It’s never a good moment when an online retailer learns that a customer is unhappy with an order they’ve received. While this could be because the product isn’t what the customer expected, this is easy enough to fix with a hassle-free return and exchange policy.
But it’s much trickier when the problem relates to the fulfillment process. When merchants outsource fulfillment to a 3PL, they put faith in the providers’ ability to ensure everything gets delivered safely and accurately.
But this doesn’t always happen; incidents like damaged products, delayed delivery, or even incorrect items can seriously damage a brand’s reputation - even if it wasn’t your fault. According to Forbes, 69% of customers will jump ship to a competitor after just one negative brand experience.
The solution? Keeping partners on the straight and narrow with routing guides.
We’re here to explain what routing guides are in order fulfillment, and why they’re crucial for companies trying to build a loyal customer base.
Routing guides are sets of rules created by retailers for wholesalers, 3PLs, or distributors to follow during the fulfillment and shipping process. A vendor that provides shipping or fulfillment services needs to follow routing guides to ensure they meet the terms of their contract or SLA (service level agreement). Otherwise, third parties can be liable for damages or major penalties if it can be proven they didn’t follow the steps listed.
Let’s imagine that you’re a distributor. You’re in the warehouse and a new order appears in your OSM. It’s your job to process that order and begin the picking/packing process. Next, you’ll slap on a shipping label and send it off.
Seems simple enough, right?
Now imagine that you have 500 orders coming in - all at the same time.
It’s easy to see how a high volume of orders can complicate fulfillment and create more room for errors and delays.
Unfortunately, some distributors struggle to keep up with large order volumes, especially during peaks of high demand like the holiday season. For this reason, some choose to cut corners to alleviate pressure, sometimes creating less than ideal delivery conditions.
Yet when deliveries or damaged, delayed or even lost, it’s the retailer whose reputation takes a hit. To prevent this from happening, merchants use routing guides to ensure accountability.
This incentivizes distributors to achieve a high level of quality control, making routing guides a major tool for keeping their customers satisfied. It avoids customer care teams having to scramble to address escalating service issues - or handling nasty reviews written by their unhappy customers on the internet!
Furthermore, large-scale retailers who operate multiple locations require a high degree of consistency. Orders need to be packed, labeled, and shipped in exactly the same way, no matter which region or store they’re being sent to. If this process varies between or even within facilities, it can cause major operational issues, especially when processing return stock. By developing a routing guide, retailers can ensure that cross-country fulfillment operations are running the same way.
The contents of a routing guide can vary widely depending on the merchant, their inventory, and what selling channels they’re using. If they’re a cross-border retail operation, it’s likely that multiple routing guides will be in effect to meet the legal requirements of shipping to each territory.
Below are some common areas that routing guides will cover to ensure accurate fulfillment:
This is a battle that every merchant has to consider when developing routing rules. Faster shipping makes for satisfied customers - but it’s going to cut into your profit margins. Likewise, specialized packaging is great for raising brand awareness, but can add considerable cost per parcel. It’s important to weigh up alternatives to figure out which strategy gives you the best of both worlds.
The devil is always the details. If you require special labeling or packing for certain SKUs, you need to make sure that these procedures for this are listed within your routing guide. A good rule of thumb is to leave no stone unturned - if you’re wondering whether something you be included, the answer is probably yes.
As illustrated earlier in this post, lackluster delivery experiences can cause long-term issues for your brand. So, you need to set out a penalty system that discourages third parties from deviating from your routing rules. You can do this by deducting a percentage of the total invoice or a set fee (depending on the nature of the error).
One of the most challenging parts of order fulfillment is that things rarely stay static. Carrier rates change or seasonal surcharges can kick in with little warning. Paper-based guides hang around in distribution centers but can quickly become out of date, leading to inconsistent fulfillment processes. Using a web-hosted guide that you can update quickly and easily will avoid confusion and errors.
Once you’re routing guide is in place, you to need to have a method for checking that instructions are being carried out - rather than waiting for a customer complaint. Set an agreed-upon schedule for carrying out audits or test orders on a periodic basis.
The best way to ensure that your customers get what they paid for? Partnering with an experienced fulfillment provider. For retailers who aren’t familiar with the specifics of order processing and inventory management, outsourcing these tasks allows you to focus on building your business.
Business leaders should ensure that whomever they decide to work with uses top-of-the-line OMS and WMS that keep them organized and holds them accountable. You can find more insights in our guide on what to look for in a fulfillment partner.
Routing guides reflect that retailers have every right to clap back at distributors who don’t follow the fulfillment rules you set to create a positive experience for your customers. By following the steps above, you can create an effective routing guide that will help you to foster positive working relationships with your fulfillment and distribution partners - and faster, more streamlined order fulfillment.