E-commerce Operations

An online order goes through a cycle from the customer clicking buy to the product arriving and maybe coming back. Each step can fail. Knowing the cycle shows where to put checks.

• The cycle has six steps: order, pick, pack, ship, deliver and return.
• Each step has a person or system responsible and a typical time, which you should record.
• Errors early in the cycle, such as picking the wrong item, cause costly returns later.
• Time each step for a sample of orders to find the slowest step.
• A common mistake is to look only at shipping speed and ignore errors in picking.

Activity. Map the cycle for your shop as a flow chart with the person, the tool and the typical time at each step.

Standard to meet. Map all six steps with owners and times, and mark at least two places where errors are likely.

Good stock control means you know what you have and where it is. You count regularly and reorder in time. Running out loses sales and holding too much ties up money.

• Give every item a bin or shelf label and a code that matches your sales list.
• Count stock each week and fix any difference between the count and the record.
• Calculate the reorder point as daily sales times the days to restock plus a safety amount.
• Record each reorder with the date, quantity and supplier.
• A common mistake is to trust the stock record without counting.

Activity. Set up a stock sheet for at least 15 items with bin labels, counts and reorder points, then do a count and fix any differences.

Standard to meet. Match your count to the record for at least 90% of items after correction, and show a worked calculation for each reorder point.

Picking is finding the right item and packing is protecting it for delivery. Small checks at this stage stop most errors. Speed comes after accuracy.

• Use a pick list that shows the item code, location and quantity for each order line.
• Check the item against the order by scanning or by reading the code aloud before it goes in the box.
• Pack with filling so the item cannot move, and add a packing slip with the order number.
• Measure accuracy as the number of correct orders divided by the total orders.
• A common mistake is to speed up without checking, which raises errors and returns.

Activity. Pick and pack at least 20 real or practice orders, record the time and errors for each, and calculate accuracy and average time per order.

Standard to meet. Reach an accuracy of at least 95%, record the time of each order and say what caused each error.

Shipping is about keeping a promise on time. A daily cutoff and tracking numbers help customers know when to expect delivery. Delays should be told early.

• Set a daily cutoff time, such as 2 pm, and tell customers what it means for their order.
• Hand parcels to the carrier at the same time each day and keep the receipt.
• Send tracking information to the customer within an hour of dispatch.
• Contact customers early when a parcel is delayed and offer a clear next step.
• A common mistake is to promise next-day delivery for orders placed after the cutoff.

Activity. Ship at least 10 test orders and complete a log with cutoff time, dispatch time, tracking number and the message sent.

Standard to meet. Show in your log every order dispatched on its promised day and every customer message sent within an hour.

Returns are part of online selling. A clear policy and a quick, fair process keeps customers and saves money. You also learn from why items come back.

• Write a returns policy in plain words with the time limit, condition required and how refunds are made.
• Inspect each returned item and record the reason and the condition.
• Refund or swap within a stated time, such as 5 days after the item arrives.
• Put returned goods back into stock only if they are in saleable condition.
• A common mistake is to keep no record of reasons, which loses useful information.

Activity. Process at least five test returns and keep a log with the reason, condition, decision, refund amount and time taken.

Standard to meet. Record a reason for every return, process all within your stated time and identify the most common reason.

Good service means a fast, kind and helpful reply. Template answers save time but must still feel personal. You also know when to pass a case to someone else.

• Aim to reply to every message within 24 hours and track the time to first reply.
• Write template answers for common questions such as delay, wrong item and refund status.
• Add the customer name and order number to every reply so it feels personal.
• Pass a case to a senior person when it involves a safety issue, a legal threat or an amount above your limit.
• A common mistake is to copy a template without checking it fits the question.

Activity. Write at least six template replies and answer 10 test messages, recording the reply time for each.

Standard to meet. Write clear and polite templates, send at least 90% of replies within 24 hours and include the order number in each reply.

You now run the shop operations for 30 days. Keep a complete log of orders, errors and costs. Honest numbers are the base for improvement.

• Record every order with the pick time, pack time, ship time and any error.
• Record every return and every complaint with a reason.
• Add up the cost of packing materials, labour time and shipping for each order.
• Calculate the error rate as orders with errors divided by total orders.
• A common mistake is to stop recording when the work gets busy.

Activity. Run order handling for 30 days and submit the order log, the error and returns log and a weekly summary with the error rate.

Standard to meet. Cover all 30 days in your log, calculate the weekly error rates correctly and give each error a cause.

The review looks at your data and decides what to fix first. You find the biggest cause of errors and plan a simple fix. Then you measure again.

• Group errors by cause, such as wrong size, wrong item or damage, and count each group.
• Find the cause that creates the most errors and focus on it first.
• Choose a simple, low-cost fix, such as a scan check or a better label.
• Set a target, such as halving that error cause, and a date to re-measure.
• A common mistake is to fix several things at once and not know which worked.

Activity. Present a plan showing your error causes, the chosen fix, the target and the date for the next review.

Standard to meet. Target the largest cause in your plan with a fix, a numeric target and a date.