But as executives at pure-play etailers know, passing the fulfillment buck is playing with fire. Typically, a fulfillment system is the largest capital outlay an online merchant makes. Without reliable data, it's hard to analyze the return on the investment-a big blind spot. It has to be very closely monitored and managed. Note that eToys, which pays considerable attention to delivery of merchandise, is still in business.
Merchants lose customers more from bad customer service than from any other reason.
And to online shoppers, a delay in receiving an order definitely qualifies as bad customer service. Even when an etailer manages to hold on to customers, inefficient fulfillment systems can slow down the company's cash conversion cycle, effectively eating away at working capital and profit margins. By contrast, a well-oiled fulfillment system not only maximizes inventory churn, it also keeps customers happy, generates return business, and therefore plumps up a company's top line. Looking at it at all would be good. At the stations, pickers receive the correct items and place them in the plastic totes to fill the order.