Some say it’s the apparent ease of setting up an online store that has led to the growth of e-commerce as a business model. However many entrepreneurs that leap feet-first into e-commerce, soon find the stress of creating profitable marketing campaigns, managing suppliers across the globe while keeping on top of customer requests, a bit much. This often leads to many quitting the business, prompting the question:
“Is e-commerce viable for small businesses?”
Is the business model flawed? Inaccessible to small-sized companies? Or are the entrepreneurs simply unprepared? It often turns out to be the latter reason. The Internet offers new, exciting business opportunities, but only entrepreneurs who lay the proper groundwork will set themselves up for success. With the e-commerce model, many overlook just how important finding a reliable order fulfillment company is.
First Impressions Matter
Even when you have exchanged emails or had a chat with a prospective customer, their first real interaction with your brand, is when they actually receive the product. How your business handles this end, will determine if you’ve gotten a customer for life or just an irate prospect. Nick Robertson, the CEO of ASOS said it best when he said:
“Logistics is 50% of the picture, if a customer places an order and doesn’t get it, that’s 100% failure.”
When a poor delivery system leads to a poor customer experience, it can negatively impact all previous marketing efforts. Yet many small retailers seem to ‘wing’ this part of their business, leaving choosing a fulfillment partner, till the very last minute.
You can do all the market research and find the best suppliers for your product, but if you fail at fulfillment (a.k.a the ‘last mile’ ), the ‘race’ to retain a customer is totally lost. With retailers like Amazon offering next day, even same day delivery, your customers are already used to speedy and precise delivery; nothing less will suffice.
Make a Lasting Impression (or Not)
Retailers that make the entire shopping process as smooth as possible for the consumer, last the longest in this business. Customer satisfaction isn’t based on only the supply and fast delivery of products; you must also be able to quickly process returns, refunds and exchanges too. One way to get all this done is to simply hire more staff; but when you consider cost of training, equipment, leasing of office space, it suddenly doesn’t seem like such a good idea.
Growing an online business brings unique challenges that must be addressed, to achieve any lasting success. The following are typical scenarios that all e-commerce businesses face. As a small business owner, how many of these can you comfortably address with your 2-person team:
How will you handle an increase in the number of SKUs in inventory?
With Black Friday only eight weeks away, are you ready for peak and its 5-times increase in volume?
Can you handle the seasonality of certain products/SKUs?
Are you equipped to handle overstocking, as many smaller businesses, initially have a hard time predicting fast- and slow- movers?
Can you handle express deliveries and late cut-off times with ease?
How ready are you to process reverse logistics?
These scenarios, if handled poorly, can sound the death knell for any small e-commerce business. Irate customers will quickly boycott your brand and can take to social media to voice their displeasure.
The One Solution
To avoid unpleasant situations (especially of the types listed above), businesses are advised to partner with e-commerce fulfillment partners. Though it’s an added cost of doing business in this industry, it offers a huge amount of benefits; some of which include:
Providing you with accurate inventory control so you know exactly how much stock you have at any point in time.
Reducing your overall cost of doing business, as you’ll usually pay one flat fee to a fulfillment company, rather than paying multiple times for storage, packing, shipping etc.
An e-commerce fulfillment company will save you time which be focused on the core revenue-generating activities of your business.
Fulfillment partners with specialized storage facilities, give small businesses the opportunity to further expand their business. They allow them to test out, expand and collapse product lines with minimal fuss.
With these benefits, wouldn’t you agree that having an e-commerce fulfillment partner reduces workload, while opening you up to opportunities? It’s really poor form for a business to have done all the work required to bring a product to market then mess their sales up, with poor logistics. Logistics CAN be the difference between achieving success and barely getting by in the e-commerce industry.
At Floship, our main focus is on helping your business grow, by making sure that all your customers are happy with your product. Get in touch today and let’s help you improve your distribution capacity.