E-Commerce Order Fulfillment: David Can Beat Goliath at his Own Game

by Joe DiSorbo

Special to the eTail Blog

What are the three most important components of an online business?

Some might say product assortment is most important. Others would say the design and layout of your website is the key. And marketing is certainly essential for attracting customers. But there is a critical aspect of online retail that is often overlooked: order fulfillment.

It’s not sexy, but numerous studies have shown that speed and accuracy of delivery are among the most important factors in customer satisfaction, which, of course, drives referrals and repeat business. In fact, a study by the Journal of Electronic Commerce found that speedy shipping ranked behind only an online retailer’s return/exchange policy and merchandise selection, in terms of impact on customer satisfaction.

Orders that arrive quickly are extremely effective in building reputation. Slow or incorrect shipments can be just as effective in destroying it.

So why do many online retailers fail to treat order fulfillment as a strategic part of the business?

It might be that online retailers just don’t think they can compete on fulfillment against giants like Walmart and Amazon. But they can. Moreover, thanks to the cloud, it’s much cheaper and easier than most small and mid-size retailers realize.

The secret to fast, inexpensive shipping is having warehouses all over the country. More shipping centers means that most orders must travel shorter distances, which means deliveries are less expensive and faster.

Of course, how many warehouses can most small or mid-size retailers afford to lease, staff, insure, mange and stock? The answer is not many. Most retailers don’t ship enough orders to justify the overhead of operating multiple shipping centers. Meanwhile, the Walmarts and Amazons of the world seem to have warehouses everywhere.

New cloud-based fulfillment systems that integrate with ecommerce shopping carts, are making the customer experience seamless and giving retailers 24/7 visibility into order status, shipment status and inventory levels. It’s becoming more common for small and mid-sized retailers to offer their customers comparable shipping options to those of the largest ecommerce companies.

What are you doing at your e-retail operation in terms of fulfillment? Is it a priority? Will it be? Why or why not?

Joe DiSorbo is the CEO of Webgistix, an order fulfillment provider for ecommerce businesses.