Fulfillment error rates are a vital metric for your eCommerce fulfillment. Every fulfillment mistake has the potential to harm your business. Of course, no fulfillment center is perfect—everyone makes a mistake sometimes. But Red Stag Fulfillment strives for perfection and achieves fulfillment error rates much lower than the industry average. Here’s how we do it.
Typical fulfillment error rates
Average fulfillment error rates in the logistics industry are 1% to 3%. But that’s not how consumers experience fulfillment mistakes. An individual order is 100% wrong, not 1%. And ordering online is easy, but packing up items and returning them can be a hassle for your customer. In some cases, 3PLs ask clients to accept an error rate of up to 4%. The typical fulfillment error rate results in a mis-packed or incorrectly shipped order one to three times for every hundred packages shipped.
Red Stag Fulfillment works hard to keep its error rates as low as possible. Our current accuracy rate is 99.976%, which translates to a fulfillment error rate of 0.024%. That equals just three fulfillment errors for every 12,500 packages RSF ships.
RSF strives for 100% accuracy and we get very close. In fact, our typical error rate is even smaller than our current figure. That statistic is based on fulfillment error rates during 2020 Q4 and 2021 Q1, as we worked through a pandemic holiday season. In addition, the bulk of the glitches reflected in that figure occurred when a carrier picked up two pallets of boxes that were supposed to ship with a different delivery service. We still take responsibility and include that in our fulfillment error rates—that’s how much we care.
How Red Stag Fulfillment reduces fulfillment errors
For every 12,500 packages a typical order fulfillment company ships, between 125 and 375 will have an error. There could be items left out of the box, the wrong product picked, or shipping labels could get mixed up, so two customers get each other’s orders.
RSF keeps that number to three (or fewer) mistakes for every 12,500 packages because we designed our warehouse systems and processes to maximize accuracy without sacrificing speed. Here are a few of the things we do to reduce fulfillment errors.
Red Stag Fulfillment’s accuracy guarantees mean that you will never be out of pocket for our mistake. If we mis-pick or mis-ship an order, we fix the problem plus pay you $50. If we fail to ship an order on time, we pay you $50. And, if any of your inventory is damaged or lost while it’s on our shelves, we reimburse you for the wholesale price of the item.
Of course, we’re not in the business of handing out $50 checks; we prefer not to make mistakes in the first place. In our RSF warehouses, accurate fulfillment is job one for our excellent staff and management.
Incentives for employee accuracy
RSF warehouse workers can earn bonuses for error-free fulfillment. The longer someone goes without an error, the higher their compensation. That incentive system has allowed us to attract and keep a skilled and experienced staff that provides top-notch fulfillment services.
Redundant order processing systems
Everything in an RSF warehouse is barcoded: SKUs, locations, packing labels, bins, and more. The picker scans the code for the container where they will collect items for an order. As each item goes into the bin, it gets scanned. The bin gets scanned, too, ensuring that products stay with the correct order. If a picker tries to place something in the wrong container, the warehouse management system alerts them to the error and stops processing until it goes into the correct bin.
At the packing station, the packer scans everything one more time to check that the products match the packing list. These redundant systems make it hard for fulfillment errors to get to the shipping station, and that helps RSF keep our fulfillment error rates low.
24/7 warehouse monitoring
RSF can offer a zero shrinkage guarantee because we have eyes on every corner of the warehouse at all times. Any time an error does occur, whether it’s a damaged item or a mis-picked order, we review the footage to find out exactly what happened.
Continuous process improvement
Reviewing the video of exactly when and where a fulfillment error occurred allows us to provide additional training or improve our processes. Our culture is one of continuous process improvement. After all, the world changes all the time, as do the needs of our clients, so we keep adapting to maintain our low fulfillment error rates.
How fulfillment errors affect your eCommerce business
Mistakes cost you in returns and customer service time, but that’s just the beginning. If your fulfillment error rates are too high, it can cost your business more than you might realize.
Costs of customer service and returns
The most obvious cost of fulfillment errors is the immediate hassle of fixing the problem. The higher your fulfillment error rates, the more customer service staff you need to fix the issues. Plus, there’s the cost of return shipping and re-shipping the order. That’s money out of your pocket. But that’s just the beginning of your problems.
Poor customer experience
With exemplary customer service, you can turn even a fulfillment mistake into a positive experience. But no matter how skilled you are at mollifying angry customers, you’re going to end up with some unhappy shoppers when orders ship wrong. That can lead to negative reviews and worse.
More customer churn
It costs more to attract new customers than retain your current customers, so churn is a marketing expense. When fulfillment errors leave customers unhappy, you’ll have to work harder and spend more money to acquire new ones.
In the long term, fulfillment error rates can reduce your profits. The extra money and time you spend on returns, customer service, customer acquisition, and damage control could have gone into customer retention campaigns, product development, or other improvements. And shrinkage can significantly increase your cost of goods sold and lead to unexpected stockouts.
In addition, poor quality fulfillment can hurt your business in ways that are harder to quantify. When orders arrive later than expected or are poorly packed, that makes your brand look bad, even if the correct items are in the parcel.
Low fulfillment error rates give you the flexibility to run a lean business with less staff and lower overhead. Paying a bit extra for accurate fulfillment is an investment in your business that will pay off over time.
What impact do fulfillment error rates have on your business?
At Red Stag Fulfillment, we’ve been able to save clients money by reducing their inventory shrinkage and improving their on-time order delivery. We are in the business of helping our clients grow and scale, so we treat your business as if it were our business. And, in our business, we want every order to be accurately picked, perfectly packed, and shipped on time.
How do fulfillment error rates affect your business? Give us a call, and let’s see what we can do to help.
More about RSF’s accurate fulfillment:
- How Much Is Shrinkage Really Costing Your Company?
- Affordable Fulfillment: Understanding Total Fulfillment Value
- Red Stag Fulfillment Is Proud to Support Oatly’s Continued Growth