This post is contributed by Andy Eastes, the CEO & Co-Founder of SkuVault, a cloud-based inventory and warehouse management system that integrates with ShipStation, and helps eCommerce retailers prevent out-of-stocks, improve warehouse efficiency, and reduce human error.
In eCommerce, shipping out the right product, to the right customer, on time, is critical. Customers expect products and services almost instantaneously; digital products can be purchased, downloaded, and enjoyed in the span of seconds. Coupled with solutions like Amazon’s single-click purchasing, there’s no longer any need to even fill out your payment info: it’s all saved and ready for you to make a purchase. With this immediate-gratification online culture in mind, keeping your customers happy means you need to deliver your products as close to “immediately” as possible. This means shipping same-day or next-day, depending on the purchase time.
What model of fulfillment processes will work best for your business?
This really depends on your industry, product type/size, and SKU depth, though there are some guidelines.
If, for example, you have a low unique SKU count but sell many of each SKU every day, it makes more sense to batch print your labels before picking, and pick by SKU, not by order. Whereas if you’re a closeout business, for example, and you sell tons of SKUs that are almost all unique, you’ll likely want to pick by order, and have a more formal and rigorous quality control process.
Many companies make use of a mixed model wherein they pick by SKU on products that have high velocity per day, and pick by order with a QC (quality control) procedure for the products with low sales volumes that their team may be unfamiliar with. A good measure for how well your fulfillment model is working is the ability to maintain a low level of out of stocks and mis-ships – typically under 0.5% of orders, dependent on industry and product type.
Goals & principles to shoot for
The basic goals of attaining a successful eCommerce fulfillment operation are:
- Efficiency – Get it done fast to get orders out of the door and to keep costs down
- Human error prevention – Barcode scanning, easy to use systems, and procedures in place
- Shipping Costs – Ship the fastest, most reliable, and cost effective method
The basic principles to accomplish shipping correctly and on time are:
- Picking – Support multiple locations per SKU; pick lists; user accountability tracking
- Quality Control – Ship the whole order, correctly, the first time
- Shipping – Automatically choose the best shipping option according to your predetermined rules
Use software to fill in fulfillment gaps
Putting software systems in place to implement these basic principles and accomplish these goals makes following the procedures faster and easier. Many systems try to do everything and end up being a “jack of all trades and master of none”. Personally, I prefer systems that work together seamlessly and focus on what they were built to do best.
ShipStation is great for printing labels from multiple carriers, to ensure the package gets shipped the best method at the best price, and will get the order to the customer as quickly as possible with as little time and thought as possible to the shipper. SkuVault works with ShipStation to cover the picking and quality control aspects with as much barcoding and other human error prevention and efficiency techniques as possible, to prevent out of stocks, mis-picks, and mis-ships.
Whichever systems and models you choose to utilize, just make sure you’re following the ABC’s of shipping by: shipping out the right product, to the right customer, on time.