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Why Your eCommerce Company Could Lose Millions Because Of Poor Fulfillment, Explained With Cute Animal GIFS

Not all eCommerce Fulfillment companies are created equal; here are 5 reasons why choosing the wrong one to work with could cost you everything.

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The Internet is a pretty huge place -- you can find literally everything there, from websites dedicated to reproducing Pokemon characters with Nic Cage's face on them to a blog that juxtaposes images of rapper Iggy Azalea next to food.

Oh wait -- that's not the Internet, that's just tumblr.

My point is, you can find everything on the Internet. These days, more and more companies than ever sell stuff online. It's estimated that there are over 100,000 eCommerce companies generating meaningful revenue (at least six or seven figures) online.

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Like this happy dog riding in a swing, the potential for starting a viable business out of your garage is a wonderful thing. In today's thriving, multifaceted marketplaces, you can utilize platforms that allow you to plug into multiple selling channels like Ebay, Amazon, and your own webstore!

But with the good comes the bad, and when it comes to bad things in eCommerce, things can get pretty, dog-gone awful bad. There are a myriad of ways that your business can run into trouble, but perhaps one of the most frustrating is when you have a bad 3PL fulfillment center handling your goods.

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Poor product fulfillment is enough to turn even the most successful business into a cesspool of broken dreams, filled with lots of grumpy customers (and perhaps one or two grumpy cats).

You don't want the business you've poured sweat, blood and tears into to turn into a cesspool of broken dreams, nor do you want all your customers to be as grumpy as that perpetually frowning cat. As unpalatable as it might be to imagine losing your loyal customers just because you use a substandard fulfillment company, it's important to consider the bitter consequences of crappy 3PL. That's why I've included cute animal GIFs to lighten the mood a bit!

Don't get pecked to death by delivery area surcharges

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Like this poor cat getting pecked by adorable little chicks, it might not hurt once or twice to have a package mislabeled as residential and sent to a commercial zone. But what happens if your fulfillment company does this repeatedly? Now you're not getting pecked a couple times, but a hundred times. FedEx adds on close to $4 per mislabled package, which can quickly accumulate to tens, if not hundreds of thousands of dollars, in easily avoidable delivery surcharges.

The duty of properly labeling packages for shipping rests not on your customers, nor on you, but on your 3PL. A quality eCommerce fulfillment provider should have an extensive and accurate database of every address they ship to that can quickly and clearly tell the difference between a commercial or residential address. Usually these databases rely on a combination of satellite images, Google Maps, and local zoning registries to ensure that there are no discrepancies when it comes to shipping labels. It should be a top priority of any eFullfilment service provider to have access to a top quality address database to prevent costly mislabeling errors.

Delayed inventory management will make you a sad panda

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It's not just a trite cliche to say that timing is everything. In eFulfillment services, being late by even a day can cost you a tremendous amount of money, in the form of cancelled orders, angry customers, lost repeat business, and potentially boosting your competition. Which is to say, you're going to be a sad panda if the 3PL company you work with isn't completely up to date with inventory management.

Let's segue away from cute animals for a moment and talk about sports, so that way you understand exactly how damaging a tardy eCommerce fulfillment warehouse can be. Imagine you own the license to sell a Golden State Warriors branded bobble head of Stephen Curry commemorating the 2016 NBA Finals.

You drop a ton of cash on buying the rights, spend weeks with Chinese suppliers getting the product just right, and finally place your order in May for all the product, with a 4 week lead time, with the expectation that your product will be stateside at the beginning of the Finals on June 2nd. It will take 2 days to get through customs, and let's say another 2 days to ship freight to your fulfillment company.

If your fulfillment company receives your product late in the day June 4th, but it just sits on your receiving dock for a day or two, then they take their sweet time checking everything for damage, ensuring that all 1,000 units orders are accounted for, and then eventually get around to stocking the bobble heads three to four business days later, it might be that the Finals are almost done by the time the product has been stocked. Which means if Stephen Curry has a lights-out tournament and the Warriors sweep the competition en route to another championship, you are totally screwed. Not to mention, a very sad panda indeed.

The fastest possible shipping times require being in the right place

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What happens if your eCommerce business works with a eCommerce 3PL logistics company based on the West Coast and a customer in Georgia wants their package delivered within 2 business days?

Even if your fulfillment partner is as committed to the job as this dog is to fetching the ball off a cliff, it becomes more challenging -- not to mention more expensive -- if they are based on just one side of the country but handle your entire national fulfillment operation. That's why it's crucial you find out what the range is for a 3PL provider before you sign up with them. A top-notch eFulfillment provider should have at least two locations, on either side of the country, to maximize delivery coverage. A great tool to see what sort of coverage you get with a certain company is to first find out where they have warehouses, then cross-check their locations using FedEx's Ground Transit Information maps. Especially if the nature of your business involves quick turnarounds and time-sensitive shipping, you'll want to have the best possible map coverage for your business.

Keep in mind, however, that even if a company only has one location, it isn't to say they can't ship product to the other side of the country within 2 days, but that will require payment for overnight express or some other high-cost service level. And while you might be able to get away with passing some of that cost onto your customers, there is a chance that inflated shipping costs might scare some of them away to your competitors.

Without the right personnel and software a 3PL company might as well be napping on the job

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Perhaps one of the worst fulfillment scenarios that can happen to you is having a contradiction between the inventory number in your computer and the inventory readings you have on-shelf -- nothing kills your relationship to customers like an "out of stock" label on your website for a popular item, and it's even worse if it happens only because of a glitch in your 3PL company's system.

Inventory discrepancies usually have two major culprits:

1) A faulty inventory software system

2) Poor personnel

A quality 3PL Fulfillment company should utilize a redundant, error proof software system to manage their warehouses. They should also employ top talent across all areas, from product pickers to packers to logistics managers. One positive attribute without the other is enough to lead to a mediocre fulfillment experience for your company, so it is absolutely paramount that you find a partner that has both. Otherwise, the combination of poor software and lousy personnel could cost your company hundreds, if not millions of dollars in lost or mismanaged inventory. You might as well entrust the storage, packing, and shipping of your eCommerce inventory to a bunch of seals.

When mistakes are made, it's always your fault, even when it's not

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Even the best 3PL companies get things wrong, kind of like this cat playing Jenga. Maybe they send the right package to the wrong address, or mix up packing slips with gift messages (imagine how much anguish must be caused every Valentine's day because women across the country receive gifts with messages to other women, all because of a mixed up packing slip).

Of course, whenever a mistake like that happens, it's almost inevitable that a disgruntled customer pays a visit to the company Facebook page and writes a scathing 1,000 word review for the whole world to see about a simple logistics mix-up. The reality is it's most likely the fault of the fulfillment company, sitting quietly in the middle, without the customer realizing that they're blaming the wrong party. This is why it's so so important that the fulfillment company is committed to delivering value to you, and that means holding themselves accountable in case they goof up. A quality 3PL provider should be happy to reimburse you for not only the trouble they caused and the cost incurred (such as issuing a refund or a discount voucher for a future purchase), they should also cover the cost of shipping the eCommerce order.

Conclusion

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You owe it to yourself to find a great quality eCommerce fulfillment provider. Ideally, they own an up-to-date database of commercial and residential addresses to minimize the chances of FedEx delivery surcharges. They should be as quick as possible when it comes to managing your inventory and maintain complete awareness of any major sales or deadlines you have for putting your product on the market. They should offer near-100% ground coverage of the continental USA within 48 hours and if not have reasonably-priced rush fulfillment charges. A good 3PL company should utilize top of the market software and pay above the industry average to ensure they have the best talent working for them to guarantee efficiency and security of your inventory. And most importantly, they should be there for you when they do mess up.

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