5 Questions To Ask Your eCommerce Fulfillment Provider
There’s no doubt about it – ecommerce is the place to be.
A recent article by Internet Retailer predicts global sales ecommerce sales will top $1.25 trillion in 2013.
That’s trillion with a “t.”
The article went on to state that China’s ecommerce market is growing by a whopping 130 percent annually, although the United States remains the world’s single biggest ecommerce market.
Forrester Research says the key drivers of this growth include consumers’ increased comfort level with making online purchases, broader web shopping capabilities with mobile and tablet devices, innovative new shopping models that divert spend
away from physical stores (e.g., flash sales, subscription models), online loyalty programs and aggressive promotional offers from web retailers.
If you are in the eCommerce business, these statistics may not surprise you.
While you may be aware, the question is, are you prepared?
The ability to meet the demands of a growing eCommerce market is the key to survival. Having the right people, technology and processes in place to handle seasonal or campaign-driven spikes will result in happy and often repeat customers.
When it comes to order processing, inventory management, and fulfillment, there are five key questions to ask when seeking out a third-party logistics (3PL) partner. Asking these questions will put you on the right path to finding a provider that has the ability to meet demand, contain costs and – most importantly – deliver your brand promise to your valued customers.
Question #1 – Will your warehouse and contact center be synchronized with my eCommerce site to provide real-time updates on inventory levels and order activity?
Because your product can be pulled from a variety of sources (sales samples, retail distribution and wholesalers) it is imperative their inventory management system tie into all channels to alert you when product levels are low. Not only will this help with forecasting and demand planning, it will also result in a greater number of satisfied customers.
Ask the fulfillment provider what system they use for inventory management. Does it have the ability to update your customer’s shopping cart with current inventory levels? How many times per day/week are inventory levels updated? Do they have standards for min/max levels for each product? Are their built in alerts to notify the supervisors when those levels are reached?
Real-time integration not only improves your service and fulfillment benchmarks, but it will also increase your throughput and lower your overhead.
Question #2 – How do you handle an unexpected large volume of orders?
Operational efficiencies often surface during spikes in orders. If your 3PL provider uses temporary or seasonal workers the results can be disastrous unless you have enforced SOPs in place as well as a robust Warehouse Management System (WMS) that optimizes workflow.
When used correctly, a WMS not only helps track orders and inventory levels, it also enhances warehouse efficiencies by streamlining movement and repetition. The goal is to reduce the number of steps it takes to fulfill an order. When set up correctly, the WMS should be able allocate your inventory into the most picked (near the front of the staging area) to the least picked (farthest away from the staging area). This will limit the number of steps it takes to fulfill an order and allow for a greater number orders to be processed on an hourly basis.
Also, ask your fulfillment provider if they utilize batch or wave picking methodologies. Wave picking allows you to view a large number of orders and plot the best path to pick those items from the warehouse. Batch picking eliminates redundant location picking and greatly reduces the distance traveled through the warehouse.
Question #3 – Do you have systems and processes in place to ensure pick/pack accuracy?
Inaccurate product selection not only affects the customer, but it can have a negative impact on a company’s brand reputation as well as its bottom line. Barcode scanners help eliminate incorrect pick orders by ensuring the product number corresponds with the barcode in the pick area. Efficient warehouses go one step further by ensuring the pallet location, SKU and product number are all in alignment.
In addition, emerging regulatory compliance and risk management information requirements are making accurate, real time data collection about every aspect of a product and its movement through the supply network mandatory for companies in nearly every industry. Supply chain management must be able to track, trace and authenticate product and monitor its environment anytime and anywhere it is in the supply network and be able to document it.
Leveraging technologies to drive automation in warehouse and distribution center environments has been a consistent theme over the past couple of decades. Driven by the need for more efficient material handling and overall supply chain process solutions powered by warehouse management software have combined to support more seamless operations.
Question #4 – Do you partner with parcel carriers to reduce shipping costs and streamline processes?
While most ecommerce companies do not have the power alone to negotiate shipping costs, a fulfillment provider has the ability to batch all its shipments and leverage its buying power. A good fulfillment provider should be able to drive significant costs out of operations and shipping by leveraging its vast resource network.
In addition, make sure your fulfillment center is in synch with the shipping companies to avoid any delays with pickup and delivery. Keep in mind your order is not complete until it leaves the warehouse. Drivers have little time to wait while you finalize paperwork and generate labels. If the fulfillment provider is tapped into the parcel carriers’ network through a third party shipping application you can avoid the stress and inefficiency of double entry.
Integrating systems with carriers not only reduces shipping costs, but it also allows fulfillment centers to take advantage of all the features offered by the carriers. In addition, companies who integrate with multiple carriers reap the benefits of comparison shopping that can be passed along to the client.
Question #5 – What processes do you have in place to enhance the customer experience?
We all know consumers are now in the driver’s seat. Their buying choices are endless. They have the ability to research a product (through customer reviews and comparison shopping) and post their own comments for the world to see. Brand loyalty has never fought a tougher battle.
So how do you keep customers happy and buying more? Much like the three keys to real estate (location, location, location) the key to consumer happiness is customize, customize, customize. Today’s consumers demand a personalize approach to their buying habits.
You spent a lot of time and capital building your brand and developing a unique customer experience for your online shoppers. Do not let that experience stop at your fulfillment center. Make sure the fulfillment center understands your brand and customer profile so they can ensure a unique consumer experience at every touch point.
At PFC, our clients’ success is the number one priority. Since 1974, PFC has delivered outstanding results, with turnkey solutions in fulfillment, e-commerce, rebates, sweepstakes, coupons and contact center – all backed by leading technology. PFC allows clients to focus on big-picture business goals, while it skillfully manages all the details. For more information call (800) 493-7063.
Source: Internet Retailer