Solving Order Fulfilment and Delivery Problems

By Ray Hurst

Give the Customers What They Expect

In theory you should be able to deliver anything via mail order. I know a site in America, Aquacon, which will send you a live Wobbegone Shark or some assorted Stingrays by overnight courier. Delivery costs vary depending on weight and how much water and oxygen each fish is likely to require for the journey. Alarmingly, though, not all fish on the list are covered by Aquacon's "live arrival guarantee".

Of course, if it's possible to Fedex a whole shark intact to your front door, you would think it must be a piece of cake to fulfil and deliver an order for a pair of knickers.

Not so for the pioneering eRetailer Bras Direct, apparently. This online trader of big name lingerie went into liquidation after three years online despite having an order book fit to bursting. What stretched the elastic to breaking point was poor order fulfilment and an inability to deliver the goods.

The problem for eRetailers is that, while fulfilment is the cornerstone of the operation, it's a financial and logistical quagmire. The internet has raised the bar pushing up customer expectations to the extent that 48 hour home delivery and even next day and same day delivery, (as opposed to the standard 28 day) is becoming necessary to compete.

But the big couriers are notoriously inflexible. In general, they like high volume; open-ended deliveries during business hours; signed proof of receipt and large, deep-pocketed business-to-business clients. There are encouraging signs that the big carriers are beginning to adapt to eCommerce requirements. But smaller companies delivering and attempting to fulfil order to the home are still at the bottom of the food chain.

With this in mind, here are a few fulfilment tips based on a straw poll of small business eCommerce sites:

• Benchmark with other businesses when choosing a carrier for orders
   If you are outsourcing fulfilment be very careful in your choice of carrier. Check out delivery performance in all regions. Some have patchy service in some depots and, in general, service levels can fluctuate wildly over time. Daniel Mitchell, Chairman of The Source, a company which supplies replacement computer equipment for insurance claims, says that he generally changes courier once a year. "I find that sooner or later the service goes off the boil. I would always recommend benchmarking with other home delivery companies before choosing a new carrier."
   
• Don't go for the cheapest option
  The cost of fire-fighting poor service levels and dealing with unhappy customers just isn't worth it. Small, local carriers boasting "national distribution" might offer very competitive, cut-rate prices - but these can sometimes badly rebound. Some smaller, local operations can suffer from a shortage of drivers or vehicles at peak times.
   
• Make communication with your customers a 'no-brainer'
  Keep all lines of communication open with your customers. Email, phones, fax, instant messaging etc. Provide email alerts when the goods are despatched. Factor in refunds and returns in your budgeting. Have a clearly stated returns procedure on your web site to minimise time consuming calls.
   
• Don't make order fulfilment promises you can't keep
  The shorter the time-frame to fulfil the order, the harder it is to guarantee delivery. Offer keen price incentives for flexible home delivery slots. At Christmas and other peak periods, be ready for the fact that Murphy's Law will come into effect with a vengeance. If you have any volume worth speaking about, there will almost certainly be late deliveries, damaged deliveries or no deliveries at all. Probably all three. Daniel Mitchell of The Source says that non-deliveries are a weekly occurrence. Take extra precautions at peak periods. For instance, remove perishables from Christmas gift hampers and dispatch parcels in sufficient time to give the carrier a generous margin for error.
   
• Offer alternative collection points
  You can solve the fulfilment and delivery problem of unattended deliveries by using alternative drop-off schemes at post offices, garages, pubs and convenience stores. Typically, Collectpoint has struck agreements with over 70 online shops enabling them to offer their customers alternative drop-off options. For just £2 a drop service charge (on top of the retailer's standard home delivery charge) Collectpoint will arrange delivery to branches of SPAR, the Co-op, Londis and OneStop/Dillons amongst others. The company currently has some 3,200 retail drop off points in the UK which, claims Chief Executive, Jim Doyle, "puts most of the population within one mile of a Collectpoint." Daniel Mitchell from The Source says: "It's a godsend for us. It addresses a really big headache. We deal with over 1,000 claims a month and have to pickup faulty equipment as well as drop off replacements. People usually have to take time off work to wait in for the delivery from the courier but this system means they can pick up our deliveries in their own time."
   
• Don't rely on technology, such as order tracking, to solve delivery problems
  All this does is confirm that there is a fulfilment problem - most people will get on the 'phone and shout at you - not at the carrier - if delivery is late. Build a relationship with your local delivery drivers and regional depot managers. Shmooze them and thank them when they exceed expectations. I know it shouldn't be necessary, but it is and it's more productive than working yourself into a lather.
   
• Check the compensation clauses
  Most carriers give themselves a let-out if products are perishable or breakable. Compensation is usually limited to refunding the delivery charge. Insure against breakages and loss.
   
• Keep your eye on services you can outsource
  Lots of companies are expanding their offerings to eCommerce companies. For instance, Parceline now offers (through partners) warehousing, order receiving and inventory management. In addition, the company's dedicated home delivery service offers evening (up to 9pm) and Saturday am home delivery. But caveat emptor. The more you outsource, the less control you have over the whole process. In my experience (as a publisher and eCommerce manager) whenever there is a crisis, small firms often get the elbow and contractors concentrate their efforts on the big gravy makers.