pricing, so they can help you find the right option at an appropriate price for your business.
- Secondly and most importantly, their quality control process must ensure that all products produced by their partners meet high standards before they reach their destinations.
Policies like product return, refunds, free shipping, etc., are a great way to ensure that your customers stay loyal. For example, if your customer finds a damaged product he ordered and wishes for a refund, your immediate move towards his wish will make him feel special. Similarly, a regret call from the call center after the refund will work towards your goal of retaining customers.
Purchase returns usually happen for more expensive products, $250 or more. If a customer is even slightly dissatisfied with the product, they immediately seek a refund for such expensive products. On the other hand, products below $100 draw fewer returns or refunds.
Ensure your fulfillment partner has appropriate plans and storage capacity to manage reverse logistics. It is estimated that 18.1% is the average online purchase return. Hence, it can be said that returns are a part of the modern eCommerce sector and should be handled smartly to gain customer loyalty.
High Customer Expectations
Customers expect an experience that is fast, easy, and seamless. They want to be sure that the product they’re ordering will arrive in the condition as it was advertised. They also want to feel like they can easily track their order and status updates regarding when it will be delivered. It is all due to customer expectations raised by companies providing great customer experiences through e-commerce fulfillment services.
Reliable e-commerce fulfillment services can help companies provide a great customer experience by taking care of the shipping and delivery. As a result, companies don’t need to hire additional employees or invest in expensive equipment. Instead, they can focus on their core products while still providing customers with an excellent experience.
Logistics and Delivery
Logistics and delivery are the top two reasons why consumers abandon their carts. If your product isn’t delivered on time or doesn’t arrive at all, you won’t have a happy customer. And if your customer isn’t happy, they won’t be back to buy from you again.
It’s crucial to understand how logistics are changing in 2022 and beyond. The good news is that more retailers are using e-commerce fulfillment services like warehouse management software to handle order processing and shipping. It means there will be less of an overall impact on delivery speed.
A seismic shift has been noticed in the warehousing and logistics industry due to the explosion in the e-commerce business. A report says that there has been an increase of more than 600% in warehousing by e-retailers.
Lack of Automation
Automating your e-commerce fulfillment program is one of the best ways to scale up your business and grow your sales. The benefits of automation include:
- Scalability: Automated systems can be scaled quickly and easily based on demand. It is a key benefit for companies in unpredictable industries such as fashion retail or food services, where demand fluctuates throughout the year.
- Cost savings: A helping hand from automation means that less human labor is needed to complete orders and manage inventory, which translates into significant cost savings for businesses.
- Time savings: The more time you save using automation, the more productive you can be as an organization overall. It allows managers and employees more time for other tasks that need attention rather than just being tied down by manual processes.
Poor Planning
Poor planning is one of the most common business mistakes. However, planning is essential for any project, and you must do it before starting any project. The process includes making a step-by-step plan for every aspect of your business, from beginning to end.
When you have a comprehensive plan, you can better manage your team’s workload and ensure everything goes according to schedule without any delays or setbacks. Moreover, if something unexpected happens during implementation, it won’t derail your whole project because you already know what needs to be done next to save the whole project.
The same goes for eCommerce fulfillment services. You need solid plans before choosing which type of service works best with your company’s goals so that everything runs smoothly once they start working together. Revenues from e-commerce businesses are estimated at around $770 billion in the US and are expected to reach $1.3 trillion by 2025. You surely don’t want to lose your share in this arena due to poor planning.
Supply Chain Vulnerabilities
Supply chain vulnerabilities are a result of poor planning. If you do not have a clear action plan, it can be hard to achieve the desired results. For example, if you are working with more than one supplier and each one is handling its inventory, then there will be no automation. Without automation, there may be no collaboration between suppliers and customers. It will lead to poor customer service and, ultimately, poor customer satisfaction.
Supply chain vulnerabilities can also be attributed to poor communication. If you are not keeping your suppliers up to date on what is going on with your company, they may not know how best to support you. For example, suppose you have a new product that needs special packaging and labeling. In that case, this should be communicated to your team so that there is sufficient time for suppliers to adjust accordingly.
Managing Inventory
It is necessary to manage your inventory properly. If you are not careful, you may end up with a surplus of products that are not selling, resulting in huge losses. It is where a warehouse management system comes in handy.
Here’s how you can do it:
- Forecasting: It helps you predict the demand for your products and services. It also helps you decide on the number of products to make so that they are available when needed by your customers. You need the foresight to avoid running out of stock before or during that period.
- A customer base: E-commerce stores must understand their customers well to plan their inventory effectively based on customer behavior patterns and preferences. Your customers might want particular sizes or colors more than others. However, unless these preferences are known beforehand, stocking up on too many items may lead us nowhere.
To Wrap it Up
Your business will face several future challenges, but you can overcome them with the right e-commerce fulfillment services. It’s important to remember that your customers always come first, so ensure that you’re providing them with what they need in every way possible.
Take advantage of new technology like artificial intelligence or augmented reality and make your customer experience better than ever before.
