Commerce & Sales Channels

Multichannel Fulfillment: How to Streamline Your Operations

Commerce & Sales Channels
April 3, 2023
8 min read

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Multichannel Fulfillment: Why It Matters

What Is Multichannel Fulfillment?

Benefits of Multichannel Fulfillment

How to Choose the Right Strategy

Multichannel Fulfillment: Why It Matters

Multichannel fulfillment is a critical aspect of growing your business. As your sales channels multiply, your internal operations become more complex. One such operation is order fulfillment, which is essential for customer satisfaction, and ultimately, Customer Lifetime Value (CLV).

Today’s consumers are shopping everywhere, all the time. And when it comes to order fulfillment, they have come to expect personalization, optionality, reliability, and speed across all channels. On the other hand, merchants have seen increased warehousing costs and an unpredictable supply chain that has made multichannel fulfillment increasingly complex.

In fact, a recent merchant survey revealed that 79% of merchants saw increased warehousing costs in 2022, and 45% of merchants want to divert time spent on managing fulfillment back to core business competencies. It’s imperative, then, for merchants looking to meet consumer expectations without damaging margins to streamline and simplify their approach to multichannel fulfillment.

In this article, we’ll explore what multichannel fulfillment is, why it’s important, and how to choose the right fulfillment strategy for your business.

What is Multichannel Fulfillment?

Multichannel fulfillment is the process of managing and fulfilling orders from multiple sales channels through a single integrated fulfillment network. This can include ecommerce platforms, ecommerce marketplaces, brick-and-mortar retail locations, and social media channels. Multichannel fulfillment allows businesses to manage all of their sales channels through a single platform, creating efficiencies that can cut down on excess warehouse space, inventory carry costs, and inbound shipments to multiple fulfillment providers.

At the end of the day, the goal of multichannel fulfillment is to provide a seamless experience for customers, regardless of the sales channel they use to make a purchase. By integrating all sales channels into a single fulfillment network, businesses can improve visibility, flexibility, and scalability, and gain valuable insights into their operations.

Why is Multichannel Fulfillment Important?

Multichannel fulfillment is the backbone of a positive customer experience that is consistent across all sales channels. Any growing brand knows that not all sales channels are equally profitable, so creating a consistent experience is key to driving customers to more profitable channels.

In fact, 70% of Amazon shoppers report that they would rather make a purchase directly from a brand’s ecommerce site, as long as they could still get the free, 2-day they have come to expect on Amazon Prime.

Some other considerations include:

Customer Satisfaction:

eCommerce order fulfillment is a critical component of customer satisfaction. When customers place an order, they expect it to be delivered quickly and accurately. By streamlining your fulfillment operations through a multichannel approach, you can ensure that orders are fulfilled quickly and accurately, leading to higher levels of customer satisfaction and retention.

For example, Palouse Brand, a fifth-generation family farm in Washington State, learned the importance of creating a consistent customer experience across sales channels when they saw explosive overnight growth in ecommerce orders. They were fulfilling Amazon orders through Fulfillment by Amazon (FBA) and their direct orders through their own in-house fulfillment operations. When Palouse Brand realized that their direct ecommerce customers were getting a very different fulfillment experience than their Amazon customers, they chose to outsource all their fulfillment to a single fulfillment partner so they could deliver to all of their customers in 1-2 days. Their ecommerce customers quickly noticed the difference in service levels and responded by leaving positive reviews on Google.

Increased Efficiency:

An effective multichannel fulfillment allows businesses to streamline processes to ensure they are carrying the right inventory in the right place at the right time to decrease inventory carry costs, optimize final mile delivery costs, and spend less time managing multiple vendors and relationships.

Improved Visibility:

By integrating all sales channels into a single fulfillment network, businesses can gain better visibility into their operations. This includes real-time inventory tracking, order status updates, and shipping notifications. With better visibility, businesses can make more informed decisions and improve their operations over time.

Flexibility and Scalability:

A multichannel fulfillment strategy provides businesses with the flexibility to adjust their operations based on changing market conditions, sales trends, and customer demand. With a flexible fulfillment partner, businesses can quickly adjust their inventory capacity, warehouse labor, and shipping capabilities to meet unexpected spikes in demand.

Actionable Insights:

Multichannel fulfillment provides businesses with valuable insights into their operations. This includes data on sales patterns, seasonal trends, and customer behavior. With this information, businesses can make more informed decisions about inventory planning, warehouse network placement, and sales channel optimization.

How to Choose the Right Multichannel Fulfillment Strategy

Choosing the right multichannel fulfillment strategy can be a daunting task. With so many options available, it’s important to carefully evaluate your options and choose a partner that can meet your specific needs. The key to successful multichannel fulfillment is to integrate and automate wherever possible, so look for a partner that relies on technology rather than analog processes to build a more resilient supply chain.

Below are a few qualities to look for in a multichannel fulfillment solution?

Flexibility and Scalability

A scalable fulfillment partner will have the ability to flex up inventory capacity, warehouse labor, and shipping capabilities at a moment’s notice through effective partnerships and comprehensive technology. Find a fulfillment partner with the flexibility to fulfill all orders through a single platform and warehouse network and the scalability to grow with you to meet unexpected spikes in demand.

Visibility and Insights

A high-quality multichannel fulfillment partner will be a valuable addition to your team with technology to offer high levels of visibility into fulfillment statuses, inventory levels, and last mile carrier tracking.

Your fulfillment partner should help you better understand your current customer footprint and how fulfillment can be optimized to improve your delivery speed and cost to serve.

Additionally, you should find a partner that can assist in interpreting sales patterns and seasonal trends to more accurately predict inventory volumes and set specific and often automated reorder points.

Extensive Network

Lastly, find a multichannel fulfillment solution that simplifies your end-to-end supply chain by partnering with a network of providers. Managing a single relationship for every step of your supply chain — from ocean freight to final mile delivery — will free up more time to focus on sales, marketing, and customer experience to grow your business.

Multichannel Fulfillment to Drive Growth

As you expand your sales channels to meet customers where they’re shopping, finding a multichannel fulfillment partner to meet all the needs of your growing business through a single platform with a distributed network is the key to long-term multichannel success.

To learn more about how Ware2Go is helping merchants simplify their multichannel fulfillment, take a look at our solution.

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