Welcome to the third instalment of my series on how to set up your own online store. Before we go any further though, if you are just discovering my articles now, consider going back to read Part 1: Finding Your Product Niche and Part 2: Setting up Your Ecommerce Platform to get a better grasp of the basics required to start your own online store. 

Once both of these stages are complete, you will be ready to turn your attention to the supply chain logistics of ecommerce ordering and delivery, a.k.a. ‘shipping’ or more accurately ‘fulfilment’.

Fulfilment consists of three main components:

  • Order management
  • Shipping and returns
  • Customer service

In the first instalment, we outlined the various options available when it comes to starting your own ecommerce platform: self-storage of your own manufactured or wholesale bought inventory, or dropshipping. 

If you chose to make your own, or wholesale purchase them, you will have to store your products either at home or an off-site warehouse. You will also have to take care of your own fulfilment process – or outsource it to a third party service provider.

If you decided to go with dropshipping, most of your logistics will be taken care of by your wholesaler, but you will still have to process orders manually, or use an automated application. 

Either way, you must be prepared to provide attentive customer service throughout the process, including the inevitable customer returns.

 

Step 1: Order Management

Every ecommerce platform must store products and manage the inventory and back end purchase process. This is known as ‘order management’.

It is not a major challenge if you are only selling a handful of different items. But once you begin selling many different products, it can become incredibly complex and easy to lose control of if you don’t have a robust fulfilment system in place.

Firstly, you will need to upload your products to your site, including a product description and images, as well as the price.

For shipping purposes you will also need to input the weight and size of each item on the back end, as well as a special code, called an SKU – a stock keeping unit – used for tracking inventory and orders.

You will need to closely monitor stock levels, to ensure products are replenished when they run low – and mark them as unavailable if they run out (and immediately reverse this once they are back in stock).

Effective communication must also be established between the payment verification, ordering, storage and shipping functions of your ecommerce business to ensure efficient fulfilment. Fortunately, there are many plug-ins – automated third party software programmes – and specialist service providers that can facilitate these processes.

However, when you are just starting out, you can almost certainly expect a measure of manual data input and continual checking on your behalf, as well as hands-on management throughout.

Your ecommerce business will be seriously jeopardised by messed up orders, so it is important to get it right from the beginning as retrofitting an improved system might be difficult, costly or even impossible further down the line.

TASK

Google ‘ecommerce supply chain’ to get a better graphic representation of what it looks like (or click the hyperlink here).

 

Part 2: Shipping and Returns

Once a customer’s order payment is verified, the purchased items must be prepared for shipping. The manner in which your products are delivered to your customers will affect many aspects of your ecommerce business.

Firstly, it will directly influence the final price they pay. 

Many larger ecommerce businesses do not charge at all for shipping as a value-add, others will offer free shipping over a certain order value, charge a flat fee, or only charge for express shipping.

Providing free shipping will make your pricing more competitive, but it will also erode your margins as your business will have to absorb the cost of the delivery.

Another factor that will affect your pricing – and choice of shipping service providers – is whether you are going to ship nationally or internationally.

Either way, you will need to enlist the services of postal or courier companies.

You can do this on an ad hoc basis, by obtaining quotes for each product or estimate their average charges and build this into your platform’s check out process. You will then also manually dispatch each order ad hoc.

Or you can enlist the assistance of specific postal or courier services, or third party service providers who will facilitate systematic ecommerce shipping and delivery fulfilment for you.

Most of these suppliers provide plug-ins for your website that automatically include accurate shipping costs at check out. These also usually come with some sort of training from the service provider so you can learn how to use their custom system efficiently.

While there is inevitably a cost to these kinds of service providers, most ecommerce platforms incorporate them as standard as they remove an enormous headache from the fulfilment process.

Many ecommerce platforms also offer their customers a choice of fulfiment options, so they can pick the shipping option that best suits their budget and delivery needs.

Before you dispatch your order, you will also have to ensure that it is securely and safely packaged – especially if it is fragile – preferably in branded packaging.

The customer’s order information and contact details must also be clearly marked on a shipping order form for easy tracking. 

But it does not end there. There is also the not-so-small matter of returns.

Your choice of delivery service providers will affect your shipping and returns policies, so you need to ensure whatever information about this process appears on your platform is the same as or is in synch with the terms your service provider or dropshipper offers.

Bear in mind many customers will read your returns policy before making a purchase and it may influence their purchase decision, so it also needs to be well-crafted and suited to your market. 

 

Tips for Your Ecommerce Returns Policy

  1. Be sure the criteria under which your customers are able to return a purchase are clearly outlined in your returns policy. 
  2. Be sure to include how long they can keep the product before they can return it.
  3. What is your policy on full or partial refunds and/or store credit? For example, some online retailers allow full refunds for normal purchases, but not for customers using digital gift cards or promo codes. 
  4. Who will be responsible for paying for the shipping of the returned item, you or the customer? Most online retailers offer strict criteria for free returns and replacements.
  5. Always display links to your policies clearly and frequently on your platform so they are easy to find.

On a final note, fraudulent returns are common in ecommerce, so you may also want to consider taking out some sort of insurance for your online business to safeguard against scammers who will try to find a way to con you out of your products or money. 

TASK

Conduct some online research on the pros and cons of the different kinds of shipping criteria and returns policies offered by established ecommerce retailers, as well as the various techniques used by online ecommerce store scammers.

 

Part 3: Customer Service 

Ecommerce customer returns can comprise between 10% to 50% of all purchases, depending on the product and market. 

Further problems that fall under the banner of returns can include

  • Payment issues
  • Out of stock products
  • Incorrect or missing deliveries
  • Complaints about damaged or spoiled goods  

You will likely have to field queries and complaints from customers at all hours. You must therefore be prepared to handle customer comebacks swiftly and effectively.

Your basic contact details need to be clearly displayed across every customer touchpoint and someone needs to respond to the customer within at least 24 hours if not sooner.

You will also need to have clear internal guidelines in place so that you (or your staff) know exactly what action to take when a customer contacts you with a specific purchase problem. 

Apart from a detailed, accurate shipping and returns policy, you should place the answers to frequently asked questions (FAQs) from customers on your platform.

Also consider real time technological tools, such as Whatsapp or AI chatbots, to improve the speed and efficacy of communications with your customer.

Do not underestimate the power of good customer service in ecommerce. Even in the worst situations, if the problem is dealt with swiftly and effectively you will probably gain a loyal repeat customer. If not, you will likely lose them forever.

Like every aspect of your ecommerce business, the fulfilment process is one you cannot take lightly and your order, shipping and customer service processes must all be 100% effective to ensure the longevity of your online store.

 

Next article to follow shortly. In ‘Populating Your Online Store’ we will take a look at how to fill your ecommerce site with basic content – design, images and text – known as ‘populating’ a platform. This includes product images and descriptions, ‘about’ pages, terms and conditions and other content mandatory for any online store.

 Next article: Part 4 – ‘Populating’ your Ecommerce Platform (with Content)