The Best Way To Manage Costs in Order Fulfillment
Fulfillment in E-commerce is the process undertaken from the time the order is added to the shopping cart until the product gets to the final user. This detailed process involves warehousing, inventory management, order scheduling, last mile delivery, cash on delivery and reverse logistics.
There are several costs including;
This is the process of storing products at a safe storage while waiting for orders to be processed. The warehousing costs cover order management, inventory management, storage etc. The storage costs are calculated by multiplication of space occupied in cubic meters by the cost /cbm.
A call center in e-commerce fulfillment involves individuals who communicate with the customers to inform them of their orders and schedule deliveries. This team consists of eloquent individuals with good knowledge of the products and are therefore responsible in answering any questions the buyer might have. The call center charges are per successful order.
Orders are picked from the stocks and prepared for shipping. The products are packed in eco-friendly packaging materials and wrapped accordingly in preparation for shipping. Fragile items are packed in bubble wraps and corrugated boxes.
The cost of packaging is not much for basic items such as clothes and non fragile packages.
Any e-commerce merchant would love their products labelled and branded to represent their brand. Labelling is done at the warehouse by adding stickers and related branded materials to the order. A simple branding does not cost much but it speaks words o your behalf outside there.
In e-commerce delivery, all orders are dropped to the last mile at the clients doorstep. This step is the most important as it is when the customer gets their order. The last mile delivery is often more expensive than ordinary deliveries where client collects packages from a pick up point. The costs for the last mile delivery depend on distance to be covered.
Most e-commerce Fulfillment companies charge for reverse logistics at a percentage of the delivery fees. This costs are as a result of a failed delivery, unsatisfactory products or customer unavailability. The delivery team conducts 3 or more delivery attempts before declaring it as a failed delivery. At Wakah Logistics, failed deliveries are charged at 30% of the delivery fees.
How to reduce Fulfillment Costs
In order to reduce your order fulfillment costs, you need to;
- Stock only first moving products to reduce on storage costs
- Use packaging provided by manufacturer
- Avoid rebranding products
- Ensure product specifications on website match the exact product to avoid failed deliveries
- opt for flat rates per order if the company offers flat rate fulfillment.
All said and done, when looking for fulfillment services, go for one that has reasonable charges. At Wakah Fulfillment centers, we have the most reasonable fulfillment charges in Kenya. All our processes are transparent and fairly charged.