What Are Ecommerce Operations & How to Improve Them (2024)

The complexity of managing ecommerce operations—from supply chains to customer service—poses a unique set of challenges. For companies that can effectively manage these tasks, the rewards are worthwhile: increased efficiency, scalability, and profitability.

Ahead, delve into the components and complexities of ecommerce operations. Explore the role of an ecommerce operations manager, and get actionable advice to streamline your own operations.

Table of Contents

• What are ecommerce operations?
• The role of an ecommerce operations manager
• How to improve your ecommerce operations (7 steps)
• Ecommerce operations FAQ

What are ecommerce operations?

Ecommerce operations are the collection of activities and systems that enable a business to sell products online. Here are the key components of ecommerce operations:

Website management

This includes everything related to maintaining your online store, such as updating product pages, managing ecommerce SEO, publishing content, and ensuring your site is user-friendly and responsive on mobile devices.

Inventory management

Running online stores requires inventory management: a solid system to track inventory levels, order fulfillment, and returns in real-time to prevent overselling or underselling.

Order fulfillment

The order fulfillment process starts when a customer places an order and ends when they receive their products. It includes the picking, packing, shipping, tracking, and delivery of orders.

Shipping logistics

Getting a package from point A to point B requires coordinating with carriers, planning the most efficient routes, managing freight costs, and dealing with international shipping regulations to ensure timely and cost-effective delivery.

Digital marketing operations

Bringing awareness to your brand requires marketing efforts like email campaigns, social media promotion, and pay-per-click advertising that drives traffic to your retail store.

Customer service

Responding to customer inquiries and complaints while providing after-sale service is key to maintaining customer satisfaction and loyalty.

Data management

Collecting, analyzing, and leveraging customer information and data can improve your operations, marketing efforts, and customer experience.

Supply chain planning

This critical aspect of ecommerce operations involves inventory forecasting, planning for procurement, managing suppliers, and ensuring seamless production and distribution to keep your store stocked.

The role of an ecommerce operations manager

• Improve the user experience
• Strategize inventory levels
• Oversee order fulfillment
• Build customer relationships
• Advise the marketing team
• Optimize the supply chain

An ecommerce operations manager is a key figure in retail operations. Think of them as the architect of the ecommerce experience. They oversee inventory management, order fulfillment, and customer relationships. With a deep understanding of digital marketing, data analytics, and supply chain logistics, they create operational efficiency, drive ecommerce sales, and increase customer satisfaction. Here’s a breakdown of an ecommerce operations manager’s key responsibilities:

Improve user experience

An ecommerce operations manager works to balance aesthetics with functionality on their company’s ecommerce site. They guide their team in creating an intuitive and engaging environment for online shoppers to discover new products and return to purchase old favorites. They understand the customer journey, from the moment a potential customer lands on the site until they complete a purchase.

Strategize inventory levels

An ecommerce operations manager plans inventory strategies and predicts demand to optimize stock levels. They analyze historical sales data to identify trends and patterns in product demand, looking at seasonal fluctuations, bestselling items, and slow-moving stock. Their goal is to align product availability with customer demand, avoiding the pitfalls of overstocking and stockouts.

Oversee order fulfillment

To ensure efficient order fulfillment, ecommerce operations managers coordinate closely with internal teams to understand and optimize warehouse operations. They may also leverage a fulfillment network—a distribution system for order processing and shipping. The manager liaises with logistics and shipping partners to ensure timely pickups and deliveries, negotiating contracts with these partners and managing any issues that may arise during shipping, like lost or damaged goods.

Build customer relationships

An ecommerce operations manager nurtures excellent customer service, turning one-time shoppers into loyal repeat customers. They may set policies for quick response times, train customer service teams to provide empathetic and solution-focused service, and implement follow-ups to confirm customer satisfaction. They rely on market research to develop a deep understanding of their company’s customer demographics, sharing these insights broadly to drive organizational alignment.

Advise the marketing team

While an ecommerce operations manager is not directly responsible for marketing, they collaborate closely with the wider marketing team to shape a digital marketing strategy. Their aim is to bring targeted traffic to the online store and convert visitors into customers. If data suggests a product is popular among a specific demographic, the ecommerce operations manager might recommend focusing a marketing campaign on this audience. They’re keen to explore novel marketing tools and new sales channels, finding additional avenues to drive sales.

Optimize the supply chain

An ecommerce operations manager uses a centralized inventory management system to track stock levels in real time across warehouses or locations. They also work with suppliers to ensure timely deliveries to warehouses. While their focus centers on getting products to customers, they also manage return logistics, providing a clear and easy process for customers to return products.

How to improve your ecommerce operations (7 steps)

1. Harness technology for automation
2. Value customer feedback
3. Rely on data for making decisions
4. Outsource non-core functions
5. Simplify the customer journey
6. Invest in customer service
7. Embrace continuous learning and adaptability

Effective ecommerce operations blend strategic planning, efficiency, and customer-centric approaches. By using the strategies below, you can boost efficiency, stimulate growth, and stand out from other ecommerce businesses.

1. Harness technology for automation

Automation is essential in ecommerce for speeding up manual processes and giving customers a personalized experience with your brand. Explore automation tools and ecommerce solutions that simplify tasks like order processing, inventory updates, and customer service responses. This frees up team bandwidth for more strategic work.

2. Value customer feedback

Your customers are an invaluable well of insight—from their product preferences to their most-used marketing channels. Inviting reviews, conducting surveys, and engaging in direct conversation with customers can provide crucial feedback, illuminating what works and what doesn’t.

3. Rely on data for making decisions

Data is the backbone of informed decision making in ecommerce. Use reports and analytics from your ecommerce platform to understand customer behaviors, product performance, and overall operations. Leverage these insights to guide decisions, from marketing approaches to inventory management.

4. Outsource non-core functions

Outsourcing functions that aren’t your business’s primary focus can save you the effort of building capacity in-house. For example, you may be an expert in brand building but less skilled in SEO. Working with outside agencies or consultants can help your business access specialized expertise, allowing your team to concentrate on core ecommerce business operations.

5. Simplify the customer journey

By simplifying navigation, improving search functionality, and making product information easily accessible on your website, you can reduce customer frustration and abandoned carts. A seamless and straightforward checkout process—including diverse payment options and clear shipping information—can enhance conversion rates, reduce operational issues, and ultimately drive revenue growth.

6. Invest in customer service

Dedicate resources to building an excellent customer service team. Prompt responses, effective problem resolution, and friendly interactions can transform a first-time buyer into a loyal customer, improving your customer retention rates.

7. Embrace continuous learning and adaptability

The ecommerce landscape is constantly evolving. Stay updated on industry trends, changes in consumer behavior, and technological advances. Regularly update and refine your strategies based on these learnings to ensure your operations remain efficient.