How Order Fulfillment Works For Ecommerce Store

The e-commerce landscape is dynamic. However, one thing remains: every business seeks ways to win. This is a constant task, from increasing its bottom line to making every process seamless.

Whether you’re a small startup or a growing e-commerce brand, we understand that optimizing your order fulfillment is a top priority. Keeping up with everyday customer demands while maintaining profits can become overwhelming.

So, how can you ensure you’re winning at order fulfillment? Our in-depth e-commerce fulfillment guide will delve into this question, offering practical tips and actionable strategies. 

We’ll start by exploring the fundamentals, then move on to the order fulfillment process, and finally, discuss the importance of efficiency in order fulfillment.

But first, let’s explore the fundamental aspects:

What is Order Fulfillment? Overview of the Process

Order fulfillment is not a one-step process. It is a series of events that starts when a customer makes a purchase order, through order processing, and finally, when the customer receives the product. A new sale is exciting to receive, but it is only complete once the customer gets the product and accepts it. That’s where order fulfillment comes in. 

Order fulfillment involves picking, assembling, packing, tracking, shipping, and handling returns. It is an end-to-end process that entails all the supporting processes involved in getting the order to a customer and ensuring it’s what they ordered.

Typically, the whole process has five phases, starting with strategic sourcing and ending with shipment. The phases comprise order processing, inventory management, quality control, supply chain management, and customer support. 

Based on the business size, this process can occur under one roof, usually in a well-organized warehouse. Most small companies have an in-house team to handle this. However, large enterprises use a strategic, complex, multi-layered center.

The main aim of order fulfillment is to get the customer exactly what they ordered efficiently. The process should be quick, reliable, and affordable. 

Order Fulfillment Process 

Depending on the nature of your business, the order fulfillment process can be short and simple or long and complicated. Research shows that it takes approximately 16 hours on average to fulfill an order. However, the number of hours depends on several factors. 

Here is the process:

Stage 1: Inventory Management

This stage involves monitoring your business’s stock amount, quality, location, and stock status. The goal is to ensure your company has the right stock, quality, and products in the proper location.

Inventory management must monitor demand patterns, supplier lead times, and sales trends to ensure customers always get what they order. This will ensure that a customer’s order is always on time.

Stage 2: Sales Order Processing

When an order comes in, it must be processed for shipping. Therefore, the sales order processing stage includes assessing what was ordered against what is in stock. If the product ordered is available, a picking request is made.

Stage 3: Picking and Packing 

After the picking request is made, the product is retrieved from the inventory shelves for packing.

This should be done carefully to pick the right product and quantity. Then comes the packing stage. Here, the product or products are packed and labeled for shipping. The package will include shipping information, tracking numbers, and other necessary documents, especially for international shipping.

Stage 4: Shipping and Delivery

 The package is given to the designated carrier for transportation at this stage. It is the final stage of the order fulfillment process and ends when the package is delivered to the customer. 

To ensure efficient shipping and delivery, Choose the correct shipping partners to coordinate with and choose the ideal shipping method with relevant regulations and requirements.

When selecting the perfect shipping method, consider factors like speed and cost. Remember, fast delivery means a satisfied customer. However, please choose only a reasonable option, as it reduces your profit margin.

Lastly, to give your customer peace of mind, you can send them the tracking number for their parcel. This allows them to keep tabs on the progress of their package. 

Stage 5: Backorder Management

This stage handles cases where customers make orders, but the products are temporarily out of stock. In this case, you must tell the client when the stocks will be in or offer alternatives. You can advise them to take a different product or wait for restocking. 

Stage 6: Returns Processing 

After the customer receives their order, they might decide to return it if they are not satisfied or if it’s the wrong product. In this case, they will return the package to the seller or warehouse using the return label. At the warehouse, the staff inspects the product for restocking.

If the product is suitable for restocking, it is returned to the shelves, and the customer is refunded or given a different product. If it cannot be restocked, it is sent to the manufacturer or vendor, and the supplier gets a refund.

Importance of an Efficient Order Fulfillment

While it presents several challenges, the benefits of an efficient order fulfillment process are worth the effort:

First, it improves customer satisfaction. Customers who receive an order on time and with no errors or breakages are highly likely to do repeat business with you. Therefore, efficient order fulfillment increases customer satisfaction and loyalty.

Another benefit is the reduction of order processing time. Efficient order processing leads to faster delivery, reducing the time it takes to pick, assemble, pack, and deliver an order. Customers appreciate it when an order is delivered faster.

This further cements customer loyalty. Moreover, an efficient order fulfillment process minimizes order errors. Errors and mistakes are expensive for ecommerce businesses. Reducing the risk of errors is, therefore, encouraged. 

A seamless order fulfillment reflects positively on a brand image and reputation. When a business consistently delivers on its promise, it shows professionalism and reliability, which enhances its reputation and brand image in the market.

Moreover, a streamlined order fulfillment process minimizes exchanges and returns, saving the business time and resources and cutting the costs it incurs in handling returns.

The icing is that a streamlined order fulfillment process improves the business’s bottom line. Every business aims to make as much profit as possible. 

An efficient process can make it smoother, reduce costs, and improve overall productivity, resulting in increased profitability.

Top Strategies to Make Order Fulfillment Efficient Here are practical tips to help streamline your order fulfillment process:

Optimizing Order Management

When customers place an order, they want it delivered as soon as possible. Therefore, the faster you can start the shipment and provide the order, the better.

You’ll end up with happy customers. Integrating an inventory and order tracking system can optimize order management.

Such a system gives you real-time insights into inventory and orders, allowing you to always control your e-commerce store’s operations.

An excellent platform to streamline your inventory and order tracking process is the EcommerceBot. It seamlessly integrates with your Shopify store to give you the best insights. 

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Ensure You Ship the Right Product Sending the correct item is a good use of time and resources. However, it is also a disappointment for customers, as they have to post back the item and wait again for the replacement. If this becomes a habit, your shop will undoubtedly lose customers.

Using a foolproof picking and packing strategy is the way to go. This approach ensures that the correct item is picked from the inventory shelves and packed for shipping. 

Also, always double-check the item before shipping. It not only saves time by avoiding returns but also saves your reputation.

Besides picking the right product, ensure the packing process is foolproof. It should be executed cautiously to ensure nothing breaks.

This reduces the chances of product returns due to damages. If picking and packing are done correctly, you’ve won another crucial step in order fulfillment. 

Nurture a Good Relationship with Shippers. Your shipping partners determine, in a great deal, how fast the parcels reach your customers. Therefore, fostering good relationships with them might help ensure your customers are served in good time.

Also, they might offer preferential prices for you, which is an added advantage. But how do you nurture good relationships with shippers? 

Proactive communication

Talk to them and see if you can do something to make the process easier. Give the proper shipping volume estimates: The correct estimates allow the shippers to plan and offer the correct shipping prices. Therefore, if you expect more orders, alert them in advance.

Show appreciation

When everything is going well, appreciate your shippers by praising their efforts. This can influence how better they serve you and your customers. Automate Various Processes Doing things manually increases the chances of making mistakes.

For instance, shipping mistakes are mainly caused by human errors, such as misreading packing slips or picking the wrong product.

Since some apps and platforms automate almost every step of order fulfillment, it’s wise to integrate such tools.

Also, handling order fulfillment manually can be time-consuming. This only delays the shipping process, leading to disappointed customers. Integrating e-commerce automation tools in your shop helps simplify the process and even make it faster and more accurate.

For example, you can incorporate EcommerceBot on your Shopify store to automate order tracking and inventory.

This way, once an order is made, it is automatically sent to your fulfillment provider. 

Also, this automation enables you to know the stock levels in real time, reducing the chances of customers ordering out-of-stock products. In other words, automating the processes leads to efficiency, fewer mistakes, and fewer costs. 

Be Transparent Transparency is vital in order fulfillment, especially when dealing with customers. The truth is that sometimes things go wrong.

And since you cannot control everything, let the customer know when there is a hitch. Hiding or trying to conceal things can lead to customer mistrust, which is a remedy for dissatisfied customers and low orders.

Therefore, be very transparent about the order delivery process. Let the customers know which stage of the order fulfillment process you are at and the expected delivery time.

For example, if a shipment’s delivery is delayed, let’s say by two days, the customer will be at peace if you inform them of the delay. 

Letting them wait an extra two days without informing them makes them anxious and disappointed. Therefore, please explain to them what caused the delay and assure them of delivery in a specific timeline. 

Choosing the Right Order Fulfillment Strategy  

There are three options for order fulfillment. The strategy you choose depends on your type of business, the number of orders, customer location, and your team’s strengths. Additionally, the type of your e-commerce store will influence the best order fulfillment strategy.

To put this into perspective, here are the main order fulfillment strategies:

Merchant Order Fulfillment

This order fulfillment strategy is ideal for startups and small e-commerce stores. Such businesses usually have low sales volumes, which makes in-house order fulfillment ideal. It is where the merchant completes the fulfillment of the order themselves. 

Merchant fulfillment is also referred to as in-house fulfillment. It is among the most common fulfillment strategies, with around 90% of orders requiring in-house fulfillment involvement. 

One good thing about this order fulfillment strategy is that it nurtures personal customer relationships. 

As you are involved in the entire process and are communicating with the customer, there is an excellent chance to forge personalized relationships, which are ideal for a business. Another benefit is that it can be cost-effective. 

This is because you only incur the shipment fees, as you’ve eliminated the fulfillment fees – you are doing it yourself. 

However, this strategy can have some challenges. For instance, it may be labor-intensive and prone to human error. Also, shipping costs might be high, as discounts are only available for small shipments. 

Third-Party Fulfillment:

If you are a growing business, your sales volume is also growing. Now, using the merchant strategy has become unattainable. That’s where the third-party order fulfillment comes in. Here, you delegate the entire order fulfillment process to a third-party company. Such companies are usually referred to as logistics companies. 

They help to ensure that a product moves from your shop, is packed, and is delivered to the customer. In other words, a third-party fulfillment company relieves you of the whole order fulfillment burden.  

The main advantages of using this strategy include:

Efficient order fulfillment:

Such companies have the right technology and tools to make the process easy, which increases the speed of order fulfillment.

It makes the work easier for you: By taking order fulfillment off your to-do list, you can focus on other issues that help make your e-commerce store successful. It also makes your e-commerce business easy to manage and grow.

 Reduces some costs:

You won’t have to hire extra staff during the peak season.Localizing your inventory: It helps you to have your inventory in warehouses near your customers. 

The only drawbacks are the added pick-up costs and the fact that you are blamed for the company’s mistakes.

Dropshipping is a strategy ideal for e-commerce businesses intending to stock products outside their warehouses. In this case, a drop shipper is just a link between the customer and the supplier or manufacturer.

So, how does it work? It’s simple! 

You open your e-commerce store and display products from your suppliers. When a customer makes an order, it goes to the supplier, who completes the order’s fulfillment. 

Payment is made according to the price of your shop, so you pocket the difference between that price and the supplier’s price. Your work generally only ensures the products are in stock.

Remove them from your shop or indicate they are out of stock. The main benefits of dropshipping order fulfillment include:

Cost-effectiveness

as you don’t need to buy or stock products. Zero inventory issues, as a product is purchased and shipped once a customer orders.It gives you more time to handle other activities in your shop, like marketing and customer engagement. 

Dropshipping is the way to go if you want to open an e-commerce store on a budget. 

Choosing the Right Order Fulfillment Partners

Proper scrutiny is required when choosing a third-party fulfillment company. The company plays a crucial role in determining your store’s success. So, how do you identify the right partner?

Experience is critical in determining the right third-party fulfillment company to contract with. Look for a company with substantial experience in the field. 

This is because they know the ins and outs of the industry and are already well-established. Hiring a company that knows what it’s doing saves you a lot of stress. You are sure that your customers’ orders are in the right hands.

Technology Consider technology when picking an order fulfillment partner. For example, have they automated their processes? And can they handle more shipment volumes if your business grows?

A company that embraces the latest technology is efficient and guarantees a bright future for its operations. Costs Everything in business boils down to profits.

And costs are some of the main determinants of your business’s profit. Therefore, always consider the cost of hiring a third-party logistics company.

Look for a company that doesn’t charge exorbitant prices. Also, avoid those that promise too low prices. Their services need to be at par with what you require. 

Conclusion

Winning in order fulfillment requires a combination of multiple actions and strategies. For example, you must understand and optimize the order fulfillment process to be efficient. It also helps to choose the correct order fulfillment strategies and partners.

The right combination of these factors will give you a winning order fulfillment.  Luckily, e-commerce automation tools can make the process seamless.

With platforms like EcommerceBot, you can automate various processes in order fulfillment, including inventory and order tracking. 

You can try Ecommercebot for free; no credit card is required. You agree to turn your E-commerce business into a success story by clicking the image below. 

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This streamlines the processes, guaranteeing more efficiency and cost-effectiveness in your business. Sign up for EcommerceBot today, your best ecommerce partner. Enjoy a free trial with access to all features.

FAQs

How do you boost your e-commerce sales?

If you want to boost your sales, efficient order fulfillment, customer engagement, and product quality are among the main factors to consider. If the right product is delivered on time to the customer, that shows effective order fulfillment. When you can communicate effectively and solve customer problems and queries, it builds more trust and increases sales. 

What is an e-commerce store?

It is a virtual online space that allows retailers to display and sell their products online. You can open an e-commerce store on your website or e-commerce platforms like WooCommerce, BigCommerce, or Shopify.

What is dropshipping e-commerce?

It is a type of online business that doesn’t include product stocking. The store owner is only the link between customers and suppliers. Once an order is placed on the e-commerce store, it is sent to the supplier, who acknowledges the order and ships it to the customer. 

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