365 Days E-commerce Fulfillment: Is it Feasible?

The rise of Service Level Agreements (SLAs) imposed by e-commerce marketplaces has created significant pressure on businesses to meet higher standards of fulfillment. One of the most notable trends in recent years is the shift towards 7 days a week or 365-day fulfillment services, a model where warehouses and fulfillment centers operate year-round, including during holidays, to meet increasing customer expectations. This article explores the feasibility, pros, and cons of 365-day e-commerce fulfillment services, as well as how businesses can navigate this growing demand.

Why Are SLAs Increasing?

As competition between e-commerce platforms such a, Shopee, and Lazada intensifies, SLAs have become stricter. These agreements define the timeframes for order processing, shipping, and delivery, with penalties for delays. E-commerce platforms are pushing for faster deliveries to enhance customer satisfaction, forcing retailers and fulfillment centers to upgrade their operations.

Is 365-day Fulfillment Feasible?

Operating 365-day fulfillment centers comes with logistical and financial challenges. However, for large-scale operations and companies that prioritize same-day or next-day delivery, this model is becoming increasingly feasible. Automation, robust software, and strategic partnerships with third-party logistics (3PL) providers are key enablers.

For smaller businesses, the costs associated with maintaining a year-round workforce, technology upgrades, and faster shipping partnerships can be daunting. However, some businesses opt for outsourcing to 3PL services that already provide 365-day operations, making it a more scalable solution.

Pros of 365-Day Fulfillment Services

Customer Satisfaction and Loyalty: Continuous operations reduce delays, meeting the high expectations of today’s online shoppers. Offering same-day or next-day delivery, even on holidays, sets companies apart from competitors.
Compliance with Marketplace SLAs: Meeting or exceeding SLAs reduces penalties and keeps businesses in good standing with major e-commerce marketplaces. Non-compliance could lead to reduced visibility or delisting.
Revenue Growth: Retailers can take advantage of holiday seasons or special events when online traffic surges, ensuring they can capture sales opportunities that might otherwise be missed due to downtime.
Brand Perception: Offering seamless, 24/7 services can build a strong brand image as a reliable and customer-focused business, which can be a major differentiator in crowded marketplaces.

Cons of 365-Day Fulfillment Services

Increased Operating Costs: Running warehouses year-round involves higher labor costs, especially during holidays when overtime pay is required. Energy and utility bills also rise due to non-stop operations.
Workforce Management: Managing a 365-day workforce is challenging, particularly in ensuring staff morale and retention. Employees may face burnout or dissatisfaction with working during holiday periods.
Supply Chain Strain: A constant flow of orders and shipments can put strain on suppliers, transport networks, and inventory systems. A disruption at any point in the chain can lead to significant delays, undermining the benefits of year-round fulfillment.
Technology Dependency: To run efficiently, 365-day fulfillment centers often require automation, inventory management systems, and advanced data analytics. Implementing and maintaining these technologies can be costly and require continuous upgrades to stay competitive.

Mitigating Challenges: Key Strategies

Automation and AI: Automation can minimize the reliance on human labor by streamlining processes like inventory management, order picking, and packaging. AI-driven forecasting tools can also help businesses prepare for demand surges and optimize staffing.
Outsourcing: Small to mid-sized businesses can partner with 3PL providers that specialize in 365-day operations. This not only reduces infrastructure costs but also provides access to the provider’s existing logistics networks, allowing for more flexible and scalable fulfillment options.
Flexible Staffing: Offering flexible shifts and rotating schedules can reduce the strain on workers and help retain staff. Incentives, bonuses, and fair compensation for holiday work are key to maintaining morale.
Data-Driven Optimization: Analyzing customer behavior and demand patterns can help businesses anticipate peak periods and scale operations accordingly. This ensures that fulfillment centers aren’t overstaffed or under-resourced at critical times.

Conclusion

While 365-day e-commerce fulfillment services are increasingly necessary to meet rising SLAs from marketplaces, they are not without challenges. Businesses that can afford to invest in automation and workforce management systems are better positioned to succeed. For smaller operations, partnering with 3PL providers offers a feasible route to remain competitive. Ultimately, the decision to implement 365-day fulfillment depends on a company’s scale, resources, and the value it places on meeting customer expectations in today’s fast-paced e-commerce landscape.

By balancing these factors, businesses can not only comply with the stricter SLAs but also gain a competitive edge through superior customer service and operational efficiency.