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Warehousing & Fulfillment

The Challenges of In-House Fulfillment (and How to Address Them)

In-house order fulfillment is when an eCommerce business handles all parts of the eCommerce order fulfillment process by themselves, without seeking help.
The Challenges of In-House Fulfillment (and How to Address Them)
Jules

By Jules

 

June 10, 2020

Running a successful eCommerce business requires entrepreneurs to understand various parts of the business. With the surge in eCommerce, effective eCommerce order fulfillment is your best chance of success. Without it, the customer experience and the business’s overall profitability may suffer. Most entrepreneurs beginning their eCommerce venture are looking to save on startup costs and so choose in-house order fulfillment.

However, fulfilling orders in-house can be tricky; a lot of things can go wrong if it’s not handled properly. So, it’s important that entrepreneurs understand how to achieve successful fulfillment.

One thing you can do is work with a reliable provider, such as Easyship, which can help you build and execute a seamless shipping process. Below, we take a look at some of the most common challenges of in-house fulfillment and offer some tips on how to overcome them.

Workers fulfilling orders in-house

What is In-House Order Fulfillment?

In-house order fulfillment is when an eCommerce business handles all parts of the eCommerce order fulfillment process by themselves, without seeking the help of any third-party solutions providers. The process involves picking and packing orders, storing and managing inventory, and ultimately, shipping the products to the end customers.

The entire process can be rather cumbersome. It also takes a lot of time that could be better spent on other things, such as acquiring more customers, developing new marketing strategies, or expanding your product range.

For in-house order fulfillment to work properly, you’ll need to consider purchasing warehouse space, employing (and training) staff, buying equipment, investing in the right software, and paying for insurance.

With all the significant costs and challenges involved, in-house order fulfillment won’t work for all entrepreneurs or businesses. For many, it probably makes more sense to outsource the process and pay an eCommerce order fulfillment expert to handle everything. But, for those just starting a business and dealing with a tight budget, fulfilling in-house can be a good option.

8 Challenges of In-House Fulfillment and Easy Fixes

As mentioned, in-house order fulfillment can be tricky. A problem in one of the steps in the in-house fulfillment process can affect the entire process. As such, eCommerce businesses running their own order fulfillment should watch out for the following challenges.

1.   Slow or Late Shipments

Most online buyers expect their packages to be delivered on time. Therefore, any delays during the shipping process can cause problems for the business. If anything goes wrong in your in-house order fulfillment process, whether it’s a delay in packing orders or a mistake on the courier’s part, your delivery timeline may be thrown off and result in upset customers.

In most cases, slow or delayed shipments often occur from a spike in orders, such as that which occurs around the holidays. As such, eCommerce businesses should prepare ahead to make sure everything is in place for these anticipated spikes and move fast to execute orders. You should create a streamlined and efficient shipping process that minimizes or avoids delays.

2.   Improper Packaging

Most businesses respond to a sharp increase in orders by speeding up the fulfillment process. But, while your customers may appreciate your swift in-house order fulfillment, they’ll be less happy if these orders contain the wrong items.

So, as you’re rushing to deliver the orders, you should take an extra few minutes to ensure that the right products are included in each order and that each one is packaged properly.

Poor packaging can lead to unexpected damage, unsatisfied customers, and eventually, a loss of business. This is especially true if you have to incur additional costs by replacing damaged goods or issue a refund.

So, you should always ensure that your packages are packed properly and meet customers’ expectations. If your in-house order fulfillment process is struggling with this, you might need to consider outsourcing to experts.

3.   Using Complicated eCommerce Fulfillment Software

With so much useful technology available, most eCommerce businesses can operate more smoothly by leveraging several tools. Of course, when it comes to order fulfillment, eCommerce merchants should look for a reliable order fulfillment software, such as Easyship.

However, you don’t want to choose software that’s too complicated and makes fulfillment a challenge. In this case, the order fulfillment software can actually slow down operations and shipping speeds, and can be tricky to integrate with eCommerce platforms.

This can be frustrating for both customers and employers. This is why it’s important to research what shipping software is available and find one that works for you. Easyship is a great choice for any merchant because we offer a “freemium” pricing model, integrations with various eCommerce platforms, automated rules, and lots of affordable courier options.

4.   Poor Inventory Management

The cost of managing inventory goes beyond renting a warehouse. You have to factor in various administrative costs, utilities, employee salaries, and other financial costs, such as insurance.

When running in-house order fulfillment, poor inventory management often leads to high costs, which reduces your profit margins. Without proper inventory management and trained staff, you might end up mislabeling packages, delivering damaged goods, and even forgetting to restock.

That said, for successful self-fulfillment, consider using a good inventory management system that suits your business. This will help you forecast order demands accurately and avoid the risk of running low on inventory.

5.   Lack of Branding Opportunities

There are plenty of eCommerce businesses out there, so you need to take advantage of every opportunity to stand out from the competition. One way to do this is to build branding into your order fulfillment.

If you’re using in-house order fulfillment, you can seize the opportunity to create custom packaging that showcases your brand and creates a deeper connection with your customers.

You can also back this up with a branded post-purchase experience that includes customized tracking emails and pages, and personalized packing slips. Easyship can help you with both of these.

6.   Errors in Product Details

Providing incorrect information is another common challenge associated with in-house order fulfillment. To meet your customer expectations, you should provide accurate product details, including the product price, specifications, package size and weight, shipping fees, and accurate delivery time.

Posting incorrect shipping fees, wrong delivery times, or failing to update your stock when the product is out of stock often leads to negative reviews and an increased shopping cart abandonment rate.

Therefore, businesses should leverage an integrated order management system that keeps track of the inventory, monitors the stock levels, and shares such information with potential customers.

Easyship offers a unique “Rates at Checkout” feature that allows you to display the most accurate shipping rates and taxes and duties information at checkout so that your customers know exactly what they’ll be paying for this.

7.   Lack of Expertise

In certain situations, in-house eCommerce order fulfillment can result in managers having to chip in and handle day-to-day fulfillment activities. These managers may not necessarily be skilled at order fulfillment; and, this comes at the cost of them neglecting their usual duties. For instance, a manager may not know what to do with returned products or how to properly schedule shipments.

Spending a lot of time on basic warehousing problems and other micro-management tasks reduces the time that managers could be handling more important business activities. To solve this, you should consider employing well-trained and qualified staff who are well-versed in in-house order fulfillment activities.

8.   Running Out of Storage Space

As mentioned, eCommerce businesses can end up spending a lot of money to acquire warehouse space and the necessary equipment to use it. However, as the business grows, the initial warehouse may no longer be big enough, requiring the business to rent more storage space. This brings with it additional costs of renting that space, setting up the warehouse, and hiring and training more workers.

As such, eCommerce businesses running out of storage space should consider outsourcing their warehouse operations. In this case, you will only pay for warehousing services in exchange for additional space, trained staff, and warehousing equipment. Easyship has warehouse partners across the world so that clients don’t have to pay for or manage warehouses themselves.

How Can You Better Manage Your Fulfillment?

Ignoring the mistakes of in-house order fulfillment and the various inefficiencies associated with the process can cost your business dearly. Therefore, identifying any shortcomings in this process is the best way to manage your self-fulfillment. To be successful with in-house order fulfillment, you should have the following:

  • Well-trained staff
  • The right technology
  • A good warehouse management software

Having the above prerequisites in place enables the proper management of self-fulfillment. However, as your business grows, additional demand and sales will expose any problems in your fulfillment process, resulting in potentially catastrophic errors. As your business grows, you may need to consider enlisting the services of a third-party fulfillment company.

Third-party fulfillment centers handle all fulfillment needs, which include receiving inventory, inventory management, packing orders, and shipping. Most fulfillment centers partner with incredible shipping solutions companies, such as Easyship, to facilitate their shipping processes. Some of the benefits of outsourced fulfillment include:

  • Enables you to focus on growing the business
  • Saves time and money
  • More efficient inventory storage and distribution process
  • Greater flexibility and ability to scale your eCommerce business
  • Better infrastructure for handling goods

To Fulfill In-House or Not, that is the Question

For sure, in-house order fulfillment is quite daunting. As such, those running an eCommerce business should consider streamlining the fulfillment process by checking for inconsistencies and problems. This involves identifying possible mistakes and taking preventive measures to avoid them.

You can also consider outsourcing your fulfillment. Additionally, working with a reliable shipping solutions provider, such as Easyship, can eliminate a lot of problems in the eCommerce fulfillment process.