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Shipping, Customer Choices & More: Why Order Fulfillment Matters

Anyone can fulfill one order in a timely manner.

But when you have to do it daily while still maintaining a budget, things get a lot more tricky. Order fulfillment is clearly vital to the life of your business, but there’s a lot more to it than slapping a product in a box and giving it to the closest postal worker you can find. Learning tricks for juggling shipping and customer choices can simplify your warehousing and distribution while still improving your bottom line.

Shipping and Customer Choice Impact Costs

Whether you have one hundred customers or one million, order fulfillment is the heart of your operation.

After all, without fulfilling those orders well, customers would stop shopping and you’d be sunk. You can choose to handle your product distribution in house or outsource it to a 3PL, but either way it’s important to understand how different situations can impact your costs.

Here are three places you can save money that might not have occurred to you yet:

  • Customers want free shipping, but it doesn’t have to be fast. According to UPS’s 2015 Pulse of the Online Shopper report, your customers will wait patiently for items that have shipped for free. In fact, on average shoppers reported they were willing to wait for free shipments for about eight days.This bit of information could save you a bundle if you’re currently trying to provide both fast and free shipping for your orders. Instead, just provide free shipping and lower your freight costs.
  • Many items ship together for less. Another simple way to reduce the freight costs of cumbersome or difficult to handle items is to ship them with something that costs less. This is why add-on programs make so much sense.You can literally limit those more expensive to ship items to orders that are going to make it cost-effective to move them out of the warehouse. Pairing more costly to ship items with cheaper ones reduces your per item shipping cost if both items can be packaged together.
  • Adding customer options complicates the equation. If you’re already doing your own order fulfillment, you know the headache of handling an order that has multiple items, as well as different items in different colors or patterns involved. The potential for a mix-up is exponential, which is why a 3PL charges more for a situation like this.Certainly, you can build the right environment to make these orders go off without a hitch, but they’ll still need extra careful handling and order checking before shipment. Those additional eyeballs can really add to the cost of order fulfillment.

Whether doing your own fulfillment service in-house or having your 3rd party logistics partner handle it for you, it’s important to understand what types of changes can influence your costs for better and for worse. Encouraging customers to bundle bulky items, for example, with less expensive to ship products can drop costs, helping to improve your bottom line.

 

July 11, 2017
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