Brands and fulfillment providers face many challenges when they are handling huge numbers of orders in a single given time.
A survey by PwC found that the average cost of fulfilling an order is $9.40, which can add up quickly for businesses handling high volumes of orders.
Thus brands and fulfillment providers must find ways to streamline their operations and reduce costs.
Challenges with the influx of orders
With the increase in the number of orders being received by a business, they also start facing new challenges in terms of packaging, fulfillment, and shipping costs.
With an increase in order volume comes an increase in the cost of packaging materials and labor, a decrease in fulfillment efficiency, and an increase in shipping costs.
Increased Packing Costs
As order volume increases, the cost of packaging materials and labor also increases.
According to a study by Packaging Digest, brands expect to spend around 5-7% of their total revenue on packaging costs. This is a significant expense for brands and fulfillment providers.
With the increase in packaging materials cost there is also an essential need to hire additional staff to handle the increased workload.
Decrease In Fulfillment Efficiency
Fulfillment efficiency decreases with an increase in orders if not handled.
Fulfillment efficiency is mainly affected by two factors those are speed and accuracy with which orders are processed and shipped to customers.
A report from McKinsey mentions businesses that can improve their fulfillment efficiency by just 1% can see an increase in revenue by up to 5%.
As order volume increases, it gets difficult to efficiently pick, pack, and ship each individual order. Thus leading to delays in order fulfillment and increased labor costs.
Increased Shipping Costs
The cost of shipping products to customers can comprise a significant expense for any business.
According to National Retail Federation, on average, shipping costs amount to about 70% of the average order value.
As order volume increases, it gets difficult to efficiently consolidate orders for shipping, which leads to additional shipping costs for both the fulfillment provider and the customer.
Hopstack’s platform with its combined order feature and its unified warehouse platform streamlines the fulfillment process.
Combining orders reduces the number of packaging materials needed and saves on costs. Helping brands saving costs and reducing their environmental impact.
Not only it increases efficiency and productivity but also improves customer satisfaction.
Combine Orders Feature
Hopstack’s Combined Orders functionality assists brands and fulfillment providers in combining multiple orders based on the following parameters:
- Name of the customer
- Address of the customer
The combined orders can be packed together and shipped out as a single unit. This not only helps in reducing order lead time but also scales down the packaging and shipping costs.
Advanced Rule Engine
Hopstack’s proprietary ‘Rule-Engine’ helps brands and fulfillment providers decide the criteria for the orders to be combined.
In countries where the address is not standardized, Hopstack takes into consideration of the following secondary parameters while combining orders:
- Name of the customer
- Email of the customer
- Phone number of the customer
Hopstack offers flexible and customizable packing and shipping options for combined orders.
It ensures that the products are packed and shipped for each order helps to improve the accuracy of orders.
Hopstack’s Robust Integration Solutions
Hopstack’s integrated solution helps warehouse managers to integrate all their hardware equipment and warehouse systems into one cohesive and automated system. This helps in unlocking efficiencies, streamlining processes, and reducing worker fatigue while combining orders.
Hopstack’s Digital Warehouse Operating System has helped brands and fulfillment providers in reducing packing and shipping costs significantly.
Using Combine Orders Feature, Hopstack customers were able to combine over 8.4% of all orders in the given criteria and boost cost efficiency by reducing the number of shipments by 4.2% in the given segment. The platform has also uplifted fulfillment efficiency by 202%.
Schedule a demo to learn more about how Hopstack streamlines the overall fulfillment process.