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What Are the Ways for Retailers to Reduce Fulfillment Cost?

Jan 13, 2023

By 2023, it is predicted that B2C e-commerce sales will have surpassed $4.5 trillion or nearly twice as much as they did three years back. E-commerce will never go away, whether you like it or not.


The continued growth of e-commerce makes it challenging for companies to keep the cost of order fulfillment in check. Retailers must find ways to cut these costs to stay competitive in the market because even though the costs of picking, processing, picking, and shipping each order are continuously rising, these orders’ intrinsic value and profit-making potential are declining. Retailers can benefit from some ways, which will help them to optimize their fulfillment processes and save a lot of money. 


Being a retailer, if you also want to lower your order fulfillment costs, then read this article.


Let’s start then!



E-commerce fulfillment

What is E-commerce Fulfillment?


The management, processing, and delivery of online orders from the seller’s hub to the customer’s door is called e-commerce fulfillment. The process of fulfilling an order includes some steps such as picking, packaging, shipping, and returns management. 


Ways to Lower Order Fulfillment Costs


Now, let’s see the various ways to reduce order fulfillment pricing


#Way 1: Instruct Customers


In the past, customers used to make a list of items they needed before going to the store. Today, customers do not make any lists of items. Instead, they rely on Amazon Prime for fast delivery options.


For example, a customer purchases face wash on Monday, face serum on Tuesday, and face moisturizer on Thursday online. The customer didn't realize they were running low on these necessities, which caused the gap.


The retailer can cut down on micro orders by implementing order policies that encourage customers to make bigger purchases. 


#Way 2: Adopt Automation


If your operation is not profitable enough, full or partial automation may be the solution. The automation of repetitive tasks frees workers to concentrate on more valuable services, resulting in lower labor costs. 


#Way 3: Consistently Maintain Retail Inventory


When retailers handle fulfillment, the warehouse can be a sizeable overhead cost because more inventory necessitates more space. Ample time and ongoing improvement are required for effective inventory management optimization.


To improve inventory management, Electronic Shelf Labels are useful for revealing product prices. It is very helpful in turnover. As a result, the overall order fulfillment cost is reduced.


Why Electronic Shelf Labels?


Because of the internet, people's shopping habits have changed. So, it's common for customers to check an item's price while inside a physical store.


They lost trust in a company when rates did not match the online display. But through the use of ESL, that interaction can be changed, resulting in one standardized pricing system that eliminates the disappointment caused by price variations.  And, consumers can believe you when you claim to have the best price by displaying competitors' prices online.


To Wrap Up


We have mentioned the 3 ways to reduce fulfillment pricing. Moreover, if you are looking for upgrading your inventory management, Use Electronic Shelf Labels (ESL) and lower the cost of order fulfillment.