The holiday season
The holiday season is here once again, and it brings with it good tidings for ecommerce businesses. It also brings with it a chance for ecommerce businesses to learn from their past mistakes, specifically, how to handle the influx in orders and ensure fast and reliable delivery.
You will be taking more orders during this holiday season than you usually do. So you need to make sure that you have the necessary shipping infrastructure to get every order to its buyer’s doorstep. Shipping from a single facility may not be sufficient (as will be discussed later); this is why you should consider shipping from multiple facilities.
Holiday Season = Shopping Season
The holiday season has become synonymous with shopping. In 2019, total sales during the holiday season surpassed the $1-Trillion mark for the first time in history. The ecommerce industry alone registered a total revenue of $142.5 billion. This was an increase of 13.1% compared to 2018; it is also worth noting that more and more people (approximately 59% of all surveyed buyers) are switching to online shopping.
2020 is expected to bring even better tidings compared to 2019. It is estimated that online shopping will increase by 13.9%, thus bringing total sales to about $156 billion. This projection does not take into account the impact of the COVID-19 pandemic on shopping; more people may be forced to do all their shopping online because of the ongoing lockdown of brick-and-mortar stores.
It’s a Recurring Problem
The windfall of the holiday shopping season is not the problem; the problem is online merchants’ inability to fulfill and deliver all orders. Online shoppers have often complained about late or canceled deliveries.
Even big brands, such as Amazon, have admitted to being incapable of fulfilling and delivering all orders in time. Last year, Amazon went on record to apologize for delayed deliveries for its two-day Prime service.
Amazon, like many other ecommerce retailers, was quick to pin the blame on other factors. However, this statement by Amazon’s spokesperson exposed the fact that this is a recurring problem: “We are off to a record-breaking start t the holiday season, and on peak shopping days, delivery promises vary and may be longer than normal based on order volume and the fulfillment and delivery capacity available in a given area.”
Amazon has one of the largest fulfillment and shipping infrastructures of any ecommerce business, but this still wasn’t enough to meet the huge demand. More than 16 billion items of packages and mail were delivered across the country in 2018, according to a report by the United States Postal Service. So, how can an ordinary ecommerce business possibly fulfill and deliver all orders during the holiday season while operating from a single shipping facility? Answer: it can’t.
Why Not Ship from Multiple Facilities?
One of the advantages of selling online is that you can serve customers from across the country (or across the world). Obviously, shipping to a customer who is in your city/state will take less time compared to shipping across state lines. So, wouldn’t it help if you had a shipping facility close to customers in every state/region?
Shipping from multiple facilities will not disrupt your operations. It is a scalable service with various options that you may choose as fits your business model. Here is an overview of some of your options:
- Self-Fulfill in Partnership with a 3PL
You can choose to fulfill orders in-house and have a 3PL with multiple shipping facilities do the deliveries. This is a flexible arrangement that can take several faces.
You can choose to outsource only some of your products to a 3PL for fulfilling and shipping. This is a convenient arrangement, especially if you anticipate an uptick in demand for one particular product/set of products. This way, a 3PL with a more robust shipping infrastructure can handle the quick-moving orders while you handle the slow-moving ones.
You can also outsource half (or more) of your products to a 3PL for fulfilling and shipping. This will reduce your workload by half or more; it will also increase fulfillment and delivery speeds by two times or more. This arrangement is especially ideal if you deal with uniform products that don’t have variations in rates of demand. It is also a great idea if your business is growing faster than it can scale up (regardless of whether or not it is the shopping season).
- Outsource to a 3PL
Many startup ecommerce businesses find it cheaper and more convenient to do the selling and leave the fulfillment and shipping to third-party contractors. The convenience doesn’t change as the business grows, but most businesses prefer to have their own shipping facilities on the side.
It is okay to have your own shipping facility, but it may not be sufficient during the holiday season. You will be dealing with an influx of orders, which means dedicating more time to working the system, restock, and do everything necessary just to keep up with the increased demand. All of this, however, would be futile if your shipping system cannot keep up. It would be easier and more convenient to deal with the sales and leave fulfilling and shipping to a company that specializes in that sort of thing.
Why Ship from Multiple Facilities?
We have already established the need for shipping from multiple facilities. So, why are many ecommerce businesses still hesitant? It may be because they think that it is expensive; after all, it only benefits the customers, right?
Wrong: shipping from multiple facilities will benefit your business just as much as it will (and should) benefit your customers.
Following is an overview of two important benefits of working with a 3PL to ship from multiple facilities:
- Customer Satisfaction
There are more than 112 million people registered for Amazon Prime shipping services. This is because online shoppers don’t like waiting too long for their deliveries.
The average online shopper expects their orders to be delivered within 24 hours, according to multiple surveys. The enthusiasm and impatience grow bigger during the holiday season, as you can imagine. Unfortunately, this is when most ecommerce businesses experience delays with shipment. The reaction is always negative, as evidenced by the numerous complaints thrown against Amazon last year.
Shipping from multiple locations, as mentioned, will drastically reduce waiting time. This means that your customers will get their deliveries sooner, and so they will have nothing to complain about.
- Customer Retention/Loyalty
Customer satisfaction usually has the effect of keeping customers coming back. Your customers will be even more inclined to keep coming back if you don’t keep them waiting when they are in the mood for holiday shopping.
The average online shopper can make multiple orders per day. They also don’t have to shop with a single online retailer; in fact, the average online shopper will switch merchants if they feel disenfranchised for any reason, such as having their deliveries delayed or cancelled. However, they will settle with one merchant if he/she can make timely deliveries.
The holiday season is the time to prove your reliability in terms of shipment. Customers who enjoy smooth shopping experience with your platform this season will likely keep coming back long after the season is over. They will also pass the word around, and this will help attract even more customers.
- Saving Costs
The logistics of handling many shipping orders over a limited period during the holiday season can prove complex. It can take up a lot of time and resources in terms of labor, transport, and more. This is more unfortunate considering that most of these resources would go to waste as you grapple with keeping up with the increased demand.
Outsourcing these services to a 3PL will not only save you time but also money; the amount you spend on these services will be insignificant considering the amount you stand to save. Think of it: you will not need to set up and run an in-house shipping facility, you will not need more employees to handle fulfilling and shipping, and you can dedicate the resources you have to more productive tasks.
The amount you spend will also be insignificant compared to the amount you stand to make from making more deliveries. Your profit margin will increase with every product you sell, and relying on an in-house shipping facility will limit the number of products you can deliver while working with a 3PL will enable you to take more orders and scale up as much as possible.
Leave it to Rakuten Super Logistics
Simply outsourcing your fulfilling and shipping services to a third-party is not enough; many third-parties have also been known to be reliable. You need a shipping service provider with the right infrastructure to meet all your needs, no matter how big they may be. Rakuten Super Logistics fits the bill.
Rakuten Super Logistics has been enabling ecommerce businesses to get products to customers all across the U.S. for close to two decades now. We have established a robust network in that period, and we will dedicate it to ensuring timely delivery to your customers. We guarantee nothing but the best:
- 100% order accuracy
- 100% order turnaround within one business day
- 2-day ground shipping
Our warehouse locations and elaborate shipping network cover up to 98% of the U.S. Get in touch today to learn more about how we can work together to further your business.