Thursday, 16 February 2012

Can your business handle a 20% increase in sales?

A recent report from GFS suggests that ecommerce parcel volumes within the UK will make up at least half of all Christmas packages by 2016. Their post 2011 findings also revealed that: 
  • Online purchases made up more than a third of all packages handled by UK carriers in November and December 2011.
  •  A 15 % volume increase on 2010.
  • As mobile technology evolves, etailers will see a further up lift in sales.
  • The more frequent use of smartphones and tablets to buy products online will fuel further parcel growth and that, in turn, means home deliveries may well catch up with those destined for business customers by 2016.
  • By 2016 it was predicted that UK consumers and businesses will contribute an estimated 4.75 million new parcels to the UK network each day.
  • As an ecommerce professional you are no doubt thinking that a predicted up lift in consumer demand is a good thing. Well you would wouldn’t you? After all, we all want to see our businesses grow and flourish.

But have you considered how your business will perform with a potential increase in demand of 15 percent next December? And that is not accounting for any marketing or sales drives that you implement over the coming months which could easily drive that figure to 20 or 30 percent.

Now a twenty to thirty percent uplift in sales is not to be sniffed at, but have you realistically considered how you are going to get another 20 to 30 parcels out of the door for every 100 you despatched last Christmas?

Remember that this is Christmas we are talking about. Were your systems and staff (the wife, the kids and anyone else you could convince to help out) already at breaking point in 2011? 

Even forgetting about despatching 30 percent more parcels, where are you going to store 30 percent more stock?

Simply putting your head down and grafting onwards into Christmas 2012 could spell disaster for the long term success of your ecommerce venture. As orders mount up do you simply work 20 percent longer, packing boxes into the night? 

Helplessly slave away while despatch timeframes slip and delivery deadlines are missed. Experience that ‘head in your hands’ moment as your overstretched operation makes picking errors, further compounding the workload. Watch those months of excellent customer service and attention to detail become a distant memory as your customers begin to suffer, and when your customers begin to suffer, they tell their friends, and their friends and.. (you know where this is going).

It is far easier to address these issues now than it is to put things right with a disgruntled customer base once the proverbial has hit the fan. 

So what is the answer?  Invest in an expensive warehouse? Employ an extra member of staff who you need to bring up to speed and then pay through the nose to watch them stand around idle when the sales drop off again in the new year?

Well the answer may be to outsource your ecommerce order fulfilment. Or as I say “3pluk-it!”

Now whilst outsourcing ecommerce order fulfilment can be the holy-grail for many businesses it is certainly not a ‘one size fits all’ solution.

Over my next couple of posts I will be highlighting the pros and cons of outsourcing your ecommerce order fulfilment, enabling you to make an informed decision on whether outsourcing your fulfilment is the answer to your cost effective and efficient business growth. 


If you would like to comment on any of the above then please do so. If you require any advice on how to 3pluk your ecommerce order fulfilment then please let me know.