Four Key Factors to Design a Successful Ecommerce Order Fulfillment Strategy

Designing a successful eCommerce order fulfillment strategy can be tricky because this task requires consideration of various factors in the process. You need to understand all aspects of the supply chain and provide your customers with an excellent experience after careful planning and optimization.

Here are some tips to help you design an eCommerce order fulfillment strategy to help you deliver products on time while improving customer satisfaction.

How to Design a Successful Ecommerce Order Fulfillment Strategy?

Track inventory regularly

When a customer finds that the ordered product is out of stock and not delivered in time, they may never shop in your store again, or vent their anger on social media. These consequences may not only lead to an increase in customer churn but also have a terrible impact on your brand.

Therefore, to avoid these incidents to the greatest extent, your best strategy is to simplify your order fulfillment process and deliver products to customers as quickly as possible. You need to focus on inventory and build an inventory management system. This system can help you get real-time fulfillment cycles, so you always know when products are out of stock or unavailable.

Ecommerce-Order-Fulfillment-Strategy丨A-Better-Lemonade-Stand丨ChinaDivision
Ecommerce-Order-Fulfillment-Strategy丨A-Better-Lemonade-Stand丨ChinaDivision

Product Kitting

Product Kitting helps reduce the processing time and cost of order fulfillment. Product Kitting refers to the process of grouping, packaging, and supplying different but related items as a unit.

Product Kitting can increase productivity and reduce labor costs by storing products in separate kits. Besides, you can reduce inventory and improve cash flow.

Automated warehouse

Adopting an intelligent warehouse system can help you manage inventory, warehouse organization, and logistics using data-driven technology.

You can automate the warehouse by choosing to use technologies including RFID identification, the Internet of Things, and easy tracking of the inside of the IoT.

Using a warehouse management system can reduce human errors in order processing.

Transparent supply chain

Supply chain visibility is the focus of your strategy. Supply chain visibility can give you a deeper understanding of each process and improve the underperforming parts.

For example, if you track picking activities in a warehouse and find that manual picking increases time costs, you can move it to an automated process.

Therefore, you must keep track of your supply chain and collect data.

How to Use Warehouse Logistics Plan to Accelerate Your E-Commerce Development

Warehouse logistics is the process of planning, operating, and controlling the flow of goods in a warehouse to optimize costs and time and achieve other business goals. The warehouse is an important part of the supply chain and should be aligned with the broader organizational goals and the entire supply chain.

Before you start planning a new warehouse, it is always recommended to develop a feasible warehouse logistics plan. Without a plan that includes clear business goals and a road map to achieve those goals, it is impossible to estimate whether you can reach your goals.

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Warehouse-Logistics丨Maintenance-Covid-Management丨ChinaDivision

Identify warehouse logistics requirements

If you need to determine the company’s warehouse requirements, you need to ask some questions before making a final decision, such as:

  • Who are your customers?
  • Where are they located?
  • What is the order volume?
  • What solution is currently adopted?
  • What is the cost of the current solution?
  • What is the delivery time of the current solution?
  • Will the new warehouse save costs?
  • What is the implementation timeline?
  • How efficient is the operation of the new warehouse?

Thinking of these questions can help you clearly define implementation needs, requirements, benefits, and timelines. You need to estimate operating costs, including all the elements of the current warehouse logistics operation, the cost or time savings gained from the investment in the new warehouse, and the break-even point of the project.

This analysis may not prove the rationality of the dedicated warehouse. In this case, cooperation with a reliable third-party logistics operator may better meet your needs. The top third-party logistics providers have spent years perfecting their operations, allowing the company to use its expertise and achieve the best performance at the lowest cost compared to maintaining internal warehouses and logistics operations. Or, you can extend the life of your warehouse by implementing flexible automation solutions.

Find location

When you finally decide that you need a new warehouse, then you need to determine a suitable location. The questions you answered in the previous requirements gathering phase will come in handy here. Once you know the location of the customer, you can easily find the best warehouse location to serve the customer.

Remember, prioritize customers who can create greater profit margins for you. You can select warehouse locations based on your proximity to your best or long-term customers so that you can deliver to these customers faster than short-term or occasional customers. goods. Geographic Information System (GIS)-based tools can be used to determine the best location for the warehouse.

Logistics丨PNGWing丨ChinaDivision
Logistics丨PNGWing丨ChinaDivision

Another factor to consider is whether you want to use an existing warehouse to upgrade to a new warehouse or choose a new warehouse. These considerations boil down to your storage needs and costs. You should also work with the company’s financial department to determine the best solution from a financial perspective. Purchases, leases, and leases have different effects on the balance sheet, and the finance department is more capable of determining the factors that are most suitable for the company’s long-term financial situation. At the same time, your new storage requirements should not be affected. Achieving finance and goals at the same time is a delicate act of coordination, so it is necessary to maintain transparent and open communication between various departments.

Mapping warehouse

Mapping the warehouse is essential for determining subsequent deliveries and how to handle operations. Order picking activities are considered to be the most labour-intensive activities in the warehouse, accounting for as much as 55% of warehouse logistics operating costs, and mapping the warehouse can help simplify this basic business function. The warehouse mapping process includes:

  • Evaluation space
  • Marking space (including aisles, shelves, shelves, containers or garbage bins, etc.)
  • Estimated traffic volume
  • Implement the right shelf system
  • Choose the best order pickup truck to meet warehouse requirements
  • Implement inventory management software

Mapping the warehouse is a crucial step and should not be missed. Without a well-mapped warehouse, your logistics business will be chaotic, because there is no operational blueprint.

How to Conduct Dropshipping Competitor Research?

To make your dropshipping business stand out in the market and get more quotes, one of the important things you need to do is to investigate your competitors. Your competitor company may inspire you to optimize your dropshipping business and help you develop a stronger marketing plan for your own shipping business.

Please select five competitors in your market for analysis, including one or two major players (such as Amazon or Walmart).

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Some methods of conducting dropshipping competitor research are:

Google search. Google search results will list your top five competitors. Starting with the keywords in a simple search, the top ten in search results will show who your top competitors are and how they promote their products. If you have a specific country or region to focus on, you can use third-party tools such as Ahrefs or SEMRush to find keyword data.

Use competitor spying tools, such as SameWeb and Alexa. Such online tools are great for finding (and tracking) the online activities of competitors. Tools can obtain a competitor’s website information such as social media profiles, popular traffic sources, number of visitors, etc.

Browse social media. Search for Facebook ads in your niche and see the top brands on the market. See how the company communicates with customers, the way its feeds are designed, how much engagement they get—you can even follow their feeds and never miss any opportunities. Use this information to find ways to differentiate your business and improve your social media marketing strategy.

Subscribe to email lists of competitors. Want updates from competitors to be sent directly to your inbox? Sign up for their email list and learn about their marketing strategy. You can also learn more about promotions and transactions to attract customers to buy.

Organize your research materials in spreadsheets and keep them updated so that you can easily refer to them when making decisions for your store. For example, if you want to use email marketing to promote your business, you can check the form material to see what strategies your competitors are using.

Simple Guidance For You In Order Fulfillment Cost

Different 3PL order fulfillment costs are different. When you decide to use 3PL services, you may encounter some expenses and knowledge you need to know before signing the agreement.

3PL-Order-Fulfillment-Costs丨Tenaxx-Logistics丨ChinaDivision
3PL-Order-Fulfillment-Costs丨Tenaxx-Logistics丨ChinaDivision

Startup costs

When you decide to start with 3PL, you may encounter startup costs. This fee is used to run e-commerce services and is a worthy investment project because it helps reduce confusion when using various services.

Inventory receiving costs

A 3PL will first receive your inventory, and then begin processing and fulfilling your online store orders. Inventory receipt means that the specific conditions of inbound and outbound logistics will be taken over by 3PL. Different 3PL own different charging methods, such as per-unit, per-pallet, flat rates, or per hour.

Inventory storage costs

When your goods need to use the 3PL order fulfillment center to store inventory, you will need to pay for storage space. Storage fees range from per SKU or per unit storage to a fixed fee (for each box, shelf, or pallet used).

Order pick and pack costs

Some 3PL models include Order pick and pack costs. After the customer places an order, the fulfillment process starts picking or use the picklist to collect each ordered item from its designated storage location. Many fulfillment providers offer to charge on a per-pick basis, which means you pay for each item included in the order.

Packaging costs

Your product packaging represents your brand image. Some 3PLs will charge for packaging materials as a separate order item, while other 3PLs include them in their fulfillment services.

Kitting costs

Some 3PLs provide kits and assembly services. Kitting refers to any unique way of assembling, arranging, or packaging items before shipping. Common applications for kitting include assembling multiple SKUs during packaging or preparing inventory in a specific way. Because this service is designed for each customer, the supporting fees may vary.

Shipping costs

The last section is e-commerce shipping costs: the amount charged by 3PL to transport orders from its fulfillment center to the customer’s doorstep. Many 3PLs will work with major transportation companies to enable them to provide volume discounts to customers. Transportation costs take into account many factors, including transportation efficiency, transportation area, and product size and weight.

Challenges in Dropshipping Business

Dropshipping business is undoubtedly one of the most outstanding things brought about by the Internet and our new lifestyle. This new business model allows start-ups to run e-commerce with little resources. Here, we will discuss the seven most common challenges related to dropshipping business and how to overcome them:

Find a reliable supplier

The first major challenge most companies face in dropshipping is to find reliable suppliers. There are many manufacturers and sourcing agencies that can be your suppliers, but you need to maintain a detailed relationship with them on the same page.

You can easily find suppliers in almost any niche market of your choice. There are many resources to help you search. Make sure that the supplier you choose can meet your needs. Consider factors such as supplier fees, minimum orders, professional industry knowledge, and scalability.

Dropshipping-problems丨ChinaBrands丨ChinaDivision
Dropshipping-problems丨ChinaBrands丨ChinaDivision

out of stock

When you start your dropshipping business, you will discover that the warehouse may be out of stock. It is one of the most common problems, and it is more common in certain product hot seasons. If you work with a very large manufacturer and order fulfilment company, you may not experience a shortage. If a product is out of stock, you must notify the customer as soon as possible, even if you find another supplier. It is recommended to cooperate with multiple suppliers.

Delay in order processing

When customers buy items from your website, they expect their order to be processed as quickly as possible. Most customers don’t understand that, in most cases, the process of processing orders is not completely under your control.

In some cases, orders that have already been placed with manufacturers will be delayed. When customers wait for the tracking code, this delay may create some tension with them. Don’t let it linger. If you haven’t received any news from the supplier within 24 hours after placing the order, please contact them to solve the problem. When these situations occur, you will at least know why the order has not been processed and how long you have to wait. Pass information to customers to appease them.

Ship to the wrong address

As embarrassing as it sounds, some orders have been shipped to the wrong or non-existent address. This is another major challenge you may face as an e-commerce entrepreneur. The best way to solve this problem is to carefully check each order address sent to the supplier.

Product return

This is something you can’t escape in e-commerce. In most cases, this is never your fault, because third parties are always involved in direct shipping. You cannot make all the rules here. Suppliers handle returns in different ways, so you must find a way to communicate clearly with customers. Your return policy is clearly stated on your website. Make all necessary efforts to make your order fulfilment proceed smoothly.

How Does Warehouse Automation Reduce Costs？

Warehouse automation can help improve accuracy, efficiency and reliability, and save labour costs. Most warehouse operations need to pay high labour costs. According to inbound logistics data, 65% of the warehouse’s operating budget belongs to labour costs. The annual expenditure for a warehouse with 100 employees is nearly $4 million. With this in mind, it makes sense for logistics companies to consider using automated warehouse processes.

How does warehouse automation work?

Warehouse automation works by automatically collecting data and controlling inventory. The warehouse control system uses the necessary hardware equipment and software systems to coordinate all operations. Here is how to achieve:

Warehouse-automation-丨Avidbots丨ChinaDivision
Warehouse-automation丨Avidbots丨ChinaDivision

1. Barcode label:

Barcode labels are the basis of warehouse automation. Warehouses track items through them. Barcode labels can accurately capture data and eliminate errors in tracking or shipping items. The use of barcodes helps inventory tracking, restocking planning, improving picking efficiency, traffic optimization, and reducing stock-outs.

2. Inventory Management System (IMS):

Check inventory levels, product information, and storage locations in real-time, thereby providing companies with high-level inventory control.

3. Automatic storage and retrieval system (AS/RS):

AS/RS consists of machines that move up and down on optimized aisles to retrieve or place items. They provide improved inventory control and item tracking. They can also ensure that the warehouse is better arranged vertically and horizontally, thereby saving inventory.

The key elements of AS/RS include storage and retrieval machines, automated guided vehicles (AGV), frame structure, and warehouse control system software (WCS). All these components work together to receive, place, pick up, pack, and ship items along an optimized route.

4. Hardware equipment:

Use the necessary hardware to help retrieve data from barcode labels and monitor activities, otherwise, warehouse automation will not be possible. Commonly used devices are portable data terminals, stationary computers, bar code scanners, rugged tablet computers, and label printers.

How to Find Wholesale Suppliers?

Are you struggling to find a suitable wholesale supplier?

Did you know that there are more than 330 thousand wholesale suppliers in the world? And the top 50 suppliers generate only 25% of industry revenue.

The difficulty of finding a suitable wholesale supplier can be imagined!

DONT WORRY! This article will provide some ways to inspire you. These tips can not only help you find the right wholesale supplier but also help you clear your mind.

How-to-Find-Wholesale-Suppliers丨ChinaDivision
How-to-Find-Wholesale-Suppliers丨ChinaDivision

Contact the manufacturer

This is the most straightforward and easy way for us to find wholesale suppliers. If you have a product you want to ship, you can call the manufacturer and ask it to provide a list of wholesale distributors. Then you can contact these wholesalers to inquire about the availability of dropshipping services and information about opening an account.

Since most wholesalers ship products from various manufacturers, this strategy will enable you to quickly source select products in the niche markets you are exploring. After several contacts with leading manufacturers, you will be able to quickly find excellent wholesalers in this market.

Use Oberlo

Oberlo can help you easily import supplier products directly into Shopify and ship them directly to your customers.

  • Import products from suppliers
  • Fulfill orders automatically
  • Inventory and price auto-updates
  • Product customization
  • Pricing automation

Use Google search

Google search can find more high-quality suppliers, but there are some rules to keep in mind:

  • You’d better search extensively. The performance of wholesalers in marketing and promotion is not optimistic, and they will definitely not be among the best in the search results for “Wholesale Supplier for Product X”. This means that you may need to look at many search results (perhaps hundreds) to find the wholesaler’s website.
  • Don’t draw conclusions through their website. Some wholesalers are now notorious for using the 90s style website design. Therefore, although a good website may indicate a good supplier in some cases, many legitimate wholesalers have a recommended homepage. Don’t let bad design scare you away.
  • Use a lot of keyword modifiers. Wholesalers do not perform extensive SEO to ensure that you find their website, so you may need to try various search queries. Don’t just stop at “[product] wholesalers”. Try to use modifiers such as “distributor”, “dealer”, “bulk”, “warehouse” and “supplier”.

Attend trade fairs

Trade fairs allow you to establish contacts with all major manufacturers and wholesalers. This is a good idea to establish contacts and investigate your products and suppliers. But this method is only effective when you have selected market segments and/or products, and it is not feasible for everyone. However, if you have the time and money to attend, it is a good way to get to know the manufacturers and suppliers in the market.

What Are the Types of Warehouses? (Part Ⅱ)

In the first part of our guide to all types of warehouses, we focused on each type of warehouse. In the second part, we will explore more types of warehouses, especially those that have emerged due to the recent demand for more complex warehousing services.

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Types-of-Warehouses丨Totaljobs丨ChinaDivision

What Are The Different Types of Warehouses?

Distribution center

The convenience of entry and exit of the distribution center is very strong. This kind of center is essentially a place where goods are purchased from different suppliers in the distribution system and quickly transferred to each customer.

Distribution centers usually have a relatively large space, almost twice the size of traditional warehouses, and can accommodate multiple supply chain businesses. Retailers’ large inventory can be released through distribution centers to save holding costs.

Government warehouse

Government warehouses, as the name suggests, these warehouses are directly owned and controlled by the government. These warehouses can not only meet the government’s own needs but also can be leased to enterprises for use. But if the company cannot pay the rent on time, the government will have the right to dispose of the goods to offset the rent.

Consolidated warehouse

The consolidated warehouse receives the goods from different suppliers and packs them into larger goods and then transports them to buyers.

Generally speaking, a consolidated warehouse is a very economical way of order fulfillment, especially suitable for small e-commerce companies or start-ups. Most of these warehouses are located in superior geographical locations to meet the needs of urban areas with strict logistics.

Climate-controlled warehouse

To meet the storage needs of different products, the climate-controlled warehouse ensures the integrity of the goods by keeping the temperature within a certain range.

Items that require special handling conditions (such as vaccines, medicines, dairy products, artwork, electronic products, etc.) should be stored in a climate-controlled warehouse. This type of warehouse will follow strict quality control procedures to ensure excellent environmental quality.

What Are the Types of Warehouses? (Part Ⅰ)

Warehouse, is defined as a place where an enterprise chooses to store or accumulate goods due to business development needs. Different types of warehouses have completely different operation methods and use. Understanding these classifications will help you choose to lease or purchase after choosing the right warehouse.

What-Are-the-Types-of-Warehouses丨ChinaDivision
What Are the Types of Warehouses?丨ChinaDivision

What Are The Different Types of Warehouses?

Private warehouse

Private warehouses are usually owned and managed by large manufacturers or suppliers and used for their own production needs. Examples of private warehouses:

  • Warehouses built by farmers/producers near their fields, farms, and workplaces
  • Warehouses owned and managed by wholesalers or retailers near the sales centre to quickly supplement sales demand
  • Warehouses built by manufacturers near its production plant to store raw materials needed for production
  • Retailer rented warehouses
  • Retailers may have several regional warehouses to meet sales needs
  • Warehouses owned/rented by wholesalers for storing and distributing products

The existence of private warehouses is a base for owners to consider using the best scope of use to maintain their long-term strategic advantages.

Public warehouse

Public warehouses are usually owned by the government or semi-government agencies. Private companies that cannot own their warehouses can meet their storage needs by paying rent.

If a private company wants to build a public warehouse, it must obtain a license issued by the government. These warehouses are very suitable for easy loading and unloading of goods, flexible and cost-effective rent, and can store a variety of products.

Bonded Storage

The tax declaration warehouse is owned and managed by the government or a private organization with a government license. Applicable to importers, the imported goods in the bonded warehouse do not need to pay any customs duties and consumption taxes before release, which reduces the business burden for importers or exporters for a while.

Automated warehouse

Automated warehouses use many automation technologies, such as AI, robotics, order tracking software, and so on.

This type of warehouse still requires human participation, but mainly depends on computer technology and equipment. At present, many large companies are working to improve the automation of warehouses to reduce the probability of human error.

Cooperative warehouse

As can be seen from the name, this type of warehouse is owned and managed by a cooperative. The Cooperative Warehouse Association provides members with storage services for goods that only charge a small rent. Its basic purpose is to help its members, not to make a profit.

Advantages of Simplifying the E-Commerce Supply Chain

Does your e-commerce supply chain encounter the following situations:

  • Delivery is not on time
  • Slow adjustment of out of stock
  • Slow product packaging and delivery speed
  • Long shipping time

Although you may not have encountered these situations, are you willing to take the time to optimize your e-commerce supply chain to achieve greater sales growth?

What is an e-commerce supply chain?

E-commerce supply chain has a series of logistics processes, including product raw material production, manufacturing, warehousing, inventory management, order fulfillment, and last-mile delivery. The ultimate goal is to provide your customers with high-quality products and good customer experience. Every link in the supply chain is critical and depends on reliable partners.

What is e-commerce supply chain management?

E-commerce supply chain management refers to the logistics process of supervising product inventory, from manufacturing to order transportation. A highly optimized supply chain is highly optimized to help reduce costs and increase productivity, which may affect profitability and customer satisfaction.

E-Commerce Supply Chain丨The Leadership Network丨ChinaDividision
E-Commerce Supply Chain丨The Leadership Network丨ChinaDividision

Four advantages of simplifying the e-commerce supply chain

A simplified e-commerce supply chain can not only improve internal operations but also improve the customer experience. The four advantages of simplifying the e-commerce supply chain are listed below:

Higher transportation efficiency

Any delays in the supply chain can wait for improvement, especially transportation. The two main factors affecting transportation time include:

  • The location of each link is different (manufacturer, warehouse, customer)
  • Different transportation methods (air, sea, freight, etc.)

The right method of transportation can bring you a competitive advantage to win more customers, and even provide services similar to Amazon.

Cost-effective freight

An important point in optimizing the e-commerce supply chain is to find cost-effective freight to reduce transportation costs. Use appropriate packaging for the weight and size of the product, split the inventory geographically were cost-effective, and ask the carrier for shipping discounts based on the order volume, etc.

Accurate inventory management

Inventory management is a key link in the e-commerce supply chain. By optimizing inventory levels, you can:

  • Avoid unnecessary stock outs and discontinuations
  • Forecast future demand
  • Simplify inventory assessment

Methods to solve common e-commerce inventory challenges include: setting reorder points based on historical order data and future forecasts, regularly reviewing inventory, and implementing inventory management software.

Better customer experience

Simplifying the e-commerce supply chain ensures that you can provide the best customer experience for every order. By optimizing the supply chain, transportation costs are reduced, delivery time is shortened and the risk of human error due to improper chain operation is reduced.

As your e-commerce supply chain becomes stronger, you can focus on improving customer communication by tracking orders in real-time to provide them with the latest information from processing orders to delivery.