Order fulfillment is one of the primary responsibilities of a warehouse or fulfillment center. A fulfillment center manages the entire process, from receiving products from the manufacturer to storing, picking, packing, and eventually shipping orders to end customers.
Each stage of this procedure has its own cost set that adds to the final fulfillment cost per order. Inventory and fulfillment efficiency needs to be your focus when embarking on the journey of international business expansion. For your eCommerce business, well-orchestrated inventory management and fulfillment strategy will save you time and cost as you navigate new markets on a global scale.
The Importance of Inventory and Fulfillment in International Expansion for Your eCommerce Business?
The combined effect of inventory and fulfillment efficiency emerges as a strong advantage for your eCommerce business in its journey of worldwide business expansion. Achieving optimal efficiency in these aspects yields multiple benefits, enriching your sales and profitability and saving you time.
Inventory Insight
Do you know what happens in your warehouse, which products take the longest to locate, which delivery locations are the most popular, and which things go out of stock regularly?
Inventory efficiency requires precise information about your products, which may be obtained by employing inventory management software. This software allows you to review a centralised pool of inventory and monitor overall performance in real-time. This invaluable tool facilitates immediate decision-making and provides insights for your business expansion.
For instance, you can:
- Identify demand trends to facilitate strategic inventory planning.
- Emphasise regional demand to facilitate strategic warehousing decisions.
- Keep an eye on delivery speeds to see how you can improve them.
Customer Demand
Holding adequate stock in the proper places ensures you constantly fulfill client demand without selling out or overselling. Keeping enough stock on hand to fulfill customer demand is critical for increasing store sales, keeping customers away from competitors, and providing great customer satisfaction that results in repeat purchases and positive feedback. It is also required for:
- Maintaining your position in search results on online marketplaces
- Maintaining your eligibility for marketplace rapid shipping programmes
- Reducing the risk of delayed deliveries arising from stock-outs and backorders
Audience Reach
Fulfillment and inventory efficiency boost your audience reach, increasing conversions and profitability.
Inventory efficiency involves distributing your stock throughout a network of warehouses to keep products close to past demand while also meeting future demand. This stock distribution also increases the number of locations you distribute, boosting your customer base.
Fulfillment efficiency boosts the speed with which purchases are delivered, allowing you to target 95% of online customers who consider expedited delivery extremely important. The more customers you attract, the more conversions and great reviews you earn, causing a flywheel effect of continuous growth.
Fast Shipping
Regarding expedited deliveries, having enough stock in the correct places also helps fuel rapid shipping speeds. The closer stock is to customers, the faster it can be delivered, allowing you to meet the needs of your customers and online marketplaces with 2-day and next-day deliveries.
A fulfillment center, combined with fulfillment efficiencies that shorten the time it takes an order from reception to delivery, can result in shipping speeds that:
- Qualify you for rapid shipping programs such as Walmart 2-day delivery and Wish 2-day, improving your visibility and revenues.
- Allow you to add rapid shipping tags and banners to your website and marketing materials.
- Meet the rising demand for speedier shipments.
Business Efficiencies
Inventory efficiency saves administrative time, facilitated by implementing inventory management software. This innovative tool synchronises updates across sales channels, expedites stock-taking procedures, and meticulously records data. By streamlining these processes, inventory efficiency liberates valuable time previously dedicated to administrative tasks.
Similarly, fulfillment efficiency contributes to labour optimisation in the fulfillment process. The intricate fulfillment steps are streamlined through the seamless orchestration of order receipt, picking, packing, and shipping. This expedites order processing and reduces labour-intensive efforts, elevating operational agility.
What to Consider Before Expanding Your eCommerce Business?
Understanding the essential factors before expanding your eCommerce venture is paramount for a successful journey. Delving into these aspects gives you the insights to optimise efficiency and maximise growth potential.
Market Demand
A foundational step involves gauging the precise quantity of stock required and aligning it with customers’ delivery expectations. Harnessing sales data, market research, and current buyer behaviour aids in forecasting product demand. You can tailor your stock orders and shipping processes by understanding delivery preferences. Negotiating minimum order quantities (MOQs) with suppliers prevents overstocking and aligns inventory with actual demand, streamlining your operations.
Inventory Management Software
Tracking your inventory and fulfillment data is essential for swiftly processing orders, assessing past performance, and identifying areas for improvement.
Inventory management software automates and streamlines this task, making it more efficient and accurate. It provides an overview of your central inventory pool and specific information for the strategic management of that pool. Additionally, integration with sales channels ensures seamless synchronisation of stock levels and order status updates.
Distributed Fulfillment Location
A significant portion of efficiency in order fulfillment is compromised during the shipping process when items are transported from your warehouse to the customer’s doorstep.
By dispersing your inventory across a network of fulfillment centers, your stock is positioned in closer proximity to your end customers, resulting in reduced travel distance. This strategic approach to order fulfillment enables you to achieve swift shipping to meet the requirements of sales channels and customer demand, all while expanding the range of locations where you can make more sales.
Stock Distribution
Efficiently distributing stock both within and among fulfillment centers influences operational efficiency. Consider this: if you’re selling luxury products and a significant portion (80%) of your stock is located in Europe, yet the bulk of orders originates from the UK, the inefficiency stemming from prolonged shipping times becomes apparent.
Likewise, if luxury products are your most popular to customers, but you store them at the back of your fulfillment center, you’re losing a lot of time and cost to warehouse workers having to dig out those products. An outsourced fulfillment partner uses business technology to route your inventory according to historical demand and best-picking practices.
If you handle order fulfillment in-house, the ABC classification method emerges as a valuable strategy. By utilising the ABC method, you streamline stock procurement, allocation, and storage in the following prioritised manner:
- The top 20% of SKUs drive 80% of revenue.
- The subsequent 30% of SKUs contribute 15% of revenue.
- The remaining 50% of SKUs contribute 5% of revenue.
Partnering with I-Fulfilment for Your Business Expansion Plan
Expanding your business will require a partner to provide time and cost efficiency without compromising quality. I-Fulfilment’s holistic approach to fulfillment, coupled with our commitment to transparency and sustainability, positions us as the ideal partner for your international market expansion.
When you partner with I-Fulfilment, you gain access to our extensive network of global fulfillment, strategically positioned to enhance shipping speed, reduce costs, and widen your market reach. Our intelligent routing strategies and stock distribution practices ensure that your products are distributed where they need to be or when your customers demand them.
As you plan your expansion path, let I-Fulfilment be the cornerstone of your success, providing you with the tools, expertise, and unwavering support needed to conquer new markets, exceed customer expectations, and achieve remarkable growth.
Contact us today and unlock the true potential of your eCommerce business expansion.