Comparing fulfilment providers on up-front price alone can often cost you more in the long run. Because when fulfilment starts getting noticed by your end customers, retention drops and negative reviews begin to surface online.
Poor fulfilment performance isn't just an operations problem. When things aren't going as planned, your customer service teams will be hit with more tickets, buyers won't return as often and your reputation will be damaged for all to see.
Let's unpack why the cheapest fulfilment option isn't always the best choice for a growing brand with strategic ambitions.
Delivery and returns are frontline customer experience
Consumers worldwide now view fulfilment as a core part of the brand experience, including delivery, tracking and returns.
- Delivery performance is now a strategic differentiator for retailers, with loyalty and repeat purchase increasingly hinging on speed, flexibility, and reliability
- Customer expectations around speed are high, with many shoppers expecting next-day or 48-hour delivery as standard
- Returns are part of the price of entry: around one in five (19.5%) products are returned in the UK, and bad return experiences drive churn
For growing brands, this means that fulfilment is part of the entire post-purchase experience, not just a back-office necessity for you to get orders from A to B.
The real fulfilment customer service problems that impact CX
Let's look into how fulfilment issues impact the overall experience.
WISMO tickets (Where Is My Order?)
If tracking is slow or inaccurate (or even worse, non-existent), customers have every right to flood your support team with "Where's my order?" queries. Give your customers control over their post-purchase experience, and that's hundreds of avoidable tickets gone that your support team no longer has to deal with.
Mis-picks, damage and delivery failures
Customers don't care why an item arrives wrong or damaged, they just care that it did. Mis-picks, poor packaging and mishandled parcels create refunds and resends, meaning no revenue retained. Now, bad delivery isn't necessarily the fault of your fulfilment provider, but it's a good sign if they have measures in place for protecting your reputation when things go wrong.
Stock inaccuracies
Overselling or keeping excess inventory tied up in warehouse space often comes down to the tools at your fingertips. If you're not able to sync inventory in real-time or take advantage of forecasting systems, you'll experience more cancelled orders, apologies and discounts. Not only do these things eat away at margin, but they also damage trust over time.
Returns and loyalty
Returns are a defining part of post-purchase fulfilment. Customers are more likely to come back if the returns process is easy and clear. When you grow globally, it's important to facilitate a local returns experience that doesn't eat too heavily into your margin. If returns are simple and fast for customers, you'll recoup the lost revenue of returns in repeat purchasing.
The hidden cost-to-serve of cheap fulfilment
A huge factor in any operational decision is cost. Where fulfilment is concerned, growing businesses need to look beyond comparing just pick and pack pricing, and instead focus on overall cost-to-serve.
Let's look beyond headline rates:
The visible costs
- Pick and pack rates
- Storage fees
- Courier charges
Hidden (and often larger) costs
- WISMO support tickets (staff hours and queue delays)
- Refunds and reships
- Discounts for unhappy customers
- Negative reviews and social complaints
- Reduced repeat purchase rate
- Lost lifetime value
Cheap units look good on paper, but the overall cost-to-serve of repairing broken experiences adds up fast.
Fulfilment + tech + visibility = Better service and faster growth
This is where the narrative can flip. Better fulfilment, even at a slightly higher price point, can often cost less overall because it results in fewer issues and more repeat business.
Even though your customers might not feel it directly, technology plays an active role in improving fulfilment and the overall consumer experience. Whether it's more accurate forecasting, better tracking, improved carrier selection, stock localisation or smarter reverse logistics, these capabilities all contribute to reduced inbound support volume and customer happiness.
How to tell if fulfilment is costing you more than you think
As well as considering your fulfilment provider's up-front price card, it's also vital to start measuring outcomes. Here are five questions to ask if your brand has big growth ambitions:
- What % of orders have tracking data that customers can access in real time?
- How many WISMO tickets hit support per 1,000 orders?
- What is your monthly pick and accuracy rate?
- How quickly and easily can customers return and refund orders?
- Do your fulfilment performance metrics feed back into CX analytics?
If you can't answer these confidently or positively, your customer experience might be at risk.
What to consider when choosing a new fulfilment provider
As we've touched on, up-front cost isn't the only thing to consider when choosing your next fulfilment provider – but overall cost-to-serve is.
For example, a provider with a wide network of warehouses may cost more up front to work with, but they're more likely to position stock closer to your customers worldwide, reducing shipping costs and providing a more local customer experience.
It may also cost more to invest in better technology, but this tech will support you across a range of key reputation-enhancing fulfilment functions.
In the end, everything boils down to:
- Where you currently stand as a business
- What you want to achieve in the coming years
- Overall ROI of functions offered by each provider
- Pick and pack cost versus overall business model and cost-to-serve
It's vital to take these into consideration when you're assessing new providers, thinking of the future as well as what you're currently servicing today.
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By Ryan Johnson
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