Essential E-commerce KPIs

Essential E-commerce KPIs

Essential E-commerce KPIs: What they are and how to calculate them.

In the increasingly competitive landscape of e-commerce, successful businesses aren’t leaving crucial business decisions up to chance. They are committed to tracking and evaluating key performance indicators (KPIs) to measure the progress and profitability of vital business operations. Simply put, KPIs are metrics that help measure the performance of a specific area or activity within your business. By tracking a few essential e-commerce KPIs, you can gain valuable insights into your e-commerce business’s performance and identify areas that need improvement. This post will take a closer look at the essential e-commerce KPIs and why they are important.


Customer Acquisition Cost (CAC)

The customer acquisition cost KPI measures the amount of money you need to spend to acquire a single customer. The CAC metric evaluates the total sales, marketing, and overhead costs required to gain a new buyer during a specific time period. By tracking CAC, you can gain insight into how much you spend to attract new customers. How to calculate CAC:

Essential E-commerce KPIs

Average Order Value (AOV)

AOV measures the average amount of money your customers spend when purchasing from your store. You can gain insight into how your pricing and promotions impact customer spending by tracking this KPI. You can also use this KPI to identify which products are most popular and which ones are not. How to calculate AOV:

Essential E-commerce KPIs

Customer Lifetime Value (CLV)

CLV measures the total amount of money a customer will spend at your store throughout their lifetime. By tracking this KPI, you can gain insight into how valuable each customer is to your business. This can help you identify opportunities to increase customer loyalty and which customers are most valuable to your business. How to calculate CLV:

Essential E-commerce KPIs

Conversion Rate

The e-commerce conversion rate is a metric used to measure the percentage of visitors to an online store that makes a purchase. This is an essential metric for any online business to track as it indicates how successful their website is in turning visitors into customers. The higher the conversion rate, the more effective the website is at converting visitors into customers.

To track the e-commerce conversion rate, you will need to set up a tracking system such as Google Analytics or use a third-party service such as HotJar or Crazy Egg. These tools will allow you to see valuable data such as the number of visitors, purchases, and the overall conversion rate. By tracking the e-commerce conversion rate, you can identify potential improvement areas and optimize your website to increase your sales. How to calculate conversion rate:

Essential E-commerce KPIs

Net Profit

Net profit is one of the essential e-commerce KPIs to track and consists of the amount left over after all expenses are paid. It is the amount of money that a business has earned after all costs have been deducted from the total revenue. Net profit is one of the most critical metrics for a company to track, as it is the ultimate indicator of a business’s overall financial health. Businesses that track their net profits over time better understand their overall financial performance. It is calculated by subtracting the total expenses from the total revenue to get the net profit.

Essential E-commerce KPIs

Cost of Goods Sold (COGS)

The Cost of Goods Sold (COGS) is the total cost of inventory a business sells over a period of time. It includes the cost of materials, labor, and overhead associated with producing goods and services. Tracking COGS is important for businesses to accurately measure the profitability of their products or services. Companies should track COGS regularly to identify areas of improvement, such as reducing production costs or optimizing inventory levels. Additionally, tracking COGS can help businesses estimate their future expenses, such as anticipating future inventory needs or calculating expected profit margins. Check out this post by Investopedia for more information about how to calculate COGS.

Shopping Cart Abandonment Rate (SCAR)

The shopping cart abandonment rate (SCAR) is the percentage of users who add items to their shopping cart but fail to complete their purchase. This happens for various reasons, including slow loading times, a complicated checkout process, or a lack of trust in the website. Tracking SCAR is vital to understand customer behavior and finding ways to increase conversions. In any case, you can measure it using analytics tools like Google Analytics or setting up conversion pixels on the checkout page.

The Shopping Cart Abandonment Rate is calculated by dividing the total number of completed purchases by the number of shopping carts created. Subtract the result from one and then multiply by 100 for the abandonment rate. Analyzing the data and understanding the reasons behind the abandonment can help businesses identify the areas that need improvement and optimize their checkout process.

Essential E-commerce KPIs

Customer Engagement

Customer engagement measures how engaged customers are with your store. You can measure it through metrics such as page views, time spent on site, and social media engagement. By tracking this KPI, you can gain insight into your marketing campaigns and how effective your customer service is. Calculating your customer engagement score includes many factors, so it will be a bit of trial and error but check out this post from Salesforce to get started.


How working with a 3PL can improve essential e-commerce KPIs

Working with a quality 3PL logistics company can improve several essential e-commerce KPIs. Specifically, a 3PL helps drive down margins, improving overall profits. While this directly affects net profit, it indirectly affects customer lifetime value, engagement, and cost of goods sold. Thus, working with a 3PL can lower your transportation costs, improve customer satisfaction, and gain time to focus on your business’s core competencies. There are many benefits associated with working with a 3PL.

Summing up, it is vital to track a few essential e-commerce KPIs. Regardless of the KPIs you use, monitoring and reviewing the data helps you gain valuable insights into how your e-commerce business is performing. This allows you to make informed decisions about optimizing your business for success. Talk to one of our agents today to learn more about how Falcon Fulfillment can improve your essential KPIs.

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6 Tips to Increasing Average Order Value (AOV)

6 Tips to Increasing Average Order Value

Increasing average order values is an essential component of success for e-commerce businesses as it can significantly boost profitability. Not only does increasing the average order size mean more income for the company, but it also increases customer loyalty and satisfaction. Additionally, when customers spend more on one order, the shipping cost is spread out across more items, leading to reduced costs for the business. Accurately forecasting sales and revenue based on average order values improves inventory management and provides insight into crucial investment decisions. This post will discuss average order value (AOV), how to calculate it, and 6 tips to increase it.


Average Order Value (AOV) Definition

Average order value (AOV) is the average dollar amount spent each time a customer places an order. In other words, it is the average amount of money a consumer spends each time they visit the store.

Average Order Value Calculation
To calculate your company’s average order value, divide total revenue by the number of orders.

increasing average order value

AOV is a key performance metric that helps determine consumer purchasing habits. Knowing the AOV is important because it allows you to evaluate your sales and marketing efforts. For example, let’s say that in March, your web store’s sales were 20k, and you had a total of 1k orders. 20k divided by 1k = $20, so March’s monthly AOV was $20. Because of the high cost per acquisition for customers, it is in your best interest to generate the maximum revenue from the consumers visiting your store. This is why profitable businesses implement strategies to increase the AOV as much as possible.

increasing average order value

Tips to Increase AOV

There are several strategies to increase AOV and compel your customer to buy more products or more expensive products. Increasing the average order value occurs across the entire sales and marketing funnel. Any idea or promotion encouraging a higher dollar amount at checkout will increase AOV. Here are a few common tips to increase AOV.

  • Offer Discounts for Larger Orders: By offering customers discounts for larger orders, customers are more likely to purchase more items at once to take advantage of the savings.
  • Cross-Selling: promote additional product add-ons that are common with a specific purchase. For example, promote buying replacement bulbs for LED flashlights, batteries, etc.
  • Upsell Items: Suggest more expensive items related to the primary items customers purchase. Highlighting best-selling items that are slightly more expensive is a great strategy to increase AOV.
  • Bundle Items: Create packages of related products and offer them at a discounted rate. This encourages customers to purchase more items, providing value for their money. To implement this strategy, determine what products work together and create a bundle. Working with a quality 3PL can help you pick and pack effectively.
  • Offering Loyalty Discounts: If you have a rewards or loyalty program, offer those repeat customers better discounts for higher purchase amounts.
  • Offer Free Shipping Thresholds: Offer free shipping for customers who meet a minimum spending threshold. This is one of the most effective strategies for increasing AOV. You might think offering free shipping will cut your profit margins, which is possible if you don’t carefully calculate. Here is a formula to help bake the shipping costs into your product pricing, so you don’t lose money!

increasing average order value

How working with a 3PL can help increase AOV

Your shipping strategy will play a massive part in the success of increasing your AOV. Working with a quality 3PL can ensure your company offers the expedited shipping options that consumers desire. Additionally, you benefit from lower shipping costs due to their relationships with multiple carriers and high-volume discounts. Lastly, working with a 3PL with multiple distribution warehouses will allow your company to lower shipping costs because products travel shorter distances to customers. Talk to one of our agents today if you want to learn more about how Falcon Fulfillment can help your business grow.

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5 technologies for 3PL

5 Technologies to look for in a 3PL

5 Technologies to look for in a 3PL

Partnering with a tech-forward 3PL is vital for any business that wants to stay competitive in today’s ever-changing market. A tech-forward 3PL can provide companies with the latest technologies to remain efficient and successful. This can include cloud-based logistics management, automated inventory management, warehouse management systems, and more. Leveraging these technologies can help companies reduce costs, increase efficiency, and improve customer service. A tech-forward 3PL can also help companies scale their operations and make it easier to manage their supply chain. This post will discuss 5 essential technologies to look for in a 3PL.


Benefits of partnering with a tech-forward 3PL:

  • Reduce errors and save time
  • Make data-driven decisions vs. gut feelings
  • Improve customer satisfaction

5 types of technologies to look for in a 3PL:

5 technologies for 3PL

Omnichannel eCommerce Integrations

3PL partners with robust integrations offer your customers an authentic omnichannel fulfillment experience. Having a partner with a genuine omnichannel approach will ensure your clients have a seamless purchasing experience no matter where they decide to buy. Investigate which platforms and marketplaces have turnkey integrations or provide a dedicated account specialist to link all sales, delivery, and customer service programs.

Warehouse management systems

A warehouse management system (WMS) is essential for 3PLs (third-party logistics providers) to manage their day-to-day operations. It tracks inventory, optimizes the warehouse layout, and provides real-time visibility into order and shipment status. WMS simplifies 3PLs’ supply chain operations and enables them to deliver goods and services faster, improve customer service, and reduce overall costs. It also helps gain visibility into inventory and warehouse operations, allowing customers to make informed decisions quickly. Furthermore, WMS provides 3PLs with the necessary tools to keep up with ever-evolving customer demands and remain competitive in the logistics industry.

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Our In-House IT Department distinguishes us from other fulfillment centers that outsource development.

5 technologies for 3PL

Automated inventory management systems

Of the 5 technologies to look for in a 3PL, an automated inventory management system is the most essential. This system can streamline the inventory tracking process, providing real-time updates on stock levels, estimated delivery times, and other important information. Additionally, it can help to keep track of orders, ensuring that customers receive their orders in a timely fashion and that the inventory is managed correctly. Automated inventory management systems can also help reduce stock-outs risk, leading to lost revenue, frustrated customers, and inefficiency. By partnering with a 3PL that uses an automated inventory management system, an e-Commerce business can ensure that they always have the right amount of stock on hand to meet customer demand.

5 technologies for 3PL

Automated order fulfillment system

Utilizing automation in order fulfillment helps eliminate costly errors and delays associated with manual processes, resulting in improved customer service and satisfaction. Automated order fulfillment also increases scalability and flexibility, allowing 3PLs to manage and process orders more efficiently and cost-effectively. The system can be multifaceted with several integrated technologies or a singular system managing multiple aspects of the fulfillment journey. Whether it is a proprietary system or several integrated programs, automation technology like this is an essential component of tech-forward 3PLs.

Returns management technology

Leveraging returns management technology to streamline returns and exchanges has become vital to eCommerce operations. This technology is essential for ensuring customers are satisfied, and their returns are handled quickly and efficiently. By leveraging automation and tracking systems, retailers can manage their returns and reduce their associated costs. Furthermore, retailers can track and analyze their return policies, allowing them to make informed decisions.


Technology is the future of eCommerce, and brands that effectively utilize it will surpass their competition. Partnering with technologically savvy 3PLs can help eCommerce brands leverage the best programs in the industry without directly investing in the infrastructure. Not only does partnering with a 3PL save money, but it will also improve customer satisfaction, order fulfillment speed, and inventory management accuracy. Falcon Fulfillment specializes in omnichannel fulfillment with a tech-forward approach.

Talk to one of our specialists today if you want to learn more about how we can help your brand streamline order fulfillment.

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offer 2-day shipping e-commerce

How to offer 2-day shipping as an e-commerce startup

How to offer 2-day shipping as an e-commerce startup.

As an e-commerce startup, offering two-day shipping can be a great way to give customers the convenience that they desire and set yourself apart from the competition. That said, offering two-day shipping can take a lot of work. It is important to understand the value of offering 2-day shipping and what is necessary to provide it without sacrificing profitability. This post will discuss the ins and outs of 2-day shipping and how you can offer it even if you are an e-commerce startup.


Benefits of offering 2-day shipping

Improved customer satisfaction

It’s no secret that when people order a product, they want it as soon as possible. The sooner they receive their items, the more likely they will have a positive brand experience. With 60% of consumers expecting expedited shipping options, it is crucial to have favorable customer reviews and recommendations.

offer 2-day shipping e-commerce

Increased sales conversions

Companies that offer expedited shipping, especially at an affordable rate, are far more likely to convert browsing consumers into paying ones. While shopping cart abandonment is a serious issue, it can be minimized by offering faster delivery options at a reasonable price.

Improved customer loyalty

When a consumer receives their package promptly, it builds trust and loyalty in the brand. Customers are far more likely to buy again if they have a positive delivery experience.

According to Lasership, slow delivery caused 64% of consumers to try a new retailer and 54% to switch retailers. Therefore, planning to offer 2-day, expedited shipping is vital. How can you provide 2-day shipping?

How to offer 2-day shipping tips

Distributed inventory

Utilizing multiple fulfillment centers or warehouses can provide faster and cheaper shipping to customers. Most 3PL partners can distribute inventory across their centers, which means it is a great way to distribute inventory without securing private warehousing spaces in multiple locations.

offer 2-day shipping e-commerce

Improve processing speeds

One of the first things that must be considered is how long it takes for an order to be received, packed, labeled, and shipped. If you fulfill in-house, this task can consume significant time and resources. In order to meet 2-day shipping cutoffs, it is vital to process orders within hours of receiving them. This gives the carriers the most time possible to execute final-mile delivery within the 2-day window.

Investing in team training, automation, high-tech inventory software that improves picking accuracy, and ensuring a clean and well-designed warehouse can improve streamlining order processing. If this seems like a hefty investment of time and money, it is. However, partnering with a quality 3PL partner can give you access to a fully optimized order processing workflow with a smaller upfront investment.

Utilize multiple expedited shipping carriers

To secure expedited shipping without breaking the bank, it is imperative to partner with multiple shipping carriers offering faster delivery speeds. Of course, the faster a package arrives often means, the more expensive the shipping fees will be. As your business grows, you can leverage bulk discounts which help alleviate the higher costs. As an eCommerce startup, it might be challenging to meet those quantities. However, partnering with a 3PL fulfillment team can allow your business to ship less and benefit from the discounts afforded to the 3PL. Furthermore, 3PL companies have relationships with most major carriers and utilize automation software to select the most affordable fast shipping available.

Set minimum order value for 2-day shipping

Another way to offset expedited shipping costs is to set minimum spending thresholds. More than 50% of shoppers will add extra products to be eligible for fast and free shipping. Use this to your advantage to increase your AOV (average order value) to help cover the cost of fast or free delivery.

offer 2-day shipping e-commerce

Incentivize membership or subscription models

Improve customer loyalty by incentivizing membership or subscription models where customers qualify for 2-day shipping. Whether the customers must subscribe to monthly purchases or pay a membership fee, this is another way to help offset the cost of your eCommerce startup.


Offering 2-day shipping as an e-commerce startup may be overwhelming, but it is entirely possible. Offering 2-day shipping is a great way to increase customer satisfaction and loyalty. It makes the shopping experience more convenient and enjoyable for customers, leading to higher customer satisfaction and more repeat customers. One of the best ways to offer 2-day shipping consistently is by partnering with a reliable 3PL. Falcon Fulfillment provides 2-day shipping for 96.4% of the 48 continental states and can offer distributed inventory, streamlined order processing, and discounted courier rates.

Talk to one of our agents today to learn how we can help your e-commerce startup offer 2-day shipping.

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U.S. Manufacturer Diversify Supply Chain

How to Find a U.S. Manufacturer to Diversify Your Supply Chain

How to Find a U.S. Manufacturer to Diversify Your Supply Chain

Those without established relationships were at the mercy of an unpredictable transportation industry and gridlocked supply chain. If 2020 taught us anything, it was to diversify our supply chain to include U.S. manufacturing, if only to ensure production in an emergency. This post will discuss how to find a US manufacturer to diversify your supply chain.

Side Effects of No Preparation

Those without established relationships were at the mercy of an unpredictable transportation industry and gridlocked supply chain. If 2020 taught us anything, it was to diversify our supply chain to include U.S. manufacturing, if only to ensure production in an emergency. This post will discuss how to find a U.S. manufacturer to diversify your supply chain.


U.S. Manufacturer Diversify Supply Chain

PROS of U.S. Manufacturing

  • American manufacturing and labor standards are higher
  • No language barrier
  • Marketing appeal of being made in North America
  • Easier to verify reputable manufacturers
  • Faster shipping time
  • High intellectual property rights protection
  • Greater payment security and recourse
  • American-made products are often of higher quality
  • U.S. production supports the national economy
  • Easier to manage quality control

CONS of U.S. Manufacturing

  • Higher manufacturing costs
  • Less product choice (some products are no longer manufactured in the U.S.)

Steps to find a U.S. manufacturer

This article assumes product development has already begun or is in progress with a supplier (overseas or otherwise). This means you have a viable product and know the basic requirements necessary for production. Changing to a U.S. manufacturer to diversify your supply chain is the next step. While we won’t go into detail about this aspect, it is crucial to understand the vision for your product, what type of manufacturer you require, and any special services or qualities needed in a supplier.

Step 1 – Research

Identifying a U.S. manufacturer is the first step in finding a domestic manufacturer. International supplier directories like Alibaba make it easy to discover global manufacturers. There are similar domestic directories to begin discovering local suppliers.

Online domestic directories

  • ThomasNet – Has been around for 120 years and has more than 500k businesses and suppliers listed. They are one of the best places to begin looking for a U.S. manufacturer.
  • Maker’s Row – This paid service helps locate manufacturers and developmental professionals to improve or refine your product offerings. Plus, they have a specific small batch option if your U.S. supplier is not your primary supplier.
  • MFG – MFG is a marketplace primarily for plastic, metal, or rubberized parts production. Companies needing machining services, assembly, injection molding, metal stamping, and metal fabrication would do well to use MFG.
  • Kompass – Kompass is a searchable marketplace with more than 70 countries on the site but is filterable to include online U.S. suppliers. Due to vendors ranging from lawyers and insurance agents to manufacturers and trading companies, the directory is extensive but isn’t simple to navigate. However, it is still helpful if you use the filtering mechanism well.
  • Council of Manufacturing Associations Member Organizations – This is a lengthy list of sub-categorized organizations and member manufacturers in the (National Association of Manufacturers). It is a hub for news, policy, and updates for the manufacturing community. This is a good resource if you have a good idea of what type of manufacturer you are looking for.

General search engine results

You can also research manufacturers directly via Google or Safari, etc. Keep in mind most manufacturers focus on creating quality products rather than boosting their SEO performance. Therefore, you might need to scroll to the second, third, or tenth search page to find what you are looking for. Nevertheless, finding U.S. manufacturers through a search engine is still viable. Ensure you use terms like distributor, wholesale, etc., in your search to help boost your results.

Referral

A direct referral is one of the best ways to find a reputable U.S. manufacturer. Make sure to leverage your professional network to reach out and see if anyone knows of a supplier who could help you. Don’t be afraid to contact companies that potentially use a similar manufacturer and see if they wouldn’t mind sharing their contact. E.g., A shoe company specializing in fine leather would be a good source if your company produces leather handbags or backpacks.

Trade Shows

A trade show is a great place to source contacts in local manufacturing. Suppliers often attend these events to secure new buyers and showcase new capabilities. Furthermore, trade shows are a gathering of industry leaders and influencers under one roof. Finding multiple suppliers and having initial conversations at one event is possible.

U.S. Manufacturer Diversify Supply Chain

Step 2 – Evaluate the shortlist

Once you have researched potential manufacturers and have a shortlist, it is time to evaluate each one. This process involves collecting information and investigating their capacity, pricing, lead times, and cultural values.

Things to consider when evaluating a potential U.S. manufacturer:

  • Check certifications – Each industry will have its own specific certifications and value-specific certifications like organic, sustainably sourced, etc. If you are still determining what certifications to look for, consider researching the U.S. Consumer and Product Safety website for guidance.
  • Gauge financial stability – To protect your own company, you must evaluate the financial viability of your vendors. Start by asking for a financial statement and have it reviewed by a qualified CPA. They can determine whether a supplier has adequate resources to maintain business operations.
  • Asses weather-related risks – Assessing weather complications might seem silly until your manufacturer shuts down because of a hurricane for 3-6 months or longer. Ensure you know the probability of weather-related delays and have insurance should the “unthinkable” happen.
  • Geographic proximity to customer base – The closer your manufacturing facility is to your customer base, the faster shipping and procurement occur and the less it costs. Therefore, it is a key factor in deciding which manufacturer to partner with.
  • Scaling capability – Evaluate how flexible your supplier is with order quantities. You may find that your original choice, which offered preferential small batch order costs, cannot meet greater demand. This is why proper sales projections are crucial in determining your scalability needs.
  • Contact references – Manufacturers confident in their work and service have no problem sharing references. Ask for at least 2-3 references and interview them about their experience with the supplier.
  • Understand lead times and delivery success statistics – Understanding lead times and success metrics are vital to choosing the right manufacturing partner. If the potential supplier has lead times that are incongruent with your ordering cycles, it might be better to choose a different partner.
  • Scrutinize payment terms – Many manufacturers will ask for full payment upfront when working with a new company. However, ask if payment terms become more flexible over time. Determine what your company needs regarding payment terms and negotiate to that end without losing the relationship.

U.S. Manufacturer Diversify Supply Chain

Step 3 – Get into the nitty gritty

Once you have narrowed your shortlist and have decided to move forward with negotiating a contract with a supplier, it is time to dig into the details. There is a lot of granular work involved in finding a U.S. manufacturer diversify your supply chain. Several questions will be crucial to finding a U.S. manufacturer that will be the best fit for you.

  • What is the process to ensure quality control for your product?
  • What are the shipping costs?
  • What are the minimum order quantities (MOQs)?
  • What assurances do they offer to protect your intellectual property? Do they offer exclusivity?
  • What do your clients say about you? Can you contact them?
  • What will be the CPU (cost per unit)?
  • What are their policies on defective products?
  • Do they support sustainable and ethical production standards?
  • Do they have any value-added services that would be helpful? I.e., assembly, engineering, prototyping, etc.
  • What are their communication patterns, style, and platforms? Determining how you will communicate is vital to a healthy partnership and resolving issues as they arise.

While this is a partial list, it should give you a good understanding of whether or not the manufacturer will be a good fit.

U.S. Manufacturer Diversify Supply Chain

Step 4 – Request a written contract

The final stage of selecting a U.S. manufacturer involves requesting a written contract outlining working together. It is best to request a proposal from a few different suppliers so that you can make the best decision for your company. Price isn’t the only contributing factor, but it will play a significant role. Therefore, it is essential to review the pricing and payment terms carefully. Ensure that all fees and timelines are clearly outlined. Once you have reviewed the contract terms and are satisfied, a partnership can begin.


A great way to find a U.S. manufacturer to diversify your supply chain, is by asking your 3PL provider. If they are anything like Falcon Fulfillment, they have solid relationships with existing suppliers with a regular cadence with the distribution facility. Furthermore, working with a quality 3PL can help to create a more resilient supply chain regardless of your manufacturing partners.

If you want to learn more about our partners and how we can help bolster your supply chain, contact one of our agents today.

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Habits successful e-commerce businesses

5 Habits of Successful E-commerce Businesses

Habits of Successful E-commerce Businesses

E-commerce is snowballing, with more than 9.1 million global online stores. In this landscape, the most successful businesses focus on and implement similar strategies. While this list isn’t exhaustive, these habits of successful e-commerce businesses strategies are common among some of the most profitable online companies. To make your business stand out, modeling the practices of successful e-commerce businesses is necessary. In this post, we will discuss 5 habits of successful e-commerce businesses.


Habits successful e-commerce businesses

Automation

To implement automation strategies for e-commerce success, consider how automation can improve customer experience. This involves automating customer service inquiries, setting up automated reminders to encourage repeat purchases, or sending automated emails to provide order updates. Now, let’s explore some of the most common marketing automation strategies:

  • Sending automated welcome emails
  • Automated cart recovery (abandoned cart reminders)
  • Win-Back emails to get subscribers re-engaged
  • Automate customer feedback collection

Look for opportunities to automate inventory management, shipping processes, and product discovery. Automation of these processes can help streamline operations and improve customer experience. Additionally, use analytics to track success of automation strategies and adjust accordingly.

Habits successful e-commerce businesses

Collaborate and Outsource

It is common for e-commerce owners to get nervous about collaborations. However, they believe that if they drive traffic to other companies, customers won’t have enough resources left to buy their products. While driving traffic to your direct competitor might do that, other symbiotic collaborations have the opposite effect. An excellent example of an ideal collaboration is Black Milk Clothing and Solestruck. Black Milk Clothing sells clothes for people who want to stand out. Their fashion line nods to niche horror films, Pokemon, and other cult-classic imagery. In a successful collaboration, they teamed up with Solestruck, a funky female-owned shoe company, on a few photo shoots, and people started asking where they could buy the shoes. This collaboration was a win-win for both brands. The key is to find mutually beneficial collaborations. To get you started, here are some easy collaboration ideas:

  • Cross promotions
  • Social media giveaways and influencer campaigns
  • Subscription boxes with multiple partners
  • Creating (topic clusters) with other retailers in similar or complementary industries

The other aspect that rings of collaboration is outsourcing business operations that are not part of the core offering to other professionals. By delegating these responsibilities to experts in that field, you free up time to focus on core competencies of the business, such as creating new products, refining customer offerings, and building marketing campaigns that singularly target your customer avatar. Now, let’s delve into the types of outsourcing that the most successful entrepreneurs engage in:

Habits successful e-commerce businesses

Track and Utilize Data Analytics

You must track the data. Regardless of whether you sell hand-poured candles or reusable baby diapers, data is crucial for making informed decisions. Successful e-commerce businesses have a habit of monitoring data and utilizing it effectively to refine their business processes. Nevertheless, it can be daunting to consider all the data points vital to business success. To help with this, here are some of the top metrics that e-commerce businesses should track:

  • Customer Acquisition Cost – Simply put, this is the amount of capital it costs to acquire a new customer
  • Average Order Value – This is the average amount customers are spending at one time in your store
  • Sales Conversion Rate – This is the number of customers who made a purchase compared to the total visitors to your store

Habits successful e-commerce businesses

  • Shopping Cart Abandonment Rate – This evaluates the number of customers who add a product to their cart but fail to complete the purchase. Tracking this metric can provide insight into troubles or difficulties with the purchasing process.
  • Top Products Sold – Tracking the most popular products is essential to profitability. Best sellers should be promoted and carefully ordered to minimize stockouts.
  • Return Rates – This calculates how many products sold are being returned or exchanged.
  • Regular Inventory Snapshots – Tracking how much inventory you have left at the end of a specific period helps you develop a cadence of reordering to limit overstocking and understocking.

There are so many more metrics that can be tracked and evaluated. However, it’s essential to recognize that data fatigue is a real issue for many owners. Instead of getting overwhelmed by all the available reports, narrow down what is vital for your business. Decide on the information you currently need to make better decisions. Focus on tracking and utilizing those metrics first, and then, you can gradually expand your usage of data and analytics.

Habits successful e-commerce businesses

Focus on Customer Experience

According to Forbes, “Customer experience is today’s business benchmark.” In this ever-evolving landscape, it’s crucial to prioritize your customers. They now demand more than just a transactional relationship with a brand; they seek a complete experience. This encompasses everything from memorable unboxing experiences to hassle-free return policies. Successful e-commerce businesses continually evaluate and enhance the customer experience. Here are the key aspects to consider:

  • Seamless user experience on your website – This implies that your website should be user-friendly, with fast loading speeds and visually appealing design. Remember, investing in high-quality product photos is worth far more than a thousand words – it’s worth a thousand dollars!
  • Secure and varied payment methods – Offering multiple secure payment options enhances customer satisfaction.
  • Excellent customer service – Gone are the days when part-time customer support sufficed. To stand out in a competitive market, you must be ready to assist your customers when they need it. While around-the-clock call center support may not be necessary, having systems like chatbots and FAQs readily available is a must from the moment you make your first sale.
  • Implement Customer Loyalty Programs – Rewarding customers for their purchases and encouraging them to return is easily achieved through customer loyalty programs.
  • Provide Seamless Omnichannel Experience – Customers now expect brand consistency across every platform. Ensuring a seamless omnichannel experience not only fosters brand loyalty but also builds trust in your company.

Habits successful e-commerce businesses

Experiment and Test

One of the most vital habits of successful e-commerce businesses is they are not afraid to experiment and test new things. Innovation in any industry comes from trial and error. Here are some common forms of business experimentation:

  • A/B Testing – Testing two versions of the same material
  • Pilot – A trial that would help test a proof of concept to see if you should go further with it
  • Mockups – A representation of the look and feel of a user interface
  • Quantification – Asking an audience to rank and rate things to quantify their thoughts into data


These experiments can be applied to marketing strategies, new product development, and even improving the customer experience online. Regardless of what experiments you run, it is important to decide what question you are trying to answer so that you can build an effective test. In other words, you need to think like a business person and a scientist.

The 5 habits of successful e-commerce businesses aren’t rocket science but require focused attention. Companies prioritizing automation, collaboration, outsourcing, tracking data, experimentation, and being customer obsessed stand a higher chance of success. Did you know that Falcon Fulfillment can help with many of these habits? We are experts at order fulfillment, warehousing, inventory management, returns management, customer service, and more. Let us show you how partnering with us can lead to better outcomes and more freedom to focus on what matters most, your customers! Talk to one of our helpful agents today.

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3PL fulfillment services efficiency

5 Reasons 3PL Services Are Key to Supply Chain Efficiency

Why 3PL Fulfillment Services Are Key to Supply Chain Efficiency

The productivity of the supply chain relies on how a company can effectively deliver its products to the right location at the right time. Due to the growth of e-commerce, businesses are increasingly relying on third-party logistics (3PL) fulfillment services to ensure the efficient operation of their supply chain. 3PL fulfillment services offer various strategies, ranging from inventory storage and management to fulfilling and shipping customer orders. These services can aid in maintaining the smooth operation of your supply chain. But why is their importance significant? Here are five reasons why 3PL fulfillment services play a key role in ensuring supply chain efficiency.


Supply Chain Metrics to Track

To understand why a 3PL is key to supply chain efficiency, we must first examine the metrics used to track success. A few common metrics that determine the health and productivity of a supply chain, and they are as follows:

  • Perfect Order IndexPerfect order measures show you the percentage of how many orders are fulfilled successfully and without any incidents, including inaccurate orders, late deliveries, or damaged items.
  • Cash-to-Cash Cycle – The cash-to-cash cycle is the time period between when a business pays cash to its suppliers for inventory and receives money from its customers. The simple cash-to-cash calculation formula is:

3PL Fulfillment Services Efficiency

  • Inventory Turnover Ratio – The inventory turnover ratio measures the number of times a company replaced its inventory balance across a specific period.

3PL fulfillment services efficiency

  • Order Accuracy – The percentage of orders accurately taken, sent to production teams, and delivered successfully to the end consumer.
  • Supply Chain Cycle TimeSupply chain cycle time is the time it would take to complete a customer’s order if inventory levels were at zero when the order was placed. The shorter the cycle, the more efficient the supply chain is.

Supply chain efficiency is measured in speed, accuracy, and profitability. A 3PL fulfillment service participates in streamlining several aspects of the supply chain, directly affecting its productivity.

5 reasons why 3PL fulfillment services are key to supply chain efficiency.

3PL fulfillment services efficiency

Optimized Inventory Management

One of the primary advantages of utilizing a 3PL is its capability to enhance inventory control. By actively monitoring your stock levels, it enables you to plan future orders more effectively and maintain inventory balance. When you outsource inventory management to a 3PL, you gain access to flexible storage options. Furthermore, it leads to quicker and more cost-effective order fulfillment, advanced inventory management software implementation, and a decreased need for inventory and fulfillment personnel. This not only prevents overstocking and stockouts but also trims costs, exerting a significant positive influence on your business’s efficiency.

Increased Visibility

Having a clear vision of your inventory, from sourcing and producing to warehousing and final delivery, is necessary to improve your supply chain efficiency. Outsourcing your fulfillment will often give you real-time visibility from dock to door, covering a significant portion of the supply chain process. Increased visibility helps your company discover bottlenecks and inefficiencies that slow down cycle times and cost you money.

Automation and Real-time Data

Automating supply chain processes is one of the most effective ways to improve supply chain efficiency and productivity. Implementing automated inventory management systems helps to improve order efficiencies. This reduces stockouts as well as overstocking. Working with a 3PL fulfillment team gives you access to real-time inventory and distribution systems that would require significant investment to own in-house. Furthermore, this allows a whole suite of automation processes to be deployed, such as; invoice processing, order processing, and even returns management. The best 3PL providers will have implementation guidance to ensure that your sales software works hand in glove with theirs.

3PL fulfillment services efficiency

Route Optimization

Unsurprisingly, selecting the fastest and most affordable route for product delivery is vital to supply chain efficiency. Working with a solid 3PL partner ensures this is handled for you. Fulfillment companies’ success and profitability hinge on the same metrics; therefore, they will prioritize route optimization for every order.

Optimized Returns Management

Returns management or reverse logistics can often be overlooked in supply chain efficiencies, but that is a mistake. With an average of 20% of all online orders ending in a return or exchange, mismanaging returns can negatively impact the bottom line. In fact, one of the main value-added services offered by 3PL companies is returns management. They can help automate the process of receiving, evaluating, and restocking products when they are no longer wanted or required by a customer.


These are just a few reasons why 3PL fulfillment services are key to supply chain efficiency. Using a 3PL, can optimize inventory management, increase visibility, automate processes using real-time data, and optimize routes and returns management. In conclusion, if you want to improve supply chain efficiency, a 3PL might be the perfect solution. Falcon Fulfillment specializes in every aspect of supply chain management, from planning and procurement to distribution and returns. We can assist with streamlining your supply chain.

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Choosing a 3PL Partner for E-commerce Order Fulfillment

Guide to Choosing a 3PL Partner for E-commerce Order Fulfillment

Choosing the right 3PL partner for e-commerce can make the difference between a highly profitable and highly frustrating relationship. It can feel overwhelming when starting to look for a new fulfillment partner. You must be patient, clearly understand what you want, and know the industry standards. There are some key criteria to consider to find the right fit for your e-commerce needs. This guide will share the steps and aspects of choosing a 3PL partner for your unique e-commerce business.


Choosing 3PL partner e-commerce

Indications it is time to switch 3PL providers.

When it comes to knowing when it’s time to switch 3PL providers, there are several signs to examine. The first is a decline in customer service. This can come in the form of bad reviews, delayed shipping, order and inventory errors, or delays. If you find that your provider can no longer meet your customer service needs, or if you’re not getting a timely response when you have an issue, then it’s likely time to move on. Another sign is if you’re consistently running into problems with the process: delayed shipping, receiving, slowing order cycle times, or incorrect orders being sent out. Lastly, if your 3PL provider can no longer accommodate your company’s growth or changes, it’s time to look for a provider that can.

Choosing 3PL partner e-commerce

Qualifications to look for when choosing a 3PL partner.

Streamlined Shipping Operations

It should come as no surprise that topping our list is streamlined shipping operations. After all, this is the quintessential service offering of a 3PL fulfillment partner. Ensuring customers receive what they order promptly is a fundamental requirement of any e-commerce order fulfillment partner. However, not all 3PL companies are created equal when it comes to their shipping operations. When choosing a 3PL partner, ensure they leverage automation in their shipper operations, including shipping labels, multiple carrier relationships, multi-site distribution centers, and real-time inventory tracking. These additional features improve shipping times and accuracy.

7 Day Operations

3PL providers that offer continuous operations can provide you and your customers with a higher level of service. 3PLs with 24//7 service process orders more quickly, decreasing shipping windows and allowing for 1-2 day delivery for most orders in the US.

Multi-site Distribution

How close is the warehouse to your manufacturer and your customers? Selecting a fulfillment provider with multi-site distribution lets your business offer faster deliveries. Choose a provider that is easily accessible to you so you can tour a property near you. This not only gives you peace of mind but also affords you the ability to direct aspects of the fulfillment process when needed. This is especially true of brands with custom or personalized packaging requiring special handling.

Choosing 3PL partner e-commerce

Communication

Most relationships that end poorly have done so because of a lack of clear communication. It is impossible to solve problems without an open line of communication. It is vital to choose a 3PL partner that provides you with assurances about how communications occur. Solid e-commerce fulfillment partners will offer 24/7 real-time data for orders, inventory levels, etc. Some providers even have a dedicated account manager to troubleshoot specific issues. Determine the appropriate communication level and make certain the channels, people, and processes are clear before you engage with a new partner.

Scalability

Many e-commerce brands switch providers because they can no longer service the number of orders or are limited by the regions where shipping is available. Regardless of the reasons, this restricts growth. As you interview new 3PL partners, it is crucial to evaluate their capacity limits. Look at current limitations as well as projected limits. You don’t want your provider to run out of warehouse space or be unable to accommodate an influx of new customers. Your company should share existing order volumes and where you hope to be in the next few years.

Experience and Expertise

When choosing a 3PL partner for your e-commerce fulfillment needs, ensure they have a long and consistent history as a service provider. This will help confirm they have adequate experience and expertise in order fulfillment. Unfortunately, as e-commerce boomed, so did sub-par 3PL providers. It is important to do your research to find the right match. A solid partner will have years of experience, expertise in your industry, and a verifiable track record. Ask to speak directly with the staff you will be working with; this will give you a good indication if your 3PL employs and trains knowledgeable staff.

Choosing 3PL partner e-commerce

Expansive Carrier Network

Most 3PL partners have relationships with numerous carriers, but it is essential to understand if those relationships are in networks where you most often deliver. For example, if DHL is the primary carrier in a specific sales region, you must ensure your partner has a relationship with them. Furthermore, many 3PLs benefit from carrier parcel discounts because of their volume of orders. Discuss what discounts might be afforded your e-commerce due to the partnership.

Review Value-Added Services

Each 3PL partner will offer a different variety of value-added services. From kitting and assembly to reverse logistics, determine which additional services are necessary or desired for your e-commerce business. Here are a few standard value-added services to consider when choosing a 3PL partner.

  • Kitting and Assembly – Kitting and assembly services include Adding labels or tags, assembling items into a kit with a new SKU, adding custom printing or numbers, and assembling components before shipment. Kitting and assembly services are commonly used when creating product bundles, promotional sales packages, and subscription boxes.
  • Custom or Branded Packaging – Many 3PLs like Falcon Fulfillment enable you to completely customize your packaging. They help you personalize every part of your package, including the material, size, style, insert, packing tape, etc. In addition to personalization, an ideal partner will help ensure the right size and eco-friendly packaging.
  • Returns Management – Reverse logistics and returns management is a time-saving value-added service provided by great 3PL partners. This eliminates the need for a separate location to execute refunds and exchanges and add inventory back to the warehouse when possible. Returns occur in approximately 20-40% of online purchases, so it is vital to have a streamlined system to process them quickly.

Choosing 3PL partner e-commerce

Sustainability

Sustainability has been a growing e-commerce trend for several years now. Consumers are looking to support companies committed to building a sustainable future. The transportation and fulfillment industry has not always been environmentally aware. However, the customers have spoken through their wallets that ensuring eco-friendly practices are a priority. When choosing a 3PL partner for your e-commerce order fulfillment, ask how they work toward a sustainable future. Here are a few ways a 3PL partner can help create a sustainable business:

  • Reduce transportation emissions
  • Sustainable packaging options
  • Optimized energy usage (in warehousing and with vehicle fuel sources)
  • Streamline reverse logistics

Transparency

Being left in the dark about inventory, stock levels, or delivery statuses is poor service and bad for your business. Determine what information your potential 3PL partner shares, when that data is regularly shared, and what the processes are if there are issues. A solid 3PL partner should behave like a teammate. They don’t try to hide aspects of business operations vital to success. Ensure the necessary information and communication are discussed before engaging with a new 3PL.

Culture Matching

While this might seem like a low priority, matching company culture can mean the difference between a thriving and symbiotic partnership and a parasitic one. When you match culture, you ensure that the principles you share are carried out to their full potential. Questions to consider are:

  • What values do they appear to uphold?
  • Do they have a mission statement? Does it match or complement your own?
  • Do you have similar priorities?


There are many things to consider when choosing a 3PL partner for your e-commerce order fulfillment. The process can initially feel overwhelming, but the key is to fully evaluate the new relationship. A solid 3PL partner can improve your business outcomes and profitability and even open new doors of opportunity, so the choice should not be rushed. Take your time and ensure your new 3PL will provide the necessary services and align with similar values and culture to help your e-commerce succeed. Are you considering a switch? Let Falcon Fulfillment help your e-commerce business thrive.

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6 Ways to Improve Order Picking Accuracy

6 Ways to Improve Picking Accuracy

Consumers increasingly rely on e-commerce to meet the demands of their busy lives, expecting accurate orders. While a delayed order can be a setback, an entirely inaccurate one is more than a frustrating inconvenience. A single picking error not only erodes customer trust but also diminishes profitability. Furthermore, picking errors can significantly impact warehouse productivity, resulting in a loss of revenue and profitability. Hence, companies must prioritize order accuracy. Here are six ways to enhance picking accuracy and maintain customer satisfaction.


The Importance of Order Picking Accuracy

In simple terms, the order-picking process involves retrieving items purchased by the customer from inventory and preparing them for shipment. It stands out as one of the most labor-intensive tasks in a warehouse or fulfillment center. Order picking typically constitutes 55% of warehouse operating costs and involves a substantial human touch, leading to the potential for human error. Additionally, the process demands a significant amount of strenuous physical labor, resulting in a slow and potentially hazardous operation. This underscores the importance of consistently enhancing order-picking accuracy and efficiency for the success of a business.

improve order picking accuracy

6 Ways to Improve Picking Accuracy

Analyze Product Velocity

Product velocity refers to the quantity and frequency of the SKU picked over a designated time. Evaluating product velocity ensures that commonly ordered items are strategically located within easy access to picking areas. Some best practices when considering the velocity of a SKU include:

  • Determine fast, medium, and slow movers and slot them accordingly (e.g., place slow movers further from picking areas).
  • Examine and evaluate picking days, averages vs. optimal.
  • Store high-velocity SKUs in a readily accessible location for easy selection and replenishment.
  • Determine if individual SKU velocities are affected by seasons or promotions.

Properly analyzing product velocity allows you to arrange warehouse storage in the most efficient manner, improving picking accuracy and order fulfillment cycle times.

Strategically organizing inventory

Enhancing picking accuracy is significantly influenced by strategically organizing inventory. Warehouses often adopt an organizational approach by creating zones where similar items are grouped together. This method is particularly useful when implementing zone-based and batch-picking methods. Another effective strategy is slotting, which entails strategically placing cases for easy access and replenishment. Regardless of the chosen inventory storage method, organization is crucial to maximizing pickers’ chances of selecting the correct items.

improve order picking accuracy

Establish picking routes

Creating clear picking routes or establishing a streamlined traffic flow within the warehouse allows pickers to fulfill orders seamlessly. This minimizes backtracking through aisles, reducing both costs and time. Overcrowded aisles are also alleviated by the implementation of well-defined picking routes.

Maintain accurate inventory data

The effectiveness of organized picking routes hinges on accurate inventory data. An organized and efficiently routed picker may face challenges if the selected product is misplaced or out of stock. To enhance picking accuracy, it is imperative to maintain a precise foundation of real-time inventory storage, quantities, and locations. The integration of an automated inventory management system can dramatically improve inventory data.

Analyze error data

Continuous improvement relies on tracking and analyzing picking accuracy data. Regularly reviewing this data provides insights into when and where problems occur, offering operational clarity about staff suitability for specific tasks. Additionally, it serves as a tool to incentivize pickers for improved order accuracy. Lastly, systematic or procedural issues become apparent when thoroughly examining error data.

improve order picking accuracy

Use technology

Embracing technology, whether transitioning to a fully automated warehouse system run by robots or adopting incremental technological improvements, can significantly elevate picking accuracy. Numerous proven solutions exist to reduce human error and enhance accuracy. Consider the following technology solutions:

Radio frequency scanning devices

Utilizing lightweight, hand-held scanners for accurate barcode reading confirms the correct product selection. These devices streamline the process by eliminating the need to read labels, improving both speed and accuracy.

Visual logistics

Going beyond traditional barcode or QR code methods, visual logistics incorporates images of the product on the scanner and/or visual bin locations.

Pick to light

PTL is an order-picking technology that uses lights and LEDs on racks or shelves to indicate pick locations, guiding pickers through their tasks. It has proven to increase picking efficiency compared to RF or paper pick lists.

Voice-directed picking

Voice picking, a hands-free and eyes-free system, guides pickers through tasks by providing verbal instructions. This system integrates headsets and advanced speech recognition software with the system of record (WMS, ERP, Inventory System).

Conveyor systems

The sophistication of conveyor systems varies, with sortation conveyors being particularly useful in improving order accuracy. Systems that allow pickers to stay in a single location as items are brought directly to them are also beneficial. The choice of the best conveyor system depends on factors like warehouse size, layout, and product diversity.


Whether you decide to implement one or all six ways to enhance picking accuracy, they embody a crucial element of successful fulfillment. Customers expect to receive the exact product they order. Business owners and warehouse managers acknowledge the importance of picking accuracy in ensuring customer satisfaction, but consistently upholding this standard can pose a challenge. If your business prioritizes picking accuracy but aims to ease the responsibility of maintaining the highest standards, let Falcon Fulfillment assist you. We uphold a 99.9% accuracy rating and are enthusiastic about ensuring that your customers consistently get what they’ve paid for. Contact one of our agents today.

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Best Practices to Avoid Overstocking

Best Practices to Avoid Overstocking

Best Practices to Avoid Overstocking

Have you ever had this experience? Last season your best-selling product sold out quickly because of supply chain issues and inadequate stock levels that couldn’t meet demand. You determined to avoid making the same mistake this year and ordered double the quantity. Customer trends shifted, and your best seller just became a slow-mover. Now, you are sitting on a pile of product that is not selling. Overstocking is ordering more inventory than you can sell. It can be costly and cause major headaches for business owners. It can lead to a surplus of unsold, unusable items and a loss of profits. To avoid overstocking and ensure your business’s long-term success, here are some best practices to follow:


best practices avoid overstocking

1. Analyze your inventory data.

Analyzing your data will help you determine how much inventory you need to keep on hand and when to order more. To effectively analyze inventory data, deciding on the key metrics that require tracking and monitoring, such as sales, costs, inventory levels, and customer demand is essential. Once these metrics have been identified, the data should be organized into categories that can be easily compared, such as product type, region, period, and customer. With this data, trends, and correlations can be identified and further analyzed. Additionally, it is important to keep track of any changes to inventory or sales over time, as well as any changes in customer demand or pricing. By tracking and analyzing these data points, organizations can gain valuable insights into their inventory performance and make more informed decisions.

best practices avoid overstocking

2. Monitor customer trends.

One of the best practices to avoid overstocking is knowing what products are trending can help you identify which items to stock and which to avoid. To do this effectively, businesses should look at customer data and feedback gathered through customer surveys, website analytics, and social media analytics. This data can be used to identify which products are popular and in demand and what kind of customer service they need. Additionally, businesses should explore emerging trends in customer buying behavior to keep up with changing customer needs and preferences. Tracking these behaviors over time and each season is crucial to avoid overstocking. Finally, businesses should use this data to create marketing campaigns and offers that target customer trends and ensure customer satisfaction.

best practices avoid overstocking

3. Track inventory levels.

Monitor your inventory levels to ensure you always have the items your customers need. To track inventory levels effectively, companies should use a comprehensive inventory management system that tracks each item from when it is purchased to when it is sold. This should include a detailed record of all purchases, sales, and shipments. Companies should also use barcode scanners to scan and record all items entering and leaving their warehouse. Companies should also set up a system to regularly audit their inventory to ensure accuracy and identify potential issues. Finally, companies should use a reliable forecasting system to anticipate future demand and accurately plan their inventory levels. You can restock quickly and avoid overstocking if something is about to run out.

best practices avoid overstocking

4. Utilize inventory management software.

The arduous task of inventory management can be streamlined by using technology. This best practice to avoid overstocking begins with implementing inventory management software can help you track and manage your inventory levels, eliminating a great deal of manual work. This can help you determine the right amount of stock to keep on hand and when to order more. When choosing an inventory management system, ensure they offer barcoding, inventory control, inventory tracking and reporting, alerts, and the ability to forecast. Here are a few of the industries leading inventory management programs. Each offers unique capabilities that cater to individual business needs.

5. Outsource inventory management.

If you don’t have the time or resources to manage your inventory, consider outsourcing it to a third-party supplier. Most 3PL companies can include this aspect as part of their service offering, and they have extensive experience. Partnering with a solid 3PL can allow you to focus on other aspects of your business while ensuring you always have the right amount of stock.


Taking the time to analyze your inventory data, track customer trends, and utilize inventory management software will help you make the most of your inventory and maximize your profits. By following these best practices to avoid overstocking, you’ll be able to avoid the costly problem of overstocking and ensure your business’s long-term success.

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