It can be challenging for wholesalers to manage inventory and supply, especially in industries with trendy or fad-related products. Keeping a high order fill rate is very important for wholesalers. You need to fulfill buyer orders to make sure your business does well. When you always meet customer needs, you stop them from going to other suppliers.

What is the Order Fill Rate?

The order fill rate is the percentage of wholesale orders successfully filled. For example, if your customer orders 1000 items and 400 are out of stock, your fill rate is 60%. This metric provides insight into how well you manage inventory and fulfill orders.

A higher order fill rate implies sufficient inventory and an effective fulfillment process to meet customer needs. Maintaining a high fill rate is crucial as the market becomes more competitive with more wholesalers and suppliers. The fill rate varies depending on the nature of your business and your customers.

How to Calculate Order Fill Rate?

The fill rate can be calculated by using the formula,

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

This formula can be applied based on cases or line items. For example, suppose a customer orders 40 units of Product A, 20 units of Product B, 25 units of Product C, and 15 units of Product D. You fulfill orders for Products A, B, and C but not Product D. In that case, your line count fill rate is 75% (3 out of 4 line items). Your case fill rate is 85% (85 out of 100 units fulfilled).

Why is Fill Rate Important?

The order fill rate is important because it indicates how well you meet customer demand. A consistently low or dropping fill rate suggests a need to manage inventory levels better or optimize your fulfillment process. Failing to meet customer needs consistently increases the risk of losing them to other suppliers. Maintaining a high fill rate helps earn customer loyalty. Keeping records of your fill rate helps compare and analyze business trends.

Challenges of Fill Rate

Last-Minute Buying: Retailers often buy at the last minute to avoid surplus or deficit. This can cause headaches for wholesalers if you need more stock for priority or expedited orders.

Poor Communication: Without clear communication, it isn't easy to understand customer needs and plans, hindering order preparation. Internal miscommunication about market demand, current inventory, and production causes issues. Clear communication channels are essential for understanding valuable customer feedback.

Unpredictable Trends: Viral posts or sudden events can create massive demand for a product overnight, like the surge in personal protective equipment (PPE) during the COVID-19 pandemic. These unpredictable trends can significantly decrease order fill rates.

How to Improve the Fill Rate?

Use a B2B eCommerce Marketplace: An established B2B eCommerce marketplace helps track inventory and sales. It shows when inventory levels are low, or items are unavailable. Some platforms also offer tools for demand forecasting and industry analytics to help plan inventory.

Optimize Your Fulfillment Process: Using a fulfillment center close to your customers reduces delivery times and the risk of lost or separated items. Taking orders online improves accuracy because retailers see exactly what they're ordering. Set aside a specific place in your warehouse for order fulfillment to minimize errors and confusion.

Hire a Specialist: A demand specialist or inventory specialist can optimize supply chain and inventory decisions. These specialists know how to forecast customer demand and understand industry trends, saving you time and effort.

Listen to the Data: Regularly analyze customer demand to know how much inventory to hold. Use dedicated software for demand planning and inventory management, or rely on reports from in-house specialists.

Communicate with Customers: Maintain clear communication with your customers to understand their needs and plan accordingly. Regular contact helps you anticipate large orders due to seasonal demand changes or business growth. Clear communication also lets you share bad news and maintain strong relationships.

Offer Alternatives: Keep alternatives available for popular products. This way, if you run out of stock, you can recommend other options to your customers.

Prepare for Seasonal Shifts: Adjust your inventory to natural seasonal demand cycles, like changing clothing demand with seasons or holiday-related items.

Maintaining a high order fill rate in the competitive wholesale world is vital for customer satisfaction and business growth. By understanding and implementing the abovementioned strategies, you can ensure efficient inventory management and timely order fulfillment. Leveraging tools like B2B eCommerce marketplaces, optimizing your fulfillment process, hiring specialists, and maintaining clear communication with your customers is crucial. By staying proactive and responsive to market trends, you can keep your fill rate high and your customers happy, securing your place as a reliable supplier in the industry. Remember these best practices to navigate challenges and build a robust wholesale operation that thrives in any market condition.