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Posted: Tue Dec 17, 2024 8:16 am
The second important KPI to remember to ensure accuracy is order cycle time. This metric tracks the time it takes for an order to be processed, picked, packed, and shipped. In short, it’s the time it takes a business to complete the order fulfillment process, from when a customer places an order until the product is delivered to them.
Shorter lead times result in faster delivery, which will lead to higher customer satisfaction and repeat purchases. It has been proven that customers will return and are more likely to be loyal to your brand if they trust that their package will be delivered on time, every time. According to Forbes “The likelihood of selling to an existing customer is up to fourteen times greater than the likelihood of selling to a new customer.” Why spend your marketing budget on finding new potential customers when you can simply retarget the old ones who already trust your brand?
By focusing on reducing order cycle time, businesses can achieve significant stockholder database benefits that directly impact customer satisfaction and loyalty. This will keep customers coming back for more reasons than just your product.
Inventory turnover rate
The inventory turnover rate indicates how quickly inventory is sold and replaced in a specific period. A high turnover rate can indicate efficient inventory management and can help businesses avoid overstocking or understocking.
An example of an inventory turnover ratio is 4 to 6, which can be an ideal KPI for most food or e-commerce businesses. This ratio would mean that your company will not run out of stock, allowing you to meet customer demands, and at the same time, your 3PL will not have an unnecessarily high volume of unsold products.
How do you calculate your company's inventory turnover ratio? Depending on your industry, this ratio can vary. The inventory turnover ratio equals the cost of goods sold divided by the total or average inventory. This shows how many times inventory is turned over or sold. This formula can help you with excessive inventory levels compared to current sales. Your 3PL can help you with this at any time.
Shipping cost per order
Calculating the average shipping cost per order provides insight into the efficiency of your shipping operations. Businesses can reduce shipping costs and increase profitability by optimizing packaging, carrier selection, and shipping methods.
If your product is experiencing exceptional sales, but your shipping costs are disproportionately high, this can certainly hurt your chances of success. In fact, you may even find it difficult to break even if shipping costs are not managed effectively. Being proactive about shipping costs is a must for an eCommerce seller trying to maintain a healthy profit margin.
Shorter lead times result in faster delivery, which will lead to higher customer satisfaction and repeat purchases. It has been proven that customers will return and are more likely to be loyal to your brand if they trust that their package will be delivered on time, every time. According to Forbes “The likelihood of selling to an existing customer is up to fourteen times greater than the likelihood of selling to a new customer.” Why spend your marketing budget on finding new potential customers when you can simply retarget the old ones who already trust your brand?
By focusing on reducing order cycle time, businesses can achieve significant stockholder database benefits that directly impact customer satisfaction and loyalty. This will keep customers coming back for more reasons than just your product.
Inventory turnover rate
The inventory turnover rate indicates how quickly inventory is sold and replaced in a specific period. A high turnover rate can indicate efficient inventory management and can help businesses avoid overstocking or understocking.
An example of an inventory turnover ratio is 4 to 6, which can be an ideal KPI for most food or e-commerce businesses. This ratio would mean that your company will not run out of stock, allowing you to meet customer demands, and at the same time, your 3PL will not have an unnecessarily high volume of unsold products.
How do you calculate your company's inventory turnover ratio? Depending on your industry, this ratio can vary. The inventory turnover ratio equals the cost of goods sold divided by the total or average inventory. This shows how many times inventory is turned over or sold. This formula can help you with excessive inventory levels compared to current sales. Your 3PL can help you with this at any time.
Shipping cost per order
Calculating the average shipping cost per order provides insight into the efficiency of your shipping operations. Businesses can reduce shipping costs and increase profitability by optimizing packaging, carrier selection, and shipping methods.
If your product is experiencing exceptional sales, but your shipping costs are disproportionately high, this can certainly hurt your chances of success. In fact, you may even find it difficult to break even if shipping costs are not managed effectively. Being proactive about shipping costs is a must for an eCommerce seller trying to maintain a healthy profit margin.