You already know what e-commerce order fulfillment stands for — storing inventory, picking the right products, packing them, and shipping the orders to customers.
E-commerce order fulfillment can be done in-house by the e-commerce company itself or as an outsourced process by a third-party service provider (3PL for short) – that's what companies like us do.
The fulfillment process begins when the customer completes the purchase. After that, the fun stuff begins.
You might even argue that this is the make or break moment for your e-commerce business. The way you manage the process after purchase affects the customer relationships, the company's profitability, and, realistically, the future of the business.
The e-commerce fulfillment process has at least these crucial steps and considerations:
- Before you can ship anything, you need to have inventory.
- You need storage to store the inventory. Each product or SKU has to have a dedicated place on your shelf, pallet, or equivalent.
- When an order is placed, order processing begins. That includes picking the product, packing it ready for shipping, using the right packing materials, applying custom packaging if needed, and labeling the product correctly for shipping.
- The next step is to get the product shipped. If an e-commerce merchant does fulfillment by themselves, this involves running to the nearest post office or having someone to pick up the orders. If a 3PL partner does the fulfillment, the partner will use the logistics service providers the customer wants to use in their portfolio.
- Once the order has been shipped, you need a tracking code you can share with the customer.
- Finally, you need to have a solid and cost-effective process to handle the returns.
Those steps are all very familiar to anyone who has ever worked with anything related to e-commerce before. But what’s lesser known is that you can easily make e-commerce order fulfillment your e-commerce store's competitive advantage.
5 ways to make e-commerce order fulfillment your competitive advantage
If you want to make order fulfillment what sets you apart, there are a few things you need to consider. The order fulfillment process has many steps where process optimization can bring significant cost savings and efficiency. Let's walk through the most common scenarios.
Pick Process: accuracy and speed
Removing all the unnecessary actions from the picking process is essential. The process should always be optimized for accuracy and speed.
Speed should not override accuracy, though. If you are doing fulfillment yourself, it may be worthwhile to invest in scannable barcodes and CRM software capable of tracking order accuracy. You might also want to implement a checking process and designate some resources to check and verify picking accuracy. Consider smart slotting and sales velocity. Organize items so that the picker can pick efficiently and not spend time wandering around the storage space.
If you outsource fulfillment, your 3PL partner should have a streamlined and accurate professional picking process, which is continuously optimized.
TIP: OGOship uses automated warehouses in some locations. Automated warehouses are super fast and accurate. It may be a perfect solution if your packaging does not require a lot of customization.
The most crucial part of packaging is protection. You simply can't afford to send items to your customers with the risk of your product getting damaged on the way. Be sure to add an extra layer of protection to the fragile items. In this case, more is less – damage, that is.
TIP: A professional 3PL partner can help you to find the optimal packaging solution for your needs.
Efficiency: shipping cost per order
Parcel shipping costs are continually rising due to the growth of the e-commerce sector. E-commerce businesses must pay close attention to shipping costs. If you’re organising shipping yourself, spare some time for negotiating with various carriers and keep an eye on the best rates to keep the shipping costs low. If you use a professional 3PL partner, the partner does this for you.
TIP: OGOship has partnerships with the most trusted carriers in every area it operates. Our pre-negotiated volume-based agreements benefit all our customers. This means we can offer competitive pricing for even those customers whose shipping volume is lower.
Shipping time: location, location, location
Customers are looking for fast shipping. Research shows that 41% of online consumers think fast delivery is very important; another 40% think it's rather important. So how can you maximize shipping speed while still keeping the costs in scope?
The solution is to store the goods close to the end customer. In most cases, it doesn't make any sense to keep moving individual parcels around through airfreight. It is way more expensive and has higher C02 emissions compared to the road, for example. But, airfreight is the only transportation model that can ship items fast from a long distance.
Our solution is to distribute the inventory to multiple locations and keep the distance between the stock and end customer as short as possible. This gives you the advantage in both shipping time, price, and C02 emissions.
In practice, this means multi-warehousing: store the goods close to the end customer to shorten shipping miles and save shipping time. But have no fear — multi-warehousing doesn't need to mix up your other processes or cause management headaches: at OGOship you can connect as many OGOship warehouses as you like to your online shop through myOGO Order Management System. Multi-warehousing is available for all OGOships customers.
TIP: OGOship has an extensive warehouse network that allows you to store your goods close to your customers. This means shorter shipping miles, faster shipments, and less burden for the environment. You can store your products in multiple warehouses at the same time.
Reverse logistics: fast return processing
Roughly around 30 percent of products ordered online are returned. Consumers expect returns to be efficient and comfortable. A cost-effective and efficient logistics process is vital for any e-commerce. Again, it's all about the location. Having a warehouse near the end customer helps you minimize transportation costs and enable faster return processing. The end result? Products get back to stock more quickly (and cheaper too).
TIP: OGOship's ideology is: the shorter the route, the quicker the delivery. The same goes for reverse logistics too.