Ecommerce order fulfillment has many steps that work together. Whether you are an established e-commerce brand or an online retailer, business success depends on delivering products on time and smoothly. Here, you need to associate with reputed and good e-commerce fulfillment service providers to meet consumer demands. Customers often have more expectations in delivery. This is mainly due to quick commerce, and it is why you need to have the right strategy to lead the market.
According to reports, the average rate of cart abandonment is around 70%. This means that 7 out of 10 customers have a desire to shop. However, they back out before clicking on the “buy now” button. Expectations of fast delivery are high while shopping online. However, you can change how customers react. All you need is to have smart e-commerce fulfillment strategies in line to meet your consumer demands.
What is Ecommerce Fulfillment?
Ecommerce fulfillment is part of supply chain operations. The E-commerce fulfillment process includes receiving bulk goods for storage, picking and packing orders, and finally delivering them to customers. So, these are the step-by-step processes involved with e commerce order fulfillment:
âž” Receiving the Orders and Check the quality.
âž” Having products on shelves of e-commerce fulfillment center.
âž” Adding SKUs to the inventory.
âž” Picking as well as packing orders.
âž” Delivery of orders.
âž” Management of returns.
Different Types of eCommerce Fulfillment Models
eCommerce fulfillment involves different approaches. So, there is not a single approach to follow. It is mainly due to product differences, changes in inventory, and business needs. Here are the fulfillment models that are used:
1. Self Fulfillment
In this model, businesses handle their order fulfillment process on their own. The fulfillment process starts with storing the products in warehouses and fulfillment centers, getting the order, picking and packing them, and transporting them through shipping service providers. It is suitable for startups and small businesses to handle the initial orders each month. Businesses with a small inventory can also use the self-fulfillment model for e-commerce.
2. 3PL Fulfillment
3PL fulfillment is a service that businesses hire to handle their order fulfillment for them. Instead of managing storage, packing, and shipping on their own, they partner with a third-party logistics company that takes care of fulfillment tasks. This helps businesses save time and resources, allowing them to focus on other important areas of their operations.
The 3PL fulfillment companies offer end-to-end fulfillment services according to the business needs. They provide better access to the company’s logistics, warehouses, supply chain, and inventory management. 3PL fulfillment companies use economies of scale to deliver to numerous businesses. Therefore, the firms would spread the costs, offering affordable 3PL options for every seller.
3. Dropshipping
Dropshipping is an e-commerce product fulfillment where retailers never retain the products they sell. However, they associate with the manufacturers or suppliers who ship products right to the end customers. In dropshipping, the retailer acts as the middleman, handling sales and marketing. This model reduces the need to manage inventory since the supplier directly ships products to the customer; it reduces the upfront costs. However, it often leads to lower profit margins and less control over product quality as well as timely shipping.
4. On-Demand Fulfillment
On-demand e-commerce fulfillment aims to produce and fulfill orders as they are received. Moreover, it helps to reduce the need for the pre-existing inventory. The model is generic for businesses offering made-to-order or customizable products. On-demand fulfillment minimizes warehouse storage costs and brings about product variations. Furthermore, order processing and production are important to meet the customers’ expectations for on-time delivery.
5. Hybrid Fulfillment
Hybrid e-commerce fulfillment is the combination of third-party and in-house logistics fulfillment. Therefore, businesses that use a hybrid model often manage a couple of aspects of internal fulfillment. So, they adopt the method of outsourcing with other 3PL service providers. The approach offers a better balance between flexibility and control. It helps businesses streamline their order fulfillment strategy. Likewise, hybrid fulfillment is beneficial for conditions that experience growth or seasonal changes with demand.
Ecommerce Order Fulfillment Strategies for Smarter Storage and Shipping
It is important to have a proper order fulfillment strategy to create an efficient process that serves your customers. They might have high expectations; however, it is manageable.
Update and Integrate All Your Systems
Proper updating and integration of the systems is the perfect way to optimize the e-commerce order fulfillment strategy. It relies on your business size as there are different software options to upgrade workflow. Large companies should implement Enterprise Resource Planning (ERP) software.
Furthermore, ERP benefits all of your business and gives you better visibility of ecommerce order progress. It uses different systems. However, smaller startups can upgrade their distributor and consumer management software. Additionally, the basic OMS tools offer good visibility of the customer orders and supply chain.
Improve Customer Visibility
Customers always need real-time order status. Customers get irritated when the shipment is lost or delayed or when there is no live status. Mainly for international orders, customers need to know the reason for late delivery or when they will get released from customs.
Also, the customer service team needs to track order status. The order status should remain the same for customer service agents and customers. A key part of the successful strategy for order fulfillment is to improve live visibility.
Reduce Overall Shipping Times
90% of customers reported that next-day delivery will increase their purchase chances. Therefore, it is known that you need to compete with major marketplaces like Amazon Prime delivery and quick commerce companies. They offer same-day or 1-day delivery services for their customers.
A significant part of an effective e-commerce fulfillment strategy is to reduce shipping time. Associating with a 3PL logistics company and locating the warehouses helps your shipping process.
Reviewing Warehouse Requirements
The right use of the warehouse is the key, as the team stays at the final point of contact between the product and customers. They remain responsible for picking up the products promptly, packaging them, and delivering the product through transport companies.
If you have different SKUs, it is essential to know where the stock is and ways to track it. There are several steps, and any delays result in your parcel arriving later, leaving a bad customer experience. Furthermore, it is a great idea to select warehouses that store your inventory in different locations. It helps to minimize shipping time. Moreover, selecting a warehouse that aligns with your order fulfillment system is important.
Use Data to Optimise Inventory Levels
You need to have the best amount of inventory to save money when there are issues of overstocking or understocking. Therefore, it improves the overall fulfillment of e-commerce orders. You offer your customers real-time stock updates with an integrated order and inventory management system.
You can offer real-time updates on the time to ship when you know where the stock is held. So, with the idea of where the stock is, you can offer your customers automated delivery times. It helps to instill confidence in customers and get items delivered at specific times.
Measure Your Performance and Improve It
You can fall behind and disappoint customers even with a perfect fulfillment system. A few of the essential data to keep track of are:
âž” Average time to ship
âž” % of on-time deliveries
âž” Return or refund rate
âž” Reasons for return
Order Accuracy Rates
It is important to maintain the best order fulfillment strategy and regularly monitor key performance indicators (KPIs).
Metrics involving return rates and shipping times recognize where improvements are needed. Therefore, this helps to make your e-commerce fulfillment efficient. Furthermore, if you work well in a specific area, use it as your key marketing tool by keeping customers informed that their deliveries will be on the next day for free.
Plan for Customer Returns
Reportedly, 62% of customers make purchases if they get free returns service. However, you are likely to have greater returns when you offer free returns. Plan this to improve the return process. The ideal way to improve the same involves:
âž” Establish a transparent return policy on the website
âž” Craft easy-to-understand return instructions
âž” Offer free shipping return labels
âž” Ensure that listings show correct details.
Make use of a good inspection process for immediate returns to warehouses. Also, more stocks have been returned on shelves for sale.
Work With the Best Shipping Companies
Shipping companies offer different shipping rates and speeds for last-mile deliveries. It is effortless to change the company you use. At the same time, the best shippers use the appropriate warehouse and order management system. Therefore, it offers you and the customer perfect order visibility.
The prominent logistics providers arrange pick-up times directly with warehouse teams. Therefore, it saves you the organization of delivery slots. Try to use an e-commerce fulfillment service or third-party provider that uses relevant warehouse and shipping company systems similar to yours. Every provider has different shipping processes and workflows that make integration essential. So this way, you can minimize any disruptions.
Final Thoughts
E-commerce fulfillment strategies are subject to change, mainly due to new trends and technology redefining the e-commerce space. So, a couple of years earlier, next-day delivery proves an expensive and exquisite option. However, it has now set new standards to meet customer expectations. All you need is to have updated systems and processes in place to optimize your fulfillment process. Therefore, this way, you have customers who rely on your brand and become your loyal shoppers, revisiting you at all times!
AAJ Supply Chain Management
