When it comes to order fulfillment, smaller businesses that offer digital commerce typically rely on their own in-house assets to carry out the entire process. This includes everything from handling product inquiries, order booking, and invoicing to order processing, shipment, delivery, and returns management.
However, as an enterprise expands, it becomes absolutely necessary for that company to lay the foundations for the subsequent phases of its growth. Bigger retailers tend to face equally bigger challenges, whether it’s ensuring that there is no high incidence of items going out of stock or making certain that the business has the resources needed to deliver orders to customers on time.
To address these challenges, many large companies are turning to third-party service providers that can efficiently carry out their order fulfillment duties. With the help of a dependable service provider, an enterprise can avoid the potentially expensive prospect of having to shell out more capital for the additional space, equipment, technology, and labor required by their growing business operations.
Signs that your business has outgrown its in-house order fulfillment infrastructure
- Storage problems – The most obvious sign that your company’s current physical space has become ill-equipped to match your order fulfillment needs is when there is no more room left for your growing inventory. To maintain your ability to run an in-house order fulfillment system, you have to lease or purchase new real estate so that you can expand.
The good thing about outsourcing order fulfillment to a service provider is that any additional storage space you need can be provided to you as part of the overall set of solutions they offer.
- Rising costs – Support costs generally rise as your business grows, but if your current order fulfillment expenses are expanding too much in proportion to the amount of new business you are handling, it may be an indication that you need to look for new solutions.
- Too much time is being lost – If your team is spending too much time on order fulfillment tasks, the company loses out on other critical areas of business operations. These can include business development, marketing, product research and development, and customer care endeavors.
- The technology you are using is not performing well – Another way to assess your company’s order fulfillment system is to look at its current technology infrastructure.
Are your customers having difficulty placing orders and tracking them through your digital commerce platform? Is your system not allowing you to have sufficient visibility over your inventory of goods? Is your company maintaining data in separate systems that don’t allow interoperability and are causing confusion because of duplicate entries? These could all be signs that your business has surpassed the capacity of its tech infrastructure.
- Shipments, deliveries, and returns are not being fulfilled on time – Are your customers complaining that their orders are not being delivered on time or returns are taking such a long time to be processed? If getting the items to and from your customers has become a real pain, then your current transportation and logistics infrastructure might no longer be adequate to meet your requirements.
Why do you need to maintain an excellent order fulfillment system?
As a business evolves, the one thing that should remain intact is the company’s good relationship with its client base. This is extremely important, especially at a time when economic uncertainties have taken the competition among large retailers to a whole new level of aggressiveness.
For businesses like yours to survive nowadays, it’s not nearly enough to just have good products to sell or to ensure that your finances are in good health. You must also make sure that you are providing a stellar customer experience, an element that is often a byproduct of an efficient order fulfillment system.
For instance, aside from the knowledge that they are buying great-quality and affordable products, customers also want to be able to place their orders in a convenient manner, to be aware of the status of their orders, to receive the items on time and in good condition, and to be able to return the items for whatever reason.
Whenever companies are able to meet their customers’ needs and demands, it leads to a positive customer experience, one that inspires repeat purchases, encourages the customers to vouch for your products and services, and excites them enough to referyour business to their friends and family.
Simply put, a good order fulfillment system can help your company nurture customer loyalty and leverage word-of-mouth promotion to help you grow your business even more.
Author Bio: John Newman is an entrepreneur who is passionate about trends in logistics and supply chain management. He enjoys writing about digital commerce, sales and marketing, and technological innovations in business.