March 5, 2014 | Jim Agger
Is outsourced ecommerce fulfillment the right choice for you?
As your client base expands and you increase your monthly numbers of online wine sales, it can put a strain on ecommerce fulfillment. Processing and verifying orders, updating inventory information and shipping wine yourself can increase the chances that there will be an error along the way. Because of the wide variety of options online, customers will be less tolerant of delays or incorrect orders.
Deciding to sell wine online can be a profitable choice because it can help you reach a new audience on the other side of the country. However, fulfillment is critical to the success of this venture. As large online retailers get more advanced, consumer expectations are higher than ever before. Ecommerce has facilitated a shopping culture of instant gratification, according to Parcel Industry. While an online wine store can open up new opportunities for you, there are several significant challenges you should keep in mind, such as high volumes of slow-moving inventory, unpredictable levels of growth, client demands for real-time inventory visibility, peak seasons and high numbers of returns.
This places a lot of stress on winery employees. Wine shipping isn't their only obligation, but doing it right is essential for customer satisfaction.
Why you should consider outsourcing ecommerce fulfillment
Because wineries are often impacted by seasonal fluctuations in demand, a fulfillment partner can ease the challenge of managing increased shipping or returns, Practical Ecommerce stated. In addition, fulfillment firms ship high enough volumes to access FedEx and UPS discounts that can make it more affordable for you to ship wine around the country. Plus, you'll save on warehouse rent and other handling expenses. Outsourcing wine shipping to a trusted organization enables you and your employees to focus on what you do best and offer exemplary customer service without getting bogged down with other processing.
Another consideration for when it may time to outsource is distance to consumers. California wineries may offer inconsistent shipping times to customers on the East Coast, compared to shoppers in closer regions. You can boost customer satisfaction by ensuring delivery times are similar for all clients, no matter where they're located. Being closer to customers also saves you more money because you can eliminate zone-based shipping fees, a separate article for Practical Ecommerce said.
To determine the most effective option for your winery, you need to assess the number of direct-to-consumer sales you make compared to the cost per order. Most low-volume vendors pay more for FedEx or UPS services, and you also need to cover the costs of shipping supplies. Free shipping is gaining speed in e-commerce, and while this isn't an option for wineries, outsourcing can help you offer low rates to customers, which can in turn encourage them to buy wine online.
Tips to keep in mind when outsourcing
When outsourcing, you will have a service agreement with your fulfillment partner. It's important to choose a firm that guarantees its work and will pay you back for errors in makes, according to Practical Ecommerce. A consideration that sometimes gets overlooked when outsourcing is return processing. You need to agree on whether customers will send returns to you or to the wine warehouse. A fulfillment partner can usually help you avoid split orders by providing a variety of packaging materials to avoid uneven delivery of a single order.
Outsourced ecommerce fulfillment can help you increase DTC sales and prevent orders from slipping through the cracks. Ultimately, the choice to outsource can come down to if a fulfillment partner can offer lower costs per order than you could maintain in-house.