- Shipping vs. warehousing vs. fulfillment: What’s the difference?
- Common challenges in the order fulfillment process
- How fulfillment services can help your business grow
- Why fulfillment is vital for e-commerce success
- Four order fulfillment steps and tips to perform them successfully
- How to choose the right e-commerce order fulfillment partner
- Selecting the right e-commerce order fulfillment model for your business
- Fulfillment trends to watch
- Growing your business
E-commerce continues to grow worldwide, and it’s predicted to increase by $1 trillion USD by 2025. If your online demand is growing fast and you’re packing and shipping your own orders, you may have noticed a few issues start to slip through the cracks. Keeping up with in-house inventory management, shipment tracking, reverse logistics, filling out customs documents for international orders and maintaining customer satisfaction with fast deliveries can drain a lot of your time and resources. It might be time for you to consider outsourcing these tasks to a fulfillment partner to free up some capacity, allowing you to focus on growth instead.
However, that’s easier said than done. When choosing the right order fulfillment services for your business, you’ll want to look for a partner that can:
- Offer guidance on kitting and assembly, packaging and return or exchange order handling.
- Handle your current, and future fulfillment needs as your business grows.
- Provide reliable and accurate order fulfilment.
- Integrate with most e-commerce platforms and inventory management systems.
- Offer excellent, transparent customer service.
- Bring you to reverse logistics services.
- Extend your reach locally and across the border.
- Offer e-commerce integration technology from your website.
Shipping vs. warehousing vs. fulfillment: What’s the difference?
Choosing the right fulfillment partner starts with getting crystal clear on all the stops along the way: shipping, warehousing and fulfillment. We’ll break down each stage of the journey to help you decide which services to seek out when shopping for a fulfilment partner.
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Common challenges in the order fulfillment process
E-commerce order fulfillment has many benefits, but it comes with its own set of challenges, too. These roadblocks can result in delays, so working with a fulfillment partner that can identify what they are and suggest solutions to overcome them will be essential. If you’re looking to ship freight, you’ll find a detailed list of freight challenges and how to solve them.
- Improperly filled orders and incorrect inventory: These issues can result in delays or redeliveries, costing extra time and resources. If this becomes a frequent issue, it may be a good idea to check if the root of the problem is caused by an error on your website or application.
- Seasonal peaks: It’s no surprise that customer orders rise during the peak seasons. While more orders are good for business, they can strain your team’s capacity. This is where a fulfillment partner can step in and share the load.
- Customer service difficulties: It can be a struggle to provide quality customer service and retain customers if you’re running a smaller e-commerce operation. Some fulfillment partners offer customer service support by taking care of delivery questions and concerns.
- Transportation: To reach your customer, the shipping journey can get complex if you’re shipping across great distances at high speeds. By partnering with a fulfillment partner with a variety of transportation options, you can expand your customer reach.
- Weather conditions: Sometimes nature can cause delays, and when these unforeseen events happen, your customers often have no choice but to wait—and a waiting customer is often an unsatisfied one. A strong fulfillment partner can help you bypass these incidents by offering alternative solutions that are unaffected by the current weather. For example, they can send your shipment by air if the roads are blocked by snow.
- Time management: You have enough on your plate when you’re busy running and growing a business. When the bulk of your time is spent fulfilling orders, you risk burnout, mistakes and unhappy customers down the line. A fulfillment partner can keep operations moving, while you can focus on what you do best.
- Managing international orders: While the benefits of expanded reach are clear, cross-border shipping is its own challenge compared to local deliveries. With customs forms and documents to fill out, and customs brokerage to consider, getting your shipment across the border is a lot more time consuming and resource intensive. A good fulfilment partner can support you with all that, and get your shipment across the border with ease.
Streamline your logistics operation. Check out our comprehensive e-commerce logistic checklist for an optimized order fulfilment process.
How fulfillment services can help your business grow
When you work with the right fulfillment partner, your business can benefit from better inventory management and reporting. This will help you streamline forecasting and planning and allow you to focus on growth while your fulfillment partner manages orders.
Additionally, you can expect them to:
- Handle your shipments, both locally and internationally.
- Adjust their offerings to scale with your business.
- Help you meet sustainability goals through green logistics solutions.
- Keep customers happy with deliveries that consistently arrive on time with order status updates and end-to-end order status visibility.
- Help you to streamline the order fulfillment process.
Why fulfillment is vital for e-commerce success
The benefits of outsourcing order fulfillment services are helpful for most companies as they can boost conversion rates and improve customer service. Any e-commerce organization can expect the following benefits when working with a fulfillment provider:
- Save on space
A growing business always needs more space. Instead of cluttering up your workplace with customer orders, you’ll be able to store orders at your partner’s fulfilment centre instead. With more space in your office, you can use the extra room for more work desks (if you’re hiring), equipment or whatever else that can power your business’ growth. Even if you don’t use the extra space, having a tidier workplace can help your team focus and boost productivity.
Find out how Legrand optimized their warehouse operations and simplified distribution.
- E-commerce integration
In most cases, a logistics e-commerce fulfilment partner will be able to integrate your e-commerce order fulfillment processes with their own technology. This can potentially enable a solution like automatically notifying your fulfillment partner whenever a customer makes an online purchase so they can pick up, store and ship an order immediately. This frees up your time, while also creating a more efficient fulfillment experience for your customers.
- Cost savings
Fulfilling orders in-house can be expensive, especially if you’re sending products across long distances or internationally. To make up for the cost, you can either charge your customers for shipping or work with a fulfilment provider who can secure better shipping rates. Because fulfillment centres ship so frequently, they are often able to negotiate more cost-effective rates with carriers. This leads to discounted shipping rates when compared to shipping products on your own.
- Enhance loyalty with a comprehensive fulfillment strategy. When you’re completely focused on improving your products and services, you can let your fulfilment partner focus on what they do best—getting your products to your customers on time. By working together, you’ll be able to create a comprehensive fulfillment strategy for a seamless customer experience. That means service that’s consistent with your brand values. Of course, there will be times when customers need to return their orders. That’s why it’s also crucial to work with a partner who has an excellent returns management process. After all, a hassle-free returns process adds to the overall customer experience and can lead to increased retention and loyalty.
Four order fulfillment steps and tips to perform them successfully
- Receiving orders and inventory managementYour fulfilment partner starts by managing order requests and receiving orders directly from your customers. This step also involves storing and accepting incoming inventory at their fulfillment centre.
Pro tip: Speed is key in this step, as well as a transparent and streamlined receiving process that keeps your business informed. With proper inventory forecasting and e-commerce technology integration, this step can be executed with speed and efficiency.
- Picking and processingThis is when an order is picked off the storage shelf by a picking team and prepared for shipment. The package is inspected for damages, boxed and moved to a shipping station. A fulfillment partner is likely to implement an order picking strategy. This is a list of steps that the picking team has to fulfill before a package is approved for shipment.
Pro tip: A good order picking strategy aims for consistency, ensuring customers receive the right order and that it’s safely packaged. Double-checking packages for damage and ensuring that the right order is being sent to the right recipient are the most important parts of this stage.
- Shipping and delivery: This is the last step of e-commerce fulfilment, which is the process of getting your product in your customer’s hands. While this step sounds simple to complete, getting it done well is harder than it seems. Going above and beyond can lead to good reviews, a positive experience, loyalty and retention.
Pro tip: Transparency, visibility and speed are all examples of what above and beyond means. The right fulfillment partner will keep you and your customers informed of the shipment’s progress from start to finish with frequent communication and tracking capabilities. And with route optimization and customizable delivery solutions, they’ll deliver to your customer on time and in their preferred way of receiving it.
- Reverse logistics, customer service and feedbackThe final step of the process comes after the order has been fulfilled. Once your customer has received their order, they’ll have a chance to let you know what they liked about your service, what they didn’t like and if they want to make a return.
Pro tip: A fulfillment partner with robust reverse logistics solutions and a circular supply chain can help you make the most of returned orders. Additionally, they may be able to handle customer service and feedback about the delivery process as well. A positive e-commerce returns experience and friendly customer service can help retain customers and secure their loyalty to your brand.
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How to choose the right e-commerce order fulfilment partner
Now that you know why your e-commerce business needs an order fulfillment partner, it’s time for you to start looking. Begin by asking yourself the following questions about each potential partner you come across.
- Do they have experience in your industry?
A fulfillment partner that has customers in your industry will know the specific packaging and delivery requirements your products need.
- How big is their network?
Choose a partner with a vast network, so you can reach customers in almost any part of the country.
- Do they offer customs brokerage for international shipments?
Shipping across borders can be complex, so choose a fulfillment partner that knows how to get your products to international destinations with ease.
- Do they have personalized shipping solutions?
If your fulfillment partner has the technology to customize your e-commerce delivery, your customers can experience a seamless and more personalized delivery.
- What is their fulfillment process like?
Each order fulfillment provider has different processes and procedures. For example, some providers require a schedule of products en route to their fulfillment centre, and others need products to be labelled beforehand. Make sure that the provider you choose has a process that suits your business operations.
- Does their pricing structure align with your growth plans?
Depending on your goals, you’ll want a fulfillment partner with pricing plans and fees match your plans for growth.
- Can they solve your immediate pain points?
Whether you’re having issues getting orders to customers on time, storage problems or returns management challenges, your ideal fulfillment partner should be able to solve any obvious issues you’re having.
- Can they provide multiple, flexible shipping solutions?
Customer demands are constantly changing, and your e-commerce business needs to have the flexibility to adapt. The right fulfilment partner will be able support these changes with multiple shipping solutions to solve a variety of new situations.
- Do they have the expertise and resources?
It’s essential that your fulfillment partner has the expertise and resources to power your growth. Do they have the expertise to help your business overcome challenges? Are they up to date with the latest industry trends? Do they have the resources, technology, tools and personnel to support your success? These are all questions you should ask before making a final decision.
Selecting the right e-commerce order fulfillment model for your business
Depending on the order fulfillment partner you choose, shipping and fulfilment may be handled in-house or by a third party. It’s important that you know the differences between the two, so you know which option is the right one for your business.
- In-house fulfillment:
This is when your customer orders are managed, stored, packed and delivered by your fulfillment partner. This means they handle every phase of the process. The benefit of this is that you can trust your fulfillment partner to handle and deliver your products reliably and accordance with their contract.
- Third-party fulfillment:
This is when your fulfillment partner outsources a part of the process. For example, they might outsource storage or the last mile of delivery. This is referred to as third party or 3PL order fulfilment. This usually leads to more cost savings, as your partner is only charging you for a portion of the fulfillment process. A potential drawback is that the third party might not understand a key aspect of your brand or product.
Order Fulfillment trends to watch
Shipping and fulfilment are constantly evolving, and it’s important that the fulfilment partner you choose stays on top of the latest logistics supply chain industry trends. After all, a partner who is up to date may be able to provide you with the latest offerings down the line.
Growing your business
By working with a fulfillment partner that offers a range of flexible shipping options, storage, returns and excellent customer service, you can save time and focus on growing your business. You’ll be able to minimize fulfillment challenges and free up a large proportion of your time to focus on scaling your business.