Shipping Costs | Order Fulfillment for SMB (Small to Mid-size Business)

What is e-commerce?

E-commerce is buying or selling a product online over the internet. When you search online and buy a new pet toy to replace the squeaky stuffed bunny the dog dismantled, you are ordering from an e-commerce business. Let’s say as a hobby, your Aunt Lucy knits fancy unicorns. Together you start selling them to friends at the local flea market. To grow your business, you decide to start posting pictures online. Soon you are selling fancy unicorns by the dozen on platforms like Etsy or Shopify. Simple as it may be, you now have a small e-commerce business.

  • In 2020 e-commerce topped just over twenty-six trillion in sales globally.
  • Growth in the US alone is expected to increase by eighteen percent to over four trillion in sales for 2021.

 

When does e-commerce make sense?

By the end of 2020 the COVID 19 pandemic had dramatically changed e-commerce. Regarding transitioning to e-commerce, Forbes writes the following from an article contributed by square Inc, on November 18, 2020; According to the PwC Global Consumer Insights Survey, safety is the top priority for 49% of urban consumers. The same survey showed that 86% of consumers are likely to continue shopping online even after pandemic restrictions end.

Consumers are prioritizing both health and convenience. To remain competitive, more businesses are offering services like click and collect and curbside pickup.

A 2020 survey from Incisiv seems foretelling as it showed that:

  • 85% of shoppers have increased curbside pickup.
  • 79% of shoppers say contactless pickup is important.
  • 80% of shoppers expect to use contactless and curbside pickup more in the next six months.

 

When should you automate?

Does the thought of being buried neck-deep in mythical yarn animals sound unpleasant? Let’s say the house is full of shipping boxes with Aunt Lucy’s knitted unicorns and you are renting a truck to haul packages to the nearest click and ship drop off center. It is likely time to automate. If counting trips to the yarn store or postal center hasn’t convinced you, a good standard to follow is when the business reaches a daily fulfillment of thirty (30) orders per day.

As most business owners learned, the term “adapt or dissolve” became an all too real state of business with the continuance of the pandemic. That alone may be the factor for deciding to automate.

 

 Making plans to automate your business:

There are many resources online that specialize in automating a business. Finding the right fit can be a daunting, but a necessary task. Do your homework as all good business decisions require research. Consider the following key areas when automating your business:

  • Marketing: Coordinate changes to your business through all channels via e-mail marketing, short message services (texting), social networks, website upgrades and paid advertising.
  • Finance: Integrating the financial aspect of a business into the automation process can reduce costs and errors. Integrating the invoicing process can also improve the supply chain.
  • Sales: Automate the sales process to track and contact existing customers as well as generate leads for both inside and outside sales to new clients. The goal here is to create more sales while maintaining the current customer base.
  • Product development: Efficient automation should free up more time to develop new products.
  • Product: Working on the business not in the business is the goal here. Automation that creates other means for product manufacturing other than the proprietor doing the work allows for this to happen.
  • Supply chain: Integrating vendor orders, shipping, warehousing, and invoicing will improve the supply chain. For example, Aunt Lucy now has a team knitting her unicorns and they need more yarn. An automated purchase order is sent to the yarn supplier each time an invoice is generated, or a shipment of unicorns leaves the warehouse.
  • Customer service: Integrating things like chatbots on your e-commerce site to answer frequently asked questions can free up more complex customer service issues requiring human contact. Also, scripting these outsourced contacts can further improve customer service beyond the FAQ’s.
  • IT: Automation through things like cloud management platforms can help control computing cost, security, and performance as well as forecasting futures. This helps free up IT personnel to work on pioneering new technology for the company like a computer chip recording that sings a lullaby when you squeeze one of Aunt Lucy’s unicorns.
  • General business function: Automate as many of the companies processes such as HR, payroll, travel scheduling, inventory management and order fulfilment can decrease errors and inefficiencies while improving compliance issues and provide insight to the business.

 

Shipping cost and order fulfilment; a micro-focus on the benefits of automation:

If you are now considering automation for your company, let’s focus on what it can do for shipping cost and order fulfilment.

  • There are many automation tools and companies that specialize in shipping and logistics available in the marketplace. The best advice here is, when possible, find tools that do not require coding or IT skills to implement—that can increase the bottom-line to the companies shipping and order fulfilment costs.
  • An efficient automation of the shipping and order fulfilment can reduce your overhead through eliminating overstock or dead stock and control inventory as well as track costs.
  • Automation can create an effortless process with not only the company’s supply chain, but fulfilment to your customer.
  • Automated shipping with efficient order fulfilment can reduce the need for human intervention in the process. With less labor costs, personnel can be assigned to other processes that do not require automation.
  • Automation can track specific products and market demands globally. So, if Aunt Lucy is still selling unicorns in California but the rest of the world now has a demand for her new calico kitties, the right amount of yarn gets ordered, proper amount of stock is produced, and customers get their orders on time.

Need more information? We can help you with strategies, tips and tricks to get the most out of your order fulfillment and e-commerce strategies.  Contact Paris SBDC today!

 

 

 

For additional resources on order fulfilment strategies, or in deciding if e-commerce is right for you and your small to mid-size business, please contact us at the Small Business Development Center – SBDC – Serving Paris area:  Lamar, Hunt, Hopkins, Delta, and Red River counties.