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Shipments and stock on hold: how to reduce their number, cost and inconvenience

Shipments don’t always end as expected, eCommerce professionals know it perfectly. One tricky situation that can affect a delivery is turning into stock on hold“. The product is in a “limbo“, neither in the hands of the customer nor among those of the merchant, waiting to be released. In order to reduce the incidence of these cases and the resulting inconvenience, let’s explore deeply:

 

What is stock on hold

 

Stock on hold of an eCommerce shipment occurs when the courier has tried to deliver the package to the recipient without success. Usually, the goods become “stock on hold” after 2 delivery attempts. In these cases, the package is returned to the carrier’s closest depot – so not back to the eCommerce warehouse – waiting for instructions. The courier leaves a “notice of stock” at the supposed destination, indicating the sender, day and time of the delivery attempt, the location where the goods in stock are located, and the time within which they will remain there.

Stock on hold can happen, due to several reasons:

  • absence of the recipient or who can take his place for collection
  • wrong, unclear, or even unknown provided address
  • refusal of delivery by the recipient (often occurs in case of cash on delivery as payment method)
  • serious damage to the goods which makes delivery impossible
  • a mistake by the courier

The storage period – the one within which the release is possible (we’ll see it later below) – varies by the type of goods and by the courier (as well as by the type of contract stipulated with the eCommerce company). It can range from a few days to 15 days up to 1 month in some cases.

eCommerce stock on hold in courier's depot

 

The cost of stock on hold for eCommerce

 

The cost of stock on hold for eCommerce also varies but you can never ignore it. The space occupation in couriers’ depots has a price, depending on the volume and weight of the packages, on the days spent and, ultimately, on the conditions agreed upon in the contract. Big players clearly can gain more advantageous terms, but they are also the ones who have to manage more failed delivery attempts.

The costs of stock on hold fluctuate on average between 3% and 5% of the total shipping costs of an eCommerce store, up to peaks of 7-8% (source: “Farsi Strada”).

Usually, “stocks on hold” are mentioned only in the final part of the courier contracts or their costs are mixed with other kinds of service, so you can run the risk of not evaluating it carefully and concentrating only on the shipping costs. Generally, a “stock opening” fee is charged to cover administrative and operating costs. Then, you have to add the so-called “parking costs“, based on the days of storage in the depot in relation to the weight-volume, and a cost for the eventual new delivery (always lower than that of the entire route, but not variable for the weight up to the quintal).

That’s why the total cost of stock on hold often exceeds that of a successful shipment.

 

What release of ware on hold means

 

The release of ware on hold consists in the sender or the recipient ordering a new delivery attempt, thus “freeing” the goods in stock. The courier updates the status of the shipment on his management system and relocates the packages to a sorting area.

Several options can occur:

  • new delivery to the same address (if the recipient was absent);
  • delivery to another address (if this was incorrect or the recipient was unable to receive it there);
  • collection of the package in the courier’s deposit by the recipient or by a delegated person;
  • return of the package to the eCommerce company (by default when no instructions are received after a maximum of days);
  • goods’ destruction (for example, for products with tight deadlines).

Therefore, some couriers, when possible, solve the issues related to stocks between themselves and the recipients, independently, sometimes rescheduling the day and time of delivery or asking them to confirm the address. In many cases, your eCommerce support team will take action. In any case, in order to reduce the inconvenience and guarantee the arrival of the product at its destination, it is essential to track and monitor these operations, otherwise, a customer may be lost.

Be careful: the stock is “opened” by the evening of the day of the failed delivery attempt, while the release takes place at least the next day if the courier receives the necessary instructions and the new delivery is made the day after that. Therefore, at least 3 days are required for the opening, the release of ware on hold, and the potential new delivery.

 

How to solve inconvenience from stock on hold for consumers

 

The first way to contain the costs and inconvenience resulting from potential stocks on hold is to reduce their incidence, of course. But how?

  • By verifying and correcting the addresses provided by the recipients from the very beginning. Qapla’ – among its many shipping management features – offers the “Check Address” service which shows the accuracy percentage of the address based on a comparison with Google Maps and reports incorrect fields such as, for example, the postcode (when importing orders). As an alternative, you can enable a similar service based on the GLS street directory on Qapla’ for this courier’s shipments creation.
  • Timely notifications via email, SMS, or WhatsApp on the first failed delivery attempt to the recipient. By informing him promptly, the problem can be solved before the courier makes a second trip and the stock on hold is generated. If you adopt a solution like Qapla’, you can set the shipping information automatic sending up, in real-time and personalize it, including all your contact information (e.g. telephone and assistance opening hours, or even integrating a chat in the tracking page).
  • Delivery to a pick-up point that is close to the recipient (a locker or shop offering this service). This is sometimes an option provided by the courier, for an additional cost. See the Fermopoint network, for example.

If the shipment turns into stock on hold, despite these precautions, to know it as soon as possible is essential for the merchant, but also for the customer. Therefore, an alert system towards Customer Care is the first necessary tool to relieve the resulting inconvenience. In most cases, the transporters do not send communications on these “events” to the merchant but merely update this status. So it can take days before you notice it and the costs (“parking costs”) in the meantime soar. A panel like Qapla’ notifies these situations in real-time, not only to the customer but also to the merchant, on an all-in-one tracking dashboard.

shipments on hold management on Qapla' dashboard

Qapla’, for certain couriers, also allows you to carry out all the operations relating to the release, directly from the platform. In the appropriate section “Stock Management”, it will be possible to settle a new delivery attempt, a delivery to a new address, a return to the own warehouse or communicate to the courier that the customer will collect the package at their deposit. For shipments containing multiple orders, it will also be possible to decide differently for every item (“partial deliveries and returns/destructions”). When the instructions have been transmitted to the courier, in such a simple way, the tracking is updated and the relative communication is sent to the customers. In this way, they can feel constantly assisted and you can turn an inconvenience into an opportunity for excellent support.

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