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Pandemic struggles for online sellers: moving ahead

After two years of COVID-19, 4Psite conducted a survey to assess the pandemic's impact on the needs of ecommerce merchants. By now, it is fair to admit that we will need to live with the consequences of the pandemic for some time to come. In addition, the world is being struck by new difficulties due to the war in Ukraine and the economic sanctions on Russia which are all impacting the economy once again.

For example, as a small company, it was difficult enough to hire employees back then and now, things are not easier at all. The way we work has changed completely; either for a hybrid or full time stay-at-home model, companies need to provide flexible workflows. It's imperative now to accommodate the business' needs in the midst of having a functional team.

Imagine a team of 20 workers, each one located in different places around the world. This possibility is amazing for individual development, but the staff needs to be synchronized to get the work done. Also, employees are now choosing companies that allow them to focus on their own quality of life, because things can change again in the blink of an eye. It's unpredictable and you can't foresee the future, but ecommerce has been a reliable source of everything from the most basic survival supplies to casual shopping throughout these years and it will stay that way.

To better understand the online seller’s struggles throughout these challenging times, 4Psite is sharing the results and answers we received from our clients and other retailers around the world who responded to our survey. Note that this is not a scientific article, since the information here was provided informally by our clients and other online respondents, and is based on their experiences.

Here are some of the top challenges faced by online retailers during the pandemic:

  • Inventory optimization: When faced with unreliable lead times, rising transportation costs and unpredictable sales, businesses have a hard time optimizing their inventory levels. Two phenomena are most stringent: either retailers keep very high inventory levels for certain products, or they manage backorders for some if not all items. Lean inventory management is hard to achieve in this context.

Some solutions for this matter would be to enhance visibility through reliable sales & inventory reports and flexible purchasing options (being able to resort to automated purchasing for the top selling items and a more manual approach for seasonal items).

  • Supply chain & manufacturing delays: The supply chain has been extremely unpredictable during the past two years and will likely continue to suffer from the pandemic’s consequences. Retailers have been forced to sell items on backorder with the risk of having to refund their customers if the items were never delivered, and to look into new supply sources (new suppliers, new products, new fulfillment options like dropshipping). This requires a flexible system that can accommodate all these changes effortlessly.

  • Pricing competitiveness: Due to rising raw material & transportation costs, online sellers have been faced with pricing competitiveness challenges. They have had to lower their margins to maintain attractive pricing for customers, all the while striving to keep their turnover in line with their goals. Solution: A flexible, automated order & inventory management system allows for economies of scale. With increased efficiency, comes growth. For example, features that retailers were doing manually before the pandemic could be converted into automations, so that the personnel may focus on other tasks like customer service, product management & other high-value tasks.

  • Shipping costs: Due to the imprevisibility of the current economic environment, shipping carriers have also increased their rates and the due dates for delivery have undoubtedly been affected as well. Especially when dealing with international orders, business owners should be guarded by this aspect in the final process of fulfillment. A solution is to have negotiated rates directly with the carriers and make sure to select insurance on your deliveries.

Still according to the information we gathered, here are some other challenges that online sellers have faced:

  • Order information accuracy due to customers not providing reliable addresses;

  • Returns & fraud prevention;

  • Multi-channel management, since retailers have opened new sales channels in the need to diversify their offering & maintain proper revenue streams;

  • Customer retention has proven to be difficult too, customers looking for the fastest order & delivery lead times, low prices and end-to end customer service;

  • Shipping efficiently coupled with employee turnover has been challenging in an era when the staff’s presence does not necessarily match the order volume that needs to be fulfilled, and carriers’ pick up & delivery times are unpredictable.

The 4Psite survey also provides us with insights into the most significant features for ecommerce businesses. End-to-end centralization & order management is obviously one of the major must-haves for online sellers.

Next to it, comes accurate & central inventory management - an essential component of efficient business operations. A Warehouse Management System is also an important area for many businesses.

For order fulfillment, dropshipping automation and accurate shipping & picking are on a par.

Quite new in the small & medium sized online sellers’ universe is EDI, which is now regarded as one of the major ways of communicating with large retailers, marketplaces and/ or top-tier suppliers for dropshipping.

We show below in a graphic representation how our clients responded as to their most essential needs:

Are our pandemic struggles behind us? How long is the war going to take? The consequences of these phenomena are going to be long lasting, unfortunately. But other factors may influence the market and also add new struggles to the already unpredictable life of online business.

You can't anticipate episodes that will most likely affect your life and the way you earn your incomes. As human beings, we adapt to what the environment is asking from us and technology should follow the times. The important thing is to be ready, by staying flexible, open-minded and having a reliable order and inventory management system that will take you where you want to go.

Are your challenges different from the ones we gathered? Are your difficulties the same as our clients described? We'd love to hear your thoughts and how we can be a helping hand for your future plans in ecommerce.

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