E-commerce order fulfillment is a word you hear over and over again in the world of e-commerce. From picking inventory to packing to managing inventory to prevent overselling, order fulfillment is critical in e-commerce. In this article, we’ll explain what order fulfillment is, what processes it involves, and how you can improve your eCommerce order fulfillment.
What Is Order Fulfillment in E-commerce?
What is order fulfillment? It is the process of receiving the goods and then processing and delivering the order to the customer. The process starts when the customer places an order and ends when they receive it. However, order fulfillment also manages the return transaction if the customer wants to return the goods.
6 Steps for Order Fulfillment Process
Receiving inventory is the first step in order fulfillment. Our fulfillment center uses the latest technology to create unique SKUs for each product, scans each product’s barcode for stocking, and then we place the products in a secure location until they are sold. Receiving inventory consists of checking product quantities, checking for damaged products, creating SKUs for products, and scanning products to ensure they are in the warehouse management software
After receiving inventory, store it in the warehouse and provide customers with real-time, up-to-date inventory using a dedicated inventory management system. A professional inventory management system ensures that you always have enough stock to continue selling and avoid order delays caused by out-of-stock. Our company has a specialized inventory management system – MaBang ERP, through which we can help you check your inventory and stock levels in a timely manner and generate accurate inventory forecasts.
Warehouse staff or warehouse robots pick products from the warehouse based on the contents of the order, which contains information such as the SKU of the item, color, size, and unit quantity.
In order to achieve the lowest actual dimensional weight, the packaging team is responsible for the packaging of the products and the selection of packaging materials. Optimizing dimensional weight is very important to speed up shipping and reduce shipping costs.
Orders are packaged and ready to be shipped to the customer’s address, and you can choose between third-party shipping, merchant shipping, or drop ship modes.
If you choose merchant shipping, you can enable further categories of shipping forms on your e-commerce platform. Your customers can choose the type of shipping they want to be based on the cost they pay.
Returns and Exchanges
E-commerce companies should not consider the older generation until the customer receives the goods as the end of order fulfillment; instead, returns and exchanges should also be considered as the last step of order fulfillment. When a customer requests an exchange/return, order processing should begin immediately.
3 Types of Order Fulfillment
There are three main order fulfillment models: in-house, third-party fulfillment, and dropshipping, each of which can meet the needs of different businesses.
Companies with warehouses can manage and process their own orders through their internal supply chain. If you decide to use in-house fulfillment, first ensure that the warehouse has enough space to store the products; second, recruit warehouse staff and train them in a timely manner; and finally, purchase the right software and equipment to fulfill the orders.
Third-party fulfillment refers to the process of outsourcing order fulfillment, and they manage everything from receiving merchant inventory to order fulfillment. Honest Fulphilment has self-managed fulfillment services and we encourage eCommerce companies to partner with us for efficient order fulfillment.
If you own a small e-commerce business, order fulfillment is inefficient, managing logistics is increasingly challenging, and you want to scale your business, then third-party fulfillment should be your first choice.
Dropshipping is similar to outsourcing in that the retailer does not keep an inventory of the items it sells. Instead, when an item is sold, the retailer buys it from a third-party supplier. That supplier may be a manufacturer or a company that purchases products from a manufacturer to sell to dropshipper. The supplier handles all the orders and you only pay for the products you sell. The supplier ships the product to your customer.
3 Tips for Small Business Order Fulfillment in E-commerce
Select Right Strategies
If you only need to process a small number of orders per day, you are perfectly capable of managing orders manually, when order automation is unprofitable. However, when you need to process more orders (about several hundred orders per day), automation becomes necessary.
Get Fast Order Picking
Smart placement of products can shorten the distance products travel. If you have specific products in your warehouse that have high sales, you can place these products in easy-to-pick locations, which will help pickers process orders faster and improve order turnaround. Also, consider combining orders to group products and it is recommended to use warehouse labels and color codes. Using a WMS (Warehouse Management System), you can provide instructions for order picking and provide the exact location of products. All of these methods can help you pick orders quickly.
Cooperate with Efficient Logistics
When shopping online, there is no doubt that every customer wants to get the goods as soon as possible. If the products take too long to be shipped, it will affect the customer’s shopping experience and it is likely to lose them. Therefore, you need to choose a shipping company with fast logistics time to improve the customer’s sense of shopping experience.
The process of e-commerce order fulfillment is a fundamental task in the supply chain of any online store, regardless of size. Understanding what order fulfillment is, the process of order fulfillment, and the types of fulfillment are important to your eCommerce business.