What is Order Fulfilment? Define Your Process & Strategy

Consider the last time that you ordered from an online store but received a poor delivery experience. Perhaps your package arrived damaged, late or lost.

Do you long to purchase from this seller again?

You’re not the only one. 37% of customers have said that they will never shop again with a retailer after a bad experience with delivery.

Your order fulfillment strategy is the key to preventing this outcome for your ecommerce brand.

State of Ecommerce Fulfillment Report:

Ecommerce fulfillment benchmarks for 7,000 brands and tens to millions of orders by 2021

The main takeaways (TL:DR)

1. Your fulfilment strategy should be able to scale with your business as it grows. For a better approach, we recommend that you answer the 10 questions below.
2. There are four main steps to fulfil an order: from receipt to shipping.
3. The best way to choose the order fulfillment option depends on several factors, such as how much bandwidth, time, and space you have available to fulfill orders yourself or how much control you desire over the supply chain.
4. There are five questions that you can ask third-party logistics providers to help you choose the best one for your order fulfillment strategy. These include platform integrations, locations, 2-day shipping, and more. ).

What is order fulfillment?

Order fulfillment covers all aspects of the process, from the moment a sale is made to the time it is delivered to the customer. This includes receiving, processing and packing orders, picking them up, and shipping them to the customers.

Ecommerce businesses must have a successful strategy for fulfilling orders in retail. This will ensure that they remain competitive and retain customers.

You may now be thinking about outsourcing your ecommerce order fulfillment to a 3PL. But what does this mean? It may seem difficult to understand what goes on at a fulfilment center, but it is not.

This is what happens in a 3PL fulfilment center once a customer places an order on your online shop.

Step 1: Receiving

To fulfill orders, your 3PL will need to have your inventory on hand. Receiving is the act of accepting and storing incoming inventory at the fulfillment centre.

Each 3PL has its own process for receiving and storing inventory. This may involve documentation from the merchant. This ensures that your orders are processed quickly and is organized.

After the 3PL has received your inventory, the items will be stored in designated warehousing storage areas such as shelves or bins.

Step 2: Picking

Warehouse picking is the first step in fulfilling an order.

The picking team is assigned an order once it has been pushed to your 3PL order fulfilment system. The picking team receives a packing slip containing the order details, quantity, and storage location at the facility. They can then collect the products from their respective locations.

Step 3: Packing

After all the items have been selected, it is time to pack them up securely.

While some 3PLs charge extra for packaging materials, others will include them in their fulfilment services. Your 3PL will select packing materials that will protect your products while also reducing their dimensional weight.

These materials include bubble mailers, poly bags, boxes, bubble mailers, packing tape, bubble wrap and other dunnage.

Some 3PLs let you stock your custom boxes, or use plain brown boxes if you prefer to keep your brand central.

Step 4: Ship

It’s time for shipping once the order has been packed.

3PLs purchase shipping labels on behalf of merchants from most shipping couriers.

While some fulfilment companies prefer to work with couriers, others can compare shipping costs from different couriers. This helps to ensure that shipping costs are as affordable as possible for each option.

Outsourcing fulfilment has the advantage that major couriers can pick up orders from 3PL fulfilment centres and ship them.

You will receive tracking information once your order ships. This information can be shared with customers either automatically or manually, depending on how the 3PL technology works.

Three tips for order fulfillment: How to do it right

Receiving processes are crucial

You want to ensure that the receiving section of your order fulfillment processes is optimized so that you can respond quickly. So that customers get a speedy delivery, any shipment should be processed quickly.

Make sure you have a backup plan in place

Shipping products is not something you can control. Goods can get damaged, couriers might increase their fees, extreme weather conditions could impact your delivery, and so forth. A backup strategy can be helpful in preventing late deliveries.

Do everything possible to anticipate the demand

To keep up with demand, it is important to have enough supplies in your inventory. You could begin by analysing your data (orders and inventory) if this is not your first year of business. To determine if your market is seasonal, you can look at the data from the previous year.

Your order fulfilment strategy: 10 questions

There is no one-size-fits all order fulfillment strategy. These are important things to remember when scaling fulfillment for your online store.

Order volume and business size

• What number of SKUs does your company sell?
• What number of orders do you ship each month?
• What number of orders are you predicting you’ll ship next month? Next year?

Your product sales and monthly order volume are important factors in determining the best fulfilment solution for you. Your fulfilment strategy will likely look different if you are new to ecommerce than a large retailer like Woolies.

Fulfillment may be more affordable if you have low order volumes than outsourcing. You may not need a warehouse management system or inventory to track your inventory and operations if you only sell a small number of products.

Keep in mind the time when your fulfilment strategy is likely to be outgrown if your business is expanding rapidly and your average order value keeps increasing. You need to ensure that your ecommerce fulfilment plan can grow with you.

Technology and sales channels

• Which online stores are you selling?
• Do you sell on an ecommerce site, a marketplace or both?
• Which ecommerce platform do you use?

Your online sales channels should be supported by your fulfilment strategy. You can streamline the order fulfillment process by using order fulfilment software that integrates with your ecommerce platform or online marketplaces.

This is particularly important if your product or service is sold through multiple channels. Your technology should simplify the order fulfillment process and not make it more complicated.

This means that online orders placed through any of your channels should be automatically pushed to fulfilment operations. It can then be picked up, packed and shipped promptly.

It is important to choose a fulfilment company that has the best inventory management software. It is important to have visibility into all inventory locations and a system in place that prevents stockouts.

Ecommerce businesses must use technology to connect upstream manufacturing and purchasing activities to downstream sales and product demand activities to make better purchasing and production decisions.

Location, location and location

• Are your customers located in a single region or spread throughout the country?
• Are you able to serve a large international client base?

Your fulfilment strategy should consider where you will ship to and where you will deliver. Customers expect ecommerce deliveries to be fast and affordable. 24% of customers will cancel orders due to slow shipping.

To ensure you meet customer expectations, reduce the shipping distances your average package takes. This will make it easier for customers to be satisfied.

You’re likely paying unnecessarily expensive shipping costs if you ship orders from rural areas. Consider fulfilling orders from centrally located urban locations instead.

You can reduce logistics costs and shipping time by shipping from multiple locations close to your customers. This allows you to leverage ground shipping more often. It is much cheaper than expedited shipping, and it takes less time than ground shipping from one end of the country.

ShipBob, for example, is a global fulfilment business with multiple locations across several countries

Needs for customisation

• Are your products made to order?
• Are customisations a major selling point for your brand?

You may choose to be more involved in your supply chain if you are selling items that are customized, gift-wrapped, or very fragile.

Outsourcing fulfillment means that you lose control of every detail. You have the flexibility and freedom to pack your items by yourself. This gives you confidence that every order will be customized exactly.