What is Fulfillment?
Order fulfillment is all the steps a company takes between receiving a new order and placing that order into the customer’s hands. The practice involves warehousing, picking and packing the product, shipping it and sending an automated email to the customer to let them know the order is in transit.
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The Steps of Order Fulfillment?
- Receiving inventory. Essentially, an eCommerce company has two ways to handle inventory. It can choose to receive and stock the inventory in-house or it can use an eCommerce order fulfillment outsourcer to take care of its stock and all the related tasks. In case it opts for the first option, the company will be responsible for taking stock, examining the inventory, labeling, and managing the inventory system. If the company chooses to outsource or decide to dropship, these tasks will be handled by the order fulfillment partner or supplier.
- Storing inventory. If you decide to warehouse the inventory yourself, there will be another slate of tasks awaiting you once the receiving part is completed. The main tasks on the list will be to shelve the inventory and keep a close eye on what items come in and what items go out, so that you can ship the orders without any delays.
- Processing the order. Businesses that outsource order fulfillment don’t need to go into the nitty-gritty of order processing, as they simply pass on the order request to their partner and let them handle the rest. For companies that manage their own inventory, this is the part where the order is picked off the shelf, transported to a packing station, inspected for any damages, boxed and moved to the shipping station.
- Shipping the order. Depending on the size, weight and specific requirements of the order, the best shipping method is determined. Usually, a third-party carrier is contracted to fulfill this step.
- Handling returns. For online buyers, the ability to easily return unwanted items is a major factor in the buying operation. To ensure the receiving, replacing and refunding of the returned items are as efficient as possible, you need to design a crystal clear returns policy that is easily accessible to both your buyers and staff. Having this step automated can help you avoid unnecessary chaos and errors.
What is the Order Fulfillment Process?
The eCommerce order fulfillment process is pretty straightforward. As explained above, order fulfillment comprises the activities of receiving, processing, and shipping the order, but can be broken down into smaller steps in chronological order:
- Order is received (online, in person, via email or on the phone)
- Order request is registered in the inventory system
- Order confirmation is sent to the customer
- Order request is sent to the warehouse
- A warehouse worker locates and picks the ordered item
- Order is packed and prepared for shipping
- Order is shipped
- The customer is notified that the order is on its way
- Order is delivered
- If necessary, order returns are handled and refunds granted
- Inventory is updated
Ecommerce Order Fulfillment Model
There are many ecommerce order fulfillment models to choose from for your ecommerce store and each has their merits.
- Dropshipping: As an order fulfillment model dropshipping is the easiest to implement. To fulfil an order you simply place an order with your supplier adding your customer’s address and the goods will be shipped straight to them.
- In-House Fulfillment: This model involves you completing all steps in the fulfillment procedure internally, investing in software and automation where necessary to make the operation easier.
- Third-Party Fulfillment: Outsourcing order fulfillment could be the right option for you if you do not possess the resources currently to package and store goods locally. Relying on a reputable third party to take over this activity can give you more time to promote your brand and business.
Want to Learn More?
- What Is Dropshipping? It’s the Easiest Way to Start an Online Business!
- 8 Months and $1M Later: How One First-Time Ecommerce Entrepreneur Made his Fortune
- Oberlo Dropshipping FAQ
- 16 Dropshipping Tips for New Entrepreneurs You Need to Know
Is there anything else you’d like to know more about and wish was included in this article? Let us know!