If you run an e-commerce company, it is necessary to comprehend how order fulfillment systems and operations work, even if you are preparing to contract out to a third-party logistics company, also known as a 3PL. Understanding the essential parts of an effective e-commerce fulfillment system can help you make the very best decisions in picking how to structure your order fulfillment practices. This post explains the basic aspects of order fulfillment, and several methods to establish your order fulfillment system.
What is Associated with Order Fulfillment?
Receiving
Getting stock from your manufacturers or providers is the very first action in getting orders to your end customers. Whether your products show up at your own home or are sent straight to a fulfillment center, the process is basically the exact same either way. If you make use of a storage facility management system, WMS for short, then you will include SKUs for your individual items in order to keep track of the location, counts, and the number of sales.
Storage
In order to improve your order fulfillment process, you need an organized solution to store items before they are ready to be delivered to your customers. An accountable organization system ought to be carried out no matter if items are saved in a spare space or garage, or a large-scale warehouse. Products are often stored on pallets, shelves, boxes, or bins based upon the variety of SKUs that you have. Making certain that your inventory is organized appropriately enables you to set up your selecting operations for the most effective technique which will help you conserve time during the fulfillment process.
Order Processing
Once an order has actually been placed and saved properly, the specific SKUs that make up an order are then picked off the racks by warehouse personnel and transferred to an order packaging station. Again, depending on the size of your operation, it can be something little like a kitchen area table or counter, to a devoted room or workstations in a warehouse. At the packaging station, the products will go through a series of quality assurance checks to make certain that the SKUs match the order and no damaged items are shipped.
Shipping
When an order gets in the shipping stage of order fulfillment, it will be determined what the best shipping method for the order is. It is likewise the duty of the shipping department to upgrade the status of an order so it can be tracked by both the sellers as well as the end clients getting the order.
Returns
For e-commerce organizations, the capability to effectively handle those returns is critical to their fulfillment operations, and to the total success of their companies. The internal policy needs to make clear to your personnel or fulfillment service provider how returns will be handled when they show up back at the warehouse.
What are Some of the Order Fulfillment Solutions?
Now that you understand the essentials of what is associated with order fulfillment, you are required to determine which option is the best suitable for the needs of your company. The primary alternatives are: doing it yourself internally, dropshipping, contracting out to a 3PL or other fulfillment company, or utilizing some combination of these methods. It is necessary to think about the aspects above and determine if you have the time and space needed to deal with all elements of order fulfillment yourself — also thinking about your capacity and room to grow — or if you need to find a fulfillment partner to support your company.
Self Fulfillment
An internal fulfillment operation can be a perfect beginning point for lots of e-commerce companies as they get up and running. You will have a strong understanding of the company’s structure and sales development if you are able to discover space such as a garage or extra space to manage your fulfillment. If you don’t have a devoted area, then it can end up being an issue as you continuously require to relocate everything. Errors can end up being more widespread with a less structured order fulfillment set-up, which leads to negative evaluations and dissatisfied clients. Another worry about internal fulfillment is an unexpected spike in service from the seasonality or virality of an item. When that happens, there are two primary cost considerations you’ll deal with: area and personnel. Both can be great throughout an initial development phase, but neither is quickly downsized if service drops off.
Dropshipping
With dropshipping, your providers handle your order fulfillment on your behalf. Stock is stocked in their place and orders are sent to clients straight from their storage facility. Numerous e-commerce sellers that utilize in-house fulfillment extend their abilities by dropshipping high expense or large volume orders straight from providers. Other e-commerce companies utilize dropshipping as their only order fulfillment approach.
Third-Party Logistics (3PL)
3PL fulfillment business specializes in stock management, order processing, and shipping. These are the most time-consuming jobs involved in an e-commerce business’s fulfillment operations, and often it is just best to outsource all of these to a logistics company. It is really typical for many small and growing e-commerce businesses turn to buy fulfillment partners to handle some or all of the order fulfillment side of their company. What you will get in return is their know-how and performance. You frequently get cost savings on shipping, as a 3PL will get marked down rates based upon their volume and can pass that on to your business. Another included benefit is the truth that many 3PLs operate fulfillment centers throughout the country so that your products reach your client’s doorstep in the fastest time possible. Even if you choose to manage the majority of your fulfillment internally, a 3PL can help with any customized fulfillment that occurs with item rollouts, seasonal sales, promotions, and other spikes in orders. There are expenses included however you require to compare outsourced fulfillment costs versus area and personnel expenses of an in-house fulfillment operation.
Conclusion
Accurate and timely order fulfillment is necessary to any effective e-commerce organization. To remain ahead of your competitors, you must understand the whole order fulfillment procedure, embrace effective habits, and manage costs end-to-end. There are many ways to get orders into the hands of your consumers, and it is essential to have knowledge of all of them so you can determine which is the best choice for you.
If you are searching for help with your order fulfillment, Simple Global can just be the right fulfillment partner for your business. You can take a look at our various e-commerce fulfillment services to learn more and see if that’s something you are looking for.
