BUSINESS | E-COMMERCE
Why Online Businesses Should Look Beyond Fulfilment Costs
A discussion about the hidden value in eCommerce
During an interview, Jeff Bezos outlined his strategy for dealing with order Fulfilment problems, via his personal Amazon account.
Yes, you read that correctly, Jeff buys on Amazon just like mere mortals, and occasionally FBA messes up his orders too.
Bezos was asked how he reacts to the wrong order. In response, he said that he requests a case study for each instance and for management to propose a solution to improve fulfilment services.
“A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well.”
— Jeff Bezos
Why should Amazons’ CEO go to so much trouble? After all, his company sells 300+ products every second … so how can one order impact cash flow and brand reputation.
This article discusses two reasons why fulfilment is invaluable online.
№1 — Fulfilment Value Outweighs the Cost
For many businesses, order fulfilment is a means to an end. In other words, the business is satisfied as long as the product reaches the consumer in good condition and in a timely manner. However, there are many aspects that can impact these objectives, such as:
- The time frame
- The quality of packaging
- Accuracy, and
- Shipping
All of the above are critical with customer experience in mind.
You see, Amazon loses money any time an order goes astray but it also loses reputation when customers leave a 1 or 2-star review for late deliveries.
“If you double the number of experiments you do per year you’re going to double your inventiveness.”
— Jeff Bezos
Potential customers are heavily influenced by reviews; existing customers are inevitably disappointed when an order is not fulfilled as agreed. A sub-par service or inefficient shipping is more than enough to dissuade repeat custom.
As such, order fulfilment has a direct impact on revenue.
№2 — Online Retail is Only as Good as the Final Mile
The final mile is, well, final. Crucial. According to Bezos, fixing a problem with one order you fix a potential problem for every customer in the future. He points out that customer service is a core value, one that enabled Amazon to achieve so much success.
“One of the only ways to get out of a tight box is to invent your way out.”
— Jeff Bezos
Enhancing logistical efficiency and accuracy creates a more satisfying consumer experience. Realtime fulfilment visibility and reporting can streamline order processing for online retailers.
Outsourcing storage, inventory management, fulfilment, and shipping can save time and a ton of money.
Efficient shipping and returns improve customer experience.
Period.
We all know this.
During peak-demand, it’s vital to have a partner, a system in place that can validate orders against inventory to ensure orders are picked, packed, and shipped accurately.
And on time!
Final Thoughts
At the core, order fulfilment is just as important as branding, marketing or production efforts in the eCommerce world. Improving this process can help any business to become more profitable.
How? From repeat orders and reduced churn.
According to eCommerce expert, Vinny O’Brien, we need “valuable insights on how to find and satisfy customers online.”
With that in mind, there are 3 tangible takeaways for an online retailing business, a triplex of customer touchpoints:
- Website
- Delivery — fulfilment service, including your driver
- Condition of order
If you mess up on any one of these you’re in for a rough ride. Trust me. Everything else is just traffic.
Fulfilment is your trump card, it’s the most important and only tangible marketing interaction for online retailers.
Remember, it’s important to look beyond fulfilment costs to realize that order processing is not a burden, rather an investment, an opportunity to scale, engage consumers and grow your online business.
Online businesses must look beyond fulfilment costs to realize value for consumers.
