What does fulfillment mean?
When used as a term in ecommerce, fulfillment is the name used when an order is completed. The term is also used for third parties that inventory a shipment of products on behalf of an ecommerce online store.
The fulfillment process starts with the taking of an order and then executing it; the execution process makes sure that it is then ready to be delivered to the customer. There’s far more to getting goods to a customer than just dropping it in a box and taking it to the post office. Small scale ecommerce companies will often outsource their fulfilment to companies that specialize in such. These specialist fulfilment companies will handle all the following:
- Warehousing, or storing, the product or its components
- Producing or assembling the product, such as photocopying pages of a binder of materials or copying a CD to be mailed out
- Packing the order in an envelope or box
- Labeling the order for shipment
- Shipping it using a major carrier, such as FedEx, UPS, or the U.S. Postal Service
- Notifying the customer via email that their order is on its way
- Processing payment and transferring funds to the business
The largest fulfillment company in the world is Amazon through its Fulfillment By Amazon (FBA) program.
Should You Use a Fulfillment Service?
While the cost of outsourcing fulfillment is certainly a consideration, many small business and ecommerce start-ups choose to use a third-party fulfillment provider simply due to time constraints. This doesn’t just take into account whether they have the time to pick, pack and ship their orders, but also whether they are able to consistently ship in a timely manner.
If you’re running a small ecommerce business you need to think how you would be able to cope if you suddenly received a large bunch of orders. Would you be able to pack and ship the orders fast enough to keep your customers happy? Or would you be better off using a service and paying a monthly fee to guarantee all your orders are shipped and tracked in a timely and efficient manner by a company that specializes in order fulfillment?
In some cases the decision to outsource fulfillment comes down to available space. If you’re running a small ecommerce business from your home you may not have the space to store all items you need to have on hand. Renting space for storage can be expensive, and it might be more cost effective to not only pay for storage, but to also pay for order fulfillment at the same time.
Fulfillment is a key part of the ecommerce process, and a good fulfillment system can pay dividends in the future in the form of an increasing number of happy customers and repeat orders.