Achieving High Order Fill Rates: Key Strategies for Wholesalers in Fast-Paced Industries

Maintaining a high order fill rate is a must for wholesalers as it can hurt your business if you are unable to fulfill the orders of your buyers. If you can consistently meet their needs, it will help stopping your customers from moving onto another supplier.

The percentage of wholesale orders that are successfully filled is known as the order fill rate. For example, your fill rate is 60% if your customer orders 100 items and 40 of them are out of stock. An insight into how well you have managed your inventory and how effective you are at fulfilling orders are provided by this metric. 

A higher order fill rate implies that you hold enough of inventory and have a fulfillment process that is effective enough to meet the needs of your customers. 

Fill rate has become an essential factor and major focus for many wholesalers as the market has become more competitive with more wholesalers and suppliers entering the market. Fill rate can not be defined with a specific number as it totally depends on the nature of your business and your customers.

The following fill rate formula can be used for calculating the fill rate:

Total number of customer orders shipped completely divided by the total number of customer orders placed. You can multiply this number by 100 to turn number into a percentage as typically it is presented as a percentage.

You can either calculate based on cases or based on line items to apply this formula. For example, your customer places 40 units of Product A, 20 units of Product B, 25 units of Product C and 15 units of Product D. Suppose, you are able to fulfill the request for Products A, B, and C but are unable to fulfill the request for Product D which means you have a line count fill rate of 75% as you can fulfill 3 out of 4 line items whereas your case fill rate is 85% as you are only able to fulfill 85 of the 100 requested units.

The order fill rate is important from the point of wholesale because it is an indicator of how well you can meet the demand of your customers for your products. You need to better manage your inventory levels or optimize your fulfillment process if your fill rate is consistently low or dropping.

The risk of turning your customer to other suppliers increases if you consistently fail to meet the need of your customers. You need to maintain a high fill rate in order to earn the loyalty of your customers. There should be a records of your fill rate so that you can refer to them when you compare and analyze other trends in your business.

Fill rate performance can be improved by staying aware of some of the challenges that cause low fill rates. These include:

Some retailers engage in last-minute buying as they don't want to have a surplus or deficit of goods. They have invested in inventory that they cannot sell in a surplus of good and their customers are left unhappy in deficit of goods. Major headaches can cause due to last-minute buying for wholesalers. Retailers will look elsewhere if you don't have enough stock when a priority or expedited order comes in for a product.

It is difficult to understand the needs and future plans of our customers if you are not facilitating clear communication with them which can cause issues in business. It can be difficult to prepare for their future orders without this insight.

Internal poor communication can also be a cause of issues. You may miss opportunities to best serve your customers if there is miscommunications about the demand of your market, current inventory, production, and related topics. You will also not be able to know the valuable feedback from your customer without clear channels of communication, that may help you down the line.

One viral post can create a massive demand for a single product almost overnight with universal access to social media and the internet. For example, there was a huge surge in personal protective equipment (PPE) at the beginning of the COVID-19 pandemic. There is a sudden rise in demand for masks or glove and there wasn't the supply to meet this need. This trend was totally unpredictable. Similar trends blow up in many industries which causes order fill rates to decrease.

You need to fill more of the orders that you receive to increase your order fill rate which requires keeping enough stock levels to meet the needs of your customers. Some of the best practices to keep your fill rate high and for improving fill rate include:

Your fill rate can be improved by using  an established B2B eCommerce marketplace. Listings can indicate low inventory levels or unavailability as you can keep track of your inventory and sales that come in. So, orders will not be placed for items that is not available in stock.

Tools such as demand forecasting and industry analytics that help you in the guesswork of determining how much inventory to hold can also be offered by some B2B platforms. You will be able to adequately plan your stock levels.

Fill rates are generally compromised by many wholesalers as a result of failing to optimize their fulfillment processes. You could approach fulfillment optimization by using a fulfillment center that is close to your customers. This helps to cut down delivery times as well as it is less likely to get lost or have parts separated when the item travels less distance.

Taking orders online is another way to optimize your order fulfillment process. Accuracy can be improved by this because retailers will be able to see exactly what they are ordering and make their own selections. However, it is advisable to reach out to the buyer for large orders to confirm their order before it is fulfilled.

Another great idea is to allocate a specific place in your warehouse for order fulfillment. You need to make sure that orders are fulfilled in a dedicated space that is free from distractions as chaotic workspaces may cause workers to get confused and to make mistakes when they package and address orders.

You can increase the likelihood of properly fulfilling each shipment by following these practices. It can also help you cut down the amount of time it takes to fulfil orders by optimizing your processes.

A demand specialist or an inventory specialist can help you improve your fill rate performance. A demand planner will optimize the supply chain by assessing customer demands and make inventory decisions accordingly to help improve your fill rate performance whereas an inventory specialist will keep track of inventory and work with the demand planner to decide when to invest more inventory according to trends.

These specialists typically come with specific expertise in customer demand forecasting and your specific industry which can be a great addition to your team. You can save time doing the actual research and analysis by hiring a specialist rather than doing it yourself. You will also be able to save time that you need to spend learning how to do these tasks.

You need to listen to the data in order to keep your fill rate up. You will come to know how much inventory to hold by regularly analyzing your customer demand. This way you don't have to worry about being short on the products that your customers need when sizable orders come in.

Dedicated software can be used for both demand planning and inventory management. Inventory data are provided by these software to help you keep track of what you have and what you need. You can also use the data and reports that are developed by an in-house specialist.

You can better understand the needs of your customer and plan accordingly by maintaining clear communication with them. Your account managers need to be in touch with customers regularly over the phone and through email surveys as a good idea of the size and frequency of your customers' orders can be given by these conversations. You will also be in the loop if any of your customers want to place larger orders due to seasonal demand changes or efforts to scale.

Some cushion can be build for circumstances that require sharing undesirable news with customers by keeping a clear path of communication. For example, you can personally let your customer know that there may be a delay with part of their order if a product is out of stock or on backorder. A strong relationship can be maintained going forward being upfront with your customer to keep their expectations realistic. Regular communication can also result in good customer service when done correctly.

Having alternatives available for your most popular products is another way that you can improve your fill rate. You can recommend a worthy alternative to take its place if you are short on inventory.

The demand for different types of clothing keeps on changing when the seasons change and the demand for certain items will also changes around different holidays. So, demands for everything change throughout the year naturally. You need to keep in mind these cycles and adjust your inventory accordingly.