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Two-Day Shipping or One-Day Order Processing: What Wins?

two-day shipping

Two-Day Shipping or One-Day Order Processing: What Wins?

Your average customer doesn’t know much about logistics, so every e-commerce company faces a unique concern for giving customers what they want. Do you offer two-day shipping for when an order is processed, or speed up your processing, all in order to meet their demands for quick products?

From the customer perspective, two-day shipping obviously sounds fantastic. However, it stops being so great when things take far longer than two days. Imagine if your order processing takes a week — how would customers feel?

In the same light, if an order is processed in a few hours, but shipping takes weeks, people might not even click “buy” if you’re upfront about how long it’ll take to get to their door. Google will lead you to many people who are disappointed with shipping times, regardless of the promise they were made.

So, what’s an e-commerce business to do?

Two-Day Shipping Changes

Adding two-day shipping is all about speed in your warehouse. As soon as this team receives an order, they get to work picking, packing, and sending it off to the customer. Buyers have a clear understanding of when things will arrive after the order is shipped and they’ll hold you to it.

To achieve this, you’ll need a streamlined warehouse with quality technology and practices, optimized to move orders as fast as possible. You also need enough people to prevent a backlog. Warehouse management tools are a tremendous help for this labor planning, plus they can ensure you’ve got the inventory of products as well as boxes and packaging materials to keep you ready.

The good news for a business is that you can keep your shipping promises even when inventory runs low because you’re guaranteeing delivery after order processing. 

Making the most out of two-day shipping requires you to be transparent. Customers need to know that the two days are when the product leaves your warehouse and arrives at their door, not when they click “buy.” Companies often address this by providing an estimated arrival date and then following up with an email once the product is shipped.

Thoughts on One-Day Order Processing

Order processing, simply put, is your ability to verify and use a purchase order to create a warehouse shipment order.

Most customers just don’t think about order processing when they’re making a purchase. Some don’t really understand the concept because they’re treating your business like a brick-and-mortar solution where they walk in, ask for what they want, and then you (the business) immediately know and can start on their order.

The behind-the-scenes actions of verifying orders and payment, checking inventory, creating an order for a warehouse, and getting it all in line when your staff is there simply blow by without a thought. You can see this in the wide range of explanations, FAQs, and responses to customer complaints about package deliveries and times. Even Comcast has to explain order processing times on its support pages.

If you’re able to streamline all of those activities, it’s a boost that customers will love, even if they don’t realize it. Processing every part of an order in a single day, or on the same day, allows your team to pick, pack, and send faster. It’ll improve the speed of all orders you receive, not just those that select expedited shipping.

Most of this is done via technology like warehouse management systems, which allow you to better control costs and understand revenue as well as inventory. What you’ll like about using a WMS is that they process orders quickly enough for you to insert them in the workflow where they need. So, if you get two orders — the first at regular shipping and then another an hour later with two-day shipping — the system will automatically move the two-day shipping to the front of the line.

The Customer-Driven Choice

Choosing between these two options requires one more consideration: where are your customers unhappy?

Unhappy customers won’t buy from you again and are likely to leave negative reviews that can impact other sales. When concerns are around your shipping, read them carefully. Ask if you can best respond by processing an order more quickly and reducing long wait times or if they demand immediate satisfaction with the two-day turnaround.

In general, customers are more likely to understand two-day shipping on your website, so if the issue is clarity or complaints around not knowing when goods will arrive, this might be a better course of action. On the other hand, if they don’t like how their order disappears for days or weeks before they get a notice about it being shipped, order processing can be the right solution.

Shoppers on the e-commerce behemoth Amazon will sometimes gripe that their Prime packages still take a week to arrive. Often this is because the seller’s order processing systems and inventory levels have issues. Because customers are paying for two-day shipping, they can feel cheated. It’s a direct sign for where those companies should focus their next warehouse investments.

Both two-day shipping and one-day order processing can improve your operations. When possible do both. When not, pick the one that your customers will understand and appreciate most based on the feedback you already have available.

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Jake Rheude is the Director of Marketing for Red Stag Fulfillment, an ecommerce fulfillment warehouse that was born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others. 

Not Just the Warehouse: How Smart Inventory Management Improves Your Ecommerce Overall

Once you start using Smart Inventory Management (SIM) in your ecommerce, you’ll notice lots of benefits mostly surrounding inventory control and workflows. But it can improve some other aspects of your business as well, like marketing, margins, and accounting.

It’s all about data, and this moves far beyond the limitations of preventing out-of-stocks by reordering goods faster. While there are software opportunities, such as using SIM to integrate your warehouse and ecommerce platform to allow customers to see what’s available and shipping times 24/7, we’re looking at bigger business processes that can have an impact on company culture, leadership, and communication.

These are some of the biggest bangs for your buck because they help you keep the business healthy.

Saving money from inexperienced purchasing decisions

One benefit of SIM technology is that you will have up-to-date access to current inventory information. This will prevent the purchase of unnecessary amounts of additional inventory. You will save money by only making purchases you will need.

You are also able to save money by being smarter about how inventory is stored. Locating goods at the proper places within your warehouses or strategically around the country in partner fulfillment locations can save you significantly on the time it takes to ship an order and the cost a shipment takes to reach your average customer.

In the warehouse, SIM helps you move inventory to shelves that reduce walking and movement, making your team faster at getting orders out the door. For partners, SIM can help you track the data you need to get a better understanding of where your customers live and how they shop. So, you’ll be able to select warehouse or fulfillment partners located near to them and provide these locations with the right mix of goods so that they can continually fulfill orders without any risk of running out of stock.

Financial Reporting

Accurately knowing your inventory, storage costs, and more data make it easier for your ecommerce store to understand its overall health. You get a complete snapshot at the expense of goods over their lifetime in your care, especially if you link up SIM with your marketing data.

You get a 360-degree view on each item, including sourcing and production, shipment to your warehouse, storage, delivery to customers, and any returns. You may be surprised to learn what the total margins on your goods are, helping you understand what to promote and sell as well as what products it might be time to phase out of your offers.

Plus, it is in these reports that many companies first acknowledge and get a complete picture of their dead-stock: what never gets sold and just slowly eats away at your overall income.

Give leadership and your accountants the ability to understand the costs of your business entirely and discover what you can best manage and change to maintain a healthy ecommerce offering.

Developing New Sales Opportunities

One reason we really like SIM tools is that they make it easier to track your overall sales and look for patterns. Plus, you can test upsell and cross-sell efforts more easily with all this new data.

Combining your products, through efforts like kitting, allows you to leverage your products for the best return both in the immediate and the long-term. You can sell multiple items together, reduce inventory levels (and related storage costs), and even get rid of things that are sitting on shelves for too long.

Customers like it because it’s convenient for them when the products work together. If you add the right set of products, kits can make your offers more useful, less costly, or start a need to reorder from you. This is common in most industries, and one of the best examples are razors that come packaged with a series of disposable heads. The customer gets the handle and heads together and then has to go back to you to get the next set.

Returns and More

Another area to consider for your smart inventory management system heads back to the warehouse but touches on many of the other elements we’ve discussed: returned goods.

Returns present a significant problem for most ecommerce businesses. You have to figure out how to approve and process the customer’s request, handle the items themselves as they come back to you, potentially repackage and resell these, and eat much of the sale cost even if you’re charging a restocking fee.

Customers returning goods tend to be unhappy and want you to automate as much of this process as possible, and they expect an email from you to include things like a shipping label.

SIM tools can integrate with your order system to generate the information the customer needs automatically. Giving your own shipping labels within an SMI also helps you out by updating your team with package tracking data, so they know what to expect and when. You’re able to manage customer expectations and prep your warehouse, minimizing the disruption.

The same system can also record information from customers about the nature of a return, giving you a feedback loop into product development and sales, helping you adjust based on price, materials, or other information.

We’re seeing a rise SIMs on their own as well as integrated with tools like ERPs because being smarter about your inventory cuts down on costs, keeps your warehouses efficient, and makes it easier to manage your business. It’s time for every ecommerce store to start considering a smarter tech stack that includes inventory controls.

Improve Customer Service

It all comes down to customer service, one of the core differentiators in the world of ecommerce. With so many drop-shipping companies, Amazon sellers, small shops, and global partners, it can be challenging to stand out on product selection alone.

So, one way companies are building a competitive advantage is by developing best-in-class customer service. Inventory management is a core part of this even though it doesn’t seem like it. Inventory management allows you to keep filling orders and even get ahead of spikes in orders that are new or seasonal by giving you smarter business analytics.

When you’re ready to ship immediately, instead of having to wait for a new restock, customers are happier. They also like it when your returns policy and other policies are clear and easy to understand. Greater knowledge of your inventory makes it easier to control those types of concerns, allowing you to simplify any steps your customers have to take.

Run a smoother business and have happier customers just by developing better control of your inventory.

Jake Rheude is the Director of Marketing for Red Stag Fulfillment, an ecommerce fulfillment warehouse that was born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.

6 Ways to Improve Efficiency, Speed, and Accuracy in Your Warehouse

Modern warehouses are already much faster and more efficient than those 20, even ten years ago. But you’re still feeling the budget crunch every quarter. And, if you’re like us, you know that there are always things we can do to make a warehouse a little better.

So, we crunched the numbers, talked to experts, and meditated in the back of the warehouse to come up with these six methods designed to improve your warehouse efficiency, speed, accuracy, and how much we like working in a warehouse.

Improve Your Operational Software

Your first step in improving your warehouse operations is having the right tools in place to measure, track, and understand what you’ve got. A modern warehouse management system (WMS) is your safest bet to start establishing baselines of your efficiency, waste, how quickly you fill orders, and how accurate everything you do is.

We’ve all heard it a thousand times, but it remains true: you can’t improve something you don’t measure. Choose and implement a capable WMS to gain a better understanding and give your team plenty of ways to use their time and your inventory better.

Enhance Your Metrics Choices

Metrics, especially key performance indicators (KPIs), build on that introduction of a smart WMS. They help you tell the story of your business and how it can do better — and sometimes communicating KPIs is just as important as choosing the right ones.

Review the metrics you track and how you define KPIs. Do they measure productivity? Can they respond to changes to your baseline? Do they match up with current targets and accurately track as performance changes?

Don’t get overly complicated.

You want KPIs that are easy to understand and measure. Glancing at your system and dashboards with these metrics should give you an idea of the health of your business. You and your warehouse team can understand five metrics much better than 20. So, find what easily tells the most important story.

Reorganize Your Inventory Locations

Once you know what to track and can start tracking it, it’s time to review your standard day’s orders and the routes people take to pick them. Look for high-volume products and see if they’re in a good or bad location.

Put your most popular products near they critical points in your warehouse that can speed up picking and packing efforts. Usually, this includes aisle ends and exit or transition areas. However, you might also have enough volume to give them their own space that’s closest to your packing areas, with a set team of pickers grabbing only these while others grab the secondary items to complete each order.

You can speed this up further with a WMS that support voice picking and wave or batch pick and pack methods. They’re faster, more accurate, and improve your efficiency for filling orders.

Try Custom Kitting

When you redo your inventory locations and start reviewing route changes, you’re collecting a lot of data along the way. Use it.

Productivity can see significant gains when you implement custom kitting in your warehouse. Kitting can occur with the packages you sell or how you manage your warehouse, both increasing efficiency by reducing pick points. Selling kits means you can control inventory better and generate higher-value orders more often.

However, you can kit within the warehouse simply by grouping products that are typically bought together. Some companies even bag select items together to give pickers an option to grab one thing instead of many. It can help you control your space and keep inventory counts more accurate, giving you a nice boost.

Give Receiving Its Due

The warehouse mantra is often about getting orders out the door as quickly and accurately as possible. Unfortunately, that leads to bottlenecks and procrastination in the receiving department. The faster and more efficient you become, the quicker you need to get your inventory ready for use.

Make every aspect of receiving, from putting away inventory to breaking down boxes and taking out the trash, important. It should be habit, and your systems should reinforce it. The better you do this, the more accurate and reliable your data, making all these other steps more efficient.

Besides, do you really want a bad inventory count because an empty box listed as full?

Talk to Your Team

And the final way we’ll think about running a better warehouse is by asking you to stop thinking about it. All of the steps above require data and activities from your warehouse team, IT, leadership, and more. Every group interacts with each change in a variety of ways, giving them varied perspectives.

Don’t let all that experience go to waste.

Talk to your team in the warehouse, in IT and sales, and leadership. Discuss what’s working, what isn’t, and their suggestions to change things regularly. You’ll get a two-prong benefit:

-People interacting with the systems and changes have excellent vantage points to find breaking points or see additional changes that can boost your performance.

-It helps your teams feel heard, which makes them happier to come into work and more likely to implement the changes you make.

Your company pays a lot to have different experts in and around the warehouse. They’re the most significant resource for maximizing your business. And, we all like feeling respected at work.