The Journey of an Ecommerce Product & Holiday Challenges
When you order a product online, you might think that it’s a simple and straightforward process, and the logistics industry is dedicated to keeping it that easy for you as a consumer. You just click a few buttons, enter your payment and shipping information, and wait for your package to arrive at your doorstep. However, behind the scenes, there are many steps and factors involved in getting your product from the manufacturer to you. There is added complexity that happens in the busy online winter shopping season. Here is an overview of the typical journey of an ecommerce product and the added complexities brought on by the holiday peak online ordering period:
- Inventory Management: The first step in the ecommerce logistics process is inventory management. This is where the seller tracks and manages the stock levels of their products across different warehouses or locations. Inventory management helps the seller avoid running out of stock or overstocking, which can affect customer satisfaction and profitability. Inventory management also helps the seller plan ahead for seasonal demand, promotions, or new product launches. Inventory management must account for all goods throughout the supply chain including orders pending delivery by the manufacturer, products in transit such as in a shipping container on the ocean, products stocked at a nearby warehouse, and even products sitting on physical store shelves, so this is an incredibly complex first step companies must take to ensuring that you the consumer can choose exactly the product you’d like and have it stocked nearby for quick delivery. To add to the complexity, goods expire and tastes change-often seasonally in the case of apparel for example, so overstocking can cut into profits and damage brand image if routinely disposed of on the liquidation market. The balancing act of ensuring inventory is at the right place at the right time is critical.
- Manufacturing: Every physical “thing” you can order online gets made somewhere, and among many reasons such as choosing to specialize in the core competency of manufacturing, the lack of storage space and/or dispatch labor, or physical distance from customers, often manufacturers don’t offer warehousing and distribution services. Therefore, once products are made into finished consumer goods, they’re shipped en masse to another location such as a distribution center or a warehouse facility, whether a company’s own warehouse or an outsourced warehouse company specializing in shared warehousing & fulfillment services. When products are manufactured a great distance from the intended consumer, often products are loaded into shipping containers for easier transport by sea, rail, or truck, and often a combination of all three modes of transport.
- Warehousing: The next step is warehousing, where the seller stores their products in a secure and organized manner. Warehousing involves various activities, such as receiving, sorting, labeling, shelving, picking, packing, and shipping products. Warehousing can be done by the seller themselves (in-house) or by a third-party logistics provider (3PL) or fulfillment partner (outsource). Outsourcing warehousing can save time, money, and space for the seller, as they don’t have to invest in building or renting a warehouse, hiring staff, or purchasing the warehouse management software needed to track inventory and fulfill orders, which is no small expense on its own. Outsourcing warehousing to a shared warehousing & fulfillment providers also allows storage and labor to flex with demand, thus overall delivering a monetary benefit to companies using these services by not retaining a constant space footprint and maintain a full staff in slower sales periods.
- Fulfillment: Fulfillment is the process of preparing and sending out orders to customers. Fulfillment involves picking the right products from the warehouse, packing them in appropriate boxes or envelopes, adding invoices or receipts, applying shipping labels or barcodes, and handing them over to the carrier or courier service. Fulfillment can also include customizing packaging or adding free samples or promotional materials to enhance customer experience. A company choosing to outsource fulfillment services to a shared warehousing & fulfillment provider doesn’t mean that customer experience has to be generic! At M&M Quality Solutions, we act as the invisible partner for our customers to prepare shipments exactly as they would themselves. This takes the form of whatever our customers would like from handwritten notes to giftwrap to using custom packaging and branded shipping tape. As a consumer, it’s often impossible to tell if your package was shipped directly from the company you ordered it from or from a professional 3PL like M&M that prepares every order with the care our customers (and you as their customers) deserve.
- Delivery: Delivery is the process of transporting orders from the warehouse to the address of your choice when you placed your online order. The most common transportation methods for ecommerce shipments in the US are truck and air travel. Some packages will be handled by just one delivery company, but some shipping services arrange for the first part of a package’s journey to you to be done by one company and for the final delivery to be made by another company, often the United States Postal Service. Many shipping services feature a tracking number to provide visibility into when you can expect your purchase to arrive so you can stay updated on its progress and journey to your doorstep.
- Returns: So you finally got your package but something’s not right; returns are also a process of some ecommerce shipments. Returns are the process of accepting and processing products that customers send back to the seller for various reasons, such as damage, defect, dissatisfaction, or change of mind. Returns involve verifying the condition and quality of the products, issuing refunds or exchanges, updating inventory records, and reselling or disposing of the products. Returns can be costly and time-consuming for both sellers and customers, but again logistics industry professionals are ready to support company needs for shipping, processing, and reconditioning and/or liquidating of returned goods.
The holiday season is a peak time for online shopping, but it also comes with some challenges for consumers who order products online for delivery. Some of the common challenges are:
- Stock-outs and exhausted inventory: Due to the high demand of the holiday season and supply-chain issues caused by a variety of factors, some products may run out of stock or become unavailable online. This can frustrate you as the consumer who wants to buy the seasons’ must have gift. To avoid this challenge, shop as early as possible and check the availability of products before placing an order. If the product you want to order is sold out in one place, check your favorite search engine-you might find that product is offered on another sales channel and is still in stock there.
- Longer shipping times and delays: Another challenge is the longer shipping times and delays that may occur during the holiday season. The increased volume of orders and the limited capacity of carriers and couriers can cause bottlenecks and disruptions in the delivery process. This can affect customers who expect to receive their orders within a certain time frame or by a specific date. To overcome this challenge, customers should choose reliable and fast delivery options, track their orders online, and be flexible with their delivery expectations. Many small parcel carriers won’t guarantee packages will arrive by a certain date during the holiday season, or they may charge a premium for shipping services that do offer a guaranteed delivery date.
- Higher shipping costs: A third challenge is the higher shipping costs that may apply during the holiday season. Some online retailers may charge extra fees or increase their shipping rates to cover the additional expenses or risks involved in delivering orders during this busy period. For small parcel delivery carriers, it makes no difference what’s in the package; their rate increases are due to higher demand and limited capacity. Often these higher shipping charges are passed on to you as the consumer trying to purchase everyday commodities and in-demand gift items alike. This can affect customers who want to save money or get free shipping on their orders. To deal with this challenge, compare shipping costs across different online retailers, look for discounts or coupons, or opt for in-store pickup or curbside delivery if available. Before placing your order, be sure you’re happy with the shipping speed and estimated delivery date or consider paying a bit more for an expedited shipping service to ensure what you’re ordering will be delivered when you need it.
- Complicated returns and exchanges: A final challenge is the complicated returns and exchanges that may arise during the holiday season. Some customers may want to return or exchange products that they bought online for various reasons, such as damage, defect, dissatisfaction, or change of mind. However, some online retailers may have strict or unclear return policies or procedures that make it difficult or costly for customers to do so. This can affect customer satisfaction and loyalty. To avoid this challenge, read and understand the return policy and procedure of the online retailer before placing an order, keep the original packaging and packing list that arrived with your order, and contact customer service with issues or questions.
As we approach the busy online shopping season, now you know about the herculean journey that your items go through to get to your doorstep, and remember there are many industry professionals-including those at M&M Quality Solutions-that hope this blog post is as close as you ever have to get to the complexity of what it takes to make each and every online order delivered correct, undamaged, and on-time.