When starting your eCommerce business, it’s vital to focus on the best practices of order fulfillment. It is easy to focus on, and get distracted with obvious aspects like site design, product descriptions and photos, pricing, incentives, etc.; however, one area that can easily be neglected or even overlooked entirely is order fulfillment. The order fulfillment experience is one of the most significant ways to contribute to the impression your customer will take away from the purchase experience. In fact, it is estimated that about 40% of shoppers will never shop with a retailer again if they had a poor delivery experience, and that about 25% of shoppers have canceled an order because of slow delivery speeds.

Order fulfillment is the collection of steps that the seller undertakes from the moment of purchase until the order is received by the customer. Order fulfillment can include steps like order intake, order picking, assembling, packing, shipping, and order tracking. Essentially, order fulfillment is the process by which you provide the customer with the product they expected, in the manner and within the time that they expect.

Failures in order fulfilment can quickly destroy a positive customer experience. It is critical to plan your order fulfillment strategy in such a way as to avoid common pitfalls that can ruin a customer relationship. The goal should be to minimize situations that will cause your customer to reach out to you for answers or action. Every time a customer feels the need to take the time to reach out to you, you are at greater risk of losing that business.

At this point, most customers’ expectations for order fulfillment will have been set by what they experience when placing an Amazon order. This can be a high bar for a small seller. Keep this in mind when designing your order fulfillment best practices strategy.

It is also important to remember that when you fulfill an order and hand it off to your shipper, any negative experience introduced by the shipper (such as a damaged product, delayed delivery, etc.) will be attributed to you, the seller, rather than the shipper. One way to improve the overall fulfillment experience is to offer several different shipping options. This way, your customer can tailor the expense and delivery speed to their specific needs.

A good sales tactic is to provide customers with order fulfillment information before they click the “buy” button. Avoid making customers wait until they add an item to their cart to view shipping and delivery information. Customers appreciate knowing all the relevant cost and timing information before they click “buy,” and failure to provide this can result in lost sales.

While many sellers conduct the order fulfillment process in-house, others enlist the help of third-party vendors to manage aspects like warehousing and shipping. Sellers may partner with a drop shipping vendor or third-party logistics (3PL) vendor. However, nearly all sellers will use a third-party partner at least to handle delivery, such as UPS or DHL.

Order Fulfillment Overview

The first essential condition to avoid disappointing a customer during the order fulfillment stage is to ensure that you actually have the item purchased. Inventory management is crucial to successful order fulfillment. Avoid selling items you don’t have in stock and ensure you have adequate inventory to cover customer demand for listed products. Displaying a real-time inventory tracker of “items remaining” can both help to avoid this while also generating positive urgency that can help drive sales.

Order Processing

The first step in the actual order fulfillment stage is to process the item for shipment. This includes locating the item in inventory, pulling the item, and then packing it for shipment. For this process to be efficient, you will need to ensure you can find items in inventory quickly and consistently. It is also important to inspect the item before you package it, to ensure there is no damage. Optionally, you may choose to document the condition of the item before packaging, either by photography or other means, to facilitate handling any disputes that may arise later.

Packaging

The next step of order fulfillment is packaging the item for shipment. The general best practice is to minimize the number of times you or your team touches the product. First, this will reduce chances to incur product damage. Second, every touch represents an expenditure of resources, and a reduction of your margin.

Consider what type of packing materials to use: boxes, bubble mailers, poly bags, paper packing, packing tape, bubble wrap, air-fill, etc. You want the item to be sufficiently protected, but not waste materials or time. Avoid creating extra hassle for your customers and wasting you own time by “over-packing” an item. Customers also don’t appreciate having excessive packing material to remove and dispose of. Ensure that the package is secure but does not make it too difficult for the customer to access the product. Excessive packaging can even result in product damage as the customer struggles to remove the shipping materials. This will create extra hassle for you.

Be cognizant to ensure there is not a conflict between the packing material you use and any “ideology” reflected in the product itself. In other words, if you sell a product that emphasizes or correlates with sustainability and environmental responsibility, try to use biodegradable packing materials and avoid excessive, disposable waste. If you do make an effort to “pack responsibly,” consider adding a small note to the package that highlights this effort. You should always strive to get “credit” for whatever effort you undertake to accommodate a customer preference.

The overall appearance and presentation of the package may seem trivial, but it can make a big impact. Unboxing is the first physical impression you will create with your customer. Of course, you will need to print and affix the appropriate shipping label. However, you might also consider using branded shipping materials. For example, you can order tape printed with your company logo or use packing materials made in the colors corresponding to your brand. You can also add a note, coupon, or free gift inside the packaging. These communicate care, thoughtfulness, and personal attention to your customer, in addition to the messaging itself. You can drive sales but adding a note with a coupon code for a discount on the next order.

You should also include a packing slip in your parcel. A packing slip contributes to an overall impression of conscientiousness and professionalism. The packing slip will also help you maintain record of what you have shipped to whom, when, and can help you avoid errors while you are packing the shipment. Packing slips also facilitate customer support inquires, reorders, and can be used to provide return instructions. Finally, a packing slip offers one more opportunity to highlight your branding, name, website, etc.

The packing slip should list all the items contained in the parcel, along with a unique order number. This makes it easy for your customer to recall what was in the order, and helps to avoid inadvertent discard of a delivered item when cleaning up packing material. Other information listed on the slip may include SKU number, unit quantity, and weight/dimensions.

Shipping

The next step in order fulfillment best practices after packaging is handing the package off to your shipper. However, just because you don’t have custody of the item, does not mean your customers will not expect updates on the status of delivery. For this reason, it is crucial to provide your customer with a way to track an order and/or receive updates from the shipper on delivery status. This is also the time to consider whether you should insure your shipments. It may make sense to invest in insurance for your shipments so that you can maintain a more predictable overhead cost associated with damaged or lost goods.

Offering free shipping can have a huge impact on consumer decision-making. Many consumers have become accustomed to the availability of a “free” shipping option, and may expect it. Of course, in such cases, shipping cost will need to be covered somewhere else – most likely in product pricing.

You may have to experiment to see if it is more favorable for you to offer “free” shipping with the small additional price penalty on products, or to offer the lowest priced products with additional shipping costs. However, there is also an opportunity to drive sales this way: you can offer free shipping on orders totaling more than a set threshold dollar figure, inducing some customers to add more items to their cart in order to “take advantage” of the free shipping.