E-commerce business covers different areas to take concern; marketing, warehousing, website building, shipping, logistics, and fulfillment. In this article, we’ll look at order fulfillment, what it is, who does it, and how you can improve its process to lead you to the overall success of your business.
What is Order Fulfillment?
Order fulfillment in eCommerce is the whole process of how the customers will receive what they ordered. This process covers from when customers place their orders to when the package arrives at their doorstep. In extensive cases, order fulfillment also covers “reverse logistics,” which is a solution to help dissatisfied customers send back their purchased items conveniently, should there be any problems like defects or wrong variations of the delivered products.
The order fulfillment process comprises five parts: order receipt, pick up, inventory and storage, package, and delivery.
Order receipt occurs when a customer puts in an order and checks out an item. This will be the kickstart of all other processes.
The pick-up consists of how you order items from the seller’s warehouse to the sorting center, where the item is to be properly stored and packaged while awaiting delivery.
The inventory and storage part takes place when the picked-up item is. The company inventories, sorts, and scrutinize on how it will deliver the item efficiently
The package part takes place when the items are put into proper packaging to ensure the product’s safety during transport. The package part of the order fulfillment process also looks at its aesthetic. Packaging may involve putting a label, brand name, or image on the product package, which may add a good impression to your customers and lead to brand loyalty, i.e., more sales! Packages bring a brand impression to your customers, so it’s important to pay attention to how they look. In designing your labels, you can always ask for help with different eCommerce tools to ease up your work so you can focus on your creativity instead of technicalities like removing backgrounds of images which removal.ai can affordably do for you.
The usual last part of the order fulfillment is the delivery. This part takes place when the company transports the packaged item to the customer.
The order fulfillment process may vary according to how an eCommerce business handles it. Here are some approaches to order fulfillment.
Approaches to Order Fulfillment
Direct-to-Consumer or D2C order fulfillment is one where the actual manufacturer, retailer, or dropshipping business receives the order, stores, packages, and delivers the ordered items to its customers. Since there are no intermediaries between the business and the customers, the receiving, inventory, and storage are usually eliminated from the order fulfillment process unless the business has a distribution center separate from the finished goods warehouse.
Of course, since this type of fulfillment doesn’t need another party, it may be cheaper when you’re just starting another. However, when you start scaling, inventory and logistics operations might get harder to handle, and distribution centers and warehouses’ costs might need to be more convenient.
Third-Party Logistics, or 3PL fulfillment, is another approach to order fulfillment. This approach offers the help of a third-party logistics company, processing your orders until they are delivered. When an order is placed, a 3PL comes to the business warehouse to pick up the ordered item and put it in a fulfillment center, a short-term storage facility where it will be processed. The 3PL will also be responsible for your order fulfillment’s packaging and delivery phases.
Having a 3PL partnered with the eCommerce business is strategic in certain cases. Outsourcing order fulfillment companies to deal with your fulfillment process gives you more time in other crucial matters, especially marketing methods in building your brand when you’re starting. You can reduce your warehouse cost when expanding with a 3PL partner as an alternative. And in usual cases, these companies have a broader reach to start with, so you can sell your products to a wider range of customers with fewer worries about them reaching your product.
A caveat of outsourcing your fulfillment to order fulfillment companies is that you might lose control entirely or partially of your fulfillment process. When the fulfillment terms are unpleasant for the customers, you may have little say in altering them in your favor. Another thing is it might be more costly than having your distribution center. Hence, it is important for an eCommerce business, especially dropshipping business where there may not be an alternative for order fulfillment, to choose the right 3PL company that suits their needs.
Why is order fulfillment important to look after?
One of the things customers base their brand loyalty on is their customer experience. Statistics say that 60% of consumers worldwide withdrew their loyalty to a brand because of poor customer experience. Part of the customer experience is order fulfillment. When delivery gets hassle or shipped for too long, customer experience is affected negatively. With poor product handling from fulfillment, customer rejects can get high, and you might lose your customers. That is why an eCommerce business must work on this part.
Examples of Order Fulfillment Companies
You can visit some eCommerce order companies. Notice how each offer varies so you can choose which company has the most suitable offer for your needs.
1. Fulfillment By Amazon
Fulfillment by Amazon (FBA) is one of eCommerce’s leading order fulfillment companies. With 170 fulfillment centers scattered around the US and 250,000 full-time employees, you can ensure that FBA is a good catch in both fulfillment and quality service.
With almost 80% of American households subscribed to Amazon Prime, FBA’s membership program where members can get a free two-day delivery, this is one of the strategically best options. After all, free shipping entices customers to buy more. According to Inc, 88% of consumers are more willing to purchase from an eCommerce store that offers free shipping.
FBA is also supported by almost every eCommerce platform, thus giving you more flexibility wherever you conduct your business.
Huboo is a UK-based fulfillment company that can be your partner regardless of your scale, whether you’re receiving large orders or just starting a business. This order fulfillment company takes pride in its customization features that other fulfillment companies might take away from you. They can abide by the packaging and delivery terms you want so you can fit your customers’ preferences.
3. Rakuten Super Logistics
Rakuten Super Logistics is another fulfillment company to partner with. They boast both their order accuracy and order turnaround to a hundred percent. They can also offer two-day ground shipping almost throughout the US.
One caveat of Rakuten Super Logistics is that they have a minimum monthly order requirement of 250 orders. This might not be a convenient option if you’re still a small-scale eCommerce or dropshipping business. However, if you’re considering upscaling, this company can handle up to 10,000 orders monthly.
(Rakuten Super Logistics is Now ShipNetwork Under New Ownership)
4. eFulfillment Service
eFulfillment service is one of the famous go-to’s of eCommerce businesses just starting. Unlike Rakuten or other order fulfillment companies, eFulfillment Service requires no minimum orders. Also, this fulfillment company offers cross-docking services. Cross-docking service eliminates the storage phase of fulfillment. In this setup, the company picks up the order from the warehouse and directly delivers it to the customers. This is good for businesses that need quick delivery to their clients.
5. FedEx Fulfillment
FedEx fulfillment is a fulfillment company that provides a reverse logistics policy. Reverse logistics is crucial for businesses as having such gives you the power to evade customer displeasure and negative feedback. FedEx fulfillment is fitting for swiftly upscaling eCommerce companies with its transparent inventory tracking policies. Further, they even assign a professional to assist their clients in dealing with and understanding their fulfillment process.
FedEx Fulfillment is also convenient as, along with other fulfillment companies, it can integrate into various eCommerce platforms. You also have the option to customize your packaging and other value-adding services in partnership with them without much restriction.
The Secrets to a Successful Order Fulfillment Companies
Here are the secrets companies wield to achieve successful order fulfillment. And you should too.
1. Align your Fulfillment Process
The order fulfillment process might seem as simple as just five phases. But you’d be surprised when you dive and discover that there are devils in the details of the process. From the very start, the ordering phase, until it’s the delivery phase, everything in the process must be set in order and standardized. Your fulfillment process should be transparent, consistent, and standardized. To do so, you must set specific workflows and controls to ensure that every move in the fulfillment process is accounted for and made efficiently.
Aligning your fulfillment process prevents you from having inefficiencies and taxing your businesses. You’ll prevent having too many lost orders or misplaced inventories with standardized processes and controls. This helps you get to your customer’s needs more quickly, reduce costs and potential losses, and benefit your business financially.
2. Organize your warehouse
Warehouse management is one of the most crucial aspects of your business. When your warehouse and inventory are well-managed, you can keep your storage cost at the lowest levels, ensuring the safety and well-being of your staff. A well-managed and organized warehouse is clean, safe, sorted out, and set in order. Just as the first secret, it follows that you need to standardize certain workflows and controls for your warehouse staff to maintain the organization and cleanliness of your inventories. As part of occupational health and safety practice, there should also be fail-safes or Poka-yoke on stacking the inventories in the warehouse.
3PL companies can also help in assisting your warehouse management. They often have the best practices you can adopt and make the most out of. With an organized warehouse and inventory in place, operation efficiency follows.
3. Prioritize Communications
Communication is an important part of a booming business. A cleared-out communication between the enterprise, the fulfillment company, and the customer always follows operations effectiveness and efficiency. One way to start prioritizing your communications is by providing full transparency in your supply chain. You can be transparent in your supply chain by using technological solutions like RFID tags. RFID tags are technology attached to transportable inventories or assets, feeding you real-time information about their current location and status. At the same time, it is being delivered or transported to another storage. This thus helps you in ensuring and maintaining that your fulfillment process is smoothly working.
Communicating the information about the delivered inventories boosts the customers’ confidence in the logistics partner and is an avenue to a faster failsafe response. Transparency is attributed to the brand loyalty of customers. According to research, 94% of customers are more likely to have brand loyalty when they offer full transparency on their supply chain.
4. Provide Reliable Customer Service
The customer is always right, as the saying goes. Though it might not be an absolute truth, it is undeniable that customer service is one of the key drivers of an eCommerce business. That is why a successful fulfillment company and its eCommerce client must provide quality customer service. You can achieve quality customer service by giving enough product descriptions and accurate stock data. Customers also love knowing their packages while in transit, so it is a reminder to communicate properly with them. Transparency is the key.
Also, we can not always eradicate the risk of customer complaints. Thus, a successful fulfillment company must always have a failsafe plan, well-established customer complaints hotlines, and convenient reverse logistics. When customers get a complaint, their patience is often as short as it usually would be, so it is important to put an extra effort not just on not having customer complaints but responding to them when they have.
5. Arrive at Data-Driven Decisions
Data drives our current age. For the effective operation of businesses and organizations, data are acquired, processed, learned, and repeatedly reported for continuous improvement. eCommerce and its fulfillment process are included in this data craze. To continuously thrive in the industry, businesses need to provide strategic solutions, which are found and created through different applications of data you can gather throughout your business. You can arrive at data-driven decisions when you collect and combine data to discover new information about the business. With data analysis, you can always use eCommerce tools to help you process your business data and come up with the information you might be surprised about.
When it comes to order fulfillment, it’s important to ensure your process is in order, have good warehouse management, put communications on top, deliver the best customer service possible, and depend on data-driven decisions. These are crucial steps to ensure that your eCommerce business reaches success.
Now it’s true that handling these things on your own may be difficult. Maybe it’s time to seek assistance from a fulfillment company. Remember that it’s important to find a fulfillment company that tailors fit your needs and is convenient for your budget. In considering such, you might ask the questions, “how many orders do I receive and fulfill on a monthly basis”, “Is my inventory management as efficient as it can be right now?”, “how much do I spend for the fulfillment, and how much will I do if I let a 3PL handle them?”, and “What can I do more?”.
Remember, the goal is to satisfy the customers, provide safety, reduce costs, and maximize profit. Good luck on your eCommerce journey.