Order fulfillment efficiency makes a big difference in the success of your eCommerce business. Whether you engage in DTC (Direct-to-consumer) sales channels or use dropshipping, eCommerce companies can only thrive if they ensure that customers receive their purchases on time and that the orders are accurate. If you sell anything online, then it is important to make wise decisions about eCommerce fulfillment services.
In this article, you will learn about the importance of eCommerce fulfillment for customer satisfaction and the effect it has on your company’s bottom line. You will also learn about the best strategies for fulfillment and how they improve your overall inventory management strategy. Likewise, you will find out about some of the best eCommerce fulfillment companies out there.
What is eCommerce Fulfillment?
eCommerce fulfillment is when a warehouse stores things that it receives from suppliers and then processes orders to send items to its customers. In other words, it refers to several stages in the supply chain; it is almost everything that comes after production and quality control. Successful eCommerce fulfillment is not just about what you store and how you run your warehouse; it is also about the tools, technology, and systems that you use to keep track of your stock and refunds. It is about using your resources efficiently to provide the best possible value for your company and for your customer base.
What are the 5 Steps of eCommerce Fulfillment?
eCommerce merchants are responsible for five different warehouse processes, which together make up eCommerce fulfillment. Fulfillment is what goes on behind the scenes when customers are buying products from eCommerce platforms.
1. Receiving
The first part of the eCommerce fulfillment process is receiving. This is when materials arrive in your warehouse, ready to be stored until someone orders them. Proper integration of receiving into your overall fulfillment strategy will ensure that you can fulfill orders accurately, therefore meeting and exceeding customer expectations. As soon as a shipment arrives, this is your opportunity to put the merchandise in the right place so that it eventually reaches the customer on time and intact. The assigning of SKUs and warehouse putaway should be both accurate and time efficient. Warehouse layout affects the quality of your receiving process. If you are finding that receiving takes a long time, your warehouse layout could need some updates, or maybe you just need to try out new types of warehouse management software.
2. Inventory Storage
Where you store your inventory and how long you store it also makes a difference in the efficiency of your fulfillment strategy. You don’t want inventory levels to be too high or too low. You should think carefully about the reason for choosing to store a certain item in a certain place. You want the most popular SKUs to have the highest visibility. Likewise, you should store items that are frequently ordered together near each other, even if it means that you have a wide variety of apparently dissimilar items together in the same room. If you use dropshipping or outsourcing of warehouse processes to third-party fulfillment providers, you should be aware of storage fees. The best fulfillment solution could be the first in first out (FIFO) model of warehousing, or it could be to deal with shipments and customer orders on a last in first out (LIFO) basis.
3. Order Processing
Order processing involves picking and packaging customer orders. Order fulfillment services are much easier in well-organized warehouses. The benefits of streamlining the picking process go far beyond improving customer service. Businesses that save money and time on picking and packaging have more money in their budgets for customer support, marketing, and a generous return policy. One of the areas in which software helps the order fulfillment process is that it makes it easier for warehouse pickers to find the correct items quickly, enabling efficient operations and the growth of the company.
You should keep in mind packaging fees and the cost of packing slips and packaging materials. Not only your company but also retail consumers who buy from you will be at an advantage when the picking and packaging processes go smoothly. Warehouse management software with the right features can improve the warehouse picking workflow. You can also partner with sellers to buy a large number of packaging materials at a low price, freeing up cash to deal with other challenges that your company faces.
4. Shipping
Whether you ship all of your products within the same country or send them to customers and retailers across the world, shipping is an essential component of the eCommerce fulfillment process. Data and customer demand should inform the choices you make about shipping, as should shipping rates and logistics. You should choose the best option to get your merchandise to the destination point safely and at the most affordable price. If you have enough information about the options for transporting goods, you can choose the correct number of warehouses, so that your merchandise never has to make too long a trip to meet customers’ needs, ensuring a better experience for customers, and thereby enhancing the profile of your brand. You can reduce your shipping costs and transport packages for less by researching shipping discounts available at the relevant locations.
5. Returns Processing
The eCommerce fulfillment process does not end once the shipment leaves your warehouse. You are also responsible for aspects of the supply chain such as order tracking and answering questions from customers whose orders are late, or who opened the box to find the incorrect item inside. You can avoid getting negative reviews if you ensure that customers in all locations have access to customer support personnel and that you have a customer-friendly return policy.
eCommerce Fulfillment Service Models
A successful fulfillment services company can help brands meet their fulfillment needs for an affordable price. There is no one-size-fits-all fulfillment service model. Your company might benefit from the dropshipping method. If your customer base is local and the volume of goods processed is low, you might even walk the packages to the post office yourself. If you want your brand to become an icon in the eCommerce industry, though, you must be efficient and consistent.
How to Choose an eCommerce Fulfillment Provider
Some companies have an outsized reputation as eCommerce fulfillment providers, such as Amazon in the United States and Rakuten in Japan. You should research several fulfillment service centers before you decide which one you choose for your eCommerce fulfillment needs.
Top 3 Best Order Fulfillment Service Centers
These are the three most popular order fulfillment service centers, trusted by brands throughout the country:
1. Shiphero
ShipHero offers comprehensive fulfillment and warehouse management solutions, from software to warehouse putaway.
2. Fulfillment by Amazon
Amazon is a household name in the field of eCommerce. If you become another small business that works with Amazon, you will have plenty of company.
3. Shopify Fulfillment Network
Shopify is Canada’s answer to Amazon of the U.S. and Rakuten of Japan. It has been in operation since 2006.
Key Planning Strategies for Successful eCommerce Fulfillment
When planning a fulfillment strategy, you should consider how much you currently spend on shipping and warehouse processes such as putaway, picking, and packaging. Use data to find ways to reduce these costs. You should also look at your rate of errors and how many packages customers return. Look for ways to improve your accuracy.
Key Takeaways
Streamlining your eCommerce fulfillment can help your eCommerce business save on costs and improve the experience for customers. It can help you build brand loyalty and grow your company. eCommerce fulfillment is about more than just maintaining the right inventory levels. It encompasses almost everything that happens in the supply chain after production and ordering.
eCommerce Fulfillment FAQs
These are some frequent questions about eCommerce fulfillment processes and fulfillment centers.
What is Amazon Fulfillment?
Amazon fulfillment is when other companies sell their products through Amazon and store their products in Amazon warehouses. Nearly half of Amazon purchases are from companies that are doing their fulfillment through Amazon.
What are Fulfillment Centers?
Fulfillment centers are warehouses where the company that owns the warehouse does not own the merchandise inside. Various eCommerce businesses, including small ones, can more affordably store and ship their products through a fulfillment center.
What is the Best Order Fulfillment Center?
The best order fulfillment center is ShipHero.
