By 2021, global B2C ecommerce sales are expected to surpass $4.5 trillion—almost double the $2.3 trillion reached in 2018. But alongside the explosive growth of online selling, customer expectations have also soared.
If you’re an ecommerce retailer, not only should your line of products be of optimal quality, you need to be able to get them to your customer’s door as quickly as possible. If you don’t, your competitors are lining up to scoop up those sales.
Longer delivery times result in abandoned carts
38 percent of online shoppers will abandon their orders if delivery takes more than a week. Amazon is setting the bar incredibly high with its two-day, next-day, and same-day delivery options. Customers increasingly expect on-demand access to products and services, and this heightened expectation poses great challenges for shipping and fulfillment.
Late deliveries result in B2B penalties from larger retailers
Aside from direct to consumer online sales, shipping and fulfillment challenges can also have an impact on online retails who also sell their products through larger retailers. In the U.S., retailers have become increasingly stringent when it comes to their suppliers’ order fulfillment.
Companies like Wal-Mart and Kroger have shrunk their delivery window from four to two days, and one day for household items, with any deviations fined $500 per order, or 3 percent or the order amount.
Apart from the fines, suppliers may also be either blacklisted or excluded from promotions and left off dedicated shelf spaces. This can potentially add up to crippling losses for businesses.
Late or missing deliveries drive B2C customers to competitors
69 percent of consumers are less likely to do business with a retailer again if a purchase is not delivered within two days of the promised date. With the hyper-competitive ecommerce industry, there are plenty of options to turn to if customers are left dissatisfied.
It doesn’t just end with losing business from that one dissatisfied customer. People want to share their experiences—whether on social media, or with their peers—which means your business reputation can take an exponential hit. This is why it’s important to build relationships—and a great way to do so is by keeping a promise.
International competition is on the rise
The U.S. share of global retail ecommerce is expected to continue to drop to 16.9 percent by 2020—down from 22.2 percent in 2015. Of course, this is not to say that U.S. ecommerce sales are declining. It’s just that sales all over the world are rapidly increasing, most notably in Asia.
From this perspective, you can see how the quality of shipping and fulfillment has become almost as important as the quality of the products itself. Below is a list of the most common problems you can face in 2019, and what you can do to address them.
1. International shipping
Apart from the obvious added costs of shipping overseas, international shipping also entails getting acquainted with rules and regulations, as well as the required paperwork and permits. Tax and duties are also mostly country-specific, so you’ll have to keep that into consideration as well.
Solution: Plan ahead
The best way to tackle the complex process of international shipping is by planning ahead. This entails building an information database with shipping rates for different package sizes and weights for the different countries you could ship to. While this could be time-consuming, it allows you to set prices confidently and be prepared for any issues that may arise.
And if you have the resources for it, you could also opt to employ an ecommerce fulfillment service provider. These businesses can provide you with all the rate and importation fee information you’ll be needing.
The key here is to be transparent with your customers. While they may not expect to get their items overnight, it’s best to tell them just how long it could take, and offer shipping options. A lot of customers are willing to pay a premium to get their orders sooner.
2. Communicating with suppliers
Your relationships with manufacturers and suppliers is just as important as your relationships with customers. If you’re new to ecommerce, it might feel intimidating at first to reach out to established suppliers.
Solution: Over-communicate and ask questions
It’s important to keep in mind that no matter how seasoned the supplier you’re reaching out to is, they’re just trying to run a business—just like you. Part of doing business is answering questions and concerns, so if you want to clarify anything—ask.
If you’re still figuring out where to source your products from, Alibaba has an expansive business directory where you can find almost anything you need.
3. Damaged/inaccurate inventory
The moment customers pay for an item, they’re already looking forward to receiving it. So if they wind up receiving an incorrect or damaged item, you can only imagine how infuriating that could be. Whether it’s a slightly creased book cover, a small scratch, or loose screws—customers notice it, and it reflects on your company.
Solution: Track and double check your inventory
Proper inventory management can address issues like these on the front end. Track inventory as it enters and leaves the warehouse with a centralized system. Also, don’t neglect your warehouse conditions. Make sure your inventory his housed safely, and that it’s double-checked before being sent out. It would also be wise to invest in quality packaging and insurance.
4. High shipping costs
While it’s easy to pass the cost to the customer, this shortcut is also a surefire way to lose them. You can also look for the cheapest solution provider, but you don’t want to compromise the quality of service.
Solution: Research the best deals and packaging options
Because each carrier has a unique set of services and prices, it’s important to practice due diligence when it comes to analyzing what your needs are. For example, a lot of carriers offer packaging tailored to specific requirements. Opting for this instead of investing in your own is a good way to avoid added costs.
There are also mail carriers that provide fixed-rate shipping based on the distance a package has to travel. If you frequently ship to a certain location, see if the flat rate shipping is a more cost-effective solution.
5. Technology deficiency
With everything that’s going on with running a business, keeping pace with technology can easily be overlooked. Not upgrading the technology you use or working with shipping vendors that don’t use the best tech can lead to you lagging behind competitors.
Solution: Stay up to date on tech trends in ecommerce
Keep your finger on the pulse of technological developments. While not every innovation that comes along fits your business needs, you need to be aware of what options are available. Automation allows you to be more effective and efficient in monitoring, tracking, and moving orders throughout the supply chain. You might also find that having an ecommerce app boosts sales.
It may take an upfront investment, but it could ultimately boost your bottom line.
6. Data security
Being an ecommerce retailer means your website handles sensitive customer information. Security issues can lead to a nightmare only the biggest companies can recover from.
Solution: Be proactive
Take time to understand potential security vulnerabilities on you website and in your payment solution. One way to avoid a lot of hassle is to use a payment service that doesn’t store any sensitive information (like credit card numbers) on your business’s servers.
If you can, manage your own servers. Don’t use common FTP to transfer files as this is prone to theft. Also, avoid using an open Wi-Fi network. Use a VPN for additional protection. And it always bears repeating: Make it a habit to have regular backup intervals.
7. Wrong tracking codes
As alluded to earlier, as soon as customers place an order, they’re already looking forward to receiving it. So when they receive a tracking code, that excitement is only heightened. You don’t want to provide a code that doesn’t work. It’s a great way to lose credibility.
Solution: Test your tracking codes
Make sure that codes are tested before they’re sent to customers. It doesn’t matter if it takes longer to be able to provide a tracking code, as long as you get it right. Having the right tracking information allows customers to manage their expectations. Should any issues arise, they know exactly where it’s stemming from.
8. Time-consuming pick and packing
Pick and packing is the process of taking orders from inventory, grouping them together, and shipping them to the customer. Depending on the systems you have in place, this could be time-consuming, and could add costs.
Solution: Do your research
There are a number of picking and packing methods to choose from, and one that works for some of the biggest retailers may not necessarily work for you. This is why it’s important to allot the time to study the different methods to find what fits your business needs.
Having the right system in place allows the process to be streamlined for warehouse associates, ultimately resulting in better customer experiences.
9. Product returns
The majority of consumers check a retailer’s return policy before making a purchase. But while having a good return and refund policy is integral to great customer service, it can mean additional costs for your business.
Solution: Make your policies easy to understand
Transparency should be standard practice in all aspects of ecommerce, and it’s the same with return policies. Use plain English when explaining your policy, this allows you to set expectations clearly.
This is also where having shipping insurance comes in handy. Do what you can to make the return process as convenient as possible, like providing a return envelope and a pre-printed label for easy returns.
10. Demand planning
Even if you’re just starting out, you need to have a plan for high demand. But predicting consumer buying habits is easier said than done.
Solution: Track your sales trends
Start with the basics—expect surges during holiday seasons. But before that even happens, monitor the movement of your products. If you find a particular product being more popular than others, chances are, this will also be the case during peak season.
Apart from working to understand your sales trends, there are also predictive ordering software solutions that can help small businesses improve their demand forecasting.
Above all, be proactive
It’s easy to overlook when you’re just starting a business, but shipping and fulfillment problems quickly turn into a tremendous concerns. From warehousing, order fulfillment, and international shipping, a lot goes into making sure your products reach your customers.
But while it might seem overwhelming, there are a number of solutions providers that can help you at virtually every step of the way. Make sure you cover all the bases to ensure that your customers don’t turn to your competition.
What shipping and fulfillment issues do you find most challenging? Let us know on Twitter @Bplans.