If you run an e-commerce business, fulfillment is a critical aspect of your day-to-day business. Fulfillment is a comprehensive service based on order fulfillment, picking, packing and delivery to customers
When you use a fulfillment service, you work with an external logistics partner (often called a logistics operator or 3PL company) that takes care of every logistics-related process in your e-commerce business.
What’s involved in e-commerce fulfillment?
The e-commerce fulfillment process starts when your customer places an order online. The order is processed and sent to your brand’s e-commerce fulfillment services provider and starts the supply chain. If you don’t handle fulfillment yourself, your service provider stores your products in a warehouse until a customer places an order during the e-commerce fulfillment process.
- Order fulfillment
Order fulfillment: It consists of product selection, packaging and shipping. E-commerce businesses can manage fulfillment and ensure a positive customer experience by filling orders themselves or using the services of a fulfillment company.
- Order management
Order management: Refers to the process of taking customer orders, order tracking and delivery. The order management process starts when the order is placed and ends when the customer receives their package.
As you scale your business, it is important to automate and streamline this process – otherwise, you will be overwhelmed by the volume of incoming orders.
- Inventory management
Inventory management: It involves storing, ordering, restocking and forecasting your inventory to prevent stock outs.
In inventory management, pay attention to how much inventory you store. Too much inventory can hamper your cash flow, as you need to rent more warehouse space to store everything. With too little inventory, you risk not being able to meet customer demand. Inventory management is a delicate balancing act that most businesses get better at over time.
- Transportation
The fulfillment process includes the actual order shipment, delivery options, and shipping rates paid by your customers. Factors that affect this process include your inventory and warehouse location, customer locations, the types of products you ship, the delivery carrier and country-specific transportation laws. A fulfillment company can take care of the shipping process, and a good third-party logistics provider (3PL) can help you get discounted rates with bulk ordering from large shipping companies.
- Storage
Warehousing, the process of storing your company’s inventory, is a critical component of order fulfillment. Warehouses offer a safe, secure and organized storage option where orders can be processed quickly and efficiently. A fulfillment partner stores your products in their warehouse and manages the fulfillment process.
- Returns management
Returns management is the process of receiving, evaluating and processing returned products. Getting your returns policy right is crucial because managing returns is an expensive and labor-intensive process. It is time-consuming to inspect returned goods and list them appropriately.
Some fulfillment providers offer easy returns management and even allow products to be sent back to the retailer instead of the logistics center.
Fulfillment Glossary – The Most Important Terms in E-commerce Logistics
3PL (Third party fulfillment) – In logistics, this is the name given to companies that help online retailers outsource distribution, warehousing and fulfillment.
4PL (Fourth party fulfillment) – 4PL providers go one step further in the supply chain than 3PL companies. They manage every step in the supply chain and act as a single point of contact for all parties involved.
Active Stock – Goods ready to be handled at active picking locations.
API (Application Programming Interface) – A set of programming instructions and standards for connecting online stores like Shopify to a warehouse.
Backorder – Accepting orders when the product is not even in the warehouse.
Processing Costs – Costs associated with shipping, transferring, preparing, and other handling of inventory.
Fulfillment Accuracy – In addition to moving the right goods to the right customer, this includes fulfilling the order within a predetermined time and delivering intact products.
Inventory – Refers to products in stock in terms of fulfillment.
Inventory Accuracy – Comparing the number of products that should be in stock with the actual number of products gives inventory accuracy.
Order Fulfillment – The order fulfillment process consists of 3 steps. These are receiving, packaging and shipping. Therefore, order fulfillment is one of the main activities of 3PL companies.
Reverse Logistics – The logistics of handling products after the customer has received the order (e.g. returns management).
SKU (Stock Keeping Unit) – A code that identifies individual product groups so that they can be tracked in inventory.
WMS (Warehouse Management Systems)- This is software that helps to effectively manage the various operations within a warehouse and optimize various processes.
Order Fulfillment Process
The main steps in the order fulfillment process include the following:
- Receiving products – Receiving involves accepting inventory from suppliers. This includes ensuring accuracy, checking stock to make sure it is in good condition and undamaged, and adding products to your existing inventory.
- Storing products – When storing products, you need to maintain an order that can help prevent errors and save time.
- Picking, packing and shipping products – Once customers have placed their online orders, you need to select the right products, place them in appropriate packaging to avoid damage, and deliver the products to your customers immediately.
- Processing returns – If a customer sends their products back, you will need an efficient process for accepting returns and restocking products (assuming they are not damaged or defective).
Leave Fulfillment to the Professionals (ShopiVerse)
ShopiVerse has various operational integrations as well as global marketplace integrations and is integrated with more than 40+ overseas e-commerce warehouses on the back end. It is also an international e-commerce fulfillment and Marketplace integration initiative where you can manage multiple warehouses in multiple countries from a single panel.
Thanks to the fulfillment service, as an online e-commerce business owner, you don’t have to worry about logistics and can instead focus on the development of your business’ marketing and sales activities.
