Key Challenges in Fulfillment Operations

In 2025, global e-commerce is expected to reach $6.56T, meaning brands must rethink their operations to meet demand and stay competitive. Brands must fulfill orders across every channel within 24-48 hours with perfect accuracy. This demands a new operational framework. After analyzing 500+ commerce brands managing over $10B in order volume, we discovered the key difference between struggling and scaling operations is not tools but the infrastructure. Many brands are trying to solve operational challenges by adding more tools, new order management systems, integrations, or AI-powered analytics. If their core infrastructure (how their systems, data, and processes connect) is weak, those tools won’t fix the real problem. Successful operations rest on three foundational pillars: 1. Connected systems: One unified data model eliminates siloed information. This enables real-time visibility across ERPs, warehouses, and marketplaces and is essential for rapid order fulfillment. 2. Intelligent orchestration: Automated order routing based on real-time inventory prevents stockouts and shipping delays. When a $400M brand implemented this, they went from manual order management to processing a sale every 3 seconds across 40+ selling points. 3. Unified data flow: A single source of truth for all operations data. One enterprise discovered $1.5M in annual cost savings simply by eliminating manual reconciliation between systems. 4. Scalable foundation: Your infrastructure should reduce complexity as you grow, not add to it. Top brands process 10x more orders with 30% less manual work by building operations this way. Modern commerce demands operational excellence. Build your foundation for scale, not maintenance. Your operations will evolve only through infrastructure that matches how customers actually buy today.

Imagine this: every distribution process goes haywire. Shipments are delayed, inventory is mismanaged and customer complaints flood in. It’s a distribution dystopia where everything that could go wrong, does. But don’t panic—let’s turn this nightmare into a masterclass on building a resilient logistics plan that can weather even the worst disruptions. Here’s how to prepare for the apocalypse of distribution disasters: 🔧 1. Build a robust contingency plan Strategy: Develop detailed contingency plans for various scenarios—natural disasters, supplier failures or transportation strikes. Ensure these plans include alternative routes, backup suppliers and emergency response teams. In Action: After a major storm disrupted their primary distribution center, a company activated their backup site and rerouted shipments, minimizing delays and maintaining customer satisfaction. 💡 2. Diversify your supply chain Strategy: Build relationships with multiple suppliers and carriers. Consider sourcing from different regions and using various transportation modes. In Action: A retailer with multiple suppliers for key products was able to switch sources seamlessly when one supplier experienced a major disruption, ensuring product availability. 🔍 3. Invest in real-time tracking and visibility Strategy: Implement real-time tracking systems for shipments and inventory. This visibility helps you quickly identify and address issues before they escalate. In Action: A logistics provider using real-time tracking could pinpoint delays in transit, reroute deliveries promptly and communicate updates to customers effectively. 🔄 4. Strengthen communication channels Strategy: Establish clear communication protocols and invest in tools that facilitate rapid updates and collaboration. Regularly review and update contact lists and escalation procedures. In Action: A company with a robust communication system managed to keep customers informed during a major supply chain disruption, maintaining trust and transparency. 📊 5. Implement agile and flexible processes Strategy: Adopt agile practices in your logistics processes. Train your team to adapt quickly to changing conditions and implement technologies that allow for rapid adjustments. In Action: A fulfillment center that used agile methodologies was able to quickly pivot its processes and reallocate resources during an unexpected surge in orders. 💪 6. Conduct regular risk assessments and drills Strategy: Perform regular risk assessments to identify vulnerabilities and conduct drills to practice your response to various scenarios. In Action: A company that regularly tested its disaster recovery plan was better prepared when a significant disruption occurred, allowing for a quicker and more effective response. Do you have any distribution horror stories? 🍿🤏 #SupplyChain #Distribution #CargoMargo

Lessons Learned from Running a Fulfillment Center: A Deep Dive into Logistics Running e53 Fulfillment has been one of the most rewarding yet challenging journeys of my professional life. Logistics is often perceived as a behind-the-scenes operation, but I’ve learned that it’s the backbone of every thriving e-commerce brand. Here's what I’ve discovered along the way: 1. Adaptability Is Key: The world of logistics is constantly evolving. Whether it's managing the surge of holiday orders, dealing with unexpected global supply chain disruptions, or meeting unique client demands, flexibility is non-negotiable. I've realized that a willingness to embrace change and adopt new technologies can make all the difference. 2. Teamwork Drives Success No fulfillment center can run smoothly without a dedicated team. It's not just about hiring the right people but empowering them with clear communication, training, and a supportive culture. I’ve seen firsthand how a motivated team can solve problems that seem insurmountable. 3. Customer Relationships Matter The trust our clients place in us to store, handle, and deliver their products is immense. Over the years, I’ve learned that transparent communication and proactive problem-solving build lasting partnerships. If something goes wrong, owning up to it and finding solutions strengthens trust even more. 4. Technology Is a Game-Changer From inventory management systems to AI-driven order forecasting, leveraging the right tools has been instrumental in ensuring efficiency. Technology allows us to streamline processes, reduce errors, and deliver the speed and accuracy that clients expect. 5. Every Problem Is an Opportunity Challenges are inevitable, but they are also opportunities to improve. For instance, one of our biggest learning moments came during a major inventory misalignment issue. It was tough, but it pushed us to refine our systems and improve accuracy across the board. 6. Scalability and Sustainability Go Hand in Hand As brands grow, their needs change. Running a fulfillment center has taught me to think not just about the present but also about how we can scale operations efficiently while minimizing waste and fostering eco-friendly practices. 7. The Human Element Is Everything Despite the rise of automation and technology, genuine relationships and understanding clients' needs have been key to our success. The challenges I’ve faced have strengthened me as a leader and e53 Fulfillment as a company. My biggest takeaway? Logistics isn't just about moving products, it's about enabling dreams and supporting businesses. If you’re running a business or scaling operations, remember: every hurdle you face is an opportunity to grow. And when you’re ready to partner with someone who understands those challenges, I’m here to help. Let’s build something great together!

Your fulfillment partner shapes your brand's future. Most sellers treat 3PLs like commodity vendors. = Wrong approach. Dead wrong. Here's what this means for ecommerce brand entrepreneurs: → Your fulfillment center becomes an extension of your brand promise → Speed to FBA dictates inventory velocity and cash flow cycles → Transparent operations prevent the profit leaks that kill margins → Scalable infrastructure determines whether you grow or plateau We've analyzed hundreds of seller partnerships over the past 18 months. The pattern is clear: 𝗦𝗲𝗹𝗹𝗲𝗿𝘀 𝘄𝗵𝗼 𝗰𝗵𝗼𝗼𝘀𝗲 𝗯𝗮𝘀𝗲𝗱 𝗼𝗻 𝗽𝗿𝗶𝗰𝗲 𝗮𝗹𝗼𝗻𝗲: • Face 23% more stockout incidents • Experience 40% longer resolution times for issues • Report significantly higher stress levels during peak seasons 𝗦𝗲𝗹𝗹𝗲𝗿𝘀 𝘄𝗵𝗼 𝗽𝗿𝗶𝗼𝗿𝗶𝘁𝗶𝘇𝗲 𝗼𝗽𝗲𝗿𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗮𝗹𝗶𝗴𝗻𝗺𝗲𝗻𝘁: • Scale inventory turns 31% faster • Maintain consistent FBA shipping speeds • Build predictable cash flow models that support growth The difference isn't just logistics. It's strategic infrastructure. When your 3PL processes your FBA shipments same-day, that's not just efficiency - that's competitive advantage. When their warehouse management system gives you real-time visibility, that's not convenience - that's control. We've watched too many promising brands stall because they treated fulfillment as an afterthought instead of a growth lever. Your warehouse partner either accelerates your trajectory or anchors you to mediocrity. Choose accordingly. What's your biggest fulfillment challenge right now? 𝗣.𝗦. The sellers moving thousands of units monthly all have one thing in common: they stopped optimizing for cheapest and started optimizing for fastest, most reliable operations.

Ship From Store (SFS). It's critical to a retailer’s fulfillment strategy. But it’s underutilized. Here’s why 👇 Many large retailers use SFS to fulfill a high % of digital orders: -Target -Walmart -Dicks Sporting Goods But they have assets many others don’t: -Large store footprint -Significant inventory coverage -Standalone store locations -High daily store package volume So, what about everyone else? SFS challenges are significant. ➡️ Inventory •accurate deployment •in-store accuracy •real-time visibility ➡️ Store processes SFS is treated as an “extra” store process. [if not well-planned] Locating items and completing orders can be inefficient. ➡️Shipping SFS shipping can be inefficient and expensive. [compared to shipping from an FC] Carriers incur higher costs. This results in high(er) parcel rates. And is compounded by split shipments due to: -inefficient inventory placement -inefficient store processes [e.g. low fill rate] ----- Solving these challenges is hard. And requires an intentional strategy, including: ➡️ Inventory Deploying inventory based on: in-store demand AND in-market digital demand ➡️ Store fulfillment Store personnel with: •primary SFS responsibility •well-defined processes •productivity metrics The goal should be to maximize: •units per package •daily shipped packages per store ----- The retailers which transform SFS from: shipping “extra” available inventory TO efficiently fulfilling local demand Will win. #retailing #omnichannel #ecommerce #logistics

Most brands wait until EOY to evaluate their fulfillment strategy. Boo! Don't be like them. By then, you’re reacting instead of planning. At minimum, do it every quarter. Here’s what to look for. 1 - SKU Placement Are your top-performing SKUs in the right locations to reduce last-mile delivery costs? SKU placement isn’t just geography; it’s about demand intelligence. Analyze your sales data to uncover where most of your orders originate. For example, are customers in the Midwest consistently ordering your top-selling SKU? If so, ensure it’s stocked in a fulfillment center nearby to avoid costly zone shipping. Match SKU velocity to proximity!! Fast movers need to be close to your biggest customer bases. However, low-demand SKUs should be centralized in one or two hubs to reduce overstock across multiple locations. Find ways to optimize replen cycles. Automating replenishment ensures SKUs are always where they’re needed. 2 - Inventory Balance WAY more than a numbers game. It's more about efficiency and cash flow. Set dynamic safety stock levels by creating flexible thresholds for each SKU but also accounting for peaks in your biz. Move slow movers strategically. Relocate underperforming products to centralized hubs or offer promotions to clear out excess stock, freeing space for high-demand items. 3 - Carrier Performance This will be THE year to get it right. There were a lot of changes in 2024 that will impact you in 2025. I worked for a company competing against the big four. Please please please, do the following. Measure actual vs. promised delivery times. Evaluate hidden fees. Conduct post-delivery surveys. In the end, quarterly reviews mean fewer surprises, lower costs, and happier customers. Make quarterly fulfillment audits a priority this year. #ecommerce #fulfillment #3PL

𝗜𝗻𝘃𝗲𝘀𝘁𝗶𝗻𝗴 𝗶𝗻 𝘄𝗼𝗿𝗹𝗱-𝗰𝗹𝗮𝘀𝘀 𝗳𝘂𝗹𝗳𝗶𝗹𝗹𝗺𝗲𝗻𝘁 𝗼𝗽𝗲𝗿𝗮𝘁𝗶𝗼𝗻𝘀 𝗰𝗮𝗻 𝘀𝗲𝘁 𝘆𝗼𝘂𝗿 𝗯𝗿𝗮𝗻𝗱 𝗮𝗽𝗮𝗿𝘁. I’ve seen too many young brands hit $10M+ in revenue, and fulfillment becomes their biggest bottleneck. - Orders delayed - Inventory miscounted - Customers pissed It’s the kind that doesn’t just hurt revenue—it kills your brand’s reputation. The brands that scale through this solve for three things: 𝟭. 𝗜𝗻𝘃𝗲𝘀𝘁 𝗶𝗻 𝗿𝗲𝗮𝗹 𝗶𝗻𝘃𝗲𝗻𝘁𝗼𝗿𝘆 𝗰𝗼𝗻𝘁𝗿𝗼𝗹 Do not send messy orders to your warehouse or 3PL partner; you and the customer will pay the price. Also, get off the disconnected spreadsheets. A trusted, real-time source of truth for inventory (like GoodDay Software) is non-negotiable. Only release orders that you know you have the inventory to support. 𝟮. 𝗖𝗵𝗼𝗼𝘀𝗲 𝟯𝗣𝗟𝘀 𝗹𝗶𝗸𝗲 𝘁𝗵𝗲𝘆’𝗿𝗲 𝘆𝗼𝘂𝗿 𝗰𝗼-𝗳𝗼𝘂𝗻𝗱𝗲𝗿𝘀 The wrong 3PL can tank your customer experience overnight; the right 3PL partner can meaningfully improve your experience. Find partners who will scale with you and operate with your urgency. Then, invest deeply in your relationship. 𝟯. 𝗢𝗽𝘁𝗶𝗺𝗶𝘇𝗲 𝗳𝗼𝗿 𝘀𝗽𝗲𝗲𝗱 𝗔𝗡𝗗 𝗮𝗰𝗰𝘂𝗿𝗮𝗰𝘆 Fulfilling orders quickly isn’t enough—you have to have a high bar for accuracy. Accuracy should improve, not degrade, over time. If you’re seeing a high number of mispicks or late shipments, your systems, people, and processes need to be fixed now, not later. Scaling past $10M is when fulfillment starts making or breaking brands. What’s the biggest challenge you’ve faced here?

𝗙𝗕𝗔 𝘃𝘀. 𝗙𝗕𝗠: 𝗧𝗵𝗲 𝗥𝗲𝗮𝗹 𝗖𝗼𝘀𝘁 𝗼𝗳 𝗡𝗼𝘁 𝗛𝗮𝘃𝗶𝗻𝗴 𝗮 𝗣𝗹𝗮𝗻 Many brands rely on 𝗙𝗕𝗔 𝘄𝗶𝘁𝗵𝗼𝘂𝘁 𝗿𝗲𝗮𝗹𝗶𝘇𝗶𝗻𝗴 𝘁𝗵𝗲 𝗵𝗶𝗱𝗱𝗲𝗻 𝗰𝗼𝘀𝘁𝘀. Amazon’s fees are rising, storage space is shrinking, and restock timelines are unpredictable. If your fulfillment strategy depends solely on FBA, you’re exposing your business to unnecessary risks. 𝗪𝗵𝘆 𝗕𝗿𝗮𝗻𝗱𝘀 𝗗𝗲𝗳𝗮𝘂𝗹𝘁 𝘁𝗼 𝗙𝗕𝗔 (𝗔𝗻𝗱 𝗪𝗵𝘆 𝗜𝘁’𝘀 𝗮 𝗣𝗿𝗼𝗯𝗹𝗲𝗺) FBA offers: ✔️ Faster shipping with Prime eligibility ✔️ Higher conversion rates But here’s what many brands overlook: 𝗙𝗕𝗔 𝗳𝗲𝗲𝘀 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗲 𝗮𝗻𝗻𝘂𝗮𝗹𝗹𝘆, cutting into margins. 𝗥𝗲𝘀𝘁𝗼𝗰𝗸 𝗹𝗶𝗺𝗶𝘁𝘀 prevent brands from keeping enough inventory in FBA, leading to stock-outs. 𝗥𝗲𝗰𝗲𝗶𝘃𝗶𝗻𝗴 𝗱𝗲𝗹𝗮𝘆𝘀 (𝟰𝟱-𝟵𝟬 𝗱𝗮𝘆𝘀) make it impossible to replenish fast-moving SKUs in time. 𝗧𝗵𝗲 𝗖𝗼𝘀𝘁 𝗼𝗳 𝗥𝗲𝗹𝘆𝗶𝗻𝗴 𝗦𝗼𝗹𝗲𝗹𝘆 𝗼𝗻 𝗙𝗕𝗔 Brands that don’t build a 𝗵𝘆𝗯𝗿𝗶𝗱 𝗳𝘂𝗹𝗳𝗶𝗹𝗹𝗺𝗲𝗻𝘁 𝗽𝗹𝗮𝗻 often face: 𝗦𝘁𝗼𝗰𝗸-𝗼𝘂𝘁𝘀 𝗮𝘁 𝗰𝗿𝗶𝘁𝗶𝗰𝗮𝗹 𝘁𝗶𝗺𝗲𝘀. High-demand products sell out, and replenishment is stuck in FBA’s queue. 𝗘𝘅𝗽𝗲𝗻𝘀𝗶𝘃𝗲 𝗳𝘂𝗹𝗳𝗶𝗹𝗹𝗺𝗲𝗻𝘁 𝗰𝗼𝘀𝘁𝘀. Last-minute replenishments lead to higher placement fees and costly carrier shipping. 𝗧𝗵𝗲 𝗦𝗼𝗹𝘂𝘁𝗶𝗼𝗻: 𝗔 𝗛𝘆𝗯𝗿𝗶𝗱 𝗙𝗕𝗔 + 𝗙𝗕𝗠 𝗠𝗼𝗱𝗲𝗹 A 𝗯𝗮𝗹𝗮𝗻𝗰𝗲𝗱 𝗳𝘂𝗹𝗳𝗶𝗹𝗹𝗺𝗲𝗻𝘁 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆 allows brands to: ✔️ 𝗠𝗮𝘅𝗶𝗺𝗶𝘇𝗲 𝗣𝗿𝗶𝗺𝗲 𝗲𝗹𝗶𝗴𝗶𝗯𝗶𝗹𝗶𝘁𝘆 while maintaining control over inventory. ✔️ 𝗔𝘃𝗼𝗶𝗱 𝘀𝘁𝗼𝗰𝗸𝗼𝘂𝘁𝘀 by using FBM as a backup when FBA limits create bottlenecks. ✔️ 𝗥𝗲𝗱𝘂𝗰𝗲 𝗰𝗼𝘀𝘁𝘀 by leveraging 3PLs and in-house fulfillment for better margin control. 𝗖𝗮𝘀𝗲 𝗦𝘁𝘂𝗱𝘆: 𝗛𝗼𝘄 𝗮 𝗗𝗧𝗖 𝗕𝗿𝗮𝗻𝗱 𝗨𝗻𝗹𝗼𝗰𝗸𝗲𝗱 $𝟯𝗠 𝗶𝗻 𝗤𝟰 𝗦𝗮𝗹𝗲𝘀 A fast-growing 𝗗𝗧𝗖 𝗯𝗿𝗮𝗻𝗱 faced a major problem before Q4: 𝗗𝗲𝗺𝗮𝗻𝗱 𝘄𝗮𝘀 𝘀𝗸𝘆𝗿𝗼𝗰𝗸𝗲𝘁𝗶𝗻𝗴, but production couldn’t keep up. They needed to allocate inventory for both 𝗗𝗧𝗖 𝗮𝗻𝗱 𝗔𝗺𝗮𝘇𝗼𝗻 but couldn’t risk FBA’s 45-90 day receiving delays. The solution? A hybrid fulfillment approach. ✔️ FBA for predictable inventory. ✔️ FBM to fulfill overflow demand and limited inventory products directly. ✔️ $3M in additional Q4 revenue captured through FBM (Non-Prime). 𝗛𝗼𝘄 𝘁𝗼 𝗔𝗽𝗽𝗹𝘆 𝗧𝗵𝗶𝘀 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝘆 1️⃣ Identify SKUs that frequently sell out or are challenged to maintain replenishment. 2️⃣ Set up an FBM option through a 3PL or in-house fulfillment. (Don't have a 3PL partner, we can help you find one) 3️⃣ Monitor restock challenges and adjust inventory flow between FBA and FBM. Are you still relying only on FBA, or have you explored a hybrid approach? Drop a comment with your biggest fulfillment challenge.

What worked at 100 orders a day won’t work at 10,000. Most retailers begin with simple fulfillment workflows that work fine when volumes are low. But as omnichannel strategies kick in, offering same-day delivery, fulfilling from stores, or managing spikes in online demand, those basic processes quickly start to break down. Shopify’s native order routing is a solid fit for small-scale operations. But as complexity grows, so does the need for smarter, more flexible fulfillment decisions. Routing every order to a store? Not scalable. Sending everything to a warehouse? Not fast enough. A more balanced approach considers the urgency of delivery, inventory availability, and store capacity. Need it today or tomorrow? Route it to the closest store that has stock and can fulfill it quickly. Standard shipping? Send it from the warehouse where fulfillment is more cost-effective. And proximity alone doesn’t cut it. A nearby store without stock or capacity can create delays instead of reducing them. That’s where intelligent order routing makes a difference. HotWax Commerce gives retailers the ability to define dynamic fulfillment rules, based on delivery promise, inventory position, and store capability, and adjust them as business conditions evolve. Smarter routing leads to faster delivery, better inventory turnover, and happier customers. Scaling fulfillment doesn’t have to mean adding chaos, just better decisions. #orderfulfillment #omnichannel #shipfromstore #retailtech #shopify #inventorymanagement

Struggling with margin compression in your fulfillment operation? The common action is to push throughput expectations. This is short sighted. It typically will result in a quick but short lived lift. The more sustainable and effective way to get margin back? Place a focus on, and put management reporting and controls around, administrative and non-revenue generating activities. Easiest things to attack where I see most SMB fulfillment providers leaking cash: 🖊️ Office supplies 📦 Packaging & Consumables, 🧍 Hiring & Onboarding 💻 Device management 🦺 PPE (gloves, cutters, hi-viz vests) 🧑🏫 Training Addressing theses topics result in long term fixes that allow you to then focus in on sustainable projects and programs related to the more difficult productivity challenges!