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Having great products to sell is just a start. Perfecting e-commerce fulfillment is the end game.
Any time e-commerce fulfillment problems arise, it is a potential threat to your business reputation and future sales.
Poor fulfillment performance can lead to higher operational costs as well as lower sales. And when customers lose confidence in your store’s ability to meet their expectations, it’s less likely they’ll come back. That bar can be much higher the second time around.
Here we present five common problems around e-commerce fulfillment, and how to avoid them.
1. Charging too much for shipping and returns
Retail tech platform ParcelLab found that free shipping is not as prevalent as consumers might think. Their analysis of over 10,0000 data points showed that half of retailers (52%) only provided free shipping after shoppers spent a minimum of $35. A fulll 30% never don’t offer free shipping at any price point. The average cost of shipping amounted to $4.25.
There’s a lot of debate within the industry about the costs and benefits of offering free shipping as a blanket policy. It’s true that those sellers able to absorb the cost of shipping are more likely to see higher conversion rates. Consumers regularly cite “free shipping” as a key reason to shop with a particular retailer. But free shipping also entails a risk of increased returns. You can mitigate that risk by charging for return shipping unless an item was damaged or defective on receipt. In that case, you’ll need to cover the cost of return shipping.
The ParcelLab data shows that nearly half of e-merchants (43%) do charge for their returns; of those, 59% charge $10 or more. In most cases, U.S shoppers are not charged an additional “restocking fee.” If you add on that charge, you’ll definitely lose any repeat business from that customer.
You can ease the pain of return shipping charges by keeping up a steady flow of good customer communication until the return has been completed, making up for a bad product experience with an excellent customer experience overall.
2. Inadequate communications with the customer
Most e-commerce businesses tend to under-communicate with customers during both the ordering and reverse logistics process. Parcellab found that among retailers who sent order confirmation emails, 68% included no additional product information or recommendations. This is a major missed opportunity. Over half (56%) don’t send alerts to customers when a package is delivered or supply tracking information for packages. Because most retailers do offer shipping notifications, customers tend to expect them. Lack of notification causes them to worry about the status, causing needless calls to customer service.
Returns communications are equally poor: 54% of retailers do not send a confirmation of receipt when a returned package arrives. This causes strain on customer support when they have to field inquiry calls. Worse, refund information to the customer is also frequently overlooked. 64% of retailers don’t share a timeline of payment with the consumer. Setting up these automated communications goes a long way toward customer satisfaction, and relieves customer service staff from answering unecessary inquiries.
3. Being stingy about lost or damaged products
Inevitably, some products you ship to customers will become lost or damaged. Replacing those items eats quickly into profits. If your loss rates are making a dent, consider purchasing shipping insurance as a best practice. Should an item be lost or stolen from someone’s front porch before they could retrieve it, you have to give the customer both the benefit of the doubt and a way to make them whole again. As the shipper, you are the only one who can purchase shipping insurance. If you don’t, you are effectively self-insuring any losses since you must absorb the costs for replacement. Offering a free return envelope or box and a pre-printed label for easy returns will build customer loyalty. A seamless and positive return process will turn a mistake into a good customer experience. And future purchases by satisfied customers is the key to long-term success in any retail business.
4. Selecting the wrong e-commerce fulfillment partner
Any time a customer places an order, the item must be easy to locate, and in stock. A warehouse that’s poorly organized or often miscommunicates with a supplier could make it hard to locate inventory for picking. Which translates into shipping delays. Customers get highly frustrated with shipping delays, especially when it’s coupled with poor communication.
To avoid this, you’ll need to maintain real-time data on your inventory, and work with a trustworthy fulfillment partner. The faster items can be located, the faster they can be delivered. If you’re running a multichannel operation through a syndicated product listing service, the best ones (like Shoppingfeed) will track inventory and orders for you in real time, syncing all orders with your master list.
An experienced fulfillment partner will have:
- Good communication protocols
- Plenty of space, staffing, equipment and technology
- Flexibility and scalability to handle varying volumes of orders
- A commitment to quality management and continuous improvement
- Good connections with partners throughout the supply chain
See this article for a list of fulfillment services with detailed descriptions and quality rankings.
5. Poorly trained customer service staff
The first stop for the disgruntled is, always, Customer Service. Inadequate training for them on how to troubleshoot problems may be the worst fulfillment mistake you make. When customer service representatives cannot respond with speed and competence, customers get frustrated. A frustrated customer isn’t likely to buy from you again unless you happen to be the exclusive seller of a specialized item they need.
E-commerce buyers today expect to get exactly what they want when they want it. You’ll usually get immediate feedback on social media or on your Reviews pages if their experience with Customer Service was less than stellar.
Even small mistakes can add up to poor sales performance. Making sure you have all these elements covered will help you keep your e-commerce sales on an upward trajectory.
My mission at Shoppingfeed is explaining how to leverage e-commerce platforms and SaaS technology to e-merchants who just want to run their business and make more money.
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