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Are you one of the many online retailers who have ever sold a product, packed and shipped it to a customer, processed a return, and tracked company inventory? Then you’re already familiar with the fulfillment process. eCommerce fulfillment is one method businesses use to enhance their logistics practice.
eCommerce logistics and fulfillment services refer to the process of storing products, filling orders and managing inventory for an online business. It involves all the steps that take place after a customer places an order on your site, including various moving parts such as multiple sales channels, product vendors, shipping schedules, and seasonal fluctuations.
Whether you own a small eCommerce business or manage a multi-warehouse facility, effective eCommerce logistics and fulfillment services are essential to get your merchandise to your customers. There are various fulfillment strategy options available, but choosing the right eCommerce fulfillment services can greatly impact your bottom line. Outsourcing your eCommerce logistics and fulfillment to a specialized company can bring numerous benefits, such as reduced costs, improved delivery times, and enhanced customer satisfaction
Online shopping is flourishing. Experts predict that nearly 22% of retail sales will take place online by 2024. If you are a business owner selling products online, you are probably aware of the importance of eCommerce. You have undoubtedly put a lot of time and effort into developing, marketing and pricing your merchandise. You have also spent resources on developing your website to make it attractive and easy to use.
If you have a superior product and offer competitive prices, you may wonder why you need to focus so much on eCommerce fulfillment services. After all, it’s just one piece of the pie, right?
While it is true that there is more to running an eCommerce company than order fulfillment services, they are absolutely critical to your brand’s success. eCommerce fulfillment should help you provide superior end-to-end services to your consumers — from putting an item in the shopping cart to opening the package to making returns.
Few aspects of business are more important than customer trust. According to a study by Adobe, 76% of customers said they believe it is vital for marketplaces to see things from the customers’ point of view and empathize with their needs.
Providing reliable and efficient eCommerce fulfillment services earns your customers‘ trust. It allows you to:
Fast shipping is important to customers when they order from an eCommerce store. A 2019 survey indicated that 40% of consumers expect to receive the merchandise within two days, while 18% expect same-day shipping. Amazon has contributed to making fast shipping an industry standard. Many online small businesses use Fulfillment by Amazon to provide fast, free shipping through Amazon Prime.
If fast shipping is crucial to consumers, it should be a priority for your business. Your eCommerce fulfillment process should include a strategy for getting your product to its destination on time.
Pricing is another part of your shipping strategy. Consumers not only expect fast shipping, they expect it to cost little or nothing. A survey indicates that 66% of online shoppers expect free shipping. With so many businesses able to keep up with low-cost or free shipping rates, your company needs the same to stay competitive.
Your items need proper packaging to prevent damage during transit. While some damaged items are unavoidable, most of your products must arrive in good condition. However, you don’t want to spend lots of time or resources on the packaging — going overboard can cut into your bottom line.
If you pack multiple items for one customer, your order fulfillment process should include steps to make sure you send the correct products.
Returns are an expected and inevitable part of eCommerce fulfillment. Retailers can expect to process returns on about 16% of their products. Some online products, such as clothing and auto parts, have higher return rates because consumers buy them without seeing them in person. However, your company needs a return strategy no matter what you sell.
An efficient return process benefits you and the customer. The sooner customers receive a refund, the more satisfied they are. A speedy return process lets you restock your inventory instead of letting the product linger on a shipping dock.
When customers email or call you, they expect your company to respond promptly with answers to their questions. Customer service is an unofficial part of the eCommerce fulfillment system, but it is critical to meeting customer expectations. Whether your customer service department is in-house or outsourced, it is the face of your business to consumers.
Your business can probably benefit from an order management system. This software is part of your fulfillment strategy. It allows you to monitor your orders and shipments while tracking returns.
Shipment tracking apps are a great way to let customers know when you ship orders. They allow customers to follow their real-time order and delivery status. Also, if someone calls or emails you with a question, you can resolve the situation without delay. You can also view purchasing history and trends.
When customers email or call you, they expect your company to respond promptly with answers to their questions. Customer service is an unofficial part of the eCommerce fulfillment system, but it is critical to meeting customer expectations. Whether your customer service department is in-house or outsourced, it is the face of your business to consumers.
Your business can probably benefit from an order management system. This software is part of your fulfillment strategy. It allows you to monitor your orders and shipments while tracking returns.
Shipment tracking apps are a great way to let customers know when you ship orders. They allow customers to follow their real-time order and delivery status. Also, if someone calls or emails you with a question, you can resolve the situation without delay. You can also view purchasing history and trends.
Your items need proper packaging to prevent damage during transit. While some damaged items are unavoidable, most of your products must arrive in good condition. However, you don’t want to spend lots of time or resources on the packaging — going overboard can cut into your bottom line.
If you pack multiple items for one customer, your order fulfillment process should include steps to make sure you send the correct products.
Returns are an expected and inevitable part of eCommerce fulfillment. Retailers can expect to process returns on about 16% of their products. Some online products, such as clothing and auto parts, have higher return rates because consumers buy them without seeing them in person. However, your company needs a return strategy no matter what you sell.
An efficient return process benefits you and the customer. The sooner customers receive a refund, the more satisfied they are. A speedy return process lets you restock your inventory instead of letting the product linger on a shipping dock.
A robust inventory management system keeps you updated on stock levels. It helps you manage seasonal or perishable product levels. It also enables you to avoid problems such as selling an out-of-stock product or tying up shelf space with too much product.
eCommerce companies can select from different eCommerce fulfillment models. What you choose depends on several variables. They include the size of your business, what you sell, how you store inventory, and where you ship products.
The in-house fulfillment model is storing, packing and shipping items yourself. The order fulfillment process goes as follows:
If your company is small, you have a low inventory, and your logistics are working smoothly, in-house fulfillment may be your solution. As your brand grows, however, you may quickly outgrow this method and look for a way to reduce fulfillment costs.
In-house eCommerce fulfillment limits your scalability when order processing takes the bulk of your time and effort. It may also restrict your inventory as you have a finite space to store items.
Third-party logistics companies handle storing, shipping, inventory and returns for you. You may also see the term abbreviated as 3PL. The process goes as follows:
The third-party fulfillment model can work for you if you have the capital to purchase products in bulk. It also works well if you know your inventory will sell quickly and won’t sit on the shelves. A centrally located outsourced fulfillment company can also decrease your shipping times, quickly getting products into customers’ hands.
This model is advantageous if you need more room for warehousing products. Additionally, it frees you to focus your efforts on growing your brand. At the same time, an experienced company handles your eCommerce fulfillment services.
In the dropshipping model, you purchase inventory from the manufacturer when the customer orders. This eCommerce order fulfillment process goes as follows:
Some dropshipping companies also offer value-added services such as branded packaging.
The difference between third-party fulfillment and dropshipping is that you purchase products as you receive orders. You do not buy and store products in bulk; instead, you outsource most of the supply chain process.
The dropshipping model can work for you if you have little capital to purchase and store products. You may also save on storage fees by dropshipping. Like third-party fulfillment, it allows you to focus on building your brand while outsourcing the fulfillment process. You can scale rapidly without committing to warehouse management.
A look at the eCommerce fulfillment process as a whole can help you choose the best fulfillment provider.
The technology behind third-party fulfillment is the brain of the system. It needs to integrate with the shopping platform you use, such as Shopify, eBay, PayPal or a custom platform. With seamless integration, the end customer who uses your platform can make transactions smoothly and process returns quickly.
Boxes of inventory arrive at your 3PL facility. Once they come, they add them to your stock.
Your products must get through receiving quickly without sitting around waiting to be logged into inventory. The sooner the product reaches the shelves, the sooner you can sell it.
Your eCommerce fulfillment partner stores products at their facility. It is then ready for customers to purchase it.
You need to know what you have in stock, and you should be able to get those numbers quickly. Knowing your inventory levels ensures you have complete control of your stock levels. It’s part of managing your inventory responsibly.
You want to avoid tying up your capital in products on the shelves because you bought too much. Likewise, you don’t want to run low and risk losing customers to out-of-stock products.
Once a customer orders from your company, your 3PL provider gets the order. They pick the products from your inventory and pack them for shipping. Many companies use automation to streamline the process and reduce potential errors.
Your fulfillment company should prepare your product for shipping using the right packing materials and boxes. This step ensures your merchandise gets to the customer undamaged.
The eCommerce fulfillment company ships the order to the customer. The shipping process must be accurate to ensure the merchandise arrives at the correct address.
The fulfillment company should be able to ship your items on time so that the customer receives the order as expected. A central shipping location gets the product into the customer’s hands quickly..
Many customers like to follow the order process to see when the product will arrive. If you partner with a third-party logistics company that sends shipping details to your customers, you can increase their satisfaction with your company.
Reverse logistics, or processing returns, is another step in order fulfillment. Once the customer returns a product, the fulfillment provider processes the refund to ensure the customer receives money back as soon as possible.
The fulfillment center then inspects the returned merchandise, checking for damage or defects. If the product is in good condition, you may choose to restock it or sell it for a discount.
How do you know which eCommerce fulfillment type is right for your company? Your business needs, size and products play into your decision. Here are a few points to consider.
Are you a brand-new startup with a small amount of inventory? On the other hand, are you a growing company with a pallet of products waiting on your dock at all times? Can you manage the volume of storage space in your home or warehouse, or are you outgrowing it?
As your company grows, you’ll need to consider the time and resources required to store products, process orders, ship packages and handle returns. You may reach a point where it makes financial sense to outsource your fulfillment needs to a logistics company so that you can focus on other tasks.
Smaller products and low inventory make in-house storage easier. However, some factors can make it a challenge to ship products yourself:
Using an eCommerce fulfillment service can benefit your bottom line if your products require lots of storage space or special handling.
Getting products to consumers quickly and efficiently is key to customer satisfaction. If your company’s physical location is not central, it can be challenging to meet shipping deadlines and expectations. An eCommerce fulfillment center with a central location can offer faster shipping times.
Your company doesn’t need to be located near your eCommerce fulfillment partner. However, your fulfillment partner should be close to your customers — and if they have a centrally located warehouse, they can reach consumers more quickly.
Processing a few orders a day in-house may be manageable for you. Once your business takes off, however, you may need the expertise of a company specializing in order fulfillment.
A 3PL provider has the resources to process a large order volume than most small businesses can provide. It can also pack and ship products quickly and handle returns in a way that satisfies the customer.
Once your business escalates, you may benefit from outsourcing order fulfillment. It lets you focus on other tasks while leaving the fulfillment solution to the professionals.
eCommerce fulfillment services partner with shipping companies because they handle high volumes of packages. Typically, eCommerce fulfillment companies get reasonable shipping rates. You may want to take advantage of their lower shipping costs to keep your overhead low, especially if your business is increasing.
It can be a challenge to keep up with shipping rates and regulations, especially if you sell products internationally. A fulfillment company has experience shipping to various destinations around the world. They can take on the responsibility so that you can focus on other things.
Finding the right company is vital when you partner with an eCommerce fulfillment service. Be sure to ask service providers your questions up front before you commit.
You should find a company that has experience handling the merchandise you sell. If your products have special considerations, finding the right eCommerce fulfillment center is crucial. Ask the company if they can handle products that are:
You want your business to reach as many customers as possible. Therefore, it’s important to think globally. A Google survey shows that 47% of all global purchases are made online.
Ask your third-party fulfillment company if they offer international shipping. With it, you may get a more extensive customer base.
An outsourced fulfillment company with a central location can get products to their destination faster. Some eCommerce fulfillment companies have multiple distribution centers so they can stock products in various locations, increasing their ability to ship fast.
Find out how the company handles customer calls and emails. It’s also critical to ask how the company manages product returns. Find a fulfillment network that sends return shipping labels or arranges for pickups from the customers. Once the product arrives at the facility, team members should inspect it to see if it can be restocked. This step is critical to quality control.
You may need to ship several items together for a customer. Examples include:
Your eCommerce fulfillment partner should have experience with pick-and-pack and kitting services.
Pick-and-pack happens when warehouse specialists retrieve items from your inventory and pack them for shipment. This step usually takes place manually, although companies may use some automation. After getting the products, a warehouse employee packs them for shipping.
Kitting is the process of pre-packaging items that typically ship together. Because the step takes place ahead of time, kitting can improve turnaround times and get orders shipped quickly.
You may need either pick-and-pack or kitting services, or both, depending on what you sell.
Your eCommerce store probably has a shopping cart platform in place if you are already in business. Your logistics partner’s technology should integrate with the system you are using. Whether the eCommerce fulfillment company’s tech already works with the platform you use or they build a custom integration, they can save you the trouble of switching shopping cart eCommerce platforms.
The logistics company you choose should have a well-organized warehouse. When operations run smoothly, the employees who pick and pack your orders can work efficiently. You may need to provide SKUs, an abbreviation for stock-keeping units, to your 3PL provider. SKUs are scannable codes for tracking inventory.
You likely have more questions about partnering with an eCommerce fulfillment provider. Contact us at Disk.com. We can give you a free quote and explain how the order fulfillment process works when you align strategies with a 3PL provider.
If you already use an eCommerce order fulfillment company, we make it easy to switch. Disk.com has nationwide fulfillment solutions. We ship domestically to all 50 states and internationally, so we can reach your customers anywhere.
We provide inventory storage, order management, an efficient shipping process and returns processing, and customer support. Call us today to review your options and find out how Disk.com can streamline your eCommerce fulfillment.
https://blog.adobe.com/en/publish/2022/03/15/2022-trust-report-customer-trust-is-earned-or-broken-with-every-experience
https://www.statista.com/statistics/561768/fast-online-order-delivery-us-consumers/
https://www.prnewswire.com/news-releases/66-of-american-consumers-expect-free-shipping-on-all-online-orders-301312811.html
https://www.insiderintelligence.com/content/worldwide-ecommerce-will-approach-5-trillion-this-yearhttps://www.thinkwithgoogle.com/marketing-strategies/app-and-mobile/global-consumers-purchase-search-statisticsE
