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Order to delivery

Why read this? A reliable order to delivery system helps you deliver products efficiently to your online shoppers. In this guide, we walk through all the steps you need to manage this process. We focus on payments, storage and delivery to the customer. We also share our experience of how to use customer service to manage complaints and deal with issues. Read this guide to learn how to set up your own order to delivery process. 

Order to delivery process

How this guide raises your game :-

  1. How to set up and manage payments and transaction rules through a payment gateway. 
  2. Learn about order validation, and the process of picking, packing and dispatching products from the warehouse. 
  3. Understand the importance of the last mile of the delivery, and how to prepare customer service teams for complaints and issues.  

Your digital media and online store website drive an online shopper to buy from you. But a “sale” isn’t complete until the product’s in the shopper’s hands. 

To complete an online sale, you need to process the payment, deliver the product safely to the shopper, and deal with any customer service issues which come up. 

To do all those things, you need to create and operate a reliable order to delivery system. 

Close up of a delivery driver handing over a cardboard box delivery to a customer

Ready to test your knowledge?

What’s your starting level of knowledge about the order to delivery process? Take the 2 minute, 5 question Three-brains order to delivery process quiz and see how much you know about the order to delivery process already.

Order to delivery meets customer expectations

Put yourself in the shoes of the online shopper. Imagine they’ve looked your product on your website, and your e-Commerce “offer” fits their needs and wants. (see our article what online shoppers want from e-Commerce for more on what customers expect from online stores). 

They’ve decided to buy. They give you their credit card details and trust the order will turn up as promised. In the same state as it was on the website, and where and when they’ve asked for it. 

Your order to delivery process is what you do to meet those shopper expectations.

In this guide, we go through each step of the order to delivery process. We identify how to make each step work as smoothly as possible. But, we also look at key challenges and issues you may face, and how to prepare for them.

It can be complex to manage an online order. Things can go wrong. And when they do, your customer relationship suffers. An efficient order to delivery process helps prevent these issues and keep your customers happy.

E-Commerce store experience

As per our online store strategy guide, there are 5 key steps in the e-Commerce experience.

In this guide, we assume you already have your digital media and store website set up. We focus on what happens next – payment, delivery and customer service

For example, what key things need to happen once a customer places an order? How do you manage transactions securely and make sure the right product gets to the customer? What happens if anything goes wrong? 

These are the types of questions answered by your order to delivery system. It’s what keeps your customers happy and loyal so they come back and buy again. 

e-commerce planning process - 5 key steps in e-commerce experience

E-Commerce ideal experience

First off, let’s look at what happens with an “ideal” purchase. That’s one where everything goes smoothly for you and for the online shopper.

They’ve decided they want to buy the product, so what happens next? 

The first choice is whether they can check out as a guest, or need to register their details to buy. So, you need to work out whether you allow both these options. 

From a purely selling point of view, you want to allow both. Recent research shows that for online shoppers, guest check-out is chosen about 20% more than the logged-in check-out, when both options exist.

So guest check-out equals more sales.

Also, the information an online shopper gives you to buy a product isn’t that different from the information they’d give you to register. But they’re happy to give your information when they buy because they understand why you need it. 

They’ll give you email and phone contact details when they buy. And permission to contact them. With guest check-out, you can add a registration, remember me, or sign-up for updates tick-box at the end of the check-out process and achieve the same result.

But there are a few circumstances where you might want to limit or restrict guest check-out. These are situations where you want to have more control over who can order from your store. Guest check-outs are more difficult to control, than when you ask people to register to buy.

So, for example, there can be times when you want to limit overseas orders, limit quantities per customer, and to manage the re-selling of products.

Limit overseas orders

While your online store gives you access to a global online market, there may be some countries you can’t, or choose not to sell to.

This might be because you know there are export / import restrictions on your products that’d make more shipping difficult. This applies particularly to products that are food related. Or, products sourced from natural materials like wood and plants.

These can present bio-security issues, that mean products can be held up or rejected by customs. In these cases, it’ll generally be up to you as the seller to resolve the issue.

Triangular warning sticker with large exclamation mark on a wall. Sticker has many rips and tears in it.

You can add a note in your FAQs and Terms and Conditions about which countries you will and won’t ship to.

But be aware, this content is not always read by the online shopper.

When you request a registration or sign-up, you can make it easier to screen out orders from countries you won’t ship to earlier in the process.

Limit quantity ordered

If you have limited stock and wish to fairly allocate that stock out to customers, this is difficult with guest check-out. With every guest check-out the customer is new and unknown. So, you don’t know if they have ordered before.

And if they have ordered before, you don’t know how much they ordered.

Though you could set a maximum quantity per order on the order form, it would be possible for that guest shopper to place multiple orders.

Barriers like limiting the number of orders per email or address can be circumvented by determined buyers.

Question mark spray painted onto a tree trunk among a wood of trees

When you force shoppers to register and disallow guest check-out, you have more data about that customer before they make a purchase. So, it’s technically easier to place restrictions on orders. Or, ban them from the site if they continually ignore your order limits. You’ll need some extra IT skills to set these restrictions up on your site and payment gateway. 

When you have a registered customer, you can allocate a quantity of items over a specific time period, so that person gets the same share as everyone else.

This is much more challenging with guest check-outs.

Prevent re-selling issues

Keeping the theme of limited stock, one of the causes of this may be that some buyers are re-selling on your stock at a profit elsewhere. Infant formula made in Australia being sold to China by daigou buyers is a well-known example of this. 

Though the practice causes some controversy, because it leaves stores out of stock, there’s nothing illegal about the practice. The buyers / re-sellers obviously have to make sure they follow all international shipping laws and procedures, though. But once, someone buys something from you, it belongs to them. They can do what they want with it.

The challenge comes when you start to lose ‘regular’ customers because your products are always out of stock.

If the quantities are large enough, you might want to set these re-sellers up as a separate channel, as if they were a trade customer. Registrations to buy help you identify who these types of customer are, and give you the option to create different buying experiences for them. You can’t do this with guest check-outs, because you don’t know who the “guest” is until they buy. 

The order starts with the order form

The order form captures the customer details you need to manage the transaction and delivery.

It’s the first part of the order to delivery process. It sets the tone for the rest of the shopping experience.

If there are issues with the order form, it has a knock-on effect on all stages that follow. 

Make the order form as easy to complete as possible. The more complicated the form, the more likely something will go wrong, or the shopper will abandon the purchase.  

Capture the minimum amount of information you need to make sure the right product gets delivered in the right way to the right customer. The key data fields you need to set in the form are as follows :-

Payment details

Most online payments are usually via :-

  • a credit card.
  • an online portal like Paypal.
  • a deferred payment service like Afterpay

The payment process via the likes of Paypal and Afterpay is fairly simple. You set up an account with them, and link it to your bank details. The customer pays them, and then they pay you. You don’t interact with the customer’s payment, only the payment provider. 

Credit card payments are a little more complex. You need to link a payment gateway to your store’s website to manage the transaction.  

Wallet with credit cards

Payment gateways

A payment gateway is a secure website system which manages the transfer of payments between a customer’s credit card and your bank account. 

It acts as an intermediary in the transaction. It manages the flow of data required to make payments, and is also used to reduce fraudulent transactions. For example, it can check whether cards have been reported stolen, and limit certain types of transaction.

There are many competing payment gateways you can choose from. SecurePayEWay, and Square are among the most well-known, but there are many more. They mostly all work in the same way, but they’ll have different fee structures, and different levels of service. 

Fees would normally include a one-off payment for set-up, and a sliding percentage rate per order depending on how many orders you put through their system. They can also differ in how much they charge you for chargebacks (customer refunds). You’d look at the different rates on offer, as part of your online store business model.

Once you choose a payment gateway

When you choose a payment gateway, you’re given a set of instructions on how to connect it to your store website. You can embed the gateway into your site (so it appears to be part of your site), or send customers to a new page on the payment gateway’s website (called a hosted gateway). 

As part of the set-up, you give the gateway provider details of your company, your contact details, your bank details and your Internet Merchant ID. You’ll also get details of their terms and conditions which you should obviously check carefully. 

You’ll also get details of how to access their back-end system to manage your settings on payments. This is usually to help you reduce fraudulent payments. For example, setting a maximum value per order, limiting repeat orders or rejecting orders made from certain countries. 

You usually involve your finance and IT teams in setting up and managing this system. There’s a lot of on-going testing to do. The payment gateway will also usually have a customer support team who can help if there are any issues. 

Managing payments on the gateway

The back-end of the payment gateway system lets you run sales reports to better analyse and understand customer behaviour. For example, you’ll be able to see completed transactions, repeat orders and any rejected transactions. 

The back-end system also lets you manage the details of individual transactions. You usually give access to your finance or customer service teams to handle this e.g. managing refunds, or adjusting incorrect payments.

You need a transaction or customer ID number to identify specific orders. The system won’t show you the actual credit card number. This is to prevent fraud, by keeping the card details secure.

Woman holding credit card near a macbook and typing in her details

It’s part of an online payment governance systems called the Payment Card Industry Data Security Standard, (PCI DSS), or PCI compliance for short. You payment gateway must be PCI compliant.

Setting payment rules on the gateway

You can also set payment “rules” on the gateway to prevent transaction you see as potentially risky. Example would include :-

– location limitations – e.g. rejecting order from countries with high fraud rates, or where you don’t deliver to because of customs regulations. 

  • repeat orders – e.g. where you are trying to manage stock levels, and suspect customers are trying to buy in bulk quantiles for re-selling purposes. You can set limits by the customers name, address, credit card and / or IP address details, so they can only order a certain amount, or can’t re-order until a certain time has passed.
  • banning customers – if you have customers who repeatedly try to break your payment rules, you can set the system up to automatically reject them (by their IP address for example). You have a right to reject any customer’s order.

Check out our e-Commerce payments article for the more specific ins and outs of managing online payments.

Order Validation checks

Assuming the payment gateway verifies the payment as genuine, the payment is then confirmed. The customer is notified the order has been placed.

All the details from the order form (apart from the payment details) are then captured in your online store website customer order database. (part of your wider Customer Relationship Management (CRM) system)

For smaller businesses with limited online sales, this would result in an automated e-mail with details of the order being sent to whoever in the business manages customer orders. This could be the store owner themselves, or whoever manages operations for the business.

In larger businesses with more regular orders, there may be a dedicated customer service manager or team, who regularly process orders. The order form details might be automatically entered into an internal order management system like SAP to be processed. (rather than sent via email).

You can manually validate and release each order, if the numbers are small. Or, you can set up automated checks to make sure the order is genuine and valid. Validated orders are then released to the warehouse team to be picked and packed ready to be shipped to the customer.

Extra validation checks may be required

Depending on the category and type of order, there may be some extra validation checks you need to build in to the order to delivery system.  Work with developers and IT teams to build these into the order form. 

For example, if you choose not to deliver to PO boxes or to certain countries, but someone requests this in another part of the order form, you can choose to reject that order.

If your product has any special delivery needs, this is a good time to check the order can be safely and securely delivered. 

For example, if the delivery requires a constant temperature (say ice cream or frozen fish), the delivery details need to make sure this is covered. 

Or, if the delivery is high value, you should make signature on delivery mandatory. 

And if, there are any legal restrictions such as over 18 for alcohol deliveries, you want to make sure there is some sort of validation in place, before you send the order. (see our article on e-Commerce alcohol sales for more on this). 

Order details sent for picking, packing and dispatch

The validated order details are then sent to the warehouse team to be picked, packed and dispatched.

This might be by email, but more often there’s a data feed from the website order system or other internal system to the warehouse and delivery systems. 

It’s important to understand what details the warehouse and delivery functions need to properly manage an order. You need to make sure your website order form captures these specific details.

If data is missing or incorrect, it can make picking, packing and delivery more difficult.

Interior of a warehouse showing high shelving and main aisle

And if it’s more difficult, this leads to delays and more costs.

You don’t want that.

So, work with the team who will manage the picking, packing and dispatch to identify the information they need.

Ask them how they will manage and update the order details. Work out how your order form data will “talk” to their system.

Define who's responsible at each stage

In the set-up of your order to delivery system, make clear who’s responsible at each stage. It’s important your supply chain team are on board, as it can cause major D2C challenges if they aren’t. Be clear what you expect people to do, and what decision-making power they have.

The order to delivery system passes an order along different functions. Each need to carry out specific actions. If one part of the system fails, the rest of the system won’t work properly.

You need to work out the timings of how orders pass through the system. Do they work in real-time? Or, do you save them up and release them in batches at specific times of day? 

Delivery companies will generally have windows of the day, where they like to collect orders from central locations. So, you need to synchronise the processing of the order with these times. 

In bigger businesses, you want to integrate online store orders into your existing financial and operational systems like SAP. This means processes can be more centralised, integrated and automated. 

However, it usually takes longer and costs more to set up than a more manual system. Think about this when you set up your order to delivery system. You’ll need specialist IT skills to help you set up an SAP integration for example. The scope of that for an online store typically covers areas like :- 

  • Order ID creation
  • Creation of a new order type (D2C)
  • Creation of a new customer type (D2C)
  • A separate storage location (SLOC) for online store orders
  • Set up an invoice
  • Set up a delivery docket
  • Automated emails to the customer
  • Inventory managerment 
  • GST and delivery costs for finance reporting

Order picked, packed and dispatched

Once the warehouse receives the order, it’s then picked, packed and dispatched.

Picking

Picking refers to taking the product off the shelf where it’s been stored.

The shelf layout in the warehouse needs to make it easy to find specific products to be picked.

In many companies, the storage location is often attached to the product number on the order form, or within the warehouse system.

Pallets of boxes wrapped in cling wrap in a warehouse

So, for example if you get an order for “male red-T-shirt large”, you don’t want the person picking the order to have to look for T-shirts, then men’s T-shirts, then red-T-shirts, then large ones. 

That’s clearly inefficient.

But, if the location of that T-shirt is marked, let’s say Aisle H, Section 42, Shelf Level 2, Position 3, then the order picker knows exactly where to go.

Packing

How the order is then packed depends on the nature of the product, and of the order. If it is already packed in a way that is transport-friendly, that helps.

But, what if it’s not?

Let’s say you sell malt whisky. You might store the bottles in boxes of 6 or 12. But what if a customer only orders one bottle?

With online stores, often quantities are smaller per order, and larger boxes need to be broken down. You need to work out where these broken down boxes will go when you’re done with them. You need to work out what extra packing materials you might need. So, bubble wrap or different size boxes for example.

(see our guide to packaging development and our article on using packaging for e-Commerce for more on this topic). 

Dispatch

When a customer orders multiple items, they generally expect them to arrive together and at the same time. So, you need to work out how to combine items together for shipping with these sorts of orders. Do you have different sizes of boxes available for example? Or, can you wrap boxes together for deliveries?

You need to consider any factors that might impact the product while it’s in transit.

If it’s a heavy object, you need to mark this on the box, so drivers take care when lifting it.

If it’s a fragile object, you need to mark this on the box.

And, if the object has an expiry date, or requires special storage while being transported, this all needs to be set-up and agreed with the warehouse and delivery company. 

If you’re setting this system up, you need to work out all these options up front. You also have to make sure that you have ordered in enough boxes and materials for packing.

Hand holding a small wrapper package marked fragile

Inventory Management

You’ll also have to agree with the warehouse team how to manage inventory levels. There are a couple of ways to do this. 

You can usually do it through your website order system, where when the order is processed, the stock level per unit drops by one. You can set re-order reminders to replace the stock at certain levels. 

This is the simplest approach. 

But, it’s not perfect. 

You have to set up the system to give access and visibility to the warehouse and delivery team, because it’s important to help them manage stock levels. 

There are many things that can happen, outside of the system that will impact inventory levels. So, you need the ability to go in and make adjustments. 

For example, if items get damaged or interfered with while in the warehouse, Or, if items get damaged or stolen at some point between the warehouse shelf and the delivery. Or, even if there’s just a miscalculation of the number of units when the goods go in to the warehouse. 

You may already have your own (SAP) system to manage inventory. The warehouse team may also have their own system. It’s important to make to make sure these systems all “talk” to each other. Usually, you involve IT teams to help set these systems up. They’re another team you need to have on board, because you run into more D2C challenges if you don’t.

Once packed, you need to label the product with the delivery details. The order details should’ve come through from the order form. Make sure there’s a clear and automated system for labelling in the warehouse. 

Delivery and tracking

Once packed and labelled, the order then goes via dispatch and into the delivery system. 

In some cases, the warehouse provider and delivery service might be the same provider. In other cases it might different.

Either way, the package needs a unique ID tracker from the delivery company which you use to track the delivery.

Ideally, the systems integrate so the customer is also sent this ID number when you dispatch the order.

This helps them track when their order will arrive. They can go to the delivery company’s website and enter this ID, where at each key point in the delivery journey, the status on the delivery will update.

Inside a courier delivery van, many different types of packages in cardboard boxes stacked up for delivery

The last mile and delivery

Once the product’s moved to the nearest central storage area or distribution centre to the delivery address, it enters its final stage.

This is where delivery to the end customer takes place. 

This is often referred to as the last mile. In an ideal world, it goes smoothly and there’s no issue. But, in reality, there can be issues which lead to customer enquiries and complaints.

These can also add to costs, and we’ve a separate article on last mile costs (i.e. the last mile before delivery) if you want to explore that topic more. 

Online store customer enquiry and complaints examples

So, what happens if something goes wrong and the customer isn’t happy with the delivery? If you can’t resolve their problems, not only do you lose their business, but they tell other people your service is bad. 

There are multiple scenarios where there can be issues with the delivery. You need to be prepared and have systems and processes to deal with these.

Think about things that could go wrong, and then work out how you should respond to them. 

So for example, common customer service enquiries you need to manage include :-

Woman sticking up one middle finger to the camera - the non-verbal way of swearing

“I ordered it X days ago, and it has not shown up”

“The delivery tracking number I got isn’t working”

“I didn’t get an order number” 

“The status is saying it’s delivered, but I don’t have it”

“I ordered product X, but product Y got delivered” 

“This product is not what it looks like on the website, I want a refund”

“I ordered X number of products, but only Y number of products arrived” 

“The product arrived damaged, and I want a refund”  

These are just a small sample of the types of scenarios that can happen when you manage a delivery from an online store. They happen across ALL online stores. For each question, you need to work with the warehouse, the delivery company and your customer service teams to work out the best response. 

Chargebacks

In most cases where the customer is unhappy, they’ll ask their credit card company to refund the payment. The payment company will then come to you to pay them back the money. 

This is called a chargeback. 

There’s often an administration fee of $25-$50 on top of the actual payment amount for the transaction too. 

Clearly, you want to minimise these chargebacks as much as you can. It’ll start to burn into your profit margins. 

The vast majority of online shoppers are honest. Set up your order to delivery system, and policies to keep those customers happy. 

Person holding 6 hundred dollar bills in front of them which have been set alight

But accept that sometimes, things will go wrong, and it’s on you to resolve them.

Fixing the issues behind the questions above adds to your overall costs. But, they also help improve your reputation for good customer service. Don’t underestimate this. This can often be more valuable in terms of creating more loyal, happier customers longer-term.

You should factor in a small percentage to your online store business model costs, say around 3-5% to manage these sorts of customer service issues.

Problematic customers

Where it can be problematic, is when you get less honest online shoppers trying to game the system. 

If they know you always give refunds, they might place repeated orders and claim multiple refunds.

It’s important then to be able to identify these specific cases, and put measures in place to manage them. 

At the most extreme, you can block IP addresses from accessing your website at all.

But normally, you’d use registration and payment gateway details to manage the journey more smoothly.

Person holding up an illustration of an angry face

So, you can identify and direct specific problematic shoppers to pages which say products are unavailable. You should also make sure your terms and conditions protect you.

Your aim is to make it as easy to shop for genuine shoppers, but also to make sure that no-one takes advantage of you.

Order to delivery process learnings

We recommend you speak to specialists in these areas if your store starts to scale. There’s no guaranteed way to protect against every eventuality. 

We’ve worked in setting up the order to delivery process in the past, but it’s not our core expertise. You need finance, supply chain and IT support.

But from our experience, we recommend 3 specific areas to focus on. These can make your life easier. 

1. Test the system before you launch

As you set up your order to delivery process, before you make it live, test the system by placing and delivering simulated orders. Do this as part of your e-Commerce website testing plan. 

Ask people who aren’t familiar with the system to place orders. Don’t brief them in advance. Let them use the store like an actual customer would. See what happens, and if anything “breaks”.

Try to identify any stress points early, so you can plan ahead and fix them before they go live. Try to think of ways to “break” the system. It’s much better to fix problems while the store is still in development.  

Only push your order to delivery process live, when you’re confident it can handle most situations. 

2. Set up your data systems well in advance

As your online store grows, so the number of transactions and customer details will also grow.

It’s important to plan ahead how and where your digital data will sit. How it will work with the rest of your marketing data and your CRM activities for example.  

When a customer contacts you with an enquiry about an order, your customer service team need to be able to easily check the status of that order.

They need access to information systems quickly and easy. It’s not good customer service, to say they need to get hold of the IT or warehouse guy to check the status of an order.

Mobile phone showing Google, with the word "analytics" in the search bar

Your digital data should define what the “master data” system is on your customer and order details. This master data should then feed any associated systems which also need that data.

(see also our article on B2B CRM for more on how to get value out of customer relationship management). 

3. Permission to Leave, Delivery Instructions and Signatures

The critical point in the order to delivery process is when the customer actually gets the product itself. The more thought you put into making this part of the process robust and reliable the better. 

If appropriate, a Permission to Leave check-box can solve a many issues around the delivery. Without Permission to Leave, when a customer isn’t at home to receive the order, you need to keep hold of the delivery and try to re-deliver it another time. This adds cost to the order to delivery process. 

You don’t want that.

Try to encourage your online shoppers to make the most effort to make the delivery easy. Ask them for delivery instructions. Make it clear it’s in their interests to provide them. 

Make it easy to deliver to a work address for example. Or, encourage them to give clearer delivery instructions such as “leave in shed” or “leave with neighbour”. 

Check with your delivery company if they have any order delivery confirmation systems. Some will have the delivery driver photograph the item being left. For more expensive products, ask for a signature on delivery.

Prepare for Customer Service

The order to delivery process can be complex to set-up. But, once the system starts working, it should become easier. But, you never know exactly how customers will interact with the system.

Even though you prepare for the most common situations, there’ll always be customer enquiries you can’t predict.

You can add the most common questions to a Frequently Asked Questions (FAQ) section on your website to reduce the number of enquiries. But be prepared to get Infrequently Asked Questions too. 

Make sure your online store website has clear ways for customers to contact you in these cases.

Flow chart showing online shoppers - shop website - payment - delivery - and online shoppers again with list of questions / complaints shoppers ask customer service

Usually, this’d be by phone or email, though social media messenger services and chat apps can also work.

This means you need to prepare the technical infrastructure to manage these enquiries. 

So, you’ll need to set up phone number and any automatic call management system for example. You’ll need to set up a shop email address. And, you’ll need to make sure the right people have access to all the necessary systems.

Train your customer service team

You need to train your customer service team on how all these systems work. They also need to practice how to answer common questions, and what to do if they can’t answer a question.   

You’ll need to decide if one person is responsible for the overall order to delivery process. Or it’s a team of people, each responsible for different stages.

Whoever manages customer enquiries needs to be familiar with the products, the store, the terms and conditions, and all the system touchpoints in the order to delivery process.

They need to be able to access specific customer order details, and manage refunds, chase up the status on deliveries and deal with returns or damaged goods.

Customer service is a vital part of the online shopping experience. Bad customer service can drive customers away. It can damage your reputation. Aim to deliver reliable customer service, that improves as your online sales continue to grow.

In our guide to managing an online store, we cover more ways in which you can continue to build improvements in customer service into the way you manage the order to delivery process.

Customer service headset sitting on a desk next to a laptop

Three-Brains and e-Commerce

We’ve worked on many e-Commerce projects and have good experience across strategy, working with online retailers and building D2C stores. We know how to connect these expertise areas back into your e-Commerce capability plan to grow your sales. 

Contact us to learn more about how we can support your e-Commerce to grow your business through our consulting services.

D2C Online Store Status dashboard - Four column headed strategy and plan, the store, order to delivery and operations
Click to download the pdf

Downloadable D2C status dashboard

Setting up an online store needs you to define your strategy and plan, work out the sales and marketing and also set up the whole operational side of the business including the finances and the delivery / supply chain model. It can be complex to manage.

That’s why we’ve used this project dashboard to great success in the past to have a simple one-page summary of the key actions require to set-up and manage a D2C online store. Download it here or from our resources section. 

Powerpoint and Keynote versions of this document available on request. 

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