Now that eCommerce companies have finally managed to dig themselves out of the holiday sales boom and increased holiday returns deluge, this month is a perfect time to look at an operations report card for 2021, especially the holiday season. Take stock of what occurred, how you’re doing, what worked, what failed, and what issues you’d like to address and avoid.
For us here at Red Stag Fulfillment, we’ve got one main question for you: How would you rate your fulfillment company for 2021? If you think back to those grade school days, how would you fill out their report card, and are you satisfied with the number of As and the areas of “needs improvement” you’re seeing?
Here are the metrics, or “subjects,” we suggest you review to rate a 3PL or in-house fulfillment process, and some information on where Red Stag stacks up.
Fulfillment Report Card 2021
Punctuality is essential. 3PLs and in-house fulfillment can’t guarantee a carrier will deliver on time, but they should never create delays in order processing and shipping. On-time shipments protect your revenue and keep customers happy, so it should be among the best grades of any fulfillment operation. Rate your operations or partners on the specific on-time shipment metric because that’s what matters most to your buyers.
Red Stag’s grade: A
Red Stag met our on-time shipment SLA 99.965% of the time in 2021. That includes a 99.959% on-time rate in December, our busiest month. When orders are on time from us, they’re more likely to be on time for your shoppers.
The wrong item in the wrong box means lost revenue and refunds or replacements. Nothing is worse for profitability or your brand reputation. Orders should be correct every time, with no excuses. Companies should use the straightforward metric of accurate orders and insist that any fulfillment provider helps absorb the costs of mistakes. For many, this is the most important score on a fulfillment report card.
Red Stag’s grade: A+
99.976% of orders left our warehouses correct and accurate during the peak in December, helping us achieve a 99.993% accuracy rate for all of 2021. Scanning orders multiple times during the pick, pack, and ship process helps our teams keep getting it right. Red Stag stands behind our capabilities and fixes any mistake while ensuring you don’t pay for those shipments.
LTL and FTL
Order volumes and inventory needs are changing for eCommerce brands. That often means a greater need for less-than-truckload and full-truckload freight shipments. Your 3PL should help you with these moves, whether they’re part of a sale or inventory balancing. Measure success on how available these options are, their cost, and the speed at which you can order the service.
Red Stag’s grade: C
We don’t specialize in LTL or FTL moves right now and recognize that it’s an area of improvement for us. We’ve brought on a new Director of Logistics to help us facilitate these moves and increase their availability for our partners even during these uncertain supply chain times. Red Stag can support these moves as customers need, but we’re hoping to offer them as a standard service in the near future. We can and will get better.
Two-day shipping reach
The “Amazon Effect” has led to customers expecting two-day shipping offers from nearly every eCommerce store. Fulfillment operations and locations determine if you can offer this to customers successfully and affordably. Reliability at speed is the heavy lifting of eCommerce fulfillment that Red Stag aims to take care of for our partners.
When you want to judge these capabilities, ask yourself: Can you meet your customers’ expectations?
Red Stag’s grade: A-
Our current Knoxville and Salt Lake City facilities enable us to reach more than 95% of homes in the continental U.S. with two-day shipping coverage. That means your customers can get products at the speeds they demand. We know there’s room for improvement, so we’re currently building out our Sweetwater warehouses and looking into other markets for greater distribution coverage. Not only do we expect this to speed up our last-mile fulfillment, but it should improve inbound costs and capabilities.
Loss and damage
Your business suffers whenever goods are damaged in transit or go missing from the warehouse. ECommerce companies shouldn’t have to eat the cost when fulfillment makes this kind of mistake. Grades here depend on a few things. First, companies should be able to receive your goods and add them quickly to inventory counts. This must be fast and accurate for it to be useful for your business. Then, take away points for shrinkage experienced within the warehouse as well as damage occurring in transit due to poor packaging.
Red Stag’s grade: A+
We maintained a 99.991% inventory accuracy report for our clients in 2021 and made partners whole whenever we missed our zero-shrinkage guarantee. For December 2021, we achieved a 99.997% inventory accuracy for all items in and passing through our facilities. We treat every SKU like it’s our favorite. It’s what your products deserve.
No two businesses are the same, so every fulfillment solution needs to offer a mix of extracurricular and add-on services. Getting what you need and want from a partner helps you know they’re the right fit. Just like you picked between band, art, foreign languages, and more, ask for a selection that makes the most sense for your business. Adjust your fulfillment report card accordingly. Grade your fulfillment based on their ability to offer what you need and then on how they execute those extracurricular capabilities.
Red Stag’s grade: B+
Let’s take a minute to be transparent with you. Red Stag Fulfillment is not the best choice for companies with lightweight products and high SKU counts. We’re not set up for it. Specializing in big, heavy, and high-value products means that our warehouses are designed in a certain way with large racking, wide bays, and lots of forklifts. Red Stag has the right set of extracurriculars for those kinds of products, but when it comes to nail polish and customized coasters, we’re that kid in the choir who can’t carry a tune.
Integrates well with others
Few eCommerce companies sell on a single channel, let alone use one piece of software for shopping carts, order management, carrier selection, payments, and much more. Fulfillment partners should integrate with your favorite tools and channels to ensure orders move swiftly and customers stay happy. Not only should fulfillment be rated on the ability to integrate, but the grade should depend on support for when things go wrong, testing for new opportunities, and a willingness to work with everyone in the class.
Red Stag’s grade: B
Red Stag’s warehouse management tool has a native plugin for Shopify, direct integration with carriers, and greater support for Magento and CartRover. There are API and middleware providers with a proven track record of support for dozens of other platforms and tools. However, we know there are always more tools and new demands, so Red Stag is working to improve our WMS offering and minimize the complexity inherent in getting all these tools to talk.
Finals month: December 2021
Red Stag’s grade: B+
While December came with a 99.959% on-time rate and 99.976% order accuracy, it was actually one of our lowest-performing months. That’s still far above industry averages, but we know this is an area where we can improve. For us, this was that moment when the teacher gave you back a good grade, but they took a moment to narrow their eyes and tell you that they know you could’ve done better on the test.
So, we’re making a commitment to ourselves and our partners to do better. We’ve got big plans for next term, and hope you’ll join us to see what’s possible.
Red Stag’s 2021 score
Don’t let a failing fulfillment report card hold you back
The most important thing for a fulfillment report card or 3PL evaluation is to let you know where things can be improved or when it’s time for a change. If your partner or in-house operations are failing, you don’t have to stick with them in 2022. Or, if you’re looking at a few areas of improvement but good grades overall, it’s time to have a conversation with your partner. Just like a parent-teacher conference, you want to get specific, be serious, and define straightforward ways for things to get better. Then, it’s up to your 3PL to do the hard work and improve.
We’ve shown you how Red Stag stacks up with our 2021 metrics and 2022 aspirations. Now it’s time to see how you’d rate your 3PL with the fulfillment report card below.
Download your own 2021 Fulfillment Report Card