When customers shop online for the first time, their initial hesitation is whether the eCommerce platform will fulfill the order in time or not.
eCommerce fulfillment is the complete workflow of an online store — from receiving orders to inventory management, processing, and shipping. And optimizing the fulfillment process is essential because fast fulfillment and delivery is the biggest factor influencing customer satisfaction.
So let’s understand the eCommerce fulfillment process more closely, along with some tips to make it more efficient.
eCommerce Fulfillment Process: Detailed Guide
Here’s the 5-step process for eCommerce fulfillment.
#Step 1: Make your inventory ready to receive orders
Fulfilling orders through an e-commerce website is more of a commitment. So before you accept orders, ensure your stock is ready to provide what is asked.
Now, eCommerce fulfillment can be done in one of the two ways — in-house fulfillment and outsourced fulfillment.
# In-house fulfillment: You’ll need an on-hand inventory for completing an in-house fulfillment process. In an on-hand inventory system, you need sufficient stocks ready for making immediate sales.
# Outsourced fulfillment: For outsourcing fulfillment, you must send a detailed stock account required to the vendor in time. This way, the inventory will be ready to receive orders.
#Step 2: Organize your warehouse or inventory storage
If you want to scale your eCommerce operations while ensuring efficient fulfillment, you have to provide different storage areas for all your SKUs (stock keeping units).
The proper storage and organization of your products are essential for the fulfillment process. It is commonly known as warehousing, and for large-scale businesses, automation is necessary for warehouse management.
Besides, 77% of the global organizations are keen on onboarding automated warehouse systems for better performance.
#Step 3: Process the accepted orders
For order processing, you must locate and pick the products from their storage locations. Then pack the orders and make them ready to ship.
Now, issue packing slips for all of them. It makes order processing more efficient and trustworthy because the slips mention the quantities and warehouse locations of the SKU ordered.
Besides, you can optimize the process even further by standardizing the sub-processes of this stage, like assigning the materials and techniques used for packaging.
#Step 4: Ship the processed orders
When the order details have been processed, it is ready to get shipped.
Reasonable and timely shipping are two primary aspects of shipping and logistics. They are crucial for efficient e-commerce fulfillment.
Shipping can be done in two ways:
- Contacting the local post office for less number of orders, or
- Hiring a carrier to pick up the orders.
Once the order is shipped, you should duly track the product until it is delivered to the consumer.
#Step 5: Build a simple and quick return mechanism
If a customer decides to return a product within the available window, you should prepare your business mechanisms to deal with it.
For instance, if you have hired a carrier for the last mile delivery fulfillment, they should be willing to pick up the return order and evaluate it at their end.
Three cases arise white returning an order:
- After checking the product’s condition, if everything is fine, it can again be restocked into the inventory.
- You can decline the return request if the product is unsuitable for restocking.
- The product is often traded at a lower price if there are minor discrepancies.
Tips for Improving your eCommerce Fulfillment Process
Let’s understand how you can grow your business with an efficient eCommerce fulfillment process.
#Tip 1: Assess your current eCommerce fulfillment strategy
Ecommerce fulfillment is an ongoing process with a continuous scope of improvement. So, at any point in time, there will be some areas where you could maximize the performance of your fulfillment process.
To evaluate such underperforming aspects, you need to assess your current e-commerce fulfillment strategy.
Here’s how you can do that.
- Question yourself whether there are any problems pertaining to logistics, delivery, storage, or inventory management.
- Consider the frequency of orders being received and the rate at which you can fulfill each of them without any complaints or delays.
These aspects will be guiding forces for your strategy to become more robust.
#Tip 2: Don’t ignore other operational demands
The deployment of an e-commerce fulfillment strategy can occur through two primary channels — in-house fulfillment and outsourced fulfillment. We have briefly discussed these two in the previous section.
Now, you have to choose between them to place everything in perspective and lend proper attention to other business aspects.
For instance, if you think other revenue-generating tactics are not optimized enough, it’s wise to keep them on top priority. Here, you can simply outsource eCommerce fulfillment.
It will not just speed up the fulfillment but can even improve the brand’s reputation with customers.
#Tip 3: Optimize your delivery services
Logistics needs to be prioritized for efficient e-commerce fulfillment. It also means optimizing the last-mile ordered product delivery via your eCommerce platform.
On the one hand, optimization means fast and timely product delivery. On the other, it means improving the entire delivery process so you can scale down the costs as much as possible.
Using a simple tool like dynamic QR codes can help in scaling down the cost and making the product delivery experience for the customer efficient at the same time. Add a dynamic QR code on the product packaging, during deliveries the delivery in charge scans it to confirm the delivery and the same QR code can be used for product information, brand promotion, loyalty code, or as a referral code for the customer. This ensures customer retention and loyalty through a simple and hassle-free product delivery experience.
Almost 53% of the cost of delivery an eCommerce platform incurs is only because of ensuring last-mile delivery. So, by making strategic changes at this point, you have a chance at better fulfillment results.
#Tip 4: Hire the right service provider
It again begins with prioritizing certain areas of your e-commerce business that require immediate attention.
If you feel you can outsource some eCommerce fulfillment aspects at the moment, go with it. The concept is popular as third-party logistics or a 3PL model.
You might already be using the services of a third-party logistics partner, and there may not be any significant changes in your fulfillment targets. But if you feel some degree of growth stagnation, it’s best to reevaluate your 3PL partner.
During the re-evaluation process, you will also have to scout the market and receive quotes from other vendors. Look out for service providers with larger warehouses and more fulfillment locations.
Sometimes smaller e-commerce businesses are unwilling to let go of the control they enjoy over their fulfillment strategy.
If you are one of them, deploy a hybrid model for e-commerce fulfillment — dedicate a focus group from your company to work alongside an external team so you can manage efficiency and control well enough.
#Tip 5: Consistently update your technology
Experts believe that only by harnessing and leveraging the benefits of automation can e-commerce fulfillment be made more coherent.
Besides, continuing with legacy systems to run your e-commerce business can hamper your growth prospects significantly.
So, there should be a focused effort to onboard new technology.
For example, automation can benefit different aspects of an eCommerce business, including logistics, delivery, and inventory management, to name a few.
eCommerce fulfillment software is already being used extensively.
Its market is expected to have a CAGR of 9.5% from 2022 to 2030, with many upgrades and even cost reductions in the long run. It will make them much more desirable and useful for eCommerce platforms.
The Bottom Line
Since it significantly impacts revenue generation, eCommerce fulfillment should be a top priority for every online business today.
So take time to understand and optimize your e-commerce fulfillment strategy. It is a great way to improve your customer relations.
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