Running an online store requires understanding how to manage many areas of a business, one of the most important components being logistics. With many steps involved in the order fulfillment process, getting products to your customers’ doorstep can be rather complicated. From warehousing inventory to picking and packing items, there is a lot of coordination that occurs before an order is even shipped out.
Many online merchants use a third-party logistics (3PL) provider to manage this process, rather than fulfilling orders themselves. However, even with a 3PL, there are both manual and automatic ways to handle order fulfillment. Traditionally, 3PL services were performed without much automation. Because sales, inventory, and shipping data lived in silos, the merchant was required to send all orders to the 3PL in advance of a cut-off time each day without hearing much back.
Modern 3PLs have adapted their services to eliminate manual intervention by taking a technology-first approach. Though inventory is still stored in the warehouses where orders are fulfilled, the 3PL’s technology connects disparate systems to give complete visibility into the lifecycle of an order. This technology and its various integrations with other platforms power the 3PL’s network of fulfillment centers, sending all details back to the merchant.
Whether you sell on marketplaces or have you own website, learn why automation is an important part of selling online.
Why should e-commerce merchants automate fulfillment?
Save time
For online merchants that are already bogged down with a never-ending to do list, spending time on redundant tasks means less time for strategic ones. Because time is the new currency of entrepreneurs, they should focus on activities other than administrative, operational ones. Every hour you spend checking for new orders, communicating back and forth with a 3PL, and trying to find answers to customers’ questions, you’re missing the opportunity to grow your customer base, develop new products, and market your business.
Instead, automation connects systems, allowing your online store to talk directly to the 3PL’s technology. As soon as orders are placed, the 3PL’s warehouse can start picking, packing, and shipping products to your customers. With everything in one place, you can also easily search for orders that meet specific criteria to find exactly what you need.
Speed up deliveries
In addition to saving you time, automation also enables much faster deliveries for your customers. Thanks to two-day shipping standards created by e-commerce giants, there is a lot of pressure for small to mid-sized retailers to get orders out the door as soon as possible. Chances are, your customers have become accustomed to this service and may even expect it. And if they can’t get it from you, they may choose to go elsewhere.
An automated solution can determine how to distribute inventory across the 3PL’s fulfillment center locations that is most strategic for your business. By warehousing inventory close to your customers, you can reduce the time in transit, getting your orders delivered quicker. For every order placed online, the technology will automatically select the warehouse that can ship the package to your customer in the most efficient way.
Prevent stockouts
An undesirable but all too common event in the e-commerce world is stockouts, which leads to lost sales for your business and frustration for your potential customers. When you use static and outdated tools in your process, such as paper, fax, spreadsheets, and email, there is a delay in producing the necessary details and a reliance on out-of-date information.
In contrast, integrated systems provide you real-time data that is automatically collected to make timely decisions about your supply chain. This includes:
- Visibility into current inventory levels at each fulfillment center
- Notifications to reorder inventory when it’s running low
- Recommendations on future inventory warehousing
By connecting the upstream activities of purchasing and manufacturing to the downstream activities of sales and product demand, you can more accurately forecast inventory.
Drive down fulfillment costs
When you have to manually enter orders, you risk typing the wrong information. These mistakes can lead to an increase in returns, exchanges, replacements, and more. This becomes expensive and can even prevent customers from buying from you again in the future. Automation helps push data from one system to another without the need for manual or duplicate effort, allowing merchants to focus on higher dollar activities.
Integrated systems also provide advanced analytics to help identify how you can optimize inventory production and warehousing to cut costs, which sales channels are performing the best, and where you should split your inventory to store it closer to your customers. The less distance your inventory travels from the fulfillment center, the more money you can save. An automated process will select the warehouse and shipping carrier that will fulfill the order in the most cost-effective manner.
Let the data guide you
When your systems and processes live in silos, your decision-making can be based on guesswork. By linking aspects of the production, sales, and logistics processes, you can gain new insights. Using data from different channels, you can view metrics such as peak fulfillment times, revenue of orders shipped by day, sales and quantity of orders by USPS zone, and much more.
Using historical data helps you anticipate customer demand, optimize inventory levels, and understand how to strategically distribute inventory. As a result, you can improve forecasting and the lead time between manufacturing and new sales to have the right amount of inventory on hand. This continuous data collection and analysis becomes even more powerful over time as you build up more order history and discover trends.
Be transparent
Customers crave immediate answers to questions, especially around deliveries. A ProShip study found that 97% of consumers expect the ability to monitor their orders throughout every step of the shipping process. Automation helps document every movement of your product in the warehouse, changing its status in real-time as it progresses from picked to packed and shipped. It also provides tracking information as the package makes its way to your customer, allowing you to confidently answer any questions with the most up-to-date information. By incorporating automation into the fulfillment process, you gain a complete view of the order – from when it is placed on your store to the moment it arrives at your customer’s front door.
How to automate the fulfillment process
Automating order fulfillment is made possible with the right technology. Learn how you can create a seamless experience for your business and your customers.
Integrate e-commerce platforms
The key to automation is connecting the system(s) you use to sell online with the technology used by the 3PL that fulfills orders for you. This way, there will be automatic triggers that alert the fulfillment center staff to get to work. Setting up an integration can range from being incredibly technical if you’re doing it yourself or if you need something highly customized, to rather seamless if you simply need to plug in a few key pieces of information when the systems you’re using already support integrations with one another.
Once your e-commerce platform is integrated with the fulfillment software, you can streamline the flow of information. The fulfillment software will then automatically fetch orders, let you easily sync over new products from your store, and reorder inventory to prevent stockouts. Connecting multiple data sources paints a complete picture of your orders, inventory levels, fulfillment centers, sales channels, and customers – all in one place.
Conclusion
Technology enables logistics. To keep up, you must embrace automation. This enables the fulfillment process to begin automatically as soon as an order is placed online and extends down to sending notifications when it’s time to restock inventory. Many e-commerce retailers are moving in this direction to save time, money, and headaches, improve the customer experience, and ultimately grow their business.
If you’re looking to connect your online store with a tech-based fulfillment provider, check out ShipBob. In a few clicks, you can integrate your e-commerce platform(s) with no technical expertise or developer work needed. ShipBob combines its integrated technology with fulfillment services and a network of strategically located warehouses to automate picking, packing, and shipping.
