Basically, ecommerce operations are the combination of the inner workings needed to sell products online.
Across any industry, operations is the backbone of the organization and the function that gets things done. And when it comes to ecommerce, there’s a lot that goes on behind the scenes.
It’s one thing to sell a high-demand product, it’s another to get it into the customers’ hands.
Here is an overview of the primary areas of the operations involved in running an ecommerce business.
As an essential part of your ecommerce operations, order fulfillment refers to the warehouse picking and packing stage of the order. Once orders are placed and processed, the correct items must be located, then picked and packed before shipment.
The complexity of overseeing fulfillment depends on the size of the business, the order volume, the number and size of SKUs they sell, and the number of warehouse locations from which orders are shipped. Choosing between managing in-house fulfillment or partnering with a third party logistics company also affects how you will manage fulfillment operations — especially when it comes to cost.
For instance, fulfilling orders in-house can lead to leasing a long-term warehouse, paying for storage, forklifts and other equipment, technology, recruiting and labor, and many hidden fulfillment costs. Shipping carriers might not offer shipping discounts if your order volume is too low too.
The bulk of the ecommerce shipping process involves processing the order, picking and packing it, and shipping it out to the delivery destination. But collectively, shipping logistics involves first-mile delivery — having inventory shipped from the supplier to one or more distribution centers.
Then you have last-mile delivery which refers to the actual process of transporting shipments and getting them to your customers on time.
To run an efficient ecommerce operation, you also need proper inventory management processes and technology. Since inventory is constantly moving, being able to track inventory in real time (across locations) is a necessity.
Real-time inventory management software helps automate and streamline the inventory management process by tracking inventory levels, orders, sales, and shipments. It can also help automate inventory tracking across channels and warehouses, saving time and preventing human error.
Along with inventory management, warehouse management involves overseeing the operations within an ecommerce warehouse if you manage one, from equipment to personnel.
Warehouse management processes include receiving storing, and tracking inventory, monitoring the movement of finished goods entering and leaving the warehouse, as well as overseeing the efficiency of warehousing processes.
An ecommerce customer service team plays a major role in a business’s operations as a whole. For instance, the first thing customers will do if they have an inquiry about an order is contact customer service. The customer service team must have an understanding of any fulfillment or shipping delays, promotions, and the company’s shipping and returns policy.
Returns also start with customer service. If a customer needs to make a return, the customer service team works with the customer to process the return and makes sure that the product gets shipped back and a new order is shipped out right away if the customer initiates an exchange.
From balance sheets to inventory write-offs, keeping track of your brand’s financial transactions and ensuring your books are in order are essential parts of your ecommerce operations. For ecommerce businesses, inventory is the most important (and often valuable) asset, which means any discrepancies in inventory counts can impact your bottom line.