Every holiday season, businesses must prepare for the influx of customers purchasing their products. An essential piece to the success of their holiday sales is the order fulfillment processes that they have in place to keep up with consumer needs during the season. To ensure order fulfillment is taken care of, most businesses outsource these operations to a third-party logistics (3PL) provider. In this article, we will cover why 3PLs are so effective in helping businesses with their order fulfillment needs during the holidays.
Holiday Order Fulfillment Challenges & Solutions
Challenges with Holiday Order Fulfillment
The holiday season brings various challenges that businesses may face. Here are some common challenges of holiday orders that 3PLs help mitigate:
High Order Volumes: Businesses often experience a significant increase in order volumes during the holiday season, leading to potential bottlenecks in fulfillment.
Order Accuracy and Timeliness: Ensuring that orders are picked, packed, and shipped accurately and on time can be a challenge, especially with increased order volumes.
Returns Processing: The holiday season often sees an increase in product returns, requiring efficient processing and restocking.
Customer Service Support: High order volumes may lead to an increased volume of customer inquiries and support requests.
Cost Management: Increased operational costs during the holiday season, including labor and shipping expenses, can impact overall profitability.
How 3PLs Help With Holiday Order Fulfillment
3PLs provide many different services and benefits to businesses looking for a reliable holiday order fulfillment partner. Here are some ways 3PLs reduce stress for businesses during the season.
- Scaling To Your Holiday Needs: 3PLs have the infrastructure and resources to scale up or down for any business needs. This ensures that businesses can store and fulfill all orders without reducing their efficiency during the holidays.
- Processing & Fulfilling Holiday Orders: Perhaps the most important way that 3PLs help businesses during the holidays is their capabilities to provide fast and efficient order processing and fulfillment during times of influx orders.
- Shipping and Logistics Expertise During the Season: Most 3PLs have reduced shipping rates due to more leverage during negotiations with carriers. This can be a great cost saver especially with the high shipping volume throughout the holiday season.
At Nautical, we have best-in-the-nation parcel carrier rates. Reach out for a custom quote today! - Customization For All Your Fulfillment Needs: 3PLs provide great flexibility and service offerings to their customers. Most provide value-added fulfillment services like custom kitting, repacking, and assembly. Providing these custom solutions allows businesses to keep all their fulfillment operations under one umbrella while they can focus on their core competencies.
- Cost Efficiency: Businesses also enjoy reduced costs even while order volumes are increased. Because they leverage the 3PLs resources, they avoid any large upfront costs like warehouse leasing, warehouse staff wages, and equipment cost. Although fees may be higher than normal, the price is much lower than operating a warehouse yourself.
What to Look for In a Holiday Order Fulfillment Partner
If a 3PL partner sounds right for your holiday fulfillment needs, there are a multitude of things to consider before making a final decision. When choosing a 3PL, it’s important to consider:
- Reliability and Reputation: It’s important to look for a 3PL partner that has proven experience with your fulfillment needs. Make sure you understand what they specialize in to ensure they align with your needs. You can also check their customer reviews & testimonials, case studies, or ask for references.
- Technology and Integration: Make sure they have integration capabilities with your e-commerce platform and other tools to ensure a smooth ordering process from the start.
- Order Accuracy and Quality Control: AAccuracy is crucial to any order fulfillment operation. And with increased order volume, your 3PL partner should have standardized procedures around quality control to minimize as many errors as possible.
- Cost Structure: Consider their pricing structures, what are their per-order fees? Storage & handling fees? Understanding these fees can help make sure the total costs align with your budget.
- Location and Shipping Zones: The location of the 3PL’s fulfillment centers will greatly impact shipping costs and delivery times for your shipments. It’s vital to choose a partner that is strategically located and can reach your customers in a reasonable time frame.
Order Fulfillment Tips to Prepare for the Holidays
Regardless of if you partner with a 3PL or not for the holidays, we have some tips that can ensure that your logistics during this time goes off without a hitch.
Plan Early
Planning for the holiday rush in advance can help you avoid most challenges. Review previous seasons to discover consumer trends and identify and issues that you may need to fix leading up to the holidays. Creating a plan that covers inventory management, staffing, shipping carriers, and other relevant information can help avoid scrambling once the orders come rushing in.
Streamline Order Processing
Implementing automations into your order fulfillment processing helps meet customer expectations during the holidays. These automations include:
- Order Confirmation Emails
- Invoices
- Shipping Updates
Communicate with Your Suppliers
Your business can probably expect a rise in orders compared to other times in the year. Because of this, it’s important to communicate clearly with your suppliers to ensure that you have enough stock for the season. This will help avoid any potential stockouts.
Assess your SKU level history
In addition to ordering more products from suppliers, it’s important to know what products are your best sellers. Use historical inventory data to understand and make better estimates on what products you should prepare more of leading into the holiday season.
Holiday Order Fulfillment Stats
Ecommerce sales are constantly growing for each holiday season. This is further proved by a 10.6% increase of non-store sales over 2022. Other holiday order fulfillment stats include:
- Consumers spent $211.7 billion online over the 2022 holiday season , an increase of 3.5% year over year (Source)
- 57% of consumers will begin holiday shopping on or before Thanksgiving (Source)
- 60% of U.S. holiday shoppers plan on spending more than $250, with 10% planning to spend more than $1,000. (Source)
- 62% of shoppers plan to “buy mostly online” (Source)
Nautical – Your Full Service Fulfillment Partner
No matter the season, Nautical is your one-stop-shop for all things warehousing & fulfillment. We provide full-service 3PL fulfillment out of our 465,000 sq ft warehouse in Kansas City, MO providing services like pallet/in pallet/out, carton/case picking, and flexible storage solutions with both racked and floor space options. Contact us for a no-obligation quote for any of your needs today!
