For ecommerce retailers, "what is order fulfillment" and how to handle it is one of the most critical tasks. It involves ordering, receiving inventory, processing and assembling orders, and shipping packages to customers.
As order fulfillment entails various moving parts, businesses need to choose the right approach to manage inventory, orders, and sales effectively.
Dive into this post for an in-depth exploration of order fulfillment, helping businesses of all sizes select the best strategy to boost their bottom line.
Self-Fulfillment vs. Outsourced Order Fulfillment Services
Most companies use one of two types of ecommerce order fulfillment: self or outsourced.
Self-fulfillment, or in-house fulfillment, refers to the process of the seller or their employees packing and shipping the items to customers.
New or small businesses often use this approach because it’s cost-effective, and the number of orders they receive is insufficient for outsourcing.
Outsourced order fulfillment involves a third party facilitating shipping, inventory management, and even refund processing.
Depending on their products and order volume, some companies use both fulfillment approaches.
How to Choose an Order Fulfillment Strategy Depending on Your Type of Business
In the robust ecommerce landscape, many types of businesses exist. Let’s break down the best strategy for every business model below.
Solopreneurs
A solopreneur is an individual who sets up and runs a business on their own, hence the term "solo." This person likely handles every facet of their business, order fulfillment being one of them.
Startups
Whether your business is in the startup phase or just dipping your toe into ecommerce retail, order fulfillment is likely still manageable for companies in the startup phase. As you get your business up and running, it saves money and is one of many tasks you can accomplish each day.
Niche Businesses
Depending on your niche and what you’re selling, it may be easier and more cost-effective to do in-house fulfillment via an employee or yourself. It depends on the product and the volume you sell each week.
However, some niche markets can be very high-volume, and if yours is, outsourcing can save you a lot of time and effort so you and your employees can focus on more critical business tasks.
Small to Medium-Sized Enterprises
For small to medium-sized enterprises, outsourcing order fulfillment offers many advantages for the company’s bottom line. The company will have access to the provider’s infrastructure, warehouse and storage, and expertise. Many enterprises at this level consider outsourcing the best option for every facet of their business.
As a company grows, outsourced order fulfillment allows flexible scaling without substantial pains. You won’t have to scramble to hire staff, find a more extensive warehouse, or rush to order more products. Everything is already on hand and ready to go, allowing your business to scale and shoot for the stars.
Large-Scale Operations
There’s no question that large-scale operations of any caliber can benefit from using outsourced order fulfillment for inventory, warehousing, order processing, packaging, shipping, returns, and more.
When partnering with trusted order fulfillment companies, large operations will have access to many necessary business solutions to grow and scale as efficiently as possible.
How to Choose Your Order Fulfillment Partner
If you’ve weighed the pros and cons and decided that outsourcing is the best approach for your business, here’s what you need to know when selecting an order fulfillment partner.
What Is Third-Party Logistics?
If you’ve researched outsourcing order fulfillment services, you have likely come across the term 3PL, also known as third-party logistics. This term refers to any part of managing fulfillment activities, including inventory storage, packaging, shipping, storage, shipping, and more.
3PL services help companies of all sizes save money and scale their operations without significant growth and scaling obstacles.
How to Select the Best 3PL Partner
Outsourcing to a 3PL partner can be a huge draw for bigger companies. A 3PL ally can add much to your bottom line, from logistics to inventory management, storage, and distribution.
Here’s what to consider as you select the best 3PL partner for your business.
Technology
Any 3PL provider you work with should be able to explain in detail their processes and the order fulfillment software, technology, and automation they use to keep things efficient. Ask questions about shipping, delivery, and logistics to gauge how up-to-date their processes are.
Check if your 3PL partner integrates with your ecommerce platform and other systems you use. It is crucial for seamless data sharing and order tracking.
For example, if you use Ecwid by Lightspeed as your ecommerce platform, you can connect your store to 3PL solutions like eFulfillment Service or dropshipping services like Wholesale2B, Alibaba, and others.
Reliability
You’ll likely want a partner and an ally, not just a service provider from the 3PL company you choose. Choose the company that aligns with your brand’s values, including communication, honesty, and reliability from the start.
Accessibility
Location coverage is critical in a 3PL provider if you’re shipping nationwide or internationally. Maintaining an extensive network across the country and the world will make shipping a breeze and save you money in the long run.
Scalability
You have lofty growth goals, so you’ll need a 3PL partner to scale alongside you. Look for a company that offers the services you need now, along with add-ons that can provide support as your needs change and your business grows.
You can ensure scalability support by finding a 3PL partner that is experiencing growth and is investing in its staff and infrastructure. This shows they can support your operational and logistic needs now and in the future.
Optimizing Your Online Order Fulfillment
Customers’ expectations are constantly shifting, and ecommerce retailers must keep up. Here’s how to optimize your online order fulfillment process to align with customer experience and satisfaction.
Prepare for High-Volume Periods in Advance
Historical data can help you understand the times or seasons when your order volume is higher so you can plan accordingly. It allows your logistics team to order the appropriate inventory stock ahead of time and have it ready to ship from your warehouse.
During busy times, keeping precise inventory records to track product quantities effectively is especially important. Getting inventory management right helps you avoid selling more than you have and ensures you restock on time to prevent running out of stock.
If you use Ecwid by Lightspeed as your ecommerce platform, you don’t have to worry about overselling.
Specify stock quantities for each product in your Ecwid store; Ecwid will adjust it automatically upon purchase. When a product hits zero, it displays a "Sold Out" label and becomes unavailable unless you enable pre-orders. You can also opt for low-stock email alerts to prompt restocking.
Save Time and Money with Pre-Filled Shipping Labels
Shipping orders yourself can be greatly streamlined using pre-filled shipping labels. These labels not only save time and money by eliminating manual entry of customer details and addresses but also minimize human errors, resulting in quicker and more precise deliveries.
Some ecommerce platforms, such as Ecwid by Lightspeed, come pre-integrated with shipping providers, streamlining the process of purchasing shipping labels for you. With Ecwid, you can buy pre-filled discounted shipping labels in your Ecwid admin (selected countries and carriers) or with the help of apps from the Ecwid App Market.
Simplify Multichannel Selling
As an online retailer, it’s important to diversify your sales channels and reach more potential customers. However, fulfilling orders from different channels can quickly become overwhelming and time-consuming. This is where multichannel fulfillment comes in.
If you sell online with Ecwid by Lightspeed, you can consolidate your orders from various platforms, including your own website, Amazon, eBay, and more. It saves time by streamlining the process and allowing you to manage all orders from one place.
With Ecwid, you can connect your online store to Channable, Koongo, and other multichannel solutions to sync your products and orders with dozens of marketplaces and manage all orders in your Ecwid admin, no matter what platform they come from.
Learn more: Multichannel Selling Explained: Expanding to Big & Niche Marketplaces
Trends Shaping Automated Order Fulfillment
Now that all the main basics are covered let’s talk about trends shaping automated order fulfillment. With the rise of ecommerce, consumers have come to expect fast and efficient delivery options. This has led to an increase in demand for automated order fulfillment solutions.
Automated order fulfillment is an approach to the process using various software and hardware solutions for efficiency purposes. Companies can automate inventory tracking, packing, and shipping to streamline the process at every level.
Upcoming Technology in Fulfillment
Distribution centers and 3PL providers invest in automation and robotics to boost their processes, save money, and improve efficiency.
It includes automated picking and packing improvements, voice-activated fulfillment, mobile-powered carts to support warehouse employees with their tasks, and robotics for order fulfillment, particularly in large-scale warehouses.
Integration with Other Platforms
Companies should be taking steps to integrate their ecommerce platform with other systems to improve efficiency and scalability. It may include a specialized returns management platform, inventory management solutions, and fulfillment platforms that help streamline automation on every level.
Ecwid by Lightspeed integrates with dozens of shipping, 3PL, and other services essential to ecommerce operations. This way, companies can manage their entire logistics ecosystem from a centralized platform.
Moreover, you have the flexibility to seamlessly connect your Ecwid store with a platform of your preference through our tailored customization services.
Sustainability
As reducing carbon footprints becomes a global cause, warehouses have aligned their values with those of the world around them.
Many warehouses and distribution centers are adopting eco-friendly practices, including using solar power and energy-efficient lighting options, sustainable building materials, and innovative shipping materials that are easily recyclable and not harmful to the environment.
Learn more: How to Make Your Online Store More Sustainable
Sell Online with Ecwid for Simplified Order Fulfilment
In today’s fast-paced and ever-changing ecommerce landscape, choosing the right ecommerce platform for your business is a top priority. Managing inventory and orders is much easier when your ecommerce platform provides you with tools for better order fulfilment.
With features such as advanced inventory and order management, shipping integrations, and multichannel options, Ecwid offers a comprehensive solution for any online store looking to streamline its order fulfillment process.
So whether you’re a small business owner or a large enterprise, Ecwid can make your order management routine more efficient.
Sign up for Ecwid to create a new online store or migrate your existing store to Ecwid.
The post How to Choose an Order Fulfillment Strategy Depending on Your Type of Ecommerce Business first appeared on Ecwid | E-Commerce Shopping Cart.
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Anastasia Prokofieva, Khareem Sudlow
