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Amidst coronavirus, small businesses struggle with e-commerce fulfillment

Man in warehouse picks a package from a shelf for delivery

In the best of times, e-commerce fulfillment—the business of getting online orders delivered—is not simple.

When there is a global pandemic, nationwide “stay at home” orders, and a surge of online shopping, e-commerce fulfillment can become a make-or-break moment for small businesses.

Order fulfillment under pressure

According to Christy Parrish, vice president of global retail and e-commerce strategy at UPS, the coronavirus pandemic is affecting small merchants differently depending on their level of experience at selling and fulfilling orders online.

For small businesses that already sell online, the challenge is prioritization: third party fulfillment centers are pushing essential items like household staples and medical supplies to the front of the line, and forcing non-essential items to the back. This causes much longer delivery windows, which may prompt customers to look for faster delivery from a competitor’s site.

"Small businesses either have to convert their own backrooms into fulfillment operations or find an expert to help them,” says Parrish.

For small businesses in the United States, though, few e-commerce fulfillment services are tailored to their needs. Most traditional third party logistics providers cater to larger retailers and require significant upfront commitments beyond the reach of smaller customers.

The situation is urgent. According to a weekly UPS survey of U.S.-based small and medium-sized businesses taken at the end of March, more than three-quarters of respondents (77%) reported either negative or significantly negative effects as a result of the pandemic.

Baptism by fire

The other severely affected group consists of smaller merchants who run brick and mortar operations. Coronavirus has hit them particularly hard as statewide orders temporarily shutter many small businesses and bring in-store foot traffic to a halt.

"Maybe they’re mom and pop shops or regional retailers with stores that never really had an e-commerce presence. Many of them are now asking, 'How do I sell online? How do I go from taking one or two e-commerce orders to all my orders being online?’”

Learning how to sell and fulfill online doesn’t happen overnight. Steps like creating an e-commerce catalog or accepting online payments can feel daunting at first, says Parrish.

Demand for online sales

Amid the significant disruption caused by coronavirus, one thing seems clear—if you’re not online, you need to be.

It’s not exactly a new trend. E-commerce sales in the United States have been steadily growing as a proportion of total retail spend for many years, reaching 16.0% in 2019— almost one in every six dollars spent, according to analysis of Department of Commerce data by Digital Commerce 360.

Coronavirus has only accelerated this upward trajectory. Despite widespread anxiety about the impact of COVID-19 on the national economy, quarantined shoppers are turning to e-commerce in greater numbers than ever to purchase the items they want and need.  

The realities of life under lockdown are fueling demand for different types of online purchases. Shoppers are opening their pocketbooks to stock up not only on essential items but on products that complement their new routines.  

"You expect hand sanitizers, masks, even sewing kits—things like that—to be surging. But then there is this secondary level of demand because lifestyles are changing so drastically right now," adds Parrish. “Whether it’s home exercise equipment, groceries, or bikes for kids, products that make domestic life more comfortable are seeing an increase in demand.”

According to the Adobe Digital Economy Index, e-commerce sales in March shot up by 25% as stores closed and online shoppers quickly adjusted to new stay-at-home requirements. “That tells you a lot about what's really going on out there.”

Help for small businesses

So, what should small merchants experiencing demand but struggling to fulfill online orders do?

Speed is of the essence, says Parrish—as is partnering with a company that has deep experience with small business fulfillment. The complexity of trying to fulfill goods is much greater than many realize, particularly when e-commerce demand surges.

"Here’s the truth: picking and packing all those boxes becomes really daunting when you're running it out of your garage. It’s much easier to find someone who has expertise fulfilling e-commerce orders for small businesses,” adds Parrish. "A small business has to get orders, whether it's your own web store or through a marketplace, and very quickly process them for shipment."

An outsourced e-fulfillment service specifically for small businesses can prove invaluable in this regard. Parrish highlights UPS® eFulfillment, a turnkey solution for small online sellers processing between five and 50 orders per day. Onboarding for the program is simple and ensures continuity with existing sales channels.

“With the UPS eFulfillment service, we know how to fulfill for all the different places that you sell online, whether it's your own store or an online marketplace. So, you don't have to worry about all the rules, all the connections, and all the data that needs to flow in order to deliver the package. You just come in and say, 'I sell on this marketplace, and here are the things I sell. I’m going to give you my 100 units, I’m going to click a button, and you're going to take care of everything.’”

First-time online fulfillment

E-commerce fulfillment can also work for brick and mortar stores looking to sell online for the first time.

“If you're a mom and pop store, it might be tempting to start fulfilling out of your own store—but do you have the right boxes, do you have tape, and do you have the ability to print labels?” she asks. “These things can become confusing for a customer that doesn't do this normally.”

Parrish adds, "It might be better to send a box full of inventory into one of our warehouses. Then you can get your e-commerce operation properly up and running rather than trying to figure out how to box up 16 different things to go out today."

We’re in this together

These are uncertain times for businesses of all shapes and sizes. The pandemic closed or reduced operations at almost half of the small and medium-sized businesses polled in the UPS survey taken in the final week of March.

"Small businesses already operate under constant stress, almost in a crisis mode every day. Now you layer coronavirus on top of that, and the pressures are significant,” says Parrish.

Nonetheless, support is available for small businesses figuring out how to move through this challenging period. Whether your orders are set to spike or you’re struggling to fulfill existing orders, it’s important to get the assistance you need quickly.

“The important thing is that UPS is still operating, and because of that we can help a lot of these small businesses that are really being pinched in ways they never expected before. So, whether it's inventory planning, which is available through UPS eFulfillment, or just understanding how the supply chain works in an e-commerce environment, we're here and we can help.”

Learn more about how UPS can help your small business

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