When you’re working to build a successful e-commerce business, order fulfillment is often one of the last thoughts – after having good products, staff to provide satisfactory customer service, and, of course, a place to do business.
At a certain point, though, if your business is successful, you’ll have to think about the order fulfillment process and all that comes with it. After all, you do want your customers to get their orders on time, don’t you?
Timely e-commerce shipping is just one of the ways you can provide your customers with a great experience that keeps them coming back.
But how do you ensure that your product fulfillment process run smoothly?
In this post, we’ll give you the rundown on everything you need to know about order fulfillment, so you can keep your business running and your customers happy.
Let’s get down to it, then!
What Is E-Commerce Order Fulfillment?
The e-commerce order fulfillment process involves receiving orders from an online store, picking said order out from inventory, packing it up, and shipping the order to the recipient.
There are many different types of fulfillment, such as:
- E-commerce fulfillment
- Retail fulfillment (Delivering to retail stores)
- Marketing/Sales collateral fulfillment
- B2B fulfillment
However, e-commerce fulfillment differs from the above examples because the order originates online and orders are shipped to individual customers all over the globe.
Other types of order fulfillment involve shipping to business retail locations, employees at said business locations, or one business shipping goods or collateral to another.
How Does E-Commerce Shipping Work?
In the supply and delivery chain, e-commerce order fulfillment and shipping play an important role. If not for a reliable order fulfillment and shipping process, your customers would have to face delays, possible shipping errors, and other mistakes.
Generally, there are three different processes you can use for e-commerce shipping. These are merchant fulfillment, drop shipping, and third-party fulfillment.
We’ll explore each of them in more depth below.
In a merchant fulfillment scenario, you, the merchant, will fulfill all of your e-commerce orders in-house. You’ll stock, track, and store inventory, take orders, write invoices, and ship each order to its intended customer.
When you fulfill orders yourself, you control the process, meaning it’s easier to control your outcomes. You can also save money – because you’re not paying for packaging or shipping products another provider has marked up. Finally, if any last minute changes are needed, you can make them easily – and do so on your own.
However, there are some disadvantages to going this route.
For example, when you have a large number of orders, it can be difficult trying to keep track of all of them. They can also be time-consuming to ship, taking manpower away from other areas of your business. Lastly, fulfilling orders on your own isn’t exactly scalable long-term, so it only really works for a small number of orders.
Drop shipping involves outsourcing fulfillment to another company.
All your e-commerce business does in this situation is simply takes orders online, as you normally would. Then, the company you’re working with receives each order and fulfills it for you.
With drop shipping, you don’t have to worry about logistics or find a warehouse or other space in which to store your products. You simply take orders, and that’s it!
However, because you don’t control the fulfillment process, you also relinquish control of overseeing how each order is packaged and shipped to your customers. If you can find a trustworthy vendor to partner with, though, this can be a helpful solution.
Third-party fulfillment (or third-party logistics) is similar to drop shipping, only it takes things yet another step further. The order fulfillment company not only stores and completes the product fulfillment for each of your orders, but they process them, too.
Of course, this means you’ll give up control of your operation to an outside vendor. If you want to ensure that every step in the order fulfillment process is handled professionally, though, third-party fulfillment is the way to go.
You won’t need to worry about learning any complicated operational processes, how to manage complex finances, or have to invest in a large amount of space, staff, or other necessary resources to keep things moving along.
How Do I Know Which Fulfillment Type to Use?
We get it. When you’re new to the e-commerce world, trying to determine what fulfillment process you’re going to use can be frustrating.
How do you know when an investment you’re making is the right one?
What you need to do in this situation is weigh the pros and cons. And, ask yourself questions like:
- How much of the e-commerce business am I prepared to handle?
- Do I know where to source packaging and shipping materials?
- Am I willing to invest the time, effort, and money into figuring out how to do this on my own?
- Can I afford to outsource any portion of the order fulfillment process?
Answering these questions will make it a lot easier for you to come to a decision on how you’re going to handle e-commerce order fulfillment for your business.
How Do I Select a Fulfillment Provider?
Before you can select a provider, you’ll need to know what services each vendor provides and which you’re planning on using.
How many warehouses do they have? Where are they located?
Will they be able to connect to the systems you’re currently using?
Do they offer any value-added services such as personalization?
What’s their reputation like?
Ensure that you know the answers to these questions before you commit to a specific provider.
Nail Your Order Fulfillment Process Down
We’ve given you the low-down on the main three types of order fulfillment in this post.
The cost of each obviously depends on where you’re looking and the specific set of services you need, so that’s something you’ll need to determine on your own.
With this helpful guide, though, figuring out where you want to start with your order fulfillment should be easy.
If you still need help, don’t hesitate to contact us today!