Multichannel Fulfillment — How to unify orders from every sales channel

Today, e-commerce businesses are not limited to a single sales channel. They sell their products through multiple channels, including their website, social media, and popular platforms in India like Amazon and Flipkart. But managing orders manually, one by one, for each sales channel, can be challenging for an e-commerce business. It may cause a delay in fulfilling orders, which can decrease brand reputation. This is where the importance of multichannel fulfillment lies. It allows a business to store products in one or many fulfillment centers and fulfill orders from various sales channels. It reduces operational costs and delivers products to customers faster and more efficiently. So, multichannel fulfillment can help a business grow in this competitive environment.

What Is Multichannel Fulfillment?

Multichannel fulfillment is the process of storing products, picking, packaging, and shipping orders received through multiple sales channels, such as websites, social media, or marketplaces.

How Multi-Channel Fulfillment Works?

• The customer places an order through any sales channel, such as the website or social media. The order details are sent automatically to the fulfillment center's system.
• The system identifies the nearest fulfillment centre with available stock to deliver products faster.
• The warehouse or fulfillment center's staff picks up the ordered products from the location and thoroughly packages them so they do not get damaged during transit.
• The staff puts a label on the packaged ordered product and hands it to the shipper.
• The shipper delivers the product to the customer's doorstep.
• The multichannel fulfillment partner even handles reverse logistics. It inspects the product and decides whether to restock, recycle, or refurbish, in accordance with the business policy.

Key Players And Variations In MCF

1. Marketplace Owned Multichannel Fulfillment Providers

These services are run directly by a prominent marketplace. Let's discuss this with an example of Amazon. Here, the Amazon sellers store their inventory at the Amazon fulfillment center. Sellers need to send their products in bulk to the Amazon fulfillment center. When someone places an order, warehouse staff pick up the ordered product, package it, and ship it directly to the customer. The ordered product is delivered to customers faster due to their pan-India fulfillment hub networks. The Amazon fulfillment center handles order fulfillment and returns as well. 

The major issue is that Amazon fulfillment centers only handle orders placed through Amazon. Also, businesses need to pay higher storage fees. There is limited customization while packaging ordered products.

2. Independent 3PL(Third party Logistics) MCF Providers

Third-party logistics multichannel fulfillment providers offer flexible, customized 3PL logistics solutions for businesses that sell products through multiple sales channels. For example, AAJ Supply Chain Company is a leading 3PL company in India. It provides end-to-end fulfillment solutions for e-commerce businesses that sell products across multiple sales channels. The company stores products in its warehouse and picks, packs, and ships orders to the customer. 3PL companies provide customized packaging, which enhances brand value in the market.

MCF Vs In-House Fulfillment Vs Single-Marketplace Fulfillment

Features	MCF	Inhouse Fulfillment	Single Marketplace Fulfillment
Definition	It uses a single fulfillment network for managing orders of the business that sells products through multiple sales channels.	The e-commerce business handles every part of the order fulfillment process, like storage, picking, and packaging, independently.	One large marketplace fulfils the orders. Example Amazon fulfillment center. The seller stores the product in the Amazon fulfillment center. When a customer orders the product from the website or app, or any other sales channel,  Amazon FBA picks the order, do the packaging and delivers orders to the customer.
Cost	Multichannel fulfillment partners provide a transparent pricing model to the business.	The business has to invest a high cost for building a warehouse, managing staff, or for shipping.	The business has to pay a certain amount of fees to the large online marketplace like Amazon for storing products or for logistics services.
Branding	Customization is only through the 3PL partner.	Products are fully customizable.	Limited customization.

Why Do Businesses Choose MCF?

1. Faster Delivery

Today, multichannel fulfillment partners utilize strategic locations and advanced technology to enable faster shipping. The order details are automatically sent to the nearest fulfillment center in India when a customer orders a product from the website, app, or social media. The fulfillment center delivers the product to the customer on the same day or the next day, thereby enhancing customer satisfaction.

2. Operational Simplicity

Managing orders across multiple sales channels can be too complex for an e-commerce business. It can lead to errors or to late product delivery. A multichannel fulfillment partner automates order management and inventory planning, reducing manual errors.

3. Cost Structure And Predictability

A multichannel order fulfillment partner offers transparent pricing for storage, picking, packaging, and shipping. Businesses can forecast their storage and logistics costs and pay for the services they use, rather than building and managing inventory for every sales channel. Outsourcing warehouse and logistics to a third-party logistics partner eliminates the need to build a warehouse, manage staff, or buy heavy equipment like forklifts, scanners, and racks.

Benefits Of Multichannel Fulfillment

Multichannel fulfillment has several advantages. Here is a list of them below.

1. Access To Advanced Technology

Multichannel fulfillment partners use advanced technology like AI, machine learning, and software like a warehouse management system, which helps an e-commerce company in India to make wise decisions.

2. Enhances Customer Satisfaction

Multichannel order fulfillment partners deliver products either on the same day or the next day to customers, thereby enhancing customer satisfaction.

3. Offers Scalable Solutions

Fulfillment partners provide scalable logistics solutions, which means they can accommodate products when the business expands in the future.

4. Reduces Operational Burden

A multichannel fulfilment service provider not only stores products but also picks the ordered products, handles packaging, and handles shipping. Thus, it reduces the business's operational burden.

5. Saves Cost

Businesses do not have to build a warehouse to store products, manage staff, or handle shipping when they outsource to a multichannel fulfillment partner. This reduces the cost of the business.

6. Focus On Core Operations

Businesses can outsource their entire order fulfillment process, like picking, packaging, and shipping products to a 3PL partner. It helps to focus primarily on core activities, such as product development or market expansion.

Common Mistakes To Avoid In Multichannel Fulfillment

1. Overreliance On A Single Provider

Many ecommerce businesses depend entirely on the multichannel provider. If there are any technical issues, the company's supply chain operations are adversely affected.

2. Poor Packaging

If the fulfillment partner uses poor packaging or does not provide customized packaging, it degrades brand value in the market. The product may be damaged during transit due to improper packaging.

3. Ignoring Return Management

Return management is essential for the business. If the fulfillment partner does not focus adequately on reverse logistics, customer satisfaction can decrease.

How does returns work in MCF?

• Sometimes the customer does not like the returned product and places a return request via the app, social media, or website from which they ordered the product.
• The return details are sent to the fulfillment service provider.
• The staff of the multichannel fulfillment provider pick up the product from the customer and bring it back to the warehouse.
• A dedicated team inspects the product and decides whether to restock, recycle, or refurbish it.
• The customer receives a refund or replacement in accordance with the business policy.

Industries That Benefit From The Multichannel Fulfillment Model

Various industries benefit from adopting a multichannel fulfillment model. Here is a list of them below.

• Retailer and ecommerce business
• Consumer electronics
• Health and wellness
• Beauty and personal care

Final Thoughts

Multichannel fulfillment enables businesses to manage orders across multiple sales channels efficiently. An ecommerce business can outsource storage and logistics to a multichannel fulfillment partner and focus on core activities, such as product development. The fulfillment partner will receive the order details from any sales channel like app, website or social media and do the order processing, delivery and return handling. It delivers the product faster to the customer and enhances customer satisfaction.