Six Fundamental Steps of Order Fulfillment Process

In today’s digital age, ecommerce has become an integral part of the business landscape. The global e-commerce market was valued at USD 14.30 trillion in 2021 and will reach USD 58.74 trillion by 2028, at a CAGR of 26.55% during the forecast period (2022-2028). As e-commerce continues to boom, businesses must ensure that their order fulfillment process is efficient and effective.

With the rise of ecommerce, e-commerce fulfillment solutions have become more complex and challenging than ever before. In this blog, we will dive into the six basic steps of order fulfillment and the challenges businesses face in each of these steps. We will also discuss practical strategies businesses can implement to overcome these challenges and improve their order fulfillment process.

Step 1- Receipt of Inventory

The receipt of inventory in bulk is a crucial step for businesses of all sizes, with items typically stored in a warehouse. For larger shipments, boxes are often sent on shrink-wrapped pallets and slotted directly into warehouse shelves using specialized machinery such as pallet trucks or forklifts. While such equipment requires a significant investment, it allows warehouse staff to pick items from the same pallet for longer, improving efficiency.

Automation is a valuable strategy for small business management, enabling the streamlining of various processes such as inventory management, ordering, pick list generation, and returns management. While seemingly minor, automating such tasks can lead to significant efficiency gains, reducing the chance of human error and resulting in a more consistent, high-quality customer experience. As a result, this can turn the process of fulfilling orders from a necessary task into a resource for the business, saving time and money for the staff.

Step 2- Efficiently Managing Inventory in the Warehouse

As an ecommerce business, receiving inventory in bulk is just one step in the complex order fulfillment process. Once the goods are received, the challenge of storing them in the warehouse arises. However, making the right decisions regarding how to store the inventory can significantly impact your bottom line.

While sales operations focus on the sales process from end to end, revenue operations encompass the entire business. Revenue operations will look at the best e-commerce fulfillment process to increase profit margins. One way to achieve this is through strategically placing goods in the warehouse, which should be updated periodically to reflect sales data. By placing products that sell better during a particular season closer to the loading bay, workers can save time and energy, resulting in a more efficient and profitable process.

Step 3- Efficiently Pick the Order

Efficient order fulfillment is crucial to the success of any ecommerce business. Picking and packing orders ensure customers receive their products on time and in good condition. To optimize this process and maximize profits, ecommerce businesses need to streamline their order-to-cash operations.

Once an order is confirmed and the inventory is verified, a pick list is generated and sent to the warehouse. This list contains all the necessary information, including product names, SKU numbers, and exact locations in the warehouse. Automating this process can save valuable time and ensure accuracy, with all information coming from a single, reliable source. This is just one aspect of running an efficient and cost-effective revenue operation.

Step 4- Pack the delivery Accurately

When fulfilling orders, packing the items for shipment is the paramount. The packaging used will depend on the product being shipped and the desired customer experience. Regulations and shipping costs must also be considered, and a revenue operations team can help optimize the process to increase profit margins. For small packages, local shipping regulations can impact shipping costs, while you must choose haulers and trucking companies for more oversized pallets. To ensure cost efficiency, all orders must be packed and ready to ship at a specific time to meet the truck’s schedule. Streamlining this process can save time and money over time.

Step 5 – Now Comes the Shipping Process!

When it comes to ecommerce, shipping costs are a significant decision that impacts business. Will you pay for them or add them to the customer’s bill? Should you offer different shipping tiers so customers can get their products faster? It all depends on the kind of service you want to deliver and what you can afford. You could even offer free shipping to customers on orders above a certain total to keep your order fulfillment profitable and increase total sales.

Once your packages leave the warehouse, they’ll be sent to your courier’s warehouse. They’ll divide the packages based on their destinations and send them out for “last-mile” delivery there. Last-mile delivery is a complicated process involving navigating different buildings, dealing with packages for people who aren’t at home, and making all the deliveries without burning extra money. This is the reason why the global ecommerce fulfillment industry is worth over $77 billion.

At this stage, tracking is key to enhance customer service and support. By tracking your packages and asking for customers’ email addresses upon ordering customer service can be improved. Sending an email when the product arrives can make a positive impression, mainly if you include setup instructions and support channel information. You can increase customer satisfaction and loyalty by keeping track of your packages and improving customer service.

Step 6- Returns Management

Managing returns effectively is an essential aspect of customer service management. Even if your product is of high quality, returns are inevitable, but a well-managed return process can enhance your reputation. The recovery paradox highlights that customers often view companies more favorably if they handle issues effectively and provide a positive experience rather than if everything runs smoothly without any issues.

However, it’s important to note that an effective return policy can be costly, particularly when shipping products back to your e fulfillment warehouse. Therefore, it’s essential to minimize returns where possible. Technologies like augmented reality e-commerce provide customers with a realistic idea of the product before purchasing, which reduces the likelihood of returns, particularly for more expensive products like furniture. By reducing the number of returns, you can streamline your operations and optimize your order-to-cash process, ultimately contributing to your bottom line.

Wrapping Up

At every stage of the order fulfillment process, from receiving your goods to the courier handing over your product, there’s an opportunity to optimize your business or enhance your customer service. And if you’re looking for reliable and best ecommerce fulfillment solutions to help you with transportation and warehousing needs, look no further than AAJ Enterprises.

By leveraging the latest technology and data-driven insights, AAJ Enterprises streamlines your operations and maximizes efficiency. With their state-of-the-art warehousing facilities and experienced team, you can trust that your products are stored and shipped with the utmost care and attention to detail.