Even the most diligent companies can fall prey to mis-shipments, whether it's dispatching the wrong items in an order, utilizing incorrect shipping service levels, or other common order processing missteps. Surprisingly, even the most adept order fulfillment companies operate with around 99.9% order accuracy – indicating that errors are inevitable! But, have you ever pondered over the actual cost of a mis-shipment? We have, and the findings might astonish you!

Defining a Mis-shipment

A mis-shipment, or mis-ship, occurs when an incorrect item is delivered to a customer. While mis-shipments are common, they can seriously impact your bottom line. The silver lining, however, is that there are strategies to enhance your order accuracy, avert mis-shipments, and conserve your valuable time and resources. Let's delve deeper into the real cost of mis-shipments and ways to minimize their risk.

The Problem with Mis-shipments

Mis-shipments can be a financial drain. Evading mis-shipments is crucial to managing a thriving shipping operation. Common forms of mis-shipments include:

Dispatching the wrong item(s)

Shipping an incorrect quantity of items

Sending items to an incorrect delivery address

Delivering the order past the agreed due date

Costs of Mis-shipments

1. Double Pick Time

Each time an incorrect order is picked and dispatched, the money spent on the original pick and ship gets wasted. If a replacement order needs to be sent, another pick and ship fee is incurred. According to our latest fulfillment pricing survey, each pick and ship can cost you between $2 to $5 on average and take anywhere from 5 to 15 minutes. Considering that a typical warehouse worker earns $14.97 per hour, this can be a significant expense.

2. Outbound Shipping Charges

If you dispatch the wrong order to a customer, it's only fair that they shouldn’t bear the shipping charges. Outbound shipping charges become your responsibility and can range from $6 to $10 for the ground delivery of a small package to $20 or more for a larger, heavier package.

3. Initial Shipping and Return Shipping Charges

There's a high likelihood that a customer won’t keep the incorrect items and opt to return them. In such cases, you'll have to cover both the initial and return shipping charges, which can range from $6 to $20 or more.

4. Unusable Materials

In most instances, the materials used to ship the original items will be damaged or destroyed. If you use recycled or standard packaging, your loss will likely be minimal. But if you use custom packaging, your overall loss will increase by at least a few extra dollars.

5. Return Processing Time

Once your warehouse receives the returned package, it needs to be checked for damage. If the item is damaged, then you’ve lost its cost. Plus, you'll have to spend $2 to $3 to process the return.

6. Customer Service

Your customer service team will need to investigate and resolve the issue with the customer, which costs time and money. Let's say they’re on the phone with the customer for 15 minutes. Considering that the average call center rate per minute is $1.43, a 15-minute call will cost $21.45.

7. Additional Incentives

Since you don’t want the customer to be disappointed with your service, you might decide to incentivize them. Maybe you'll waive all their handling charges or provide them with a free or discounted item. Regardless, you may spend $10 or more to ensure their satisfaction.

8. Customer Dissatisfaction

In an ideal world, a customer will be understanding and ask for their order to be corrected. However, the reality is that some customers will be completely dissatisfied. In such cases, there’s a good chance they'll request a full refund and refrain from purchasing from you in the future. They might also leave negative online reviews on platforms like Amazon, Better Business Bureau, and TrustPilot, share their poor experience with their social circle, and ultimately deter others from your company.

Strategies to Prevent Mis-shipments

Mis-shipments can easily cost your business thousands of extra dollars each year. By implementing these tips, you can ensure timely and accurate shipments that not only please your customers but also allow you to retain more of your hard-earned money.

1. Perform Regular Inventory Checks

If your inventory is scattered across multiple warehouse locations, issues with picking and inventory management are bound to arise. With quarterly inventory checks, routine cycle counts, and annual inventory audits, you can reduce errors and accelerate pick-up times.

2. Utilize Barcode Scanners and Robust Warehouse Management Software

Barcode scanners and warehouse management software can inform your team if they’re picking the right items off the shelves in the correct quantities. Some scanners will even update your inventory once an item has been picked, assisting with the accuracy of your inventory.

3. Implement Quality Control Checks

Before orders are sealed for shipping, barcode and other technologies can be used to quickly scan the order for accuracy. Then, final quality checks can be made upon labeling the order for shipping, ensuring that orders are processed without error.

4. Establish a Robust Returns Process

Unless you have a solid process in place, returns can be a nightmare. Your returns process should ensure the items get back to stock as soon as possible and the correct products are shipped to customers within a few business days.

Engage a High-Quality Fulfillment Company

The ultimate key to preventing mis-shipments is working with an experienced 3PL warehousing company. LinkTrans has the expertise and resources to ensure that every shipment arrives correctly the first time. Want to learn more? Fill out the quote request form to find the best plan for your needs!

By following these strategies and leveraging the advanced technology and expertise of LinkTrans, shippers can significantly reduce the risks and costs associated with mis-shipments, ensuring efficient and cost-effective operations.