Ecommerce has skyrocketed in the past decade, riding the digital wave to simplify shopping like never before. Industries better shape up or ship out to keep up with this online shopping spree!
Efficient order processing in ecommerce is the key to keeping up with those high customer expectations. To go above and beyond, businesses must dance through a slick order-processing tango.
Here’s everything you need to know about order processing and how to improve it.
What Does Order Processing Mean?
Some may wonder: what does order processing mean? Simply, order processing means accepting, managing, and fulfilling customer orders. It is the series of steps that ensure that an order successfully reaches the customer who made the purchase.
Steps of the Purchase Order Process
Order processing methods vary depending on a business’s type and scale. However, the fundamental steps for order processing remain consistent across online and fulfillment companies. Here is a broad overview of the steps in the purchase order process.
Customer Places an Order
The customer will order a product through an online store, email, or with a company sales representative.
Company Receives the Order
The company will receive the order from the customer, including details like the ordered product, amount, shipping details, payment processing data, and delivery information.
Depending on the company’s size, an individual may receive this order through a sales email, online store, or an order management system. This information must be manually or automatically verified to ensure a properly executed order.
In the case of companies with multiple locations or warehouses, the order management system will determine which location will handle the order.
Inventory Picking
Then comes the picking of the inventory. This is when the specified items and quantity will be collected from the current stock to satisfy the customer’s order.
The picking part of the process needs to be optimized in every way possible for efficient order processing. The sooner the items are allocated and picked out, the faster they can be prepared and sent to the next part of the process: packing.
Order Packing
This is where the items are packed into shipping boxes to prepare to send them off to the customer.
The packing procedure involves weighing the boxes and attaching required labels, address details, and delivery instructions.
Shipping
Following the packing process, the next step involves shipping the order to the customer.
Smaller companies usually send orders directly to customers, while larger enterprises often consolidate and ship batches of orders to nearby locations simultaneously. These orders are then distributed to specific locations as needed, which can help cut costs by reducing the number of shipments sent out.
Customer Notification
After shipping the product, it’s crucial to inform the customer that their order is en route with tracking information. This proactive approach keeps them updated and significantly boosts customer satisfaction.
While these steps vary for different company types and sizes, every step is essential. No matter the company, each step should be followed to ensure a smooth order process.
Tips for Improved Order Processing
Now, let’s discuss some tips for improved order processing. These strategies help streamline the process and make it more efficient for both the company and the customer.
Implement a Clear and Organized System
Having a well-organized system in place for order processing is crucial. It includes having a designated area for storing and organizing orders, creating clear guidelines for employees to follow, and using technologies like barcode scanners to track orders.
Use Automation Tools
Automation is becoming increasingly popular in the business world, and for good reason. Companies can save time and reduce errors by automating certain parts of the order process, such as sending out notifications or generating shipping labels.
Optimize Packaging
Optimizing packaging is one of the areas that is essential to optimize. Whether a company uses premade boxes, templates, or custom packaging, it must have the best dimensions and be cost-effective.
Packaging should be the right size to fit and protect the products while being affordable enough to not cut into the product’s profit too much.
Make Shipping Cost-Effective
Affordable and efficient shipping is critical when handling orders. Shipping costs can really add up fast if not done well. Take a small ecommerce business, for example — they may start shipping products on their own, but as orders grow, so do those costs.
It all adds up when you factor in the time spent grabbing materials like tape and boxes and packing and then the time and fuel to haul shipments to the carrier.
As a business grows and orders pile up, it might make sense to start partnering with a distribution service to handle your shipping load.
To reduce shipping costs, consider purchasing discounted supplies, opting for flat-rate shipping, or using lightweight and custom packaging materials.
Learn more about cutting shipping costs in this article:
Use Order Management Software
During the initial stages of a business, handling a few orders is no big deal. But as traffic picks up, things can get tricky, leading to more errors. That’s when it might be wise to consider getting some top-notch order management software.
Such software can help track incoming and outgoing orders, orders in processing, inventory levels, and much more. It offers more transparency over the order process, improves accuracy, and can help to increase efficiency significantly. It also frees up a considerable amount of staff to focus on other areas and growing the business.
Monitor Order Processing KPIs
Every ecommerce business should determine its key performance indicators (KPIs) throughout its shipping process. These metrics can be monitored to determine the efficacy and efficiency of the order fulfillment process.
The most critical metrics in this regard are the turnaround time for an order, customer satisfaction, fulfillment rate, and accuracy rate.
Let’s learn more about them:
Order turnaround time: The time it takes between an order being placed and delivered to the customer. The lower this number, the more efficient the process is. To improve its turnaround rate, a business can track step times to pinpoint inefficiencies in specific process stages. Accuracy rate: The number or percentage of orders completed and fulfilled without errors. It helps pinpoint common mistakes and find ways to fix them, leading to a much better rate of accurate orders. Customer satisfaction rate: It measures how customers perceive the business and their satisfaction with it. To gather data, ask customers for feedback through surveys or follow-up emails. Customer feedback is vital in pinpointing any issues in the order processing chain, like long delivery times, damaged products, wrong items, or other concerns. Fulfillment rate: The fulfillment rate is the number of orders that have been completed compared to the number that are still in progress. It can help quickly identify problems or inefficiencies in the fulfillment process and identify areas of key demand for specific products. Every business should strive to keep a high fulfillment rate to ensure customers receive their products promptly.
Some businesses may also consider some extra or more detailed metrics. Still, these are the basic ones that should be monitored regularly to ensure a smooth and efficient order fulfillment process.
Stay on Top of Inventory
Another critical aspect of order processing is inventory management. Keeping track of inventory levels is crucial in ensuring timely delivery of products. Businesses need to have enough stock on hand to fulfill orders, but not so much that it becomes a burden on storage space and finances.
A good practice is conducting inventory audits to track stock levels regularly. It can also help identify potential issues such as overstocking or slow-moving products.
Enabling low-stock alerts also helps in staying on top of inventory levels. It allows businesses to restock and fulfill orders without delays.
By staying on top of inventory management, businesses can avoid stockouts and backorders, leading to dissatisfied customers and lost sales.
Keep Customers Informed
Order transparency and status are among the best ways for a company to improve customer satisfaction. Customers should either be regularly informed of their order status or be able to check the company website for information.
It won’t hurt to notify the customer about the following steps:
Order in process: The company has received the order and is currently going through the above steps, such as verification, picking, packing, and preparing to be shipped. Order processed: This means the order is collected, packed, and ready to be shipped. Order shipped: The order has been sent off to the customer. It should also include tracking information so the customer can monitor their order.
This information helps customers feel in control and stay involved with their purchases. It can make all the difference in their satisfaction with the purchase process.
Not only does this contribute to them becoming returning customers, but they will also be more likely to recommend the company to others.
Order Management Made Simple with Ecwid
Running your own ecommerce business can be an incredible journey, and Ecwid is here to help you achieve it. Our ecommerce platform is designed to make running an ecommerce store more effortless than ever.
Ecwid helps you enhance your order processing and smoothly handle the entire order lifecycle, from placing an order to getting it delivered on time.
Here are just some of the tools that make order processing a breeze with Ecwid:
Keep track of orders from all sales channels in one dashboard, with handy filters for payment and fulfillment status, date, and more. Keep your customers informed about their orders by updating the statuses from waiting to processed, shipped, and delivered. Ensure your team stays updated on any status changes to speed up order processing. Stay on top of your inventory with low-stock alerts to keep track of all your products and ensure you never run out of stock. Provide tracking information to your customers so that they know when to expect the order’s arrival. Use other tools for efficient order fulfillment, such as new order alerts, staff notes, comments on orders, and order list export. Buy discounted shipping labels right from the Ecwid admin.
In today’s fast-paced world, having a powerful online store is essential for any business. So why wait? Create a store today and explore Ecwid’s possibilities for your business.
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