What is e-commerce fulfillment?
Storing, packing, and shipping, as well as dealing with returns and exchanges, are all parts of the fulfillment process. Some companies handle fulfillment internally, while others use a service like Fulfillment by Amazon or a mix of internal and external fulfillment options.
What are the benefits of fulfillment?
Your company might get a competitive edge by using the correct e-commerce fulfillment provider.
An online fulfillment service can:
- Control client orders
- Deliver packages on time.
- Obtain the most recent product information
- Wish to draw Amazon Prime subscribers
Ecommerce fulfillment that is efficient and dependable builds client confidence and satisfaction. What happens if clients aren’t satisfied with the product delivery or if something is broken in transit? These kinds of fulfillment issues might be detrimental to your online store.
A sale can be made or lost based on how quickly buyers receive their purchases. Free delivery is the most crucial consideration for 83% of American consumers when doing an online buy.
Due to delivery fees, more than half (54%) of online shoppers have abandoned their carts.
Four types of e-commerce fulfillment models
Ecommerce brand owners frequently face a decision point as their business expands: Should you scale up internal operations to find a means to store, handle, and distribute additional inventory, or should you hire a fulfillment service?
Here are three possible answers:
- In-house fulfillment
Smaller firms frequently employ the strategy of storing and sending orders from their place of business. This choice can reduce the range and volume of goods you can stock and sell, and it might raise overhead costs.
Consider using in-house fulfillment if you:
- Sell a small number of items.
- maintain a working logistical network
- Sell goods that require challenging packaging and shipping procedures
As orders grow, it becomes increasingly crucial to store, pack, and transport products swiftly and efficiently to the customer’s door. You can expand to a more giant warehouse or storage space or hire a third party to handle a portion of your product fulfillment.
- Third-party fulfillment
A large number of e-commerce service providers provide fulfillment services, which include warehousing, packing, shipping, and return management. For eCommerce companies just like yours, FBA offers all these options. For the benefit of small and medium-sized enterprises in 2019 and 2020, Amazon invested more than $30 billion in logistics, equipment, services, initiatives, and personnel.
- Multi-channel fulfillment
The process of organizing and completing orders across numerous channels, including your website, Amazon stores, social media, and other places where customers can buy things, is known as multi-channel fulfillment.
Each channel doesn’t require an exclusive fulfillment method. You can vary your e-commerce marketing and sales channels while keeping your order fulfillment process under control by utilizing a multi-channel fulfillment solution.
- Fulfillment by Amazon
Customers who shop online anticipate dependable delivery and quick shipment times. To match customer expectations, many online retailers use Fulfillment by Amazon (FBA) to offer Amazon Prime shipping.
FBA is the right option If any of the following apply to you and your company:
- Are you trying to find a strategy to scale your business while saving time?
- Need a complete answer for refunds, shipping, and inventory management
- Wishing to attract Amazon Prime subscribers
You can ship inventory to an Amazon warehouse at a reasonable price via FBA. When a consumer places an order, Amazon ships the requested item. You can benefit from Amazon’s infrastructure, distribution network, first-rate shipping service, return policy, and customer support system.
FBA facilitates fulfillment over several channels. This implies that you can process and send orders after selling goods on your own website using Amazon fulfillment centers.
How does the fulfillment process work?
From the moment a consumer clicks the “purchase” button until they open the package, every stage in your fulfillment process offers a chance to optimize. An unpleasant customer experience might be caused by brief delays or trivial mistakes.
Let’s examine closely at each stage of the fulfillment process to prevent typical issues.
Step one: Receiving inventory
Getting goods to a distribution point is the first step. Receiving inventory is the term used to describe this phase of the fulfillment process. Your place of business, a warehouse, a fulfillment facility, or storage space can be where you receive goods.
Use the proper shipping materials and clearly labeled packaging when working with a third-party service. By doing this, the inventory-receiving process will go more quickly, and the product will be prepared for shipment to customers.
Step 2: Storing the inventory
Orders are kept in inventory storage, which is where they are kept. If you decide on in-house fulfillment, this could be a convenient spot like a spare room or the garage at your house. Companies with a large number of goods may need warehousing.
To satisfy client demand, you must have enough inventory, especially during seasonal holidays or major e-commerce sales occasions like Cyber Monday or Prime Day.
To assist you to manage inventory, each product needs to have a stock-keeping unit (SKU) identification code that identifies it and places it in a specific storage location.
Step 3: Processing the order
Order processing gets started as soon as a customer completes a transaction. The selection of the items, packing, and shipping preparations are all part of this process.
Choosing the appropriate packaging is an important step in processing orders. This might be:
- bubble mailers or paper mailers
- packaging supplies like bubble wrap or air pillows
Step four: Order shipping
The next stage in the order fulfillment process, if you don’t employ a service like FBA, is shipping orders via a significant carrier like FedEx, UPS, or the U.S. Postal Service. Shipping for minor orders can only require a brief trip to your neighborhood UPS or postal office. You could want to arrange for a carrier to pick up larger orders in front of a fulfillment location, such as your company’s offices or storage space, for fulfillment.
Step 5: Informing the client
It’s crucial to incorporate a customer relationship management solution to provide customers with a tracking number and notify them when orders have arrived, even though it’s not precisely a part of the e-commerce fulfillment process. Utilizing email and shipment tracking decreases inquiries from clients inquiring about the status of their orders to your customer service department.
Step six: Processing returns
Returns are a typical aspect of business and should be anticipated. You will need a procedure for handling returns, restocking or discarding defective products, and providing refunds to customers whether you utilize in-house fulfillment or a third-party fulfillment provider.
Seventy-five percent of all returns in the online retail industry are for clothing items. Don’t be deterred by the returns procedure. It’s crucial to keep high-return product categories in mind if you’re new to e-commerce and to have a procedure in place for managing returns. Amazon handles returns on your behalf when you use FBA.