Selling nutritional supplements online is a competitive business because consumers are smart. Most know with a quick search the same product can be found at similar or better prices. Yet, it’s not all about price. Transit time and shipping costs are factors buyers care about too and consider as part of their decision. Keeping this in mind, online retailers must be tactical in how they keep customers on their website through that final crucial step of checking out.
On the flip side, retailers can’t give away too much just to make a sale and have to protect their margins. Selling on price alone is a race to bottom, so what’s a retailer to do?
For a leading online marketer of nutritional supplements this was a familiar story. To them it was painfully clear their rate of cart abandonment was too high. The goal had to be to take steps for keeping customers on their site while looking for other ways to drive costs out of the supply chain and increase margins. What was not so clear was what to do about it.
Looking to take this challenge head on, the retailer took a deep dive into their supply chain and order fulfillment processes. This research led them to three main conclusions.
1 – High shipping costs and slow delivery times were the primary causes of cart abandonment on the site.
2 – Margins could be improved with better cash flow and reduced lead times by way of tighter inventory control.
3 – Implementing real change would require an upgrade in their supply chain expertise and technology.
The solution to these challenges became a reality by partnering with a new ecommerce order fulfillment provider, Kable Fulfillment.
Shipping costs and delivery times are mostly determined by where an order ships from, making a shipping point in the central U.S. a big advantage for retailers. Leveraging Kable’s strategic location and volume shipping discounts, the retailer was able to reduce their shipping costs by 28% and reduce average deliver time to its customers in the eastern U.S. by 2.5 days. These are ongoing savings that benefit their operation by way of lower costs as well as improved customer satisfaction thanks to faster delivery times.
Better inventory management positively impacts operating costs and cash flow by ensuring the right amount of product is always in the right place, at the right time. Kable’s fulfillment and warehouse technology provides the customer with robust inventory reporting tools and program data. The tools at the client’s disposal include trigger “alerts” by SKU as a given item’s inventory hits a particular threshold. The result? The client has reduced their average Cost per Order for fulfillment by 14%.
By working with an experienced fulfillment partner, the retailer is able to benefit from the collective experience of an organization whose sole focus is to make supply chains work better. The pressure on all types of online retailers to sell for less and deliver faster is not going away. Kable Fulfillment offers simple, cost effective solutions to reduce problems like cart abandonment and high shipping costs – which helps to ensure our customers remain competitive in the marketplace.