There are many reasons shipping errors occur. These include picking the wrong product in your warehouse and then shipping it. It could mean shipping the wrong quantity of a specific item. It can also mean shipping your products to the wrong address.
Regardless if you are a small, medium or even larger company any shipping error will cost you. What will Shipping Errors Cost You? Let’s take a look.
Loss of Future Orders
In the event of a customer that placed even a small order and received the wrong product, it is an unsatisfactory experience. Although “mistakes happen” in today’s economy, no matter what your remedy is, you may have lost potential repeat business and word-of-mouth referrals in addition to your own costs.
Charge Backs from Major Retailers or eCommerce Giants
Now, when you start playing with the “Big Boys” such as High Volume Retailers you are going to lose even more. If you ship the wrong item, quantities or miss a promise date not only do you need to remedy the situation but you may receive a “Charge Back!” Other reasons for Charge Backs include improper labeling of your products, boxes, packages or pallets, damaged merchandise or even improper packaging of your products according to agreed upon terms.
Expensive Return Processing
Regardless of the product, it costs you precious dollars to return or exchange it. Processing an RMA (Return Merchandise Authorization) Means administrative work (Customer Service or Web Service), return shipping costs (if your are shipping product back to your customer in an exchange), warehouse work or giving your customer her cash back. Think about it, unless you have these costs built into your margin, it’s going to affect your profitability.
In Conclusion, Double Check It Before You Ship It
Geez, it seems rudimentary but it really pays to make sure you have the correct procedures in place so you do not incur the shipping error expense. If you cannot afford a warehouse management system and bar-coding solution in your operations (Like DCWarehouse Automation), at minimum you should not only double check each shipment but have specific individuals checkers “bless” any shipment before it goes out. This means checking the sales order, checking the products, validating the address and ensuring it’s packed correctly.
Here is a free, Shipping The Wrong Item Work-Sheet, to help gain an understanding of the costs associated with shipping the wrong item.
Questions? Call us 314-664-2200