eBook: Build an Ecommerce Tech Stack for Fast & Flawless Order Fulfillment

CHAPTERS

BUILD AN ECOMMERCE TECH STACK FOR FAST & FLAWLESS ORDER FULFILLMENT HOW-TO GUIDE

This guide outlines the must-have components, red flags, and steps for how to build a high-performance ecommerce technology (tech) stack.

What’s a Tech Stack?

Everyone wants fast and flawless ecommerce order fulfillment, but sometimes it seems impossible. You know technology can help, but with countless software options available, it’s hard to know where to start. Descartes has been in the logistics technology business for a long time, and we’re here to lift the burden. Let’s talk about tech stacks for ecommerce. A technology stack sounds more complex than it is. A tech stack, as ecommerce business leaders commonly define it, is simply a collection of software programs that all talk to each other and work together to accomplish a specific process. This is also called an app stack, especially by IT people, but, to avoid overcomplication, we call it a tech stack in this guide.

Whether you fulfill 50 orders per day or 50,000, a tech stack allows you to use integrated technology for things you used to do by hand, such as typing customer information into a label-printing program. A good tech stack will equip you with tools to increase efficiency, prevent errors, and make sure your customer gets the right order on time, every time. Tech stacks are not one-size-fits-all but can differ based on business type and growth stage. Think of a tech stack as a set of connected building blocks. You start at the ground and add each block of technology as your business grows. They all need to be sturdy and work together.

Do I Need a Tech Stack?

It’s Time For a Tech Stack When You Have:

• Unhappy Customers and Bad Reviews
  The most common problem is negative feedback from your customers, i.e., complaints about late orders, receiving the wrong items, and canceling orders due to inventory availability. In short, your customers will tell you where they need better performance from your business, so pay close attention to feedback both online and through your customer service team.

• Staffing Shortages and Overtime
  The second most common way to know you need integrated technology is to look at the overtime costs and if you are thinking of hiring new or temporary employees. Sometimes adding more people is a quick fix, but it can soon lead to inefficiencies and more fulfillment errors.

• Too Many Tedious, Error-Prone, Repetitive Tasks
  A third way to tell it’s time for a tech stack is when your workers frequently become bottlenecked by too many time-consuming manual tasks that should be automated. If manual data entry, handwritten records, double data entry, or manual configuration of settings/preferences is slowing you down, it’s time for a tech stack.

Without a foundation of scalable integrated technology, these problems will worsen as your business continues to grow.

Why Integrated Technology?

The Value of Integrated Technology

As your business starts to scale, you will outgrow certain processes and stand-alone technologies that used to work when it was smaller. Why use integrated technology for ecommerce?

• It makes businesses operate faster by preventing double data entry
• It improves accuracy and prevents keyed entry errors
• It provides greater visibility on holistic performance with cross-platform data
• It equips businesses to scale up and down as needed for growth and peak seasons
• It reduces the number of people needed to run fulfillment operations
• It saves businesses money

How can an integrated tech stack save my business money?

Businesses that invest in a tech stack often see a significant return on investment from:

• Savings in labor costs
• Savings in shipping costs
• Reduced shrink
• Increased fulfillment process efficiency
• Repeat business/evangelism from happy customers
• Decreased fulfillment errors

Your Tech Journey

Before we get too deep into software solutions details, let’s identify a basic tech journey for your business. While every business’ tech journey will be unique, everyone benefits from a high-level overview of how things fit together before getting started.

The tech stack journey for ecommerce fulfillment takes two very basic forms: direct-to-consumer (D2C) and business-to-business (B2B). As you begin to brainstorm the best tech journey for your business, these simplified examples will provide a basic idea of where to start.

Questions to consider when planning your tech journey:

Four Must-Have Capabilities of a Tech Stack

What belongs in an ecommerce tech stack?

Think of an ecommerce tech stack like a set of connected building blocks. You start at the ground when your business is small, and you add each block of technology to the stack as your business grows. Each block needs to be sturdy enough to support the weight of the next one, and it must be constructed to fit with the others in a secure way so the stack doesn’t topple. Depending on which stage your business is in right now, you may only need the first couple of blocks. However, you should choose them with the future stack in mind.

These programs work together to create a smooth experience every step of the way. For each program, we will cover important considerations for that type of software, the red flags to avoid when building your tech stack, and how to know when your business is ready to add that type of software. Again, you may not need all these capabilities yet, but understanding the programs will help you lay a solid foundation for future growth.

A mature ecommerce tech stack includes four capabilities for fulfillment: ecommerce platform, shipping, inventory/order management, and warehouse management.

1. Ecommerce Platform

The first block of your tech stack is an ecommerce platform. This is the software that allows your customers to shop from YOUR website rather than a marketplace such as Amazon or Etsy. As the foundation of your tech stack, it needs to support all the other programs you will eventually add. You can use a pre-built version or build your own.

You are ready for an ecommerce platform when:

• You want to run a fully functioning online store where people can purchase your products.
• You want secure payment processing for your customers.
• You want to manage sales, marketing, and your website all in one place.
• You want full control over your brand with a concrete online presence.

Considerations for choosing an ecommerce platform:

• Ease of use. It doesn’t have to be overly fancy, but it DOES need to be user-friendly.
• Integrations/applications/plugins to help you grow your business (i.e., marketing, website development, CRM)
• Scalability. Do you anticipate a high online sales volume? Make sure your platform can handle it.
• Need to handle both in-person (POS) and online sales? Not all platforms do this, so check for this capability.

Red flags when choosing an ecommerce platform:

• Limited customization for your brand’s look, feel, and experience
• Limited or small number of integrations
• Poor reputation for cyber/data security
• No online identity verification (i.e., single sign on, two-factor authentication)

2. Shipping Solution

The second building block of your ecommerce tech stack is shipping software. Not only will this save you time versus manually entering order information into carrier shipping websites (and all the typos!), but it will also allow you to rate-shop multiple carriers (i.e., FedEx, USPS, and UPS) to find the best shipping rates. Most shipping software companies negotiate discounted shipping rates with carriers and pass the savings along to their customers, so you will pay less for shipping through a software company than you would by using a carrier directly.

You are ready for a shipping solution when:

• You want cheaper shipping.
• Typing shipping information into a carrier’s website for every order is causing a HUGE bottleneck.
• Keyed entry errors are causing shipping problems and unhappy customers.
• You want to use more than one carrier and start shipping rate comparisons.

Considerations for choosing a shipping solution:

• Carrier rate shopping. Easily compare and choose the best price for a given shipping timeframe.
• Automations. Time-consuming, repetitive tasks can be automated to save time during shipping.
• Live customer support. Have a support team of real people to help keep things running smoothly.
• Integrations with all your preferred carriers, including support for all carrier-specific services.

Red flags when choosing a shipping solution:

• Limited number of integrations with all your sales channels and marketplaces.
• Automatic billing when you ship above your pricing tier. Some programs charge immediately.
• Limited scalability. Will your shipping software keep up during peak season or a surge in orders?
• Unstable company. Choose a company with a long-standing reputation of excellent service.

3. Inventory/Order Management

The third must-have capability of an ecommerce tech stack is an inventory/order management system. In short, this helps you know what’s in stock, prevents overselling, and organizes complex multi-channel orders. There are three types of software that accomplish this: an inventory management system (IMS), an order management system (OMS), and an enterprise resource planning (ERP) program.

What’s the difference between an IMS, OMS, and ERP?
IMS and OMS titles for software are often used interchangeably, with only slight differences between the two types of programs. Generally, an IMS is considered a more “lightweight” and less expensive program, while an OMS provides slightly more complex features and functionality to solve the same basic set of problems. If you compare the descriptions and offerings of different IMS and OMS programs, you will find the differences to be inconsistent and minor.

An ERP, on the other hand, is usually a much more robust software program than an IMS or OMS. It offers the inventory and order management capabilities of an IMS or OMS, plus advanced day-to-day business management tools. From procurement to processes, financials to human resources, an ERP delivers advanced software capabilities to manage highly complex business functions in one platform. While an IMS or OMS may be enough for a direct-to-consumer company, wholesale sellers and manufacturers need an ERP.

IMS and OMS are often used interchangeably, while ERP performs the tasks of an IMS/OMS plus additional functionality. When comparing these programs, focus on features and capabilities rather than software names. Based on the tech stack journey you have in mind, you may already have an idea which of these solutions could be the best fit for your business. If not, let’s explore each one in greater detail. Ultimately, it’s not the name of the software that matters; it’s finding the feature set that best solves your ecommerce fulfillment problems.