Toronto, CANADA - March 24, 2020 - The trend of eCommerce is continuing to grow with no sign of slowing, especially under current global conditions that require virtual market participation. As a supplier (distributor and/or manufacturer), it is important to understand some of the key challenges that inhibit businesses who try to compete in this channel.
There are three primary ways for suppliers to engage in the eCommerce channel:
1) Through an eTailer, like Walmart.com, Amazon.com, eBay, etc.; or,
2) Through a customer web store using platforms like Shopify, Magento, etc.
3) Through a web store deeply integrated to your ERP
You might be selling your products through one or all of these online channels. Whichever way you choose to sell your products online, the challenge of understanding, organizing, and complying with each channel’s fulfillment requirements and expectations is paramount in satisfying your customers and achieving maximum profitability.
In the following section, we have highlighted the four key challenges of organizing your order fulfillment processes for eCommerce drop-shipments – while also remaining in compliance with eTailers. Each section includes important considerations for the scenario in which an order purchased on an eTailer’s site – for example, Walmart.com – is fulfilled by you, the supplier, directly to the consumer.
Branded Packing Slips
Let’s start with Direct Vendor Ship (DVS) Branded Packing Slips. Most eTailers require them to be included in the packages that are sent directly from suppliers to consumers. These are important from the eTailer’s perspective as it ensures a seamless customer experience for the consumer who will have purchased the product from their e-store and will be expecting the product to arrive with their branding. While it also drives efficiencies in the supply chain, these savings are primarily reaped by the eTailer who is able to reduce overhead costs related to the stocking and shipping of your products.
To remain in compliance, you need to be able to generate and print a branded packing slip that follows the specifications of each eTailer you supply your products to. Depending on the depth and breadth of channels that each business is engaging in, this seemingly small requirement can begin to bottleneck warehouse processes. In many cases, each eCommerce order requires access to multiple 3rd Party Portals to print these branded packing slips.
As a business, it’s important that you review your process for any inefficiencies in how and where all these branded packing slips are being accessed, generated, printed, and ultimately put in the hands of your warehouse staff.
Small Parcel Shipments
Historically, suppliers have instituted tight operational processes for managing what used to be larger orders to just a Distribution Center (DC), requiring the use of carrier services for Full-Truckload (FTL) or Less-Than-Truckload (LTL) shipments.
Today, eCommerce drop-shipment orders have introduced the requirement for Small Parcel Carrier Services. This adds another layer of compliance and complexity, in efficiently dealing with multiple carrier services and service levels.
To accommodate shipments to a DC and drop-shipments to consumers, you might have two distinct fulfillment processes or workflows in your warehouse. It goes without saying that this can be inefficient and costly, resulting in additional operational overhead related to staffing, physical space, and the support of IT systems. If you want to compete and remain profitable in the world of eCommerce, eliminating redundant fulfillment processes would allow you to gain a competitive advantage and scale your business more cost effectively.
In today’s world of instant gratification, it is an expectation of consumers to receive advanced shipment notifications and tracking information when ordering online. As consumers, we want to know how quickly it will be arriving on our doorstep and be able to follow it on its journey there.
To provide the best customer experience and to remain both compliant and competitive, suppliers have to be prepared to provide this information in a timely and accurate manner. Typically, the required shipment data consists of the name of the Carrier delivering the product and the assigned Tracking Number. How are you capturing and managing this data today? And do you have a consistent and efficient process for providing shipment notifications either directly to consumer or via your eTailers?
Real-Time Inventory Updates
The final key challenge is regarding inventory. Having accurate and timely details of your inventory stock is also integral to the success of your eCommerce business. Failing to accurately provide existing inventory stock levels could result in an unsatisfactory Vendor Scorecard Rating with your eTailers and unsatisfactory customer ratings/reviews. Depending on the type of inventory (i.e. how quickly and in what volume it is typically purchased), suppliers might be required to provide daily updates to their eTailers in order to remain compliant.
This consideration is augmented as the number of eCommerce channels grows. For most suppliers, the manual rekeying of inventory data is no longer a sustainable option as it requires significant collaboration across multiple departments to ultimately deliver this information back to each eCommerce channel.
In summary, the four key challenges we have identified above all lend themselves to additional layers of process complexity that typically result in operational inefficiencies – limiting a business’ ability to compete efficiently and effectively on a regional, national or international scale.
Optimizing your eCommerce order fulfillment may seem like a daunting task without the proper evaluation of best practices and the IT systems that support them. The globalization of trade has made this evaluation a top priority for suppliers, as the competition for a piece of the eCommerce pie only becomes more fierce.