Ecommerce fulfillment includes all of the operations that get the product to the consumer. This entails proper inventory management, returns processing, integrating your website and your fulfillment center, and simply filling orders. These four processes are also the four main elements of successful e-commerce fulfillment. To ensure consumers get the product they need on time, a warehouse must solidify e-commerce fulfillment best practices in these areas.
What Areas are Considered Part of the Ecommerce Fulfillment Process?
Order fulfillment is a blanket term referring to all the processes that lead to fulfilling an order made by a customer. Order fulfillment begins the second an order is placed online until the product is in the hands of the customer. It’s the bread and butter of the warehouse operations and where all workflows point to successfully send packages to consumers.
Returns and Exchanges
Writing a proper return policy for your eCommerce business can be a huge part of remaining a successful, profitable business. As good as your product or service may be, refunds and exchanges happen. Without the proper handling of such things, you can end up with unhappy customers and lose customers to competitors. For example, the shoe company, Zappos, offers a 365-day return policy where customers can return unworn items in their original packaging for a full refund within a year of purchase. That has set them above and beyond any other competition.
Inventory Management and Receiving
Inventory management is what can make or break your warehouse operations. eCommerce fulfillment cannot happen without solid inventory management. This requires warehouse management systems, accurate inventory counts, organized shelving, etc.
Integrating the Fulfillment Center and E-Commerce Store
Your e-commerce store and the fulfillment center need to seamlessly talk to one another to ensure proper order fulfillment. Some systems can help build the link and integrate the two that will help maintain real-time data, up-to-date stock numbers, and ensure the timely fulfillment of orders.
Understanding the E-Commerce Fulfillment Workflow
- The purchasing team places an order for a product from the manufacturer or supplier.
- The products are shipped to your warehouse.
- The products reach the warehouse and receiving records all delivered items, ensuring everything is correct as ordered. They also check for damage or any missing items.
- The received items get stocked on the shelves and scanned into the system.
- The inventory management team ensures the new stock gets applied in the system as well as the e-commerce store, and items are set for sale at a competitive price.
- Customers place orders through the website and they come through the warehouse management system to be picked and packed.
- Orders are picked, packed, and shipped to the customer.
- The customer receives the complete order at their destination.
This is a simplified list of how the e-commerce fulfillment workflow works and how each area of the warehouse plays a part in getting the product through the warehouse and to the customer successfully. Meanwhile, all the prices, shipment tracking, inventory updates, etc. are being updated in time to ensure accurate information on the website and in the warehouse system.
The Qualities of a Successful Fulfillment Center
Whether your business is located in the same place as your fulfillment center or not, it should possess these critical factors to be the best fulfillment center for your needs.
A Convenient Location
First, you want a great location that works for your clientele, your shipping limits, and your manufacturer. A good location for fast shipping times may be somewhere in the Midwest so you can quickly and easily ship to either coast in no time.
Also, if your manufacturers or suppliers are located across the country from the fulfillment center, that may not be very sustainable. So location is key to maintaining high-quality fulfillment and inventory management.
A Guaranteed Turnaround Time
To really compete in today’s eCommerce world, a business needs to promise, or at least offer 2-day shipping for customers. Amazon Prime has made 2-day and even same-day shipping possible thanks to their multiple fulfillment center locations and ultra-fast turnaround time.
This is why the location of your fulfillment center and seamless inventory management procedures are crucial to be able to offer a fast turnaround time to your customers. Your goal should be to get your eCommerce fulfillment company as organized as possible to be able to offer a guaranteed shipping time.
Highly Rated Customer Support Team
Aside from your warehouse employees, the customer support team is critical to keeping the cogs turning during the order fulfillment process. They are the heart of eCommerce businesses and know everything inside and out. Without happy and returning customers, you will find it hard to remain profitable in your business.
Hiring a highly-rated, professional customer support team is key to this success. They help customers along every single touchpoint from the business side with product descriptions and information to shipping updates and issuing returns or refunds. Hire appropriately and focus on education and training to make sure your team exceeds customer expectations in every interaction.
The Right Warehouse Specs for Your Products
Depending on the products you sell and their shelf life will heavily impact the size and type of functionality your warehouse needs. There are certain layouts and shelving units that can work best for you whether you stock large products that need a ton of space or small products that require highly organized systems.
Third Party Logistics vs. Drop Shipping
Ecommerce fulfillment may also just be called order fulfillment or third party logistics because these workflows may be in-house or, more often than not, are outsourced to a 3PL or other fulfillment warehouse. It’s important to know the difference between 3PL fulfillment and drop shipping.
A 3PL will fulfill your online orders for you along with any other business distribution channels you outsource to them. 3PL companies can provide more complex offerings for supply chain logistics and can do more customized things for a business than drop shipping. They offer more full-service capabilities and will handle the entire process from receiving the item to required assembly to inventory management and shipping it out.
A drop shipper, on the other hand, will still fulfill your order but with fewer customizations and less control on your end. When an order is placed in the online store, it will be diverted to the manufacturer or supplier and they ship directly to the customer. This means you never actually purchase your inventory like with a 3PL warehouse. It will never touch your hands, it will just go through your middle-man or drop shipper. This can be a cheaper method but risky since you have no control over inventory management or supply chain operations.
The Benefits of Outsourcing Your E-Commerce Fulfillment
Part of running a successful eCommerce business is knowing how to streamline and delegate tasks appropriately. One of those tasks is often hiring a great eCommerce fulfillment or 3PL company to house your products and fulfill them to your customers on your behalf. This requires trust, diligence, and solid best practices. Outsourcing these operations can be one of the best things for your business to be successful and there are several benefits to outsourcing for you to consider.
Access to More and Better Technology
When you outsource your fulfillment, you gain access to all of the technologies and features that 3PL has. This could mean higher security, faster data and reporting, and real-time inventory updates.
Save on Operational Costs
Operating a fulfillment center can be a costly business expense. You pay for the lease, employees, technologies, insurance, machinery repairs, delivery trucks, packaging materials, etc. By hiring an outsourced team to handle those operations, you will pay a flat rate that includes the full package.
Save on Shipping Costs
When you ship orders out of a warehouse there is likely a fee attached to every outgoing shipment. However, you may be able to negotiate bulk shipping prices with your outsourced vendor based on how many shipments are sent out each day/week/month.
Improve Customer Service
Finding a 3PL or other eCommerce fulfillment company that includes 24/7 customer support can be a game-changer for your business. With 24/7 response time for emails, chat, or phone calls can streamline returns, exchanges, and other customer issues. Happy customers mean repeat customers—which is the main goal.
Focus on Other Aspects of the Business
With fulfillment happening outside of your day-to-day business operations, your departments can put more effort and focus on other business operations. You can hone in on sales channels, marketing strategy, and other aspects of the business that can boost sales and secure your relationship with your 3PL.
Decrease Shipping Times
Many fulfillment centers may have multiple locations that can expand your reach thus decreasing shipping times. As 2-day shipping continues to become the industry standard, it’s more important than ever to have the capabilities to ship quickly and accurately.
Between streamlined eCommerce fulfillment, outsourcing to 3PLs, and using the right tools, you should find yourself with a recipe for a successful eCommerce business in 2021. Inventory management is an integral part of your e-fulfillment services and if you are looking for the right tools for the job, look no further than TopShelf. Scout offers a FREE demo of this fully comprehensive software to integrate into your fulfillment service. check it out here!