What is a Short Shipment in E-commerce?
A short shipment in e-commerce refers to a situation where a customer orders a certain number of items from an online store, but the store sends fewer items than the customer ordered. This may be due to stock availability, shipping errors, or other factors. Short shipments can be a source of customer dissatisfaction and can lead to costly returns and refunds.
Significance of Short Shipment in E-commerce
When an item is shipped that doesn’t match the order, it can lead to customer disappointment and even a loss of trust in the company. A short shipment can help prevent this by ensuring the customer receives only what was ordered. This can lead to better customer service, improved customer satisfaction, and higher sales.
The significance of short shipment include –
1. Cost Savings: This could be especially beneficial for businesses with high shipping costs or store inventory in expensive warehouses.
2. Faster Delivery: Short shipment enables businesses to send orders faster than traditional methods. This can be beneficial for customers who need their orders quickly and reduce the risk of customer dissatisfaction due to late delivery.
3. Increased Efficiency: Short shipment can help businesses become more efficient by eliminating the need to store inventory in warehouses or other storage facilities. This could help businesses reduce overhead costs and become more profitable.
4. Improved Flexibility: Short shipment allows businesses to be more flexible with their inventory and order fulfillment processes. This could be especially beneficial for businesses that experience fluctuations in demand or those that need to respond quickly to customer requests.
Prerequisites to Calculate Short Shipment and How It Works
To accurately calculate a short shipment, businesses must have accurate records of their original inventory and deliveries. They should also be able to track the condition of their product when it is received from their suppliers.
Short shipments occur when the quantity of goods received from a supplier differs from the amount ordered. To calculate a short shipment, businesses should compare the number of items sent with the number received. Any discrepancies can then be deducted from the total amount due to the supplier.
Use Case With Short Shipment
For example, if a business ordered 100 items but only received 90, it can calculate a 10-item short shipment and deduct that amount from the total owed.