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For most people, the holidays are a time for family and fun and maybe one party too many. If you are an eCommerce business, your holiday season is probably more hectic than ever. Red Stag Fulfillment thinks your year-end sales season should also be full of good cheer. After all, there’s nothing like making enough money to start your New Year in the black to put you in a good mood. The last thing you need is a holiday fulfillment center that throws a Grinch into your plans.

The test of any holiday fulfillment center is how well it serves its clients during the busiest sales months of the year. Here are five things for eCommerce sellers to think about when choosing a fulfillment center. Each should help ensure that your holidays are merry — and profitable.

Red Stag originally published this blog on November 1, 2016. We updated it with current information, supply chain understanding, and recent news on November 15, 2021.

1. Holiday fulfillment center staffing

You most likely started preparing for your holiday rush in the spring or summer. You tried to get inventory lined up, production scheduled, and promotions set to fire off at the right time. Depending on your supply chain, that even might have happened. You may even have added staff to help process holiday orders. But has your holiday fulfillment center prepped for the season?

If you’ve been operating your eCommerce shop for a few years, you probably have a strong idea of the cyclical nature of your sales. Your sales history gives you an idea of how much inventory you need to have on hand to cover your holiday orders. You’ve planned to have just the right amount of product: enough to fill every possible order but not so much that you will have a lot of inventory left at the end of the year.

Barring an unexpected viral shopping hit (and wouldn’t that be an excellent problem to have) or another significant supply chain disruption, your inventory is ready to flow out to your fulfillment center right on schedule. But what if the holiday fulfillment center hasn’t added the capacity it needs to process the surge in orders or adapt to disruption? Then, your other planning could go to waste.

Priming your fulfillment partner

Your insights about your business can help a fulfillment provider like Red Stag Fulfillment serve you better. Think about your typical year:

  • Do your weekly sales numbers double or triple in late November?
  • Is your largest spike usually around December 15?
  • Will that come earlier this year?

A top-notch holiday fulfillment center will want to know what to expect from your business. It will try to have enough staff to process orders on the critical days for eCommerce holiday shipping. They’ll also work with multiple carriers to help get your orders out the door. Ask your fulfillment center for an order processing guarantee and how it holds up during the holidays.

There’s nothing merrier than orders flying out the door as fast as they come in.

2. Holiday fulfillment center space crunch

You have calculated the ship dates that will get your products to your holiday fulfillment center in time to be ready as your orders come pouring in. But does your fulfillment center have space to accommodate the extra merchandise?

As customers of Amazon FBA know all too well, when everyone wants to pile on more inventory in the 4th quarter, holiday fulfillment centers can run out of space to store all that merchandise. Some, like Amazon, place limits on storage space or raise storage fees during the holiday season.

A shelf space shortage at your fulfillment center could leave your products sitting in pallets on the loading dock when they should be picked, packed, and shipped. Ask your holiday fulfillment center for a dock-to-stock time guarantee to ensure no delays occur because of warehouse stocking backlogs. After all, fulfillment center shelves that are chock full of your inventory and ready to ship to customers anywhere from Juneau to Johannesburg will warm eCommerce sellers’ hearts more than a frothy mug of eggnog. Learn about that an more with our holiday fulfillment survival guide here.

3. Fulfillment center inventory accuracy

Products may move off the pallets and onto the fulfillment center shelves, but you could still lose sales if your holiday fulfillment center inventory isn’t accurate. There’s nothing worse than a lonely 230-piece standard and metric mechanic’s tool set or a silver-tone pendant necklace on a 14-inch chain sitting unrecognized on the warehouse shelf. You can’t sell it, and your customer gets an out-of-stock message.

Merchandise that doesn’t make it into the fulfillment center inventory system might as well be lost. Ask your holiday fulfillment center for an inventory accuracy guarantee to ensure that every piece of merchandise you forward for fulfillment counts. As eCommerce sellers know, nothing makes a Christmas elf happier than shipping every gift to a new home.

4. Holiday fulfillment centers and shrinkage

Most order fulfillment centers contracts allow for inventory shrinkage of up to three percent. This means that the fulfillment warehouse can lose, break, or misplace up to three items for every 100 you send to them. During the holidays, when there is so little margin for error, shrinkage can hurt your bottom line and lose you sales and customers.

To make your holidays happy, look for a 3PL provider with a shrinkage allowance of zero, zip, zilch. Find one that guarantees that every item you send to the fulfillment partner will make its way into inventory and out to your customers. (Hint: Red Stag has just such a guarantee for its fulfillment center clients.)

5. 3PL accountability

No one is perfect. You, your vendors, and your customers make mistakes. A good business relationship means giving each other some latitude, catching errors quickly, and correcting them just as fast. During your busy holiday season, however, mistakes can be costly. Your customers need their orders to arrive both accurately and on time.

holiday fulfillment center santa speaking about supply chain issues

How much margin for error can you give your fulfillment center? Each error will cost you extra customer service time as you soothe frazzled nerves. Don’t disappoint Delores in Des Moines, who got the red one when she ordered the green one. Or there’s Peter in Portland, who ordered a small and got the large one. As every business re-learned last year, the worst is Simone in St. Louis, whose package didn’t arrive at all. And, here’s your guide to helping ensure these holiday shoppers become permanent fans of your store.

A fulfillment center that compensates you for every late shipment, mis-pick, or incorrectly labeled package is a 3PL provider with a solid incentive to get it right for you every time. That’s why Red Stag pays you for every mistake it makes. Our managers and team leaders take your orders as seriously as you do.

No one is perfect. But a fulfillment center with accuracy in picking and packing that exceeds industry standards can go a long way toward making your holidays merry and bright. So, this holiday season, may every click in the buy box at your online store end with money in your pocket and a happy customer who will buy from you again. An excellent fulfillment center is your best partner to make this happen. And ask for someone with enough experience and honesty to discuss what’s gone right and wrong in the past. To help you get started with that analysis, here’s our take on fulfillment during the 2020 holiday season.

click to read eCommerce peak season lessons