What Is An Order Fulfillment Service? 5 Steps Of The Fulfillment Process
Quick Summary: To become a survivor in such a competitive eCommerce industry, having high-quality products is useless if orders cannot be delivered to customers on time and safely. As a result, selecting an order fulfillment company for your eCommerce business is critical. If you choose wisely, your fulfillment partner may considerably contribute to the success of your brand—but make the incorrect pick, you risk ruining your customer experience and losing future revenue from existing customers. So, what exactly is an order fulfillment company, and how can you choose the best one from so many? What is an order fulfillment service? Order fulfillment…
To become a survivor in such a competitive eCommerce industry, having high-quality products is useless if orders cannot be delivered to customers on time and safely. As a result, selecting an order fulfillment company for your eCommerce business is critical.
If you choose wisely, your fulfillment partner may considerably contribute to the success of your brand—but make the incorrect pick, you risk ruining your customer experience and losing future revenue from existing customers. So, what exactly is an order fulfillment company, and how can you choose the best one from so many?
What is an order fulfillment service?
Order fulfillment is a service offered by third-party fulfillment solution providers. Outsourcing order fulfillment service means the sellers don’t have to keep products in stock, and physically fulfill the order in any way. Instead, the sellers sell their products and pass on the orders to a third-party fulfillment company whenever the orders have been placed.
Outsourcing order fulfillment operation is an optimal solution for companies to balance business benefits and customer satisfaction as well as flexibly scale up business operations and minimize operation time and cost. Using fulfillment service allows you to focus on other aspects of your business and continue to grow rather than investing in the order fulfillment process.
Order fulfillment service process: How does it work?
The order fulfillment process contains all of the supply chain functions referring to receiving, picking, packing, and shipping customer orders to their final destinations. These functions are completed at a fulfillment center that should be closest to the shipping destination to ensure the shortest shipping time possible.
- Receiving Inventory
Receiving inventory is the first step of the fulfillment process. It refers to the process of picking up the inventory and storing them at the fulfillment center. The items delivered to the fulfillment center are usually offloaded and accounted for in five different steps: Counting, inspection for accuracy, inspection for damage, SKU indexing, and SKU application.
- Inventory storage
After receiving the inventory, they will be strategically organized and stored the items in the warehouse to ensure the inventory may be retrieved as accurately and efficiently as possible. The organization of stock plays an important role in the order fulfillment process as it determines the accuracy and speed of the fulfillment process. For example, products with high-turnover rates should be placed close to the fulfillment areas. In contrast, less popular items should be stored in the back of the warehouse.
- Order processing
Order processing encompasses all steps from the time the order has been placed online to the time it has been fulfilled and ready to ship. Thus, integrating fulfillment platforms with the eCommerce platforms is the most productive way to go about this process. Once the platforms are integrated, the placed orders have been automatically synchronized to the fulfillment center to fulfill.
Automated warehouse robots or picking teams pick items from the fulfillment center according to the instructions of packing slips. Normally, the packing slip includes specific information about the items such as a list of item SKUs, product colors, sizes, the number of units, and location in the distribution center.
The technologies and methods involved in picking items from storage will vary widely depending on the operation size of the fulfillment center. But, it is important to keep the operation running smoothly and efficiently so the picking teams can find and locate the items to the packing area as quickly as possible.
The next step after order picking is packing. The packing process involves preparing the unit to be shipped to its final destination. At this stage, the packing team is responsible for collecting the items for the order and packing the order into the appropriate sized mailers and boxes to ensure the safety of all items shipped. Then, the shipping label is placed on the package for shipping and order identity.
4 . Shipping
Usually, this stage will be undertaken by shipping carriers. Depending on the size, dimension, weight, shipping service, and other specific requirements of the order, the shipping cost is determined. Once the orders are delivered, you can send the updated shipping status to your customers so they can keep track of their delivery status.
5. Return processing
Returns processing is an integral part of your eCommerce business. It’s essential to understand the process so you can manage it well. Every third-party logistics returns processing center will have its own policies and practices, and these can vary based on client requirements. When a product is returned for a refund or an exchange, the returning process must be carefully executed to guarantee the returns are acceptable to restock. Of course, if the returned items were damaged, they could not be restocked.
6 Things To Consider When Picking A Fulfillment Company
It can be challenging to determine which fulfillment company is best for your business as it’s a vital criterion to decide if your business could survive on the eCommerce market or not. There are numerous variables to consider. Here are 6 things to keep in mind when selecting an order fulfillment provider for your online business.
1. Shipping Time
One of the most crucial aspects to consider when assessing fulfillment solutions is shipping speed. Amazon Prime’s two-day delivery speeds have become the new norm, which implies that current consumers anticipate faster shipping times than ever before. Unless you can align with these changing expectations by partnering with an order fulfillment provider that can actually deliver on promises, you risk losing money from the 53% of customers who claimed they abandoned an online purchase due to late delivery..
2. Location of Fulfillment Warehouses
The closer the order fulfillment center is to the end customer, the less distance your products must travel to arrive, resulting in faster shipping timelines and lower shipping costs. Remember to verify the location of the fulfillment company you intend to deal with, as a fulfillment company with only a few fulfillment warehouses is unlikely to be able to deliver at the speed your consumers want, and therefore partnering with them may harm your user experience.
It’s critical to ensure that your fulfillment partner has warehouses near your customers. Furthermore, if you want to sell internationally, be sure the fulfillment company you’re considering has collaborated with global shipping carriers.
3. Order Fulfillment Software
Various order fulfillment companies utilize their own order fulfillment software which has plenty of features and capabilities. As an eCommerce business owner, you have a lot to deal with day by day so choosing an order fulfillment company that has easy-to-implement software could help you shorten your fulfillment processing time. Make sure that it can seamlessly integrate with eCommerce platforms and business apps you are already using.
4. Branding Options
A major problem is how to stand out in a sea of millions of eCommerce business shops and capture the attention of customers. Because modern consumers prefer brands that customize their experiences, putting your products in a generic, brown box will create an uninteresting customer experience. Choosing an order fulfillment service with branding options will assist you in creating a visual image in the minds of your customers.
With 89% of digital businesses engaging in personalization and 51% of digital marketers stating that personalization is their top priority right now, failing to consider branding possibilities when selecting a fulfillment partner might be damaging to your user experience!
5. Returns management
Choosing a responsible order fulfillment company is necessary as the fulfillment process doesn’t end when the buyer has received the items. Because over 30% of products that are sold online are returned and some returns are unavoidable. For example, customers just simply don’t like the product anymore. The software used by your fulfillment company should also be able to assist you in identifying “serial returners.” These are the customers who make purchases frequently only to return them. By identifying them, you can avoid sending them advertising material during a huge sale, or you can send them emails after a purchase highlighting great reviews from delighted customers about the product they just purchased to reassure them of their purchase.
You should not be charged for long-term storage if you are paying for the fulfillment process. In the long term, you will save money on labor, administration, packing materials, and other expenses. Furthermore, you want to ensure that the fulfillment center you select is providing you with the finest possible deals.
Because of the volume they deliver, fulfillment centers can get better rates from carriers than any individual eCommerce store, so be sure they’re passing along some of these savings to you. These lower costs frequently enable eCommerce retailers to compete with traditional giant by offering free or reduced shipping.
We hope these things mentioned above will help you choose your future partner. Now, it’s time for your turn and make your dream come true.