Many e-commerce businesses use split shipments to expedite order fulfillment and send items from different warehouses. However, this can increase shipping costs and generate extra package waste, which is not only costly but also harmful to the environment.
Furthermore, customers may become confused and frustrated if they only receive a portion of their order, negatively impacting their experience with your brand.
The perfect way to avoid this is to use shipment consolidation, which allows you to reduce shipping costs while improving customer satisfaction. In this article, we will look at order consolidation, what it is, and how it can lead to happier customers.
Order Consolidation Definition
When you send out multiple individual items from an order in a single shipment, you are referred to as order consolidation. When multiple orders are sent to the same shipping address, they are consolidated into a single shipment and sent out at the same time.
This helps to reduce shipping costs while also reducing package waste and making sure that customers receive all components of their orders at the same time.
How can order consolidation assist you in providing a better experience for your customers?
Order fulfilment can be greatly simplified by consolidating your shipments. As a result, you can improve your fulfillment experience in a variety of ways.
- Decreased Shipping Fees and Time
When it comes to e-commerce shipping, two major factors influence the customer experience – speed and cost. The number one reason why 62 percent of shoppers have a positive retail experience is fast shipping speed. And, when it comes to shipping, 64.3 percent of US consumers say cost is the most important factor.
Both of these issues are addressed by order consolidation, allowing e-commerce retailers to deliver orders more quickly and at a lower cost. Because you don’t have to pay for multiple packages and shipments when you consolidate your orders, you save money on shipping.
Furthermore, because all items in the order are shipped out at the same time, you can fulfil orders faster and customers will not have to wait for specific items to arrive much later.
- More Environmentally Friendly Shipping
Because it uses less packaging material and fuel, order consolidation allows for more environmentally friendly shipping. More orders packaged and shipped together allow you to reduce your carbon footprint and the environmental impact of your e-commerce operations.
As more shoppers become concerned about environmental issues, you have the opportunity to positively influence how they perceive your brand.
Consumers, particularly younger generations, are increasingly selecting brands based on their environmental impact, and engaging in green commerce may help you reach out to this environmentally conscious group. On top of purchasing more environmentally friendly products, millennials are also purchasing from companies that make conscious decisions to protect the environment. Furthermore, 52% of consumers in the United States and the United Kingdom want brands to create products with less packaging.
As a result, consolidating your shipments is an excellent way to meet these consumer expectations.
- Simpler Shipment Monitoring
Order consolidation also enhances the customer experience by making it easier for customers to track their orders. Customers can easily track the movement of their order because all parts of the order are in the same shipment, eliminating the need to figure out which item belongs to which shipment.
Instead, by updating them on the transit status of a single shipment, you can set realistic and transparent expectations.
- Enhanced Order Accuracy
Consolidated shipments allow you to collect and review all orders prior to shipping them out. This allows you to quickly see if the order is complete and accurate before it’s ready for shipping, lowering the risk of sending out incomplete or incorrect orders, which could ruin the customer experience.
Order consolidation can improve order accuracy, which not only improves the customer experience but also reduces the need for returns.
What is the process of order and shipment consolidation?
Order and shipment consolidation necessitates effective collaboration among various fulfillment process players and partners. So, in addition to understanding how the process works, it is critical to adhere to best practices that will allow you to streamline and optimize your efforts.
- Collaboration with Reliable Partners
To successfully consolidate orders, you must work seamlessly with all parties involved. This could include business partners, fulfillment centers, and distribution companies. But, more importantly, you require a reliable shipping partner to professionally consolidate your shipments on your behalf.
Your shipping partner is critical to the entire process because they must ensure that the order is complete and accurate before packaging and delivering it to your end customer. This is why partnering with a professional 3PL that can also provide warehousing and picking and packing services is beneficial. This allows you to delegate the entire process to them, reducing the risk of disruptions or mistakes that may occur when there are too many parties included.
- Mutual Agreement on Procedures
To ensure the success of your collaboration, you must first determine and define the entire consolidation process. Outline who is in charge of what and how you intend to make your partnership work.
Will you ship the products to your shipping partner as orders come in? Will they be in charge of packaging and reviewing orders as they are consolidated? Or will you send them your entire inventory so that they can handle storage in addition to picking, packing, and logistics?
Agreements may differ depending on how you want to work and the level of service provided by your partners. As a result, it’s critical to thoroughly define everything up front in order to prevent problems from occurring.
- Careful Execution
Implementation is one of the most difficult aspects of order consolidation. With such a high risk of errors, delays, and disruptions, this must be carefully planned and spaced out to minimize the negative consequences. As a result, the order consolidation process is heavily reliant on testing various aspects of the operation.
As you get ready for implementation, you may want to conduct test transactions with various trading partners and shipping companies to determine which partners are best for your company. Before you finalize the process, this stage will also assist you in identifying any issues or potential improvements.
But don’t rush into final implementation because you still need to audit and review the test transactions for compliance and accuracy. You can then decide how to proceed, who to collaborate with, and how the process should work.