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Order fulfilment

Have a reliable way to deliver what customers buy online

Give the Customers What They Expect

In theory you should be able to deliver anything via mail order. I even know a site in America which will send you a live shark by overnight courier.

Of course, if it's possible to courier 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 filled to bursting (if you'll excuse the pun). What stretched the elastic to breaking point was poor order fulfilment and an inability to deliver the goods.

The problem for etailers is that, while fulfilment is the cornerstone of the operation, it's a financial and logistical nightmare. The internet has raised the bar for deliveries, pushing up customer expectations to the extent that 48 hour home delivery and even next and same day delivery are the standards. Just five years ago, mail order companies could sit pretty offering a 28 day turnaround.

etailers on Test: We tested some of Britain's biggest online shops over christmas 2004- just when they're at their most stretched. The results were varied to say the least:

Amazon: Impeccable. Delivered perfectly within 48 hours.

Presents Direct: Excellent. Order arrived within 72 hours.

Memorise This: Below average. Deliveries arrived at separate times with no notification by email as to why or when. Personalised gift was mis-spelled.

Innovations: We're still waiting. As an old-style catalogue operation, they don't understand that customers need fast turnaround. Delivery scheduled for 3 weeks time.

Why is delivery such a sore point?

The fact is, etailers don't have control over delivery. Technology, yes, marketing, yes, procurement, yes, delivery, no. 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 orders to the home are still at the bottom of the food chain.

By the way, our much maligned Post Office isn't as bad as you might think it is. Jeff Bezos, founder of Amazon.com, has said many times that the company owes much of its success in the UK to the reliability of our Post Office. A trip down to the high street might be more effective than a courier after all.

Some Answers

With all 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." Major players include DHL, FedEx, Parcelforce and (the choice of an awful lot of etailers) Parceline.

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 etc. Provide email alerts when the goods are despatched, and communicate quickly if there is a problem. It seems to be a British custom to hide under the bed if things go wrong- in fact, your customer will be far happier to receive an email or a phone call outlining the problem and what you intend to do about it. 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. Put simply, expect the worst and aim for the best. Set expectations you can realistically keep.

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 a small fee. 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 pick up 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.". New auction bidding service AuctionAssist has struck a deal with the Post Office to allow its customers to drop off goods for auctioning in their local high street. This sort of convenience is growing, and if you're planning an ecommerce website, you should consider offering these flexible delivery alternatives.

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. Schmooze 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.

That list of worries has probably scared you witless- but don't panic. Like all elements of a business, things will go wrong, and you will have problems to resolve. The key is (as ever) to antcipate problems, and have a gameplan to deal with them, Once you reach a certain size, you may retain more than one courier. And as long as you communicate with customers effectively, you really needn't worry at all.

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