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How Fast Order Fulfillment Can Increase eCommerce Revenue

This entry is a guest post by Brandon Rollins, Marketing Consultant at Fulfillrite.

Running a successful eCommerce company is a juggling act. It's not enough to simply sell valuable products for a reasonable price. In order to succeed, you must market your business to generate leads. Once visitors show up on your site, you must convert them into buyers.

It's a complex multi-step process. In the minds of many eCommerce store owners, generating leads and earning sales revenue is a marketing task. Yet this is an incomplete view. The customer experience involves everything from the moment someone hears about your company to the moment their package arrives, and well afterward.

To put it differently, shipping has a direct impact on your bottom line! It's not enough to merely find inexpensive ways to ship products to your customers around the world. You need to do so quickly and reliably, or else you will leave money on the table.

Order fulfillment isn't just an expense to be reduced. It can and will change the amount of revenue you bring in. Here's how.

Your Customers Expect Fast Shipping

It's no secret that we live in a world characterized by instant gratification. Customers have been trained by companies like Amazon to expect their packages to arrive very quickly. After all, if you have a Prime account, most items you order from them will arrive in two days.

As many as 87% of online shoppers consider shipping speed a key factor in whether or not they choose to shop with an eCommerce brand again. Another 63% of online shoppers expect three-day shipping as a standard.

Many customers will abandon your website, even with items added to their shopping cart, if they find that your shipping is too slow. That means failure to implement a fast order fulfillment system will reduce revenue by lowering the average conversion rate.

Related: Packaging Tips: How to Packaage your Products for Delivery

Late Deliveries Impact Customer Retention

Many customers do not pay close attention to shipping speed when they make a purchase. That doesn't mean they don't have expectations for how quickly the package will arrive, though! It merely means that customers may find themselves disappointed if it takes a full week for their package to arrive.

As many as 69% of consumers "are much less or less likely to shop with a retailer in the future if an item they purchased is not delivered within two days of the date promised." In other words, slow shipping means losing repeat customers.

Repeat customers are the lifeblood of many eCommerce businesses. It is hard and expensive to acquire new customers. It's much easier to make a customer happy the first time and then sell to them the next time. In fact, according to Harvard Business Review, customer acquisition costs 5 to 25 times more than customer retention.

Related: Why so many freight delays?

Returns Affect Customer Retention Too

People return items that they order online more than you would think. Yet despite this fact, a lot of eCommerce stores do not have elegant ways for customers to return items. Ideally, you want the process to be as easy as possible. Order returns should be as quick as order fulfillment.

At first glance, it might seem against your best interest to make it easy for customers to return items. After all, making it easier to return items would mean you have to refund their money. However, there is a different and more complex chain of events going on under the surface.

First, 81% of customers say they are more loyal to retailers who have generous return policies. Buying an item online is an act of trust. Being easy to work with makes prospective customers trust you, increases your conversion rate, and thus, increases revenue.

But it's not just about your return policy - your actual return process needs to be a good one too. Customers that take the time to return a product are willingly interacting with the company again. That means they are in a delicate state. If you treat them well during the process, they're likely to come back and buy something from your company again.

The faster your process the customer's return and refund their money, the better the experience. The better experience, the better the chance of the customer returning and thus spending more money.

Shipping Your Own Orders This Quickly is Difficult

Good order fulfillment processes both increase your conversion rate and improve customer retention. However, the standard set by many of the large companies in the eCommerce space is high. It's difficult to fulfill orders for your own shop quickly once you pass a certain threshold.

In order to be able to keep up in a competitive marketplace, consider outsourcing your order fulfillment. While it's not for everyone, most companies that ship more than 100 units per month can benefit from outsourcing fulfillment.

Another sound option would be to use e-commerce shipping software like Shiplane - which can help simplify the tedious process of shipping out your products.

The benefits are myriad. Shipping is faster and more reliable, improving customer retention. It's less complex to run your business and you may save on labor. The overall cost of shipping might even be lower since the company you outsource to will likely have discounted rates on postage.

Final Thoughts

Order fulfillment is hugely important to the success of eCommerce businesses. It's right up there with quality product design and well-executed marketing plans.

Done correctly, order fulfillment can retain customers, increase conversions, and increase the overall revenue being brought into your business!

Need help fulfilling your orders? Click here to request a quote from Fulfillrite.

About the Author:

Brandon Rollins is a Marketing Consultant at Fulfillrite. His main areas of expertise are online marketing and supply chain management. He also runs Pangea Marketing Agency and Pangea Games.

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