What is Configure-to-Order?
Configure-to-order denotes the manufacturing procedure in which the products are configured and designed based on customer requirements and preferences. However, these customizations are done after the customer places an order.
This technique is a win-win situation for both the manufacturers/sellers and consumers as it fulfills the objectives of both parties.
Significance of Configure-to-Order in E-commerce
The configure-to-order approach helps e-commerce brands minimize overhead costs and unnecessary inventory. Here are some benefits in detail:
- Greater customer satisfaction
Customer satisfaction is the driving force of any business. Without a strong client base, businesses are vulnerable and prone to collapse. Configure-to-order ensures a greater number of satisfied customers as products are tailored according to their preferences.
- Specialization
Specialization is the main feature of configure-to-order. Based on the modifications requested by the customers, manufacturers procure, assemble, and design the products to deliver the desired goods.
- Increase in revenue
Catering to the customers’ specific requirements helps bring in more sales, directly boosting revenue. With a stable revenue, you can focus on introducing more customizations.
- No excess inventory
Since orders are crafted specifically to suit the customers’ requirements, the chances of storing unsold stock are drastically reduced. Moreover, manufacturers operate flexibly, as procuring and maintaining inventory is required only after they receive an order.
- Augments growth
It is easier to expand business with more satisfied customers and increased revenue.
How Configure-to-Order Works
In this unique configuring process, the customers are entitled to prescribe the details of the product design according to their tastes. Design selection is carried out after the customer places the order.
A particular set of features and combinations are offered so customers can create unique modifications and variants with combinations of assemblies and parts. Once the product is ready, it is shipped to the end customer.
Use Case with Configure-to-Order
For instance, customer X is planning to buy a car. The customer places an order with a company that offers the configure-to-order option. Now, the customer can select the car’s color, seating arrangement, audio and lighting systems, wheels and tires, etc.
The manufacturer will design the car according to the specifications stated by the customer and deliver it.
