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BizReport : Ecommerce archives : March 24, 2014

Is your scalability strategy right?

For every business there is a scalability strategy that works. The problem is that many businesses are using more generic strategies that don't necessarily fit their objective.

by Kristina Knight

"As an example, one retailer may need to plan for growth throughout the year, while another retailer may only be concerned with managing holiday peak orders for the busiest couple of weeks prior to Christmas. Retailers must keep their goals in mind and manage the investment that's required to scale their specific type of growth," said Maria Haggerty, CEO, DOTcom Distribution.

One thing to keep in mind - the season, says Haggerty. She suggests that some may see a spike in orders as on-going growth when it should be attributed to a particular season. Fulfillment forecasting is a good place to begin, because many retailers are setting up for failure by planning to fulfill 100 orders per day when they actually handle up to 1,000. This causes a shortage in products and can lead to customer dissatisfaction because orders go unfulfilled or take a long time to arrive.

"The key to scaling business is to have near-accurate forecasting. I say near because there is no "crystal ball" for retailers - they can only get as close to forecasting inventory as their analytics allow, which can actually be very close. To accurately forecast, retailers and their fulfillment providers need to look at how many orders they receive in a day, a week or a month, how many units they're receiving per order and when goods will start arriving at the warehouse," said Haggerty.

More from Maria and Dotcom Distribution later this week, including how better scalability leads to better customer service.

Image via Shutterstock

Tags: Dotcom Distribution, ecommerce, ecommerce scalabilty, SMB tips

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