What is ecommerce fulfillment?

What is ecommerce fulfillment?

When you click the “buy” button on an online store and later receive your purchased items at home, the process appears to be smooth and straightforward. But in reality, it involves various elements that work together to complete what we call ecommerce fulfillment. So what is ecommerce fulfillment? This article does not aim to provide a brief response but rather intends to offer a more comprehensive understanding of ecommerce fulfillment.

Ecommerce fulfillment process

Order processing in a warehouse

Order processing

Order Placement: The process starts with a customer placing an order using any online platform. This generally entails choosing a product, adding it to the cart, and finalizing the checkout by giving the required details.

Order Confirmation: When a customer makes an order, it needs to check the personal information, confirm if the product is available, and validate payment methods. Confirming an order helps avoid mistakes and makes everything go well during the fulfillment.

Order Preparation: In this step, we gather all ordered items and check their quality before shipment. This could mean putting together products, adding necessary accessories, or ensuring the product is in a condition as expected.

Inventory management

Stock Control: The stock control must stay precise, so the products are ready when customers place an order. This includes keeping track of inventory amounts as they change and ensuring online stock matches with what’s in the warehouse.

Reorder Points: These are specific inventory levels indicating the need to replenish stock. Such points depend on factors like how fast items get sold, the time required for new stock to arrive, and any upcoming promotions or seasonal changes.

Inventory Forecasting: It predicts future inventory requirements by looking at past data, market patterns, and other important elements. Precise forecasting supports businesses to sustain ideal inventory amounts, avoiding the danger of running out of stock or having too much.

Packaging and labeling

Product Packaging: This is about choosing the right packaging materials, ensuring your product is safely put within a package, and considering if protective substances should be used to avoid harm.

Shipping Label Application: After packing the product, a shipping label gets made and put on the package. This sticker has the important details.

Options for Customization: Businesses might include options to customize package and label details. This could involve giving personal messages and using branded packaging or unique labeling.

Fulfillment models

In-house fulfillment

In-house fulfillment means a business deals with its order processing, inventory handling, and shipment tasks.

Pros

This fulfillment method can have full control over the process of fulfilling orders. It can personalize the customer experience, making it match the brand idea.

This can work well if the business has a small range of products and steady orders coming in.

Cons

You need to make a big investment at the beginning for infrastructure and employees. The company has to take care of every part of the process of fulfilling orders which can use a lot of resources.

Third-party logistics (3PL)

Third-party logistics (3PL) includes transferring the fulfillment procedure to an outside firm skilled in logistics and supply chain management. For instance, a business may engage a 3PL provider for warehousing and storage, order processing and handling, inventory control, packaging, shipping, and returns management.

Pros

You have more time to concentrate on main business activities because the 3PL manages daily fulfillment tasks.

3PLs access to a global network, which can be beneficial for businesses with international customers.

Having backup plans that 3PLs usually prepare for different supply chain interruptions can mitigate the risks.

Cons

Loss of direct handling in the fulfillment process might be a worry for businesses having certain quality standards.

Outsourcing is not consistently cost-effective over time. It may raise your expenditures if not handled correctly.

This model relies largely on the provider’s performance. A poor showing from the provider can affect your business’s image.

3PL

Dropshipping

In dropshipping, the seller doesn’t keep products in stock. Instead, when an order comes from a customer, they purchase the item from a third party and then ship it directly to the client.

Pros

There is no requirement to rent a warehouse because the products are sent directly from supplier to customer.

You can provide a wide variety of items, even if you don’t keep them in inventory. This may appeal to many different types of customers.

Less time needs to be dedicated to managing inventory and shipping, allowing for more focus on marketing and customer service.

Cons

You don’t have as much power over the quality of the products or shipping process because you aren’t dealing with them.

For dropshipping, handling returns and exchanges can become more complex. This is because the products must be sent back to the supplier and not directly to you.

In this model, profit margins may not be high. Essentially you are operating like a middleman and the supplier determines prices.

Key components of ecommerce fulfillment

Several key components determine the efficiency of ecommerce fulfillment operations.

Order fulfillment speed

Same-day shipping: If a company offers shipping on the same day, it can improve customer satisfaction as they get their products immediately. This is important for businesses in crowded cities where people want quicker delivery.

Two-day shipping: Sending goods in two days has become a regular method for many internet traders. This kind of shipping balances between speed and expense.

Standard shipping: This is usually the most economical choice for many businesses and customers. It takes around three to five working days, not as fast as same-day or two-day shipping but good enough for customers who aren’t in a hurry.

Accuracy

Keeping high order accuracy rates signifies the right items are sent out in the proper amounts and to the correct locations. This results in fewer chances for return or customer grievances.

Customer service

Customer Communication: Making sure customers are aware of the order’s progress. This involves giving information about the order status, sending them shipping alerts, and being proactive in communicating if there are any delays or problems with their orders.

Returns and Exchanges Management: Customers should be able to return or exchange products without difficulty, having clear instructions and less trouble.

After-Sales Support: Offering help after the sale like aiding in setting up or solving issues with the product. This can improve how customers see your brand and result in them coming back again while spreading good word about your services.

Ecommerce platform integration

Modern ecommerce platforms usually offer robust integration, connecting businesses with fulfillment services.

Shopify: Shopify is a well-known complete ecommerce platform providing many fulfillment solutions. It has an in-built feature named Shopify Shipping. With this, merchants can print shipping labels and monitor their packages.

Also, through the Shopify app store, integration is possible with third-party logistics providers. This helps businesses to make their order fulfillment process more efficient. The system also backs automated workflows, assisting in cutting down on manual order handling and boosting general efficiency.

Amazon FBA (Fulfillment by Amazon): It is a service offered by Amazon that enables sellers to store their products in the fulfillment centers. Here, they handle the tasks of storing, packing, shipping, and handling customer services related to these goods.

This method is suitable for sellers who wish to utilize the large logistics network of Amazon and provide swift and dependable delivery choices such as those available through Prime membership on this platform. FBA can also seamlessly merge with Amazon’s extensive marketplace, potentially boosting product visibility and leading to more opportunities.

Magento: Magento, an open-source ecommerce platform, may be changed for various business needs and has in-built order management functions. It can harmonize with diverse third-party fulfillment services to improve the process of fulfilling orders.

The extension store of Magento provides businesses with functionalities that could automate and enhance their fulfillment processes like dropshipping integrations, systems for warehouse management and transport carrier integrations.

FAQ

What does ecommerce fulfillment mean?

Ecommerce fulfillment is the way of getting products ready and sending them to customers after they order through the internet. It includes processing orders, managing inventory, packing, and shipment. The aim is to make sure that customers receive their orders correctly, quickly, and within the promised time.

How to fulfill ecommerce orders?

Fulfilling ecommerce orders starts with order processing. Then comes inventory managing which confirms if ordered items are in stock, and ready to be sent out from the warehouse. Next, the order is readied. This involves gathering all the things that have been chosen, making sure they are packed properly, and sticking on shipping labels. The package gets sent out using a specific carrier and the customer can get tracking details. After delivery, customer service takes responsibility for dealing with any questions or issues related to returns and exchanges as well as general inquiries about the products they bought.

What does an ecommerce fulfillment specialist do?

An ecommerce fulfillment specialist is the one who manages and controls all steps in order fulfillment. This person handles managing order processes, coordinating with inventory systems to guarantee product availability, organizing physical picking and packing of items as well as arranging for shipping and delivery. They are also important in keeping correct inventory records and solving problems related to fulfilling customer orders.