A Comprehensive Guide to Delivery Management: How to Improve Your Delivery Systems
Fast, reliable, and consistent delivery creates an unforgettable post-purchase experience.
As an e-commerce operator (and not a carrier), you may wonder: Do I have much control over delivery operations?
The answer is yes. In this rapidly growing industry, there are countless ways to improve the delivery process, especially with the right systems in place.
In this article, you will learn why delivery management is essential for business growth and how you can improve your delivery strategy to meet customer expectations.
What is Delivery Management?
Delivery management is the process of overseeing the transportation of finished goods from one location to another.
For e-commerce businesses, it means optimizing last-mile delivery for shipping customer orders and ensuring they arrive on time and undamaged. Since online shoppers expect a perfect delivery experience every time they order, proper delivery management is crucial for retaining customers and maintaining profit margins.
Why is Delivery Management Important?
With ever-increasing customer expectations, on-demand logistics solutions have become a vital part of the supply chain.
Online retailers feel the pressure to deliver customer orders quickly to enhance brand loyalty and stay competitive.
Delivery management starts with a strong logistics execution strategy. The fulfillment experience involves selecting, packing, and shipping orders through the fastest and most cost-efficient routes.
However, without the proper fulfillment infrastructure and supply chain technology, delivering orders quickly and accurately can be challenging.
Key Challenges in Delivery Management
Delivering customer orders to their doorsteps intact and on time is more complicated than the average consumer might realize. In fact, e-commerce brands face several challenges in managing deliveries.
Inventory Management Issues
To fulfill and deliver orders, inventory must be in the right place at the right time. If a brand struggles with stockouts or can’t balance inventory levels across its fulfillment network to meet demand, they won’t have the products ready to fulfill an order when it comes in. This results in backorders and delays in delivering orders to customers.
Proper replenishment timing, real-time inventory tracking software, and accurate demand forecasting can help brands avoid inventory management issues and ensure timely delivery.
Increased Demand for Fast and Efficient Delivery
Like it or not, one- or two-day delivery has become the new standard for e-commerce. According to a recent report, 90% of consumers consider delivery within 2-3 days as the minimum standard, with 30% expecting same-day delivery options when shopping online.
This expectation can place smaller brands in a difficult position. While express shipping is expensive and can eat into a merchant’s profit margins, small brands may not have the capital to operate a network of strategically distributed warehouses to minimize shipping costs and times.
That’s why many small e-commerce businesses choose to partner with logistics platforms like Fastcoo. Top-tier fulfillment and shipping partners can help your brand distribute inventory near customer hubs for faster, more affordable shipping without the hefty price tag.
Increased Competitive Pressure
E-commerce giants like Amazon continue to turn delivery into a competitive advantage. Whether offering free two-day shipping on all online orders or a wide variety of delivery options (same-day, next-day, or even in-store pickup), major retailers and e-commerce platforms have the logistics network and resources to meet customer expectations on a large scale.
The Rise of Cross-Border E-Commerce (and its Complications)
E-commerce is a global industry, and brands are no longer limited to selling to local customers. Merchants now have the option to launch their brands in international markets, reaching millions of new customers and demographics.
However, with new opportunities come new challenges. The desire for fast, affordable shipping is universal, but international delivery often comes with long wait times and high shipping costs. Additionally, the geopolitical landscape is constantly changing, and these changes and challenges often affect international shipping and delivery.
By building a resilient and agile supply chain, merchants can navigate the global e-commerce market smoothly. By establishing local fulfillment and shipping operations in the countries to which they ship, brands can avoid many of the complications of cross-border trade, such as customs duties and taxes.
Customer Expectations and Complaints
According to a 2022 study, 85% of online shoppers stated that a single negative delivery experience with a brand would prevent them from purchasing from that brand again in the future.
While some customers may forgive a brand for an occasional mishap, if your delivery management strategy consistently results in lost, damaged, or undelivered orders, customers are unlikely to stick around. Worse yet, they might leave negative reviews online and discourage other consumers from making purchases.
How to Measure the Efficiency of Your Delivery Management System
Now that we understand why a delivery management system is important, especially with rising customer expectations, we invite you to take a closer look at your delivery management system to determine how efficient it truly is.
Monitor Delayed Deliveries
How often are there delays in your delivery system? Delivery exceptions happen occasionally due to bad weather or road construction, but identifying the cause is a crucial part of delivery management. If delays occur frequently and are within your control, it might be time to step back and reconsider your options.
Documenting delayed deliveries can help you identify patterns if they exist. Or, you can compile a list of the most common causes, which is the first step to solving these problems, especially if they happen regularly and are within your control.
Know Your Average Time per Delivery
Your average time per delivery can depend on many factors, particularly your customers’ locations. If you consistently ship locally and your clients benefit from free two-day shipping, that’s one thing. However, if you ship across the country or internationally, you should pay closer attention to your average delivery time. This helps customers know what to expect and allows you to address delays and work on reducing shipping times.
Calculating your average time per delivery is simple: add up the total days it took to deliver separate items and divide that by the number of deliveries. If you handle thousands of deliveries, you can consider taking a random sample of ten or one hundred deliveries or any other manageable number to add up. Some businesses use business days, but with some shipping carriers operating seven days a week, you can include those as delivery days.
This process is much easier if you partner with an e-commerce enablement platform like Fastcoo, which tracks key delivery metrics for you. Through Fastcoo analytics dashboard, merchants can see what percentage of their orders arrived within a specific delivery window, as well as the average transit time for various shipping methods.
Track Your Average Delivery Cost
It’s no surprise that free two-day shipping has spoiled customers, and competing with that as a business can be very difficult. That’s why knowing your delivery speed and costs is essential to remain competitive.
Similar to your average time per delivery, you’ll need to add up the costs of each delivery and divide them by the number of deliveries.
For instance, suppose you have 10 deliveries this week, each with varying costs. Add all those costs together to get the total, then divide by ten (the number of deliveries). This will give you the average cost of your deliveries during that time frame. With this information in hand, you can analyze your spending and work on reducing costs without sacrificing transit time, of course.
You can also dive deeper into delivery cost data for more insights. For example, Fastcoo dashboard can show your brand’s average shipping cost by state and shipping method, and even track average fulfillment costs (which you can choose to include or not in total delivery cost).
Track Your Customer Satisfaction Score
Feedback is one of the most valuable resources for business owners. Sometimes feedback can rejuvenate your business, while criticism can be a major blow to your enthusiasm and profits. However, knowing what people are saying, whether good or bad, can help set you up for success. When someone leaves a negative review, you can directly address their complaint and also tackle the root of the problem before it happens again.
It’s clear that a robust delivery management system is one of the core pillars that can drive the success of any e-commerce company. Whether the goal is to increase customer retention, improve operational efficiency, or reduce costs, investing in advanced and effective delivery management systems like Fastcoo allows businesses to stand out in a highly competitive market. By managing operations properly and leveraging advanced technology, you can deliver an unforgettable shipping experience that boosts customer satisfaction and supports business growth.
