If you are an entrepreneur, you know how vital it is to make sure that you know all of the eCommerce success factors. This article will help you to reduce your expenses and create raving customer experiences.
Cost Per Order
You will need to analyze your eCommerce fulfillment expenses. This will be broken down into six categories.
- Indirect labor
- Facilities – including security, maintenance, and your eCommerce order fulfillment providers
- Shipping supplies
- Management and supervision
- Direct labor
In general, you will notice that freight expenses will typically exceed all of the other components. Making these notes will give you a starting point to spotting weaknesses in improving the process.
Reduce Your Freight Costs
If you haven’t negotiated new agreements for a while, now is the chance. eCommerce order fulfillment providers are in hot competition. Which means you do have the upper hand. Conduct some research using all of your data to find whether you’re overspending on your shipping.
Your picking and packing need to be quick and effective. In general, your picking and packing department will make up more than 50% of your overall costs per order. This excludes outbound shipping. How can you increase your labor productivity? Are you incentivizing your staff?
Reduce Employee Turnover
Hiring and firing of staff costs money. This comes back to incentivizing. Are there career paths and opportunities for your staff to advance? If not, can you create those pathways?
There will be several places where you can apply automation to your benefit. If you work with specific eCommerce order fulfillment providers, you can check if they have automation. If not, their process could probably be faster. Look for synergy; this might be where you need to hire a consultant to evaluate your full operation.
Packing Supply Cost
A conversation with your packing supplier can help you find the data and possibly reduce the number of cartons and dunnage.
Compare Service Level Metrics
Here are some service-level metrics to compare yourself to.
- Dock-to-stock (two hours)
- Order fulfillment (100% of orders shipped the same day as ordered)
- Returns (Same day)
How did your business compare? Do a deep dive into your processes and make the changes where necessary.
Is your warehouse software going to enable you to grow as a business? If not, you’re going to need more robust tools to help you. Having all the data you need will ensure you make the right decisions at the right time. Advance shipping notices, labor management, productivity analysis, and so much more is available on the right system.
Your managers will directly affect everybody’s productivity. It would be best if you found where your managers can make improvements. This will mean all of the work is of higher quality, and you will see more productivity overall.
Depending on the size of your business it might be more prudent to outsource your eCommerce needs to eCommerce order fulfillment providers.
Continuous process improvement is the requirements of modern-day e-commerce success.
Follow these tips and watch your business thrive! For more details contact us today.