The marketplace today isn’t quite what it used to be. With the development of technology, consumers no longer need to leave the comfort of their own home to shop for anything and everything. E-commerce businesses are growing faster, and quickly replacing the traditional retail experience.
E-commerce businesses are growing and the owners of these businesses face many issues with rapid growth, but one of the biggest issues they face is fulfillment. As an e-commerce business starts out with only a few orders per day or even per week, it is easy to receive, pack and ship product quickly and effectively to their customers. When this same business grows rapidly and there is a high demand for their products, then receiving, packing and shipping for hundreds of orders quickly becomes a problem.
In order to help relieve some of the pressures of fulfillment, e-commerce businesses can turn to business integration for help. Business integration is connecting a company’s systems together to streamline their processes (including fulfillment, among other processes) become more efficient. In this article, we’ll take a look at how e-commerce businesses can improve their fulfillment processes through business integration.
Most e-commerce businesses do not manufacture their own products. A lot of them will purchase their product from a distributor or directly from a specific brand, then re-sell that product to their customers. In this case, e-commerce businesses can integrate their order management software system with their supplier’s systems. This type of integration allows both the supplier and business to eliminate fulfillment issues such as missed orders, sales input errors, and blunders that lead to late shipments to customers.
System integration can also help e-commerce business evaluate their suppliers too. E-commerce businesses should track supplier compliance as this shows which suppliers are doing well and which need to improve.
E-commerce businesses who are forging their own path have one giant adversary who emphasizes fast shipping and weekend deliveries – Amazon. Many e-commerce businesses join forces with Amazon, who offers product fulfillment and shipping services. For E-commerce businesses who are not on the Amazon e-commerce platform, the fulfillment and logistics fall onto their shoulders. The size of the shipment determines what kind of shipping service a company should use but for smaller packages, shippers like UPS, FedEx, and DHL all have online portals that can help ease the shipping burden. For larger cargo, e-commerce businesses can take their pick of the numerous third-party logistics providers.
Integrating systems with a shipper such as FedEx, who offers fulfillment services similar to Amazon, can help streamline the entire process. Whether using FedEx for fulfillment and shipping or just shipping, they have their own platform that allows e-commerce merchants to upload their data for fulfillment and inventory management. This type of service can open up large amounts of time that e-commerce businesses can put back into their day-to-day operations.
For e-commerce businesses that are shipping larger freight, there are third-party logistics companies that have taken steps into the fulfillment process. Companies like ShipBob and Red Stag Fulfillment are third-party companies that can take care of larger shipments. Red Stag handles high-value shipments, so they would be a particularly good fit for an e-commerce business that deals with electronics or jewelry. The beauty of using third-party fulfillment and logistics providers is that there are no term contracts, no need to hire more staff and they improve the effectiveness of an e-commerce business’ supply chain.
When an e-commerce company grows to the point where their volume of sales exceeds their fulfillment capacity, they have a few options to consider: add more manpower or invest in automation. More manpower is a cheaper immediate alternative, but it is limited to certain hours and will cost money to train new employees to get up to par with fulfillment processes. Automation is more of an upfront cost, but the long-term benefits can outweigh the initial cost.
Automated fulfillment systems are more efficient in many ways but most simply, eliminating time in the picking process. Many companies have employees that will walk up and down the warehouse looking for a certain product for an order, which his incredibly unproductive. Having an automated system that can move product around the warehouse can improve output levels and open up more time for employees.
Another benefit to automated systems to handle fulfillment is that they can work longer than a human employee. The software and machinery can run 24 hours a day, seven days a week. Companies do not need to pay overtime and holiday pay to these automation devices either. The increased productivity without the cost of additional manpower to do it will pay off in spades for e-commerce retailers who are growing at a fast-enough pace to justify automating their fulfillment.
As e-commerce businesses grow, the amount of time they have in a day starts to evaporate quicker than they could have imagined. Integrating systems with suppliers and logistics/fulfillment providers can get some of that time back on top of becoming more efficient in the fulfillment process. For companies that do their own fulfillment, automation can lead to financial and effective processes.