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20 Dec 2022

Order Fulfilment Challenges Continue to Loom in E-commerce

The pandemic worked as a catalyst to surge global E-commerce from 15% of total retail sales in 2019 to 21% in 2021. Moreover, the global...

The pandemic worked as a catalyst to surge global E-commerce from 15% of total retail sales in 2019 to 21% in 2021. Moreover, the global E-commerce market is estimated to reach a value of US$ 48.2 Bn by the end of 2022 and is expected to reach at a value of US$ 117.7 Bn by 2030 with a significant CAGR of 11.9%. However, order fulfillment continues to be a challenge within E-commerce globally.

Due to the processes involved in receiving and processing orders, storing and managing inventory, and delivering goods to customers, order fulfillment can be a significant challenge for e-commerce businesses. The following are some typical issues that e-commerce companies may encounter when fulfilling orders:

Managing inventory

Systems must be in place for E-commerce start-ups to track and manage inventory levels, as well as to ensure that products are accessible for purchase when customers wish to buy them. There are two types of inventory management, perpetual and periodic. Perpetual inventory is the continual process of counting the inventory, which can be manually counting stock when it arrives and editing as each unit is sold or shipped. This is the primary alternative to perpetual inventory management. Rather than constantly updating stock figures as deliveries and sales occur, you count your inventory at predetermined times.

Fulfilling orders quickly and accurately

Customers expect fast and accurate order fulfillment, so it is important for e-commerce businesses to have efficient processes in place to process and ship orders in a timely manner. There are four types of order fulfilment, In-house order filfillment, outsourced order fulfillment, dropshipping, and hybrid order fulfillment. In-house order fulfillment is when a start-up manages the entire process of fulfilling an order from start to finish, outsourced order fulfillment is when the startup hires a third party to manage the processing of their orders. Dropshipping is when an E-commerce does not own any inventory and simply ships orders directly from your supplier to your customer. Hybrid order fulfillment is when the company ships some orders by themselves and the rest outsourcing to others.

There is no one perfect way of fulfilling orders, but your main goal should always be efficiency and accuracy when fulfilling their orders. The most important part of fulfilling orders is to avoid customer dissatisfaction and revenue loss.

Managing returns and exchanges

Managing returns and exchanges can be a challenging aspect of running an e-commerce business. If its not handled well, E-commerce returns and exchange can be a disease which aggressively affect your profit margins, conversion rates, and ultimately jeopardizing your business. But there are a few steps you can take to make the process smoother for both you and your customers.

  1. Your return and exchange policies should be made clear: Ensure that your policies are simple to access and comprehend. By doing this, you can avoid misunderstandings and manage fewer returns and exchanges.
  2. Provide a variety of return solutions: Take into account providing a variety of return or exchange options, such as in-store returns, mail-in returns, and internet returns. Customers will have more flexibility and will find it simpler to swap or return things as a result of this.
  3. Make the return/exchange process simple for consumers: Make it simple for clients to start a return or exchange. For example, you might provide them with a pre-paid return label or let them start the procedure online.
  4. Use return and exchange data to boost your company’s performance: To improve your products, descriptions, or policies, keep track of the reasons why customers return or exchange items. By doing this, you might handle fewer returns and exchanges in the future.

Dealing with shipping and logistics

To make sure that goods are delivered to customers on time and efficiently, e-commerce start-ups must collaborate with carriers and other logistics partners. Here are some tips to some of the common challenges faced by e-commerce start-ups regarding shipping and logistics.

  1. Managing shipment costs: You could want to take into account negotiating shipping rates with carriers, providing free delivery for purchases over a particular amount, or implementing flat-rate shipping. By charging for delivery or providing varied shipping rates depending on the destination, weight, or size of the items being transported, you might want to think about passing some of the shipping expenses on to your customers.
  2. Handling lost or damaged items: You might want to consider about providing free returns or swaps, as well as a refund or replacement for the lost or damaged item, to handle lost or damaged goods. In order to interact with affected customers and promptly address their difficulties, a procedure must be in place.
  3. Dealing with delays: To cope with delays, you might want to think about providing consumers with shipping insurance or informing impacted customers about the status of their orders. Additionally, you want to have a strategy in place for interacting with affected clients and resolving any potential problems.

To address these issues, e-commerce start-ups may need to invest in advanced order fulfillment technologies and systems, such as automated warehouse management systems and real-time inventory tracking systems. They may also need to establish strong relationships with reputable logistics partners and employ tactics such as cross-docking and drop-shipping to boost efficiency and cut costs.

Storm5 Is Here To Deliver Support

At Storm5, we are specialist recruiters dedicated to working with the top companies in all RetailTech sectors. Whether you are a start-up or planning to scale up, Storm5 is here to help you find the right senior talent for the right specialism. If you are looking to expand your team, contact us.

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