A disrupted and in many cases broken supply chain continues to be the bane of merchants everywhere, especially during the busy holiday shopping season. This holiday season has seen an extended shopping window, with 25% of shoppers starting their annual gift hunts in September, and continuing well into the new year as gift cards took the place of unavailable merchandise for many gift givers. For merchants, it is always a good time to make sure that your business is best positioned to ensure that your customers have the best possible shopping experience under the circumstances.
Good, clear communication is important with any relationship, and even more so between businesses and their customers. Don’t overpromise, but focus on overdelivering on what you do promise. If you do encounter a shipping or delivery delay, consider emailing the customer at regular intervals to let them know what’s happening; if you wait for the customer to reach out to you, research shows that the transaction is likely to turn into a chargeback. Also, be sure that inventory counts are in sync and updated as frequently as possible. Perform physical inventory checks on popular items to be sure that you have what you think you do and that all the goods are ready to sell. Always continue to seek out and develop new supplier relationships that can provide additional inventory as needed.
Directly drop shipping wholesalers or manufacturers is a proven way to streamline delivery to the consumer. But if the drop shipper is supporting multiple retailers in the same fashion, it can be even more challenging to stay current on inventory levels.
As difficult as cost-planning is, the potential for cost increases in both the cost of goods and inbound logistics is always just around the corner. Consumers will always be price-sensitive, but in today’s market, most shoppers will pay a higher price for a product that is guaranteed in-stock and ready to ship, vs. a deeply discounted price from a merchant who may or may not actually have it in stock. If you’re selling through marketplaces, be sure to consider additional delays that result in going through the operator as a middleman.
Overview by Don Apgar, Director, Merchant Services Advisory Practice at Mercator Advisory Group