Product fulfillment solutions are becoming more important than ever in current markets. E-commerce has been a rising force in domestic and global consumer markets, but the past year has seen a significant surge in growth for e-commerce — both in terms of customers and the businesses competing for profits in the space. In fact, according to InternetRetailing's analysis of recent e-commerce statistics:
"The revenue of the global eCommerce industry is expected to jump by 12% YoY and hit $2.7 trillion in 2021, a 12% increase year-over-year. China and the United States, as the world’s largest eCommerce markets, will generate 60% of that value."
While this fast-paced growth is good news for established companies in the space, it can be tumultuous for businesses that don't already have the tools they need to exceed customer expectations, ensure seamless order fulfillment, and secure customer loyalty.
Even stable companies need to prepare for the future by building for scale, not just growth. In this article, we'll explore how you can take stock of your company's product fulfillment processes and how to reorganize your company's tech stack for scalable revenue.
Do You Need to Improve Your Product Fulfillment Solutions?
There's room for improvement in every system. But when you're building your company for scalability rather than maintaining the status quo or managing incremental growth, it's important to focus on the systems where (i) you have the most room for improvement, and (ii) changes have a significant effect on company efficiency or customer experience.
Start by assessing your product fulfillment solution and determining whether it's good enough for your current volume of sales or (especially if you're a high-volume seller) inefficiencies are having a significant negative effect on your bottom line.
We recommend finding a better solution for your product fulfillment processes if:
- Your company manages consistently high volumes of orders: Short-term spikes may stress your business processes, but they may not be enough to warrant a migration to another system. However, if you're a high-volume distributor, you've reached the point where switching to enterprise-level solutions can help you scale your revenue.
- Your orders are frequently backdated: Backdated orders are a liability to your business, especially as customers get used to one-day (or less) delivery. You need a new solution that offers fast turnaround and reliable delivery.
- You rely on manual labor: When businesses first get started, they require a lot of manual labor — even in e-commerce. But once you start having consistent, predictable orders, that manual labor is hindering your growth. Manual labor simply isn't scalable without hiring more people and massively increasing your overhead.
- Your operational costs are growing more than your profits. It's not enough to have increased revenue — that increase must also correlate to profit. If you widen your scope of services or invest in more employees to meet increases in demand, your expenses will rise. But if your profits aren't rising at the same pace (or, ideally, faster), then it's time to take a hard look at your growth strategy.
Understanding Growth vs. Scale
Fulfillment solutions are necessary to scale, but to recognize why, it’s important to know the difference between growth and scale.
Growth is simply an increase in revenue or profits. Many businesses achieve this by hiring more employees, increasing man-hours in a project, or incentivizing employees to work harder. Scalability, on the other hand, is the concept of achieving growth by investing in smarter, more streamlined processes that generate much greater output than the cost or effort of input.
For example, adding a new salesperson to a team can increase the number of leads and sales a company makes, but it doesn't increase the average number of sales per person. But switching to a smarter CRM that handles data entry allows that same sales team to focus more on converting leads, leading to significantly more sales (and more sales per person) without the expenses of hiring a new employee.
Like that example implies, technology is one of the best ways to scale your business. Investing in product fulfillment tools that replace manual efforts and give your company the support it needs to grow faster at a lower rate of expense can scale your revenue.
How Modern Product Fulfillment Solutions Scale Revenue
Product fulfillment solutions are platforms and organizations that allow e-commerce businesses to track customer orders, interface with suppliers and shippers, and ensure that orders are being properly fulfilled on time and according to your company's quality control standards.
For dropshipping businesses, this may be as simple as ensuring that your suppliers are sending orders to customers properly. For more hands-on businesses, your solution will grow in complexity to handle warehouse management, inventory, distribution, and packaging.
While your business may be handling these responsibilities manually or through siloed software, a modern product fulfillment solution can scale your company's growth and revenue through these advantages:
Automation
Automation removes the burden of many manual processes from your company's employees. Data entry, data transfer, inventory management, and other tedious tasks can be handled by smart platforms with minimal intervention from humans. Not only does this give your employees more time to focus on dynamic tasks, but it also increases the accuracy of your data, and thus, your deliveries. This further saves your company time on audits, revising records, and fixing incorrect orders.
Efficiency
Product fulfillment solutions that offer complete order management or fulfillment as a service remove order-related tasks from your team's list of responsibilities altogether. Instead of self-fulfillment models that leave your organization handling the entire process, product fulfillment services can handle them for you. Because they handle the needs of several different businesses, your order fulfillment becomes much more efficient.
Modern-day solutions are even more effective than services in the past. They have far fewer errors and delays, so your team also won't have to manage angry customer calls and emergencies.
Customer Experience
Every improvement you make to your business also improves your customers' experiences, and a better product fulfillment solution is no exception. It can interface between you and your customers and streamline the process from the checkout to your customers receiving their order. Faster and more accurate order fulfillment will result in happier customers, more positive reviews, and ultimately an increase in customers and sales.
Scale Your Business With Fulfillment Solutions From Smart Warehousing
At Smart Warehousing, we specialize in helping high-volume e-commerce businesses fulfill their orders. We offer nationwide coverage for customer support, order management and fulfillment, and complete supply chain services with exemplary picking, packing, and shipping services. Instead of just growing your business, scale your business. Our team at Smart Warehousing is here to help — get started today!