Ecommerce fulfillment is an essential but often misunderstood part of the online shopping business. Learn what ecommerce fulfillment is, how it works, and how the right ecommerce fulfillment provider can benefit direct-to-consumer (D2C) companies.
When shopping online, getting your items in the mail often feels as easy as clicking a button. Whatever you’re ordering—new shirts, books, shoes—it shows up on your doorstep without a hitch. Behind the scenes, there’s a lot more going on.
Ecommerce fulfillment is the term used to describe that process—the steps between online ordering and item delivery. It includes inventory receiving and storage, order processing, picking and packing goods, shipping them, and—if necessary—facilitating returns.
Ecommerce fulfillment is the multi-step process that gets products from the factory to front door and into the hands of the consumer.
So, what does the ecommerce fulfillment process look like? At a high level, there are four key phases in the ecommerce fulfillment process:
Before you can fulfill orders, the warehouse or fulfillment center needs to receive your finished goods from the factory where they are made. This step involves receiving, unloading, verifying, and storing your ecommerce inventory.
After the inventory is received, the warehouse can start fulfilling individual customers’ orders. Order picking is when the products listed in a customer order are pulled from warehouse shelves. Order picking is often one of the more labor-intensive and expensive warehouse processes.
After the items are retrieved within the warehouse, they are placed in a suitable container with appropriate packaging and insert materials—such as tissue paper and promotional printouts—and prepared for shipment.
Once the order is picked and packed, it is ready to be transported to the customer. With a variety of shipping carriers, methods, and speeds to choose from—in addition to different shipping zones and surcharges—this is often a highly variable step of the ecommerce fulfillment process in terms of cost.
After all that, the consumer receives their product. A lot goes into ensuring ecommerce fulfillment logistics run smoothly, so there’s plenty of room for mistakes. Nonetheless, ecommerce fulfillment services help manage the process and prevent those mistakes so that everyone—both you and your consumer—are satisfied.
Ecommerce fulfillment providers—often called third-party logistics (3PL) providers—manage order fulfillment and shipping for DTC brands. Ecommerce fulfillment providers use specialized software to coordinate efficient warehouse and inventory management, order processing, shipping, and returns. This provider takes on the burden of the often complicated fulfillment process so that consumers receive their products seamlessly and businesses can prioritize other operations.
Ecommerce fulfillment services benefit online businesses that don’t want to spend valuable time and energy coordinating the logistics of getting orders to customers. By outsourcing ecommerce fulfillment to a third-party provider, DTC companies have more time to focus on activities that will grow the business—building their brand and acquiring more customers.
Order fulfillment begins well before consumers place their orders. After choosing an ecommerce fulfillment provider, here’s what happens:
Once a customer places their order through your ecommerce platform, a few more behind-the-scenes steps take place:
Using a third-party ecommerce fulfillment provider is great for business—it’s scalable, saves time and money, and improves the customer experience.
An ecommerce fulfillment provider helps lower operating costs by tailoring inventory needs to the needs of your business. Overstocking inventory costs money, and understocking warehouses can cause delays in shipping or canceled orders. The costs of warehouse management, storage, and shipping can also be more easily adjusted to best suit the needs of your business.
Customers get better service when ecommerce fulfillment providers are involved with business operations. When using an automated ecommerce fulfillment platform, items are more likely to be picked, packaged, and delivered faster and more accurately. And consumers who receive exactly what they ordered in a timely manner are much more satisfied.
When a consumer needs to make a return or cancels an order, an easy return or refund process is vital to excellent customer service. And customer service, of course, has a significant impact on customer retention and loyalty. Fulfillment software helps streamline the return process, creating a hassle-free customer experience and protecting the reputation of your business.
Time spent negotiating with fulfillment centers and chasing down invoices is time wasted. Using warehouses in an ecommerce fulfillment network avoids the lengthy negotiations required when choosing your own facilities. Handing off communications, inventory management, and shipping to an ecommerce fulfillment service takes those complicated and sometimes tedious tasks off your plate.
During peak season—the holiday-related period of high order and shipment volume that lasts from October through January each year—an ecommerce fulfillment provider can also help you prepare and adjust to changes that might impact order deliveries.
An ecommerce fulfillment provider adjusts comfortably to business growth. Warehouse inventory can be just as easily managed at fulfillment centers in large numbers as well as small. After all, the systems that are already in place for picking, packaging, and shipping don’t need to be overhauled as your business needs change. With ecommerce fulfillment providers, your business is scalable. Fulfillment software allows your business to sell (in most cases) wherever it wants, and it also allows you to manage multiple storefronts.
Once you’ve decided an ecommerce fulfillment provider is right for your business, how do you choose a great one? First, assess for transparency. How open are providers with you about their pricing models?
There are two dominant types of ecommerce fulfillment pricing models: a la carte pricing and all-in-one pricing. It’s essential to choose the right type for your business. While an all-inclusive fulfillment pricing model may be a fine fit for simple products with no shipping complexity, an a la carte pricing model is better suited for products with any shipping complexity.
Any fulfillment platform should allow your business to access pertinent data in a user-friendly dashboard—for viewing both inventory and active orders. Managing returns through the fulfillment provider should also be a straightforward process. Fulfillment providers should be removing headaches, not creating them.
Consider, too, what the onboarding process looks like for integrating a fulfillment provider into your current business flow. Some ecommerce fulfillment providers offer a streamlined onboarding process, while others require complicated plugins or additional software.
An ecommerce fulfillment provider takes on the logistical burden of order fulfillment. Outsourcing fulfillment and ecommerce logistics to a 3PL provider will lower your operating costs, save time, and enable your business to scale effortlessly. With the help of an ecommerce fulfillment provider like Airhouse, you can optimize order fulfillment while spending less time on logistics—and more time growing your business.
Connect with a fulfillment expert at Airhouse to learn how we can help simplify your company’s ecommerce fulfillment process, optimize order fulfillment costs, and scale your business.
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