Understanding the Scope of Ecommerce Order Fulfillment

Order fulfilment is one of the most important facets of any ecommerce business. It doesn’t matter if your website is perfect or your products are flawless if your customers don’t receive what they order.

With 21.5% of all retail sales expected to be ecommerce-driven by 2023, you must ensure your company is well-placed to benefit from this growth. And to have a truly great online business, you need to understand the scope of order fulfilment and its importance to your enterprise.

Whether you’re looking to establish an ecommerce business or improve your existing company’s order fulfilment, this guide will explain why order fulfilment matters and how to effectively build an order fulfilment process.

What is Ecommerce Order Fulfilment?

Anyone working in ecommerce will know that various stages lie behind completing a customer’s purchase, and many of these come under order fulfilment.

Whether creating a distributor contract template or ensuring the customer is informed about delivery, anything involved in getting your products from your warehouse to a customer’s front door is order fulfilment. Here are some of the stages you need to know about:

1. Inventory management

An accurate and comprehensive understanding of the products you have in stock is an important building block in order fulfilment. Inventory management is keeping up-to-date records of the goods in your warehouse.

This means you can prevent delays when an order comes in, as you won’t have to wait for it to be delivered to the warehouse; it’s already there. With the right tools, you can also forecast future demand, further streamlining the fulfilment process.

2. Order processing

Order processing is the handling and management of orders that come through your website or selling platforms like Amazon and Trademe. You should have a system that sends the relevant customer data to your shipping provider. If you handle the shipping yourself, you’ll have to send this to the employees involved in the delivery.

Much of this process can be automated, and once orders have been received, the product should be quickly prepared and packaged correctly to ensure it remains safe during transit. This is one way to make certain customers receive the highest quality of service.

3. Delivery

Whether you use an external delivery provider or not, your customers will expect your product to reach them as soon as possible. You must also make every effort to ensure customers don’t receive damaged goods.

If you use a courier company, make sure they have a good reputation and won’t lose packages or deliver them after the deadlines agreed to.

4. Customer communication

An ecommerce business lives and dies by its relationship with its customers. This means a successful order fulfilment process includes good communication with them.

Modern technology enables purchasers to monitor their order through every step, including being able to track their package when it’s out for delivery. They should be notified during each part of the process and have the option to choose from different delivery options.

This is a good opportunity to build your brand image, as customers will interact with your company repeatedly. If they have a good experience, they’re likely to return to shop with you again. Retaining customers will mean you have less need for outbound lead-generation vendors.

5. Returns

Finally, order fulfilment includes managing returns. While, ideally, every customer will be perfectly happy with their order, all ecommerce businesses have to deal with returns.

You should have a clear and simple process in place, such as including a form with every order that customers can use to easily return products they’re unhappy with.

Different types of order fulfilment explained

Many ecommerce companies choose to outsource their order fulfilment. Let’s now consider the advantages of the different options that are out there.

1. Dropshipping

This model is most suitable for certain small businesses – usually ones that are just starting out on an online marketplace. Dropshipping is when an ecommerce business provides the customer interface, with the products being produced and shipped from elsewhere.

Order fulfilment is a simple process for dropshipping companies. Rather than needing to worry about order processing and delivery, this is managed by the wholesaler. However, this approach leaves little room for growth.

2. Self-fulfilment

If you’re new to the ecommerce industry, it’s likely you’ll use a self-fulfilment model. You probably have only a small number of orders and a warehouse inventory that can be managed and monitored by you and your employees.

By having a manageable amount of orders and stock, you should be able to handle the fulfilment process in-house, from purchase orders to shipping products and managing returns.

Of course, this can quickly become a lot of work, especially if your business is growing. As more orders come in, you’ll likely realize self-fulfilment isn’t sustainable for larger ecommerce businesses.

3. Third-party fulfilment

The most suitable model for growing businesses is third-party (3PL) fulfilment. This allows you to outsource to an external company that specializes in ecommerce order fulfilment.

This often gives you access to more warehouse space and ensures orders are processed and shipped by staff specifically trained in order fulfilment. Furthermore, you don’t have to worry about logistical challenges, allowing you to focus on parts of the business such as product development and sales.

When looking for a 3PL fulfilment company, try to find one that suits the needs of your business e.g. a third party that offers refrigerated shipping if you’re selling temperature-controlled goods. Once you’ve identified a suitable company, consider using proposal management Salesforce software when approaching them with your requirements.

Self-fulfilment vs 3PL fulfilment

Key to understanding the scope of ecommerce order fulfilment is knowing whether your company is best suited to self-fulfilment or 3PL fulfilment. It’s not that one model is better than the other—but you do need to recognize which will be more useful for your business.

Self-fulfilment Checklist

Self-fulfilment might suit you if:

• Levels of demand for your product are manageable
• Your company has available warehouse space
• You have a team of employees who can process orders and ship products

3PL Checklist

3PL might be the better option if:

• Your business is growing, and you expect demand to keep increasing
• You need access to more warehouse space
• Your staff is not large enough to deal with demands themselves

Conclusion

Ecommerce order fulfilment is an important part of supply chain management as companies try to capitalise on the growth of the online industry. If you can understand all the important aspects of order fulfilment, you’ll be able to deliver the best service to your customers.

You should now be able to recognize whether your business would benefit from handling order fulfilment internally or could grow further by adopting a 3PL fulfilment model. The scope of ecommerce order fulfilment today demands that your company can implement an effective process.

This article was written by Yauhen Zaremba – Director of Demand Generation at PandaDoc.