Self-Fulfilment: How to build a distribution network for your growing online business

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Do-It-Yourself logistics and self-fulfilment are not new concepts. Many large corporations have been using the strategy as a way to maintain control over their entire business process.

In the case of DIY logistics, the concept is now being used by Amazon through its Amazon Flex program as a cost-efficient measure and a way to get communities around the company’s operations involved.

These concepts are now becoming viable options for smaller businesses. Online businesses that are enjoying rapid growth thanks to market hike are beginning to invest in self-fulfilment capabilities, including investing in their own fleet of vehicles. Is self-fulfilment the right strategy for your growing online business? How can you get started with developing your own distribution network?

Why Self-Fulfilment?

There are some interesting stats about checkout and order fulfilment that we need to discuss before we dig deeper into the reasons why self-fulfilment is a good strategy, starting with the fact that more than 60% of online shoppers stop short of making a purchase when the shipping and handling fee is too high.

There is also the fact that 53% of shoppers expect fast and reliable delivery. It is one of the factors they consider when shopping online. On top of that, 38%of shoppers stop shopping on an online store if their delivery experience is less than stellar.

It is easy to see why shipping and handling are very important to the success of online businesses. Partnering with a reliable logistics company is one way of making sure that orders get fulfilled quickly. Another way, which gives more control over shipping and handling to the online business, is self-fulfilment.

Self-fulfilment can also be more cost-efficient. This, of course, depends on the nature of the online business and its scope of operations. Order fulfilment includes three main elements: inventory management, picking and packing products, and shipping orders to the customers. A lot of time and money can be saved by doing all three steps in-house.

There is also a branding element to it. Online businesses can maintain a more consistent branding through self-fulfilment. No other brands – particularly those of the shipping companies – will be added to the packaging, allowing for a more seamless and well-integrated branding that wins the customers’ loyalty.

The Big Challenges

Time consumption is a major challenge in the implementation of self-fulfilment. The online business will also need more resources to process customer orders, particularly when the volume of orders is large and growing.

Some online businesses start investing in their own fleet of vehicles as a way to expand their operational capacity. This requires a big investment, but online businesses can expect higher return on investment (ROI) as well.

Let’s not forget that self-fulfilment allows the products themselves to be highly customisable and more personal. Rather than shipping a standardised set of products, online businesses can offer more personalisation options to customers. Orders can then be manually processed to meet specific requests before being delivered to the customers.

The Solutions

The challenges mentioned in the previous part are also opportunities waiting to be seized. Time consumption and the higher resources required for self-fulfilment can be daunting for smaller online businesses, but they are challenges that can be solved. The solution to these challenges is automation.

Through the use of automation, tasks such as picking items and inventory management can be completed without a lot of manual work. Rather than calculating and managing inventory manually, the inventory management system can now talk to the online storefront directly. The inventory is managed meticulously, allowing for purchase orders to be automated as well.

The same can be said for picking and packing. With a better warehouse management system, picking items for delivery is a task that doesn’t consume a lot of time. A few optimisations and tweaks, and every online business can have an optimised warehouse for faster, more reliable self-fulfilment.

The same is true with the next challenge, which is the need for a delivery fleet. Using vehicle tracking solutions from a provider like FleetGo, it is no longer necessary to make large investments on tracking systems and fleet management. Everything is provided as a service (SaaS) and online businesses only have a small monthly fee to worry about. FleetGo goes a step further by enabling detailed trip logs and route planning. This means the fleet can be kept lean and efficient. It also makes the entire distribution network more scalable, allowing it to grow alongside the business. The result is better integration of self-fulfilment with the growth of the online business.

As for product customisation, the possibilities are endless. Online businesses can offer custom packaging and be more detailed with the customer journey. There is something different about receiving a branded package that meets one’s expectations; customers reaching this part of their journey will certainly appreciate the experience even more.

The combination provides the competitive advantage you need to succeed in today’s market. With the market – the online market in particular – being as competitive as it is today, the added touches introduced to the customer experience become more and more valuable.

Getting Started with Self-Fulfilment

There is no need to go all out and invest big when trying to implement self-fulfilment as part of your online business operations. In fact, there are plenty of ways to implement self-fulfilment in a more gradual and manageable way.

The best way to start is by automating inventory management. Make sure all orders placed on the ecommerce site get recorded by the inventory management system as well. The two solutions need to be able to talk to each other so that the right inventory level can be managed.

Next, automate product manufacturing or purchasing. Using data from the ecommerce platform and inventory management system, it is easier to create forecasts and automate purchase orders accordingly. It will not be long before a cost-efficient inventory level can be maintained.

The next part of self-fulfilment is better order handling. Interestingly, this begins with providing customers with an accurate estimate of when their orders will be shipped. That estimate is a way to manage customers’ expectations; it helps maintain a high level of satisfaction.

Picking and packing are relatively easy when you have an organised warehouse. The warehouse management system can also be integrated with your ecommerce platform. When an order comes in, pickers will get detailed information on the location of each ordered item for faster handling.

The last part of the equation is shipping. You don’t have to turn to DIY logistics entirely. Start with one vehicle for servicing customers near your base of operations. At the very least, nearby customers can start enjoying instant delivery. You can then expand the fleet of vehicles to reach more customers.

The FleetGo solution mentioned earlier is perfect for time and trip tracking. It is available as an iOS or Android app and a proprietary hardware. It even supports features such as telematics and encryption of vehicle data, allowing for the fleet to be built on a solid foundation.

At this point, self-fulfilment will be more beneficial than ever. With some of the processes automated and the fleet of vehicles growing, your online business can continue serving more customers and maintaining a seamless brand experience from start to finish. This will give you the competitive advantage you need to stay ahead.