Businesses often strategically leverage peak seasons to expand their operations, introduce new products, establish additional branches, and capitalize on the potential for sales and revenue generation. These peak periods are viewed as golden opportunities to enhance brand visibility, deplete existing stock, cultivate leads, and gather valuable data for future growth.
While the term “peak season sale” is familiar to online shoppers, those responsible for composing such events understand that it is a multifaceted undertaking demanding meticulous planning and flawless execution. The fulfillment process, especially when handling a surge in orders during peak seasons, transforms from an opportunity into a formidable challenge.
To truly comprehend the dynamics of peak season shipping, one must delve into the particulars involved, including the array of challenges and opportunities that come with it. Effective planning and careful consideration of key factors are imperative when preparing for a significant peak season event.
What is Peak Season Shipping?
Peak season shipping or peak season fulfillment is the term that refers to fulfilling e-commerce orders during peak season when there are a high number of orders. During peak season shipping, businesses have a large number of orders to fulfill due to growing customer demand during that period.
It is a testing time for supply chain efficiency, inventory planning and management, 3PL fulfillment partners, and a seller’s skills in order management. Any disruption can result in late delivery, damages, lower revenue margins, bad customer experiences, and ultimately downgrade a seller’s ratings.
Peak Season Shipping Challenges
When you have a high number of orders, you have more chances of making mistakes during peak season shipping so let’s look at some challenges that e-commerce businesses face:
Fulfilling Orders at a Fast Pace
Fulfillment companies and sellers usually provide same-day and next-day delivery as one of their USPs which is quite a difficult task to achieve when you have high sales velocity. Peak season fulfillment is a trying time for e-commerce businesses because every department will be struggling to meet its allocations due to the increased demand. On the other hand, customers continue to demand ultra-fast peak season shipping to take full advantage of the season.
Lack of Staff During Holidays
As the name suggests, seasonal sales occur during special times of the year so a large part of the workforce may want to take leaves which puts extra strain on e-commerce businesses. This is not just limited to supply-chain staff but also employees that handle picking, packing, inventory management, and other processes.
To counter this, a seller can ask their staff to work reduced shifts, provide incentives on orders and give their staff a bonus post-sale, based on their performance.
High Expectations From Customers
During peak season, customers expect to receive their orders before a specified time period. In Canada, peak season shipping needs to meet customers’ expectations as they often plan ahead and expect to receive their orders before the start of a holiday season or festival.
Risk of Product Damage
Damage can occur during peak season fulfillment while storing, picking, packing, shipping, delivering, and managing returns.
When e-commerce businesses need to provide peak season shipping for a large number of orders, they cannot provide personalized care to each item because it will take extra time. They are under pressure to provide delivery services at the same pace while having to fulfill a much larger number of orders than any other time of the year, which leads to more careless handling of products and thus, there is more scope for mishaps to occur.
Limited Amount of Warehouse Space
While providing peak season shipping, you have more items to deliver which means that the sales velocity is high and you need to have an appropriate amount of inventory and enough space in the warehouse to store it. Keeping only a few items in stock can result in product shortages and storing more items than the warehouse capacity allows can result in product damage and deterioration.
Incompetent Supply Chain Processes
An incompetent supply chain could be your biggest challenge during peak season fulfillment. An order that is not fulfilled properly leads to customer dissatisfaction. If a logistics company does not deliver on time or damages the product in transit, there is a high chance of the customer returning the product and giving negative feedback to your business. The customer may never think of ordering from your business again which could result in other customers not giving it a chance.
10 Proven Ways to Prepare Online Stores for Peak Season in 2023
Plan in Advance
To plan ahead of time and prepare online stores for peak season, arrange all of the data, create and implement planned promotions, and figure out how you will handle the surge in demand. You can optimize stock levels and make smarter decisions about when and how much to reorder for each SKU by estimating demand. Though inventory forecasting may never be 100% precise, there are things you can do to bring your projections closer to reality such as analyzing seasonal historical data, considering upcoming promotions and expected demands, and tracking fast-moving vs. slow-moving products to optimize stock levels. In the case of a stockout, you will have to set up a mechanism that immediately identifies products that have a low level of stock and that are out-of-stock in your store, so that both you and your consumers are aware of the current availability of stock. If you have dead stock, you can launch a promotion or a sale to clear it out and create space for in-demand products.Utilize Technology
A simplified tech stack can increase peak season shipping speed while improving order accuracy. It also delivers accurate data in real-time that can be integrated across multiple platforms. Before you begin peak season shipping, add the following technological elements to your supply chain:- Warehouse Management System (WMS)
- Inventory Management Software (IMS)
- Order management
- Supply chain management
- Automated order processing
- Returns management
Partner With a Trusted 3PL Provider
It’s difficult to meet seasonal demand on your own and leasing your own warehouse can be costly and time-consuming. From inventory planning to returns management, working with a 3PL like Ecom gives you access to premium technology and direct connections with major eCommerce systems. It’s never too late to include technology in your supply chain if you want to optimize it before peak season fulfillment. Partnering with a 3PL can make the hectic season a lot easier to handle by providing the following:- Ability to focus more on core business operations
- Fulfills orders on behalf of you
- Takes care of multi-channel sales orders
- Gives you multiple e-commerce warehouses and intelligent inventory placement
- Providing technological benefits and monitoring of your business from a single platform
- Take care of orders and settle transactions within a week
- Ensures same-day and next-day delivery
Utilize Multiple Shipping Carriers
You can increase your peak season shipping flexibility by using different shipping companies. However, collaborating with various shipping carriers can be time-consuming and it may cause you to fall below the minimum shipping threshold required to receive discounted shipping prices. Fortunately, a 3PL like Ecom Logistics can assist you by giving you the choice of a variety of regional carriers. This will allow you to optimize your shipping strategy without having to manage things on your own.Use Multiple Warehouses Across Different Locations
If you work with a third-party logistics company, you will be able to distribute inventory across different fulfillment centers, lowering shipping costs and shortening transit times in the process. It gains access to data tools and helps you determine which regions are generating the most sales, so you can improve your inventory allocation plan accordingly because every location is driven by the same technology. You can match consumer expectations by using a distributed inventory technique to offer competitive, rapid and economical delivery choices such as same-day or next-day delivery with a minimum spending threshold that exceeds your average order value (AOV).Calculate MOQs and EOQs
During peak season shipping, you need to have a good amount of inventory to fulfill the orders of all your buyers. Also, you must take care not to buy more inventory than is necessary to avoid your money being held up. To provide the ideal peak season fulfillment, you need to calculate the number of items you need to keep. There are two major ways to do so:Economic Order Quantity (EOQ)
The economic order quantity (EOQ) is a method used to determine the actual inventory quantity to order. It is calculated after taking into account product demand, unit pricing, and holding costs to assist sellers in figuring out the order quantity. The purpose of EOQ is to help sellers figure out how many products they need to meet demand without overordering and raising their holding costs. A seller must have a good grip on the following to make this method work:- Order costs – Cost per merchandise order
- Demand rate – Sold units during a certain period
- Holding costs – Expense for holding the product
Minimum Order Quantity (MOQ)
The minimum order quantity is a method used for calculating the amount of inventory a seller should order at any given time. This is for the sellers who wish to be careful with their ordering habits or want to maximize their cash on hand while avoiding excessive inventory storing and spending. There isn’t a set formula to calculate MOQ but a seller can calculate the right MOQ for their business by:- Calculating Demand
- Being Aware of Holding Costs
- Knowing the Breakeven Point
- Determining MOQ
Prioritize Your Peak Freight Shipments
Shipments can get delayed during peak season shipping. You need to inform your freight partner about boxes or containers that consist of higher-priority items. Before a shipment is rolled out, the relevant teams will be notified and they can help guarantee that higher-priority boxes or containers will be given extra importance. You can prioritize using a variety of factors such as securing prepaid orders first and then others. If you sell laptops and other peripherals, try to deliver the laptop primarily and other related products after that so that there will be fewer chances of order cancellation, RTOs, and unhealthy feedback. The idea is that your key product should be delivered first.Establish Reverse Logistics
By making the returns procedure as simple as possible for the customer, you can enhance brand loyalty and retain customers. A positive returns experience may also inspire your clients to exchange their items, allowing you to avoid losing a transaction. To ensure you are not losing money, make necessary changes to your return policy. Examine which products are getting the most returns, figure out why, and make modifications to the products to better meet expectations. Also, make sure you have a well-defined return and exchange policy in place that is easy to comprehend and accessible on your online store or product listings page at all times of the year.Summary
Preparing an e-commerce business for peak season shipping in 2023 involves addressing several challenges and implementing key strategies. Peak season shipping refers to the high-demand periods when fulfilling e-commerce orders becomes challenging due to factors like fast-paced order fulfillment, staff shortages during holidays, customer expectations for timely deliveries, the risk of product damage, limited warehouse space, and supply chain inefficiencies. To overcome these challenges and prepare for peak seasons, businesses can plan in advance, leverage technology such as warehouse management systems and inventory software, partner with trusted 3PL providers, utilize multiple shipping carriers, distribute inventory across different locations, calculate economic order quantities (EOQ) and minimum order quantities (MOQ), prioritize high-priority shipments, and establish efficient reverse logistics and return policies to enhance customer loyalty and minimize losses.
Why Partner with Ecom Logistics?
Ecom Logistics is a leading Canadian 3PL providing end to end logistics solutions to North American businesses since 2017. Headquartered at North york, Ontario, equipped with more than 250,000 sq feet of warehousing space and the latest fulfillment technology, we have proved to be a trusted partner for thousands of businesses for all their warehousing and fulfillment needs. We also offer complimentary logistics services such as inventory management, same day and next day delivery, Canadian, US and international shipping options, returns management, LTL freight and much more.
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