How to defend your e-commerce business and secure international logistics – supply chain risks in 2025
30 September 2025
In-House vs Outsourced eCommerce Fulfillment: Which Strategy Works Best?
30 September 2025
OUR GOAL
To provide an A-to-Z e-commerce logistics solution that would complete Amazon fulfillment network in the European Union.
1. Inventory Accuracy
Inventory accuracy is the backbone of effective warehouse management. It refers to the degree of alignment between recorded stock levels and what is physically present in the warehouse. Inaccurate inventory can lead to overstocking, missed sales, backorders, and unhappy customers.
For e-commerce sellers operating in fast-moving environments, even a small deviation can result in substantial issues. Let’s say your system shows 20 units of a popular item in stock, but in reality, there are only 5. This mismatch can cause fulfilment errors, delivery delays, and damage to your brand’s credibility.
Achieving high inventory accuracy is also critical for platforms like Amazon, which penalise sellers for late deliveries or cancelled orders. Regular cycle counts, intelligent warehouse systems, and barcode scanning all contribute to maintaining accuracy. And if your 3PL provider consistently fails in this area, it’s a sign that something’s wrong operationally.
Inventory accuracy isn’t just about knowing how many items are on the shelf—it’s about trust in your system, your warehouse, and ultimately, your customer promise.
2. Order Picking Accuracy
Getting the right product into the right box may sound simple, but order picking errors are one of the most common causes of fulfilment problems. Order picking accuracy measures how often warehouse staff select and ship the correct items for customer orders.
For e-commerce sellers, especially those managing a wide variety of SKUs or bundles, accurate picking is essential. A single wrongly picked item can trigger customer complaints, product returns, and negative reviews. Worse, the cost of handling a return can exceed the product’s value—especially in international transactions.
High-performing fulfilment providers invest in technology and training to support accurate picking. Tools like handheld scanners, warehouse management systems (WMS), and pick-to-light systems reduce human error. Proper labelling, efficient slotting, and ergonomic picking paths also make a measurable difference.
In the e-commerce world, poor order accuracy can erode customer trust quickly. It’s a KPI that directly influences brand perception and lifetime customer value.
3. Order Cycle Time
Order cycle time is the time it takes from when a customer places an order to when the order is shipped. In today’s world of next-day delivery and Amazon Prime expectations, shorter cycle times have become the norm—not a premium.
E-commerce sellers need a fulfilment partner that can process and ship orders quickly, especially during peak seasons. Long order cycle times can indicate inefficiencies in picking, packing, or inventory allocation.
Beyond customer satisfaction, order cycle time also affects your cash flow. Faster processing means quicker turnover, more frequent inventory replenishment, and better working capital management.
In practice, reducing order cycle time requires a combination of warehouse layout optimisation, staff training, automation, and streamlined workflows. Sellers should routinely benchmark this KPI to see how it stacks up against competitors—and against customer expectations.
4. On-Time Shipping Rate
Your warehouse may operate smoothly, but if shipments are delayed, it doesn’t matter to the end customer. On-time shipping rate tracks how often orders leave the warehouse within the promised window. For many marketplaces, including Amazon and eBay, this metric can directly impact seller ratings and visibility.
Late shipments are a customer service nightmare. They result in a higher volume of support tickets, increased refund requests, and negative feedback. For international sellers shipping across borders, delays can also mean customs issues and missed delivery commitments.
Monitoring this KPI helps e-commerce sellers assess the reliability of their logistics network. If on-time shipping rates are consistently low, it might be a sign to renegotiate with carriers, adjust cut-off times, or re-evaluate your 3PL’s performance.
Consistency is key here—one late order may be forgiven, but repeated failures can really damage your brand. On-time shipping is as much about customer retention as it is about operational performance.
5. Inventory Turnover
Inventory turnover measures how frequently your warehouse sells and replaces stock over a specific period. A high turnover rate generally indicates efficient sales and purchasing processes, while a low turnover rate may suggest overstocking, slow-moving products, or poor demand forecasting.
For e-commerce sellers, slow inventory turnover ties up cash in unsold goods and storage fees. It can be particularly damaging when you're selling seasonal or perishable products, where old stock may become obsolete or unsellable.
That said, understanding your turnover rate enables smarter purchasing decisions and helps avoid both overstocking and stockouts. Sellers should work closely with their 3PLs to ensure they’re not just storing inventory, but helping to move it.
Ideally, fulfilment partners should offer insights into turnover rates and suggest opportunities to optimise product velocity. This KPI directly connects warehouse efficiency with broader business strategy.
6. Backorder and Stockout Rates
Stockouts mean lost sales. Backorders mean delayed satisfaction. Both mean disappointed customers. This KPI monitors how often you run out of products or are forced to delay fulfilment due to lack of inventory.
E-commerce operates at high speed. A product that’s out of stock for even a few days may cause customers to switch to a competitor. Stockouts also lead to additional costs—emergency restocking, priority shipping, and administrative burden.
Reducing backorders requires synchronisation between sales forecasting, inventory planning, and warehouse operations. For sellers using multiple sales channels, stockouts on one platform can trigger algorithmic penalties that reduce visibility and sales.
Sellers should treat this KPI as a red-alert indicator. If it spikes, something upstream—sourcing, forecasting, or warehousing—is broken. Prevention is always cheaper than recovery.
7. Cost per Order
Cost per order gives a complete picture of how much it costs to fulfil each customer order, including labour, packaging, storage, and shipping. For businesses operating on tight margins, this KPI is critical to long-term sustainability.
If your cost per order is too high, profits evaporate quickly. High costs might result from inefficient picking paths, excessive packaging, or poor carrier selection. It could also indicate a misalignment between order size and warehouse processes.
E-commerce sellers should aim to reduce this cost without compromising service levels. Working with 3PL providers who offer transparent pricing and regularly benchmark their processes is key.
Ultimately, reducing fulfilment cost per order can free up budget for marketing, product development, or expanding into new markets. It’s a KPI that connects warehouse operations with business growth.
8. Warehouse Space Utilisation
Warehouse real estate is expensive—especially in central Europe. This KPI measures how effectively the available space is used. Poor utilisation results in unnecessary rent, energy costs, and operational complexity.
For e-commerce sellers with growing SKU counts, smart space allocation becomes a differentiator. It ensures faster picking, easier inventory counts, and lower handling errors.
Effective 3PL partners use dynamic slotting, vertical racking, and demand-based allocation to maximise space efficiency. If your stock is taking up more space than it should, or if your provider keeps requesting extra storage fees, this KPI deserves scrutiny.
Space utilisation isn’t just about packing more into the same footprint. It’s about doing so in a way that supports speed, accuracy, and safety.
9. Return Rate
Returns are a reality in online retail—especially in fashion, electronics, and cross-border e-commerce. But an unusually high return rate can point to deeper issues: product quality, listing accuracy, or fulfilment errors.
This KPI reveals more than just customer behaviour. A spike in returns might signal that the wrong products are being shipped, items are arriving damaged, or expectations set during the sale aren't being met.
E-commerce sellers should track returns by product type, reason code, and fulfilment source. Identifying patterns helps address issues early and mitigate losses. Good fulfilment partners also offer streamlined reverse logistics to minimise costs.
While not all returns can be avoided, they can certainly be managed more effectively when the data is clear and timely.
10. Labour Productivity
Behind every fulfilled order is a team of workers—pickers, packers, supervisors—whose efficiency drives costs and customer satisfaction. Labour productivity measures how many orders a warehouse worker can process over a given time.
In a warehouse environment, it's important to say that time really is money. If staff spend excessive time searching for items, waiting on systems, or correcting mistakes, the entire operation slows down. This affects not just cost but also shipping timelines and order accuracy.
Many 3PL providers are investing in automation to enhance labour productivity, from mobile scanning to robotic picking. But even in manual warehouses, layout design, clear protocols, and effective leadership can drive significant gains.
Sellers should expect their 3PL partners to monitor labour efficiency and report on it regularly. High productivity, when not achieved through burnout or cutting corners, is a sign of a well-run operation.
Conclusion
Tracking warehouse KPIs is no longer optional—it’s essential for scaling an e-commerce business. As customer expectations rise and competition intensifies, sellers who have clear insight into their logistics performance will be better positioned to adapt, grow, and lead.
Each of the ten KPIs covered—inventory accuracy, picking accuracy, order cycle time, and beyond—offers a different lens through which to evaluate your fulfilment operation. Combined, they provide a comprehensive view of performance, efficiency, and reliability.
If you’re working with a 3PL partner or considering switching providers, these metrics are your baseline. Make sure your partner can not only track them but also act on them. Because in e-commerce, logistics isn’t a back-end operation—it’s your customer experience engine.
