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.

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.

9 Questions You Should Ask Before Choosing a Chinese Dropshipping Agent

A Chinese dropshipping agent is a ‘middle man’ with a real warehouse in China, who can offer one-stop service to help you find products with the best price. Order fulfillment warehouses fulfill the order, arrange shipment, and save your time to focus on marketing.

They can also take care of high volume orders and product quality along the way. However, it is hard to find an ideal and long-term dropshipping partner. This blog will share nine questions that you can ask when contacting a Chinese agent. They’re useful to sort out the good from the bad. Ask these questions wisely, and you will get what you want.

1. Do you have a warehouse? 

The real dropshipping agents is definitely have their warehouse. In other words, physical building with walls, doors, and windows. Generally speaking, they are pleased to tell you about their warehouse location and show you photos. Because they have invested a massive amount of money building and improving it every day to give you the highest quality service. You can ask them directly when considering a Chinese dropshipping company.

2. What is your processing time?

It is practical to find a dropshipping agent who can give you a definition of processing time like this:

Processing time starts from the moment a fulfillment request is received to the time that you get the tracking number of order.

Processing time is different among dropshipping agents. It’s usually anywhere between 2-3 days. The longer the processing time, the longer the shipping time.

3. How do you conduct a quality control inspection?

Dropshipping agent is responsible for checking product quality to ensure every product fits the order specifications. Once the products arrive at their warehouse, they will check their colors, size, quantity, flaws, etc. If there is any quality issue, they’ll contact suppliers to require an exchange or return.

4. Do you have product labeling and packaging?

You need to ask if a dropshipping agent will offer labeling and packaging service. For example, you can ask if they can add a logo/pattern or a thank you tag in the package. 

5. What is your return policy?

It is normal to return the product in the e-commerce business. So you need to figure out the return policy in the dropshipping cooperation. The following questions count a lot in the return policy.

  • How do they carry out the overall return process?
  • In which cases do they accept to resend products or make a refund?
  • Whether will they cover shipping fee when resending products to customers?

6. Do you have MOQ?

MOQ is the abbreviation of minimum order quantity, which refers to the lowest number of a specific product that a dropshipping agent is willing to order and stock at their warehouse. If you cannot reach their MOQ requirement, the dropshipping agent won’t accept your request. But different dropshipping agents have different MOQs. Some may have a MOQ of 100 units while others may require you to order at least 20 units. The coolest thing is you don’t need to order one by one with a dropshipping agency. A CSV file can easily be applied to save your time.

7. Do you provide inventory data updates?

If you’ve got an order from your customer and transfer it to your dropshipping agent. Unfortunately, they tell you that it’s out of stock, which is the worst case you should be aware of at the beginning. In order to avoid this problem, you should ask the agent if they provide you inventory status and how often the data will be updated, especially during holidays like Chinese New Year and Christmas. In this way, you can make plans to order more products early.

8. What’s the service charge?

In most cases, dropshipping agents don’t use a fixed cost. The cost often depends on types of products. But all the fees should be visible and transparent. A responsible dropshipping company only charge a very reasonable service fee without any hidden costs or commissions.

9. How to contact you if I have questions?

Your dropshipping agent should be present (almost) whenever you need their help. Compared to email, the instant communication channels(like WeChat, Skype, WhatsApp, etc.) is more effective and convenient. So you can make sure if they can provide some instant communication choice for you.

How to Protect Shelves in Order Fulfillment Warehouse?

With the rapid development of the e-commerce industry, storage shelves have been widely used in many order fulfillment warehouses, but few people pay attention to shelves maintaining. So today we will share the importance points of maintaining storage shelves.

Reasonable use

The storage shelves must strictly follow their internal parameters to place items. Too heavy goods will seriously affect the shelf lifetime.

Regular cleaning

In most cases, few staff will pay attention to the cleaning of shelves. Most of them will approach the shelves only when they need certain goods, and then leave quickly, which will accumulate a lot of dust on the shelves, undoubtedly, it will affect the goods on the shelf, and at the same time, it will also have a certain impact on the life of the storage shelf.

Regular cleaning of shelves can extend shelf life. The cleaning of bookshelves is not always cleaned with water. Remove the dust from the shelf. If the shelf is washed with water, it is easy to oxidize the shelf surface, shortening the shelf life greatly.

Load-bearing capacity

When placing goods, you need to pay attention to the load-bearing capacity of the shelf and avoid overweight. Place lighter goods on the upper floor and heavier ones on the lower floor to avoid safety accidents.

Keep the warehouse dry and ventilated

Storage shelves need to be painted with protective paint on a regular basis to avoid corrosion. Do daily inspections, fix the loose screws in time, ventilate the warehouse, keep the warehouse dry, and avoid excessive humidity.

Develop specifications for the use of storage shelves

Warehouse managers need to formulate specifications for the use of storage shelves, cultivate the awareness of protecting shelves while improving the standardization of storage operations.

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Clean and tidy shelves in ChinaDivision

What can e-commerce Sellers Learn from WalMart ’s Biggest Revenue Surprise?

Recently, Wal-Mart announced its biggest revenue surprise in 31 years. As consumers poured into Wal-Mart to consume, its online sales almost doubled during the coronavirus pandemic.

During COVID-19, the discount retailer used its large store base and investment in e-commerce to provide customers with food and other goods. In the second quarter, US same-store sales increased by 9.3% while US e-commerce sales soared 97%. This is because more and more customers tend to use same-day delivery and curbside pickup services.

Wal-Mart’s CEO Doug McMillon (Doug McMillon) said the company will expand these benefits by adding member services. He did not disclose when it was launched, nor did he provide details about the privileges. He only stated that the project will pick up goods by the roadside and speed up the delivery of customers, strengthen the relationship with customers, and collect valuable data. What’s more, It is reported that the program called “Wal-Mart+” is expected to compete with Amazon Prime.

Whether you are an Amazon seller or an Shopify entrepreneur, the most significant thing for your business is to find an effective order fulfillment agent. Like ChinaDivision, a leading order fulfillment company in China.

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Three Key Factors You Should Know When Choosing an Order Fulfillment Center

Order fulfillment warehouse becomes a popular role for most Amazon and Shopify sellers, but how to find a long-term order fulfillment partner need more skills. Last week, ChinaDivision made a random sampling about the reason why they chose us to fulfill their order, from which we found the major three factors.

  • 1. In terms of management form, traditional warehousing requires e-commerce sellers to arrange their own warehousing management personnel to perform operations such as product management, regular inventory counting, packaging and delivery, etc. So the e-commerce sellers need to recruit relevant personnel to be responsible for warehouse management problem. The third-party warehousing can help e-commerce sellers solve this problem well, and e-commerce sellers do not need to spend manpower and cost to carry out warehouse management.
  • 2. During the order promotion event, the order volume of the e-commerce store skyrocketed, causing the warehouse management staff to start rushing, a large number of delivery errors occurred, and the frequency of consumer returns and exchanges was greatly increased, resulting in a decrease in the store’s related scores, which was not worth the loss. And professional third-party warehousing companies have many years of experience in warehousing and delivery services, even during the promotion activities, they can complete the delivery tasks with quality and quantity.
  • 3. In terms of warehouse renting. It is difficult for e-commerce sellers to find a warehouse of the right size using the traditional method of renting warehouses, which is bound to cause some inevitable troubles. The order fulfillment warehouse can solve this problem. E-commerce sellers only need to pay for the used storage area, which is good for cost saving.

Something You Should Know about 2020 E-commerce Order Fulfillment

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Shipping two units is cheaper than one unit

Shipping cost reduction has attracted the attention of e-commerce sellers. When you sell multiple units as part of the same order, your expenses as a percentage should go down. 

Here is an example:

  • If you sell two of the same product.
  • You sell them for $40 each and your margin is $20 each.
  • You charge your customer a flat rate of $5 for shipping.
  • Your shipping cost for one unit is $10.
  • When two units are shipped in the same box, your shipping cost is $12.

Therefore, if you sold just one unit, your margin would be $15 after accounting for the shipping cost. With two units, even though your shipping weight doubled, your shipping cost would actually only go up slightly. As a result, your margin is $33, which works out to $16.50 per unit.

Effective stock area brings better e-commerce order fulfillment

There are many customer questions in China Division’s website every day, among which the area of our warehouse is frequently asked. Some customers also go to our warehouse directly to find more information of our service and capability. Indeed, a warehouse with effective stock area allows you embrace larger market and better profit. This is why China Division keeps finding large and convenient warehouse all the time.

Logistics management is more important than free warehousing

If you are an Amazon seller, you must have been troubled by the delivery problem during COVID-19. Some customers chose China Division as theis new order fulfillment agent after being deceiving by their previous agent.

In other words, the professional logistics management system of China Division leads to smoother delivery and after-sale problem solving. More and more sellers begin to study logistics management while other still focus on the free shipping and warehousing. In fact, logistics management deserves the high praise for its accuracy and timeliness of data transfer.

How to use Drop-shipping effectively?

Drop-shipping efficiency plays an important role in COVID-19. Both the e-commerce seller and the warehouse want to use drop-shipping effectively, so it is time to find an available way.

Before setting the goal of improving drop-shipping efficiency, we need to figure out what people pay attention to. For example, some Amazon sellers want to know what is the cheapest shipping to Canada. Shipping discount offered by the order fulfillment warehouse brings the best solution? In fact, it’s not enough.

According to the customer’s feedback of China Division, most clients are concerned with price, delivery and service. Therefore, we proposed feasible order fulfillment optimization plan on last summary meeting. Here we share it with you:

  • Offer Competitive Price

China Division has a strict and thoughtful price accounting system, providing a competitive price for every customer. (More details had been showed in this blog: https://blog.chinadivision.com/important-factors-of-drop-shipping-price/)

In a word, our price is based on the market research and warehouse situation, you can also share your view with your account manager for better cooperation.

  • Time-based Delivery

China Division will make clear schedule of the order fulfillment, making every item and shipping details in an orderly way. What I need to mention is that one of my workmates will set memos and alarm clocks to remind him to fulfill the order. What a hardworking and dedicated colleague, isn’t it?

  • Professional Customer Service Center

In addition to the sales and order management department, China Division creates a professional and experienced team of customer service. All the new colleague will be given a training about customer communication before they start to work, which covers daily calling, package tracking, after-sales problem solving, etc.

Finally, regular summary is a necessary in China Division, take the weekly meeting as an example, everybody can share their opinion with others, as well as receiving the feedback from the participants. In this way, every workmate can find their value in China Division. What’s more, both individuals and departments can benefit from it. Therefore, we can create better warehousing performance for the e-commerce sellers.

Suggestions on Controlling Fulfillment Warehouse Loss Rate

What is the utilization rate of the warehouse to prove the strength of an e-commerce order fulfillment center? In a sense, it covers the control of loss rate, the lower the loss rate is, the better the utilization rate will be. Nevertheless, the turnover rate of goods in the e-commerce warehouse is quite high, and there will be losses in the process of turnover and movement. What’s worse, it is difficult to predict where these losses will occur, how many losses will occur, whether they will be registered timely, what causes it, and the most important question is how to effectively control the rate of loss of inventory.

The following aspects will tell you how ChinaDivision carry out this work:

  • List Loss Points

All warehouse staff will participate in the discussion, starting with the process of e-commerce warehouse management, studying which operations are easy to cause the loss of goods, and recording these possible problems timely. Second, we need to count historical data, classify according to the cause of loss, and see how much loss is caused by each loss point. To determine the percentage of each loss that accounts for the overall loss of the e-commerce warehousing.

  • Set the Standard for Los

According to the data, ChinaDivision will calculate the loss value and percentage of the loss point to determine the loss standard and determine how much the loss standard should be kept. Zero loss is always just an idealized number. In reality, there is no such zero loss situation. 3pl fulfilment It is better to work out a more reasonable control target at a time and gradually improve it. Besides, the loss prevention standards mainly  referred to  two aspects, one is the target value, and the other is the loss prevention operation standard, which is used to regulate the staff in the e-commerce cloud storage in order to control within the target loss value operational requirements.

  • Record Data Timely

It is not for the operator to clarify the target value of the loss to be controlled, to receive training to understand how to prevent loss, and the loss will naturally fall below the target. It is necessary to record and account for the loss of the operation. In some places where management is not standardized, there are certain hidden rules, such as underreporting of losses, concealment, or staring at target values. These actions will affect the timely search for the cause of the loss, and then take effective measures to reduce subsequent occurrences. We have formulated the rules for accurate accounting. The loss is classified according to the reason for loss and scrap in the finance. When the reason is more general, the specific loss point is written in the remarks, which is convenient for the next round of combing and reducing the entire warehouse management. There must be a mechanism for inspection, supervision, and assessment, and actions that are not properly accounted for should be dealt with and punished in a timely manner.

Only by sorting out these loss issues, determining specific loss standards, and confirming the data in time, can the loss be controlled within the target range, so both the drop shippers and their customers can benefit a lot.