How to Manage Split Orders and Shipments: A Guide for Retailers
Key Takeaway:
A split shipment occurs when a single order is divided and shipped in two or more separate packages.A split shipment occurs when a single order is divided and shipped in two or more separate packages. This often happens when a customer order is fulfilled from multiple locations due to inventory distribution or logistical reasons.
Split order, which is basically the same thing as split shipment, can be a blessing or an irritating nightmare for your business. Whichever way it swings depends on how well you understand what order splitting is about and how you manage it.
How do we mean?
Let’s say a customer ordered two items from your store: A and B. The issue is that while item A is in a warehouse very close to the customer, it’s a totally different story for item B, and so it will take longer to ship.
The best course of action is to ship out item A to keep the customer satisfied. But on the flip side, you will incur more shipping charges – not to mention taxes.
Getting the gist now?
Needless to say, though largely inevitable, managing split shipments correctly can greatly improve customer experience, enhance order management, and so much more. Efficient order fulfillment processes, such as optimizing inventory across multiple locations, can help manage split shipments and reduce associated costs. Read through to learn more.
What are Split Orders/Shipments?
A split shipment occurs when a single order is divided and shipped in two or more separate packages (also referred to as multiple packages or more than one package). Instead of delivering all items together, you dispatch the ordered items in bits and pieces.
Split shipments can be intentional or a result of an unavoidable circumstance. For example, customers might want their orders split by brand or categories for faster delivery. In such an instance, it’s intentional.
However, split shipment can also occur when there is insufficient inventory to cover an order or the items in an order are kept in different warehouses. When items are stored in different locations, a separate shipment may be required for each, so the customer receives their order in parts rather than one shipment.
Why Do Split Shipments Happen?
Like we pointed out earlier, split shipments can happen for multiple reasons, which could be intentional or reasons beyond your control. Split shipments often occur when inventory is distributed across multiple warehouses or multiple fulfillment centers. They are as follows:
Storing inventory in one fulfillment center or the same location can help reduce the need for split shipments, while having stock in more than one location increases the likelihood of split shipments.
1. Backorders and Inventory Shortages
Inventory shortages and a stockpile of backorders can leave you with no choice but to split customers’ orders into multiple shipments.
2. Multiple Warehouse Locations
If you have products stored in multiple warehouse locations or fulfilment center, splitting orders could become an inevitable reality for your business.
3. Supplier Constraints
If you deal with suppliers that deliver supplies in batches, it’s only a matter of time before you begin to split your customers’ orders.
4. Customer Preferences
Customers might want items in their orders sent to different addresses. Also, they might want certain items delivered faster than the others, and wouldn’t mind paying extra.
In such instances, splitting the items into separate orders becomes inevitable. Split shipments can help meet customer expectations for faster or more flexible delivery, ensuring that customers receive their items according to their preferred timelines.
Benefits of Split Shipments
Split shipments aren’t really a bad thing. As a matter of fact, it can benefit you, the retailer, as well as your customers. Let’s go over these benefits.
How Split Orders Benefit Your Customers
1. Faster Access to Products
Splitting orders into different shipments allows your customers to access their orders much faster. For example, if the order is partially ready for fulfillment, you can quickly ship it out while waiting for the complete items to arrive. Split shipments can also improve delivery times for customers, especially when multiple items or multiple products are involved.
2. Improved Customer Satisfaction
When communicated clearly, split shipments show flexibility and responsiveness, leading to better satisfaction on the part of your customers.
3. Reduced Risk of Complete Delays
If one product in the order is delayed due to backorders, production, or shipping issues, your customers don’t have to wait until the product is ready. Orders with multiple items or multiple products are less likely to be delayed overall when split shipments are used.
4. Supports Personalised Needs
In some cases, your customers may want to personalize their shopping by splitting their orders. One part for them and the other as a gift for a loved one. Some customers may prefer to receive their order in a single shipment or single box, while others may want split deliveries.
How Split Shipment Benefits Retailers
Better Inventory Management
Automated or manual order splitting enables you to ship orders as soon as they arrive. This not only reduces inventory handling costs but can also enhance overall business efficiency. Efficient order fulfillment from the right fulfillment center can be more cost effective, as it streamlines inventory allocation and shipping processes.
Reduced Backlog & Inventory Pressure
Shipping out available items as soon as you receive them lessens the chances of backorder build-up, hence reducing inventory pressure.
Better Flexibility
Split shipment will come in highly useful if you store inventory across multiple warehouse locations or fulfillment centers, as it allows you to ship items from the location that is nearest your customer. Using the nearest fulfillment center for each item can optimize order fulfillment and reduce costs.
Manage orders across all your sales channels efficiently with zero stress
Challenges of Split Shipments
Of course, split shipments aren’t without their downsides. Some of the challenges you will likely encounter are as follows: Businesses need to carefully weigh these challenges:
Higher Shipping Costs: Multiple deliveries increase transportation expenses.
Complex Tracking: Customers must monitor multiple tracking numbers for one order.
Risk of Confusion: Without clear communication, customer confusion can occur when separate shipments arrive at different times, leading to upset customers who may think their order is incomplete or missing items.
Operational Complexity: Managing separate fulfillment processes for the same order, including separate deliveries, adds strain on inventory and logistics teams.
Poor communication about separate shipments and separate deliveries can result in negative reviews, damaging your brand reputation.
Tips for Managing Split Shipments
How well you manage split orders determines whether it will serve your business’s interests or not. Splitting shipments strategically can help balance customer satisfaction and operational efficiency.
That being said, here are some tips to manage them for the best results.
1. Strengthen Inventory Planning
The best way to reduce unnecessary split shipments is by improving your inventory management. To achieve this:
Use demand forecasting tools to anticipate stock needs, which helps improve order fulfillment and reduce split shipments.
Maintain safety stock for fast-moving and high-demand products.
Ensure real-time visibility across all warehouses so teams can plan fulfillment better.
2. Communicate Clearly with Customers
Transparency is key to keeping customers happy when their order arrives in parts. To this end:
Notify customers beforehand if their order will be split.
Provide separate tracking numbers for each package.
Share clear delivery timelines for pending items.
Respond quickly to customers’ messages when they express concerns.
3. Optimize Shipping Strategy
Shipping costs can add up quickly when splitting orders. To keep costs as low as possible:
Consolidate shipments where possible without delaying urgent items.
Partner with logistics providers that offer multi-location fulfillment support.
Use shipping rules to determine whether splitting or consolidating an order makes the most sense financially.
4. Offer Customer Options
Whenever possible, give customers control over their delivery preferences. Allow them to choose between one consolidated shipment (even if it takes longer) or split deliveries for faster access to available items.
How to Handle Returns for Split Shipment
So you shipped an order to a customer abroad in two batches. Unfortunately, the first shipment comes in the wrong size, while the second is damaged in transit. The customer wants to return the items.
While this is a hypothetical situation, it happens pretty much in real life. So, how would you handle a situation like this when it arises?
Here are some helpful tips for handling returns for split shipments:
Provide Clear Return Instructions for Each Package
Include a return slip or label with every shipment so customers can return items individually if needed. On top of that, make sure the instructions clearly explain whether items can be returned separately or need to be consolidated.
Track Returns at the Order Level
Even though shipments are split, treat the return as part of the same order record in your system. An ERP system like Uphance with order return management capabilities will come in handy here.
Communicate Refund Timelines Clearly
Let customers know whether partial refunds will be processed as items are received, or if the refund will be issued once all returns are processed.
Managing Split Shipments with Technology
In today’s fast-paced retail environment, managing split shipments efficiently is nearly impossible without the right technology. Leveraging advanced tools not only helps you minimize split shipments but also gives you more control over your shipping strategy, fulfillment costs, and overall supply chain performance.
Modern inventory management systems provide real-time visibility into stock levels across multiple warehouse locations and fulfillment centers. This means you can quickly identify where products are available and route orders to the most optimal location, reducing the need to split shipments and helping you ship more orders in a single package. By syncing sales data and inventory availability, these systems help ensure that customers’ orders are fulfilled from the best possible source, minimizing unnecessary multiple shipments and higher shipping costs.
Conclusion
Split shipments are an unavoidable part of doing business, especially in industries like fashion and retail. But with the right planning, technology, and customer communication, they don’t have to be a problem. By approaching split shipments strategically, businesses can reduce costs, keep customers happy, and maintain smoother supply chain operations.
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