Thoughtless Ecommerce Fulfillment Will Do Holiday Season Brand Damage

We spent several hours online recently searching for a motorized airplane kit that a 15-year-old nephew could build and fly. Those kinds of toys can range from $60 to several thousand dollars. We eliminated many possibilities based on cost, engine systems, navigability and durability and no stock for immediate shipment. Success! We found one under $100 and ordered it from Amazon on Dec. 3 via Seller Fulfilled Prime.

The good news about the fulfillment experience: The gift arrived on time Dec. 6 via UPS Parcel Select, as Amazon had promised. The outer carton had no damage. There was a battery warning label on it, with the emergency number and a Global Response access code.

Now for the bad news: The gift crashed on delivery – so to speak – sending us scrambling to quickly find a replacement gift. While the outer carton had no damage, there was a 2.5”-by 3” hole in the product’s inner carton (see photo above). The dunnage had protected the plane itself from damage. After reading the parts list, we found we were missing batteries and some parts.

No, Amazon, we don’t want a replacement product shipped free. As a new customer, we are DONE with you. If you can’t get the shipping right, what makes us think the plane will actually fly? Just credit our card.

Someone in fulfillment had destroyed the shopping experience and our trust that they would ship a working product to us for Christmas. Since there wasn’t any outer carton damage at all, the error had obviously happened in the fulfillment center. How? Maybe it was a previous customer’s return that had been reshipped, minus the batteries and parts.

It doesn’t matter what happened. In our experience, Amazon doesn’t put up with many customer problems before dropping the seller.

Here are 5 things to consider as we break down this fulfillment center experience:

Tell Fulfillment Associates the Obvious

Develop written, easy-to-understand standards for all critical functions in your ecommerce fulfillment center. For example, have pickers take damaged stock to a holding area for inventory disposition. If it’s dusty, clean it off. How do you as a company want the package to arrive and be presented to the customer? If it has a hole in it, don’t ship it.

Teach your associates that how they do their job matters. They are critical to a great customer experience, continued purchases and higher lifetime value.

Here are things to consider to make your packing and shipping more efficient.

Fulfillment Workforce Quality and Hiring

The U.S. unemployment rate at 3.5% is the lowest it’s been in 50 years. In every industry, there are far more entry level and hourly jobs than people to fill them. Ecommerce fulfillment businesses are built on hourly workers, with many manual operations and processes. The quality of the workforce, the degree to which they can work independently and their work ethic may vary widely. Standards and procedures are essential.

Given these historically low unemployment levels, you may be faced with hiring people that don’t know what ecommerce fulfillment work really is. We have seen new hires come to work for a couple days and never come back. Or we hear, “Boy this warehouse is big, and there’s a lot of walking and lifting in this job!” As you finish the final weeks of the holiday season, take time to assess what you can improve upon in hiring for next year’s peak season.

The High Cost of Errors

Based on our 35 years of consulting, we’ve found the average cost to your business of a fulfillment error is between $35 and $50. But the most severe error not included in this number is one that causes you to lose a customer and their lifetime value.

Additionally, returns cost more than orders to process. Losing the sale through a return, you lose the prospecting and website expenses in acquiring the customer; the cost of processing the initial order; the margin earned on selling the product; the internal fulfillment return processing costs; and maybe the return shipping costs as well. Here’s more on the extent of these costs.

Build a Solid Fulfillment Foundation

The customer has myriad shopping choices, so operate on the assumption that you only get one chance to make a first customer impression. Procedural development, standards and training are the cornerstones of customer-centered ecommerce fulfillment. Without standards and procedures, you’ll be chasing your tail by constantly repeating to associates what you expect and correcting errors – if you catch them – and still have sloppy, expensive fulfillment.

Establish a Buddy System for New Hires

You don’t know how good the new worker is until they get a week or two under their belt. Coming into a new center as it’s ramping up is tough when you consider training, systems, procedures and processes they have to pick up quickly. We often see greater success if the new hire is assigned a buddy – an experienced fulfillment employee who can help them adapt and get on a faster track.

Ecommerce fulfillment is a lot easier if you get the basics right. Here’s hoping your business has a profitable holiday season, and a great New Year!

Brian Barry is president of F. Curtis Barry & Company

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