Internet Retailer just published a research report whose title posed an important question for any online seller: Are Your Fulfillment Operations Good Enough?
Interestingly, many of the 100 mid-sized e-retailers who responded to the survey don’t think so.
They rate the “importance of fulfillment” as a well-deserved 8.77 out of 10, while rating the quality of their own fulfillment operations a comparatively “meh” score of 7.31.
A deeper dive into the survey’s findings begins to uncover reasons for this performance gap.
44% of e-retailer respondents do not believe or are unsure if their current fulfillment warehouse network is sufficient to meet customer delivery requirements.
As we peel the onion back further, we discover that almost 50% of survey respondents fulfill orders for national distribution through a single warehouse.
A single warehouse strategy makes it “impossible to meet a two-day, nationwide delivery requirement using efficient ground transportation,” survey analysts concluded, adding that, “many companies don’t have enough warehouse coverage across the U.S. to fulfill orders quickly and efficiently.”
Given the evidence, we have to agree, especially when you consider another telling survey takeaway: 57% of mid-sized companies still take three days or more to fulfill orders with their current warehouse network.
This begs the question: How many warehouses do you really need to stay on pace with customer expectations for fast, free delivery – and to ensure your fulfillment performance is on par with the changing landscape?
The answer depends on a lot of factors, including:
- how many SKUs you have (the greater the number, the more complicated it is to spread your inventory across multiple locations)
- whether or not your product is a distinct brand or a common commodity (customers are sometimes willing to wait a little longer for delivery of the former)
- what type of industry you’re operating in (some have considerably faster delivery standards than others)
- how much of the cost for delivery your company is willing to absorb (most companies foot the cost of at least some of it)
One thing is certain: the trend is toward expanding B2C warehouse networks to put products closer to customers in order to speed delivery times and reduce parcel delivery costs by eliminating high zone moves
We’ll be sharing additional findings from the Internet Retailer study in future blog posts. Until then, feel free to contact us if you’d like to discuss your current warehouse network’s ability to scale to meet consumer expectations.