What is Ecommerce Fulfillment?
Ecommerce fulfillment refers to the entire process of receiving, processing, packing, picking, and shipping orders to customers.
Fulfillment It's a crucial part of the online retail operation, ensuring that products purchased via an ecommerce platform are delivered to the buyer efficiently and accurately.
For the most part, fulfillment in the ecommerce play field means a process where the merchant takes steps to deliver an order to the buyer.
That is to say, the seller goes an extra mile to streamline their logistics bit of the online business via a smooth order fulfillment process.
Table of contents:
The Fulfillment Process
Here's a breakdown of the key stages in eCommerce fulfillment:
1. Receiving Inventory
The first step involves receiving products from suppliers and storing them in a warehouse or fulfillment center.
2. Inventory Storage
Once the inventory is received, it's organized and stored in a warehouse. Efficient inventory management is key to quick and accurate order fulfillment.
3. Order Processing
When a customer places an order, the fulfillment process kicks off. The order details are processed, and the items are located in the warehouse.
4. Picking
Warehouse staff, known as pickers, collect the items from where they are stored in the warehouse.
5. Packing
After picking, the items are packed for shipping. This includes selecting the right type of packaging material and boxing the items securely to prevent damage during transit.
6. Shipping
The packed order is then shipped to the customer. Shipping times can vary based on the delivery location and the shipping method chosen by the customer.
7. Returns Processing
Handling returns efficiently is also a part of fulfillment. This includes receiving returned items, inspecting them, and restocking them if they're in sellable condition.
Fulfillment can be managed in-house by an eCommerce company, or it can be outsourced to third-party logistics (3PL) providers who specialize in these services.
In house Fulfillment vs Outsourcing
The choice between in-house and outsourced fulfillment depends on various factors like the size of the business, order volume, geographical reach, and specific business needs. Efficient fulfillment is crucial for customer satisfaction, as it directly impacts delivery time and order accuracy.
As you may know, order fulfillment comes with so many procedures which are all essential in a bid to make the order reach a customer's doorstep.
Practically speaking, a merchant has to deal with the entire order processing activity which is quite tedious and needs a number of resources. And this is where an order fulfillment platform steps in.
It's unquestionably the right way to go for any merchant. In essence, a fulfillment company offers a couple of services which revolve around making your products ready for shipment. To start with, a merchant needs a warehouse to store their inventory.
Ecommerce Fulfillment vs Dropshipping
To sharply define the two terms, fullfillment and dropshipping in a clear-cut manner, you ought to bear in mind, the basic fact that both are models used by merchants to reach the products to the end customers. More often than not, retailers might be puzzled by which method, in particular, to incorporate in their businesses.
In actual sense, both order fulfillment and dropshipping, are more or less the same. While fulfilling an order, a merchant can opt to use a third-party service. From this end, it means that they need to store their inventory in another company's warehouse. Alternatively, a merchant can choose to go with dropshipping.
Technically, this is a business model which is quite predominant since it needs a lower startup capital. Here, the products are made and stored by the manufacturer. The process begins once an order is made from the drop shipper's online store. The merchant will later forward the orders to the manufacturer.
The dropshipper purchases all items at a wholesale price and keeps the profit margin. The manufacturer is now left with the task of fulfilling all orders to the customers. From the look of things, it seems like drop shipping is a type of third-party fulfillment. Simply put, it all depends on the retailer's needs. The best part about third-party fulfillment is the fact that you can leverage off their well-established infrastructure.
Here's an illustration:
Fulfillment by Amazon(FBA), for instance, has the capacity to help you reach customers globally. In precise terms, Amazon provides fulfillment centers where they pick your products, do custom packaging, and ship the items on your behalf. Keep in mind, customers are always on the hunt for a deal which includes the fastest shipping method.
What is Fulfillment? Wrapping Up
All things considered, the retailer needs to make a conscious decision with regards to fulfillment. If you're a newbie in any ecommerce niche, you need to figure out how to smoothly run the shipping process. Businesswise, positive results are seen across the board when both the merchant and customers are happy.
Arguably, it may seem right and sensible to work with a team of experts. In fact, it's of paramount importance to leave everything at the able hands of third-party fulfillment services such as those mentioned above. I would advise any merchant to look for a company which has built its reputation by handling all orders successfully over the years.
And not only that.
Be keen to choose one which comes with a cloud-based software which lets you integrate with your ecommerce channel, probably has a mobile app, and creates real-time reports. Don't feel shy to do a background check to understand how the entire logistics operations are done.
FAQ
To a greater extent, a 3rd party fulfillment service comes in handy whenever a retailer wants to scale their business. Think of it as an elite strategy to meet the ever-growing customer demand. Most importantly, you ought to take into account all the inventory management operations. You can never go wrong with inventory if you leave it to the experts.
To fulfill an eCommerce order you need to: receive the inventory, process the order, pick and pack the items, ship the order to the customer, and then manage returns and exchanges efficiently and accurately.
An example of order fulfillment in eCommerce can be when a customer orders an item from your store online. The retailer processes the order, locates the book in their warehouse, packages it securely, and ships it to the customer's address. If the customer is dissatisfied and returns the book, the retailer processes the return and restocks the item.
