As your business grows, you may find that you need to expand your services. Your customers expect a lot out of you, and you probably do too. To meet everyone’s expectations, you need to have high standards for customer service.
For many eCommerce shops, what customers expect most is fast shipping and products that align with what they ordered. When you need fast, accurate shipping for your orders, you might need to find expert help for order fulfillment. But did you know that this doesn’t have to be handled in-house?
You can use eCommerce fulfillment services to improve customer service, order accuracy, and business efficiency.
What Is eCommerce Fulfillment Services?
eCommerce fulfillment services typically include a process that begins when an order is placed on your eCommerce storefront by your customer and ends when the order has been successfully delivered to that customer. A lot of companies attempt to handle these tasks in-house, and that can work at first.
When an eCommerce store is just starting out, handling your own order fulfillment can be easy and even fun! But as your business grows, these tasks can become too tedious and take up too much time for most eCommerce stores. When order fulfillment pulls employees from other important tasks or your company is bringing in orders faster than you can send them out, it may be time to consider finding a partner for eCommerce fulfillment services.
When following the eCommerce order fulfillment process successfully, your customers will be happy and come back for more. However, to get to that point, you need to fill orders quickly and efficiently to fulfill customer expectations. The order fulfillment process can be a complex one, but meeting all the steps will keep your customers – and your employees – happier.
eCommerce Fulfillment Process Steps
The eCommerce fulfillment process can be boiled down to three main categories: receiving, processing, and shipping. Each step falls into these categories and each requires certain skills and tools.
Receiving
Within the “receiving” category, you first need to send the inventory to the warehouse or fulfillment center. The warehouse will receive the items, input them into the warehouse management system (WMS), and store them in the location designated for your business.
This is a critical step for successful order fulfillment, because without an accurate record of what inventory is on hand or organizing that inventory in an efficient way, then the rest of the process can fall apart. If you choose to continue to handle order fulfillment in-house, you will still need to organize and store your inventory and keep accurate track of what’s in stock.
Processing
The processing phase starts once an order is placed. In order for this to run efficiently, you need to make sure your eCommerce platform and the warehouse management system are integrated. This will allow an order slip to be created as soon as an order is placed, making sure that orders can be filled quickly.
Typically, processing begins with an automated check of the address, inventory, and other important factors, so issues can be identified early on. Then, the more manual process begins. An order fulfillment worker will take the packing slip and gather all the items in the order. They will securely package them into the correct-sized box or envelope in order for safe shipping.
If this step isn’t done correctly, then customers might receive the wrong items, damaged items, or no items at all (if their order is somehow missed).
Shipping
After the order has been processed and packaged, it’s time for shipping. Depending on what options your company offers – or your fulfillment center offers – your customers may have access to different carriers or shipping speeds. You will need to make sure to select the correct carrier (USPS, FedEx, UPS, DHL, or others) and the right speed (two day, priority, standard, etc.). Then the label can be affixed to the package and it’s ready for the carrier!
If you handle fulfillment in-house, you will either need to organize a pick up or drop off the package with the carrier. If you use a fulfillment center, most have designated areas for packages for each carrier. Shipping doesn’t end here, though. Your customer is notified of their tracking number and can track their package as it makes its way to them.
Once it’s delivered, if your customer is happy with their order, the process is complete! (If they are unhappy and need to return something, then the returns management process should be triggered – and this can often also be handled by a fulfillment center.)
How eCommerce Fulfillment Services Help With the Process
When you use an eCommerce fulfillment specialist for their services, you can be confident that each of the steps involved in receiving inventory, processing orders, and ensuring successful delivery will be completed effectively and efficiently.
You won’t have to stress over the time or money you have to invest in order fulfillment, especially as your eCommerce business continues to grow.
What Does an eCommerce Fulfillment Specialist do?
An eCommerce fulfillment specialist can fulfill many roles for your organization. They can take some of the pressure off of your customer service teams by handling inquiries about order status or returns. They can save space and money on warehouse space, by taking care of storing your inventory for you.
All of these tasks have to be handled by someone, so having a partner who knows exactly how to do these can make the process easier.
Tasks Fulfillment Specialists Take On
Warehousing
eCommerce fulfillment specialists are able to efficiently set up a warehouse. They have the skills and tools needed to ensure that every step is taken for maximum space usage and safe warehousing (for both the inventory and the people working there).
Warehousing requires space, equipment (including pallet racks, forklifts, shelves or bins, packing space or table, shipping space, etc.), and specific technologies.
Managing Inventory
Keeping an accurate account of your inventory is important for any business. Specialists can help you make sure that there aren’t misplaced items, stock level errors, or incorrect intake of inventory.
This will allow you to know exactly what you have in stock – so you know when it’s time to send some of the most popular items to the warehouse so they can be ready for when orders come in.
Storage
Depending on what you sell, you may need to have specific storage conditions. This can apply to more than just perishable food items! If you sell antiques, wood items, or other things made of materials susceptible to the elements, making sure that your storage facility can protect them will be important.
Fulfillment specialists have access to temperature or climate-controlled facilities so all of your goods are stored in the right conditions. They can eleven help you ensure that federal guidelines and regulations are met during the storage of your inventory.
Fulfillment
Even though it’s in their name, order fulfillment is just one of the many tasks that a fulfillment specialist can take on. Fulfillment warehouse workers can make sure that products are picked and packed accurately so they can be quickly and safely shipped to your customer.
As far as your customer is concerned, this is the only thing that matters. So making sure that this task is handled in the right way means that your customer is happy. During seasonal or holiday rushes, promotions, or other busy times, having an effective partner in order fulfillment can make or break your business and the happiness of your customers.
Logistics
Whether you handle order fulfillment in-house or you outsource, there are a lot of different elements to the logistics. Unfortunately, it can be time-consuming and complex to make sure your products are getting from one place to the next. Negotiating costs with shipping carriers, at a time when costs across the board are rising, can add unneeded stress.
Making sure your inventory level is accurately reflected in your store can get challenging, especially when orders are coming in faster than you can fill them. With all of these logistical challenges that eCommerce stores are facing, a fulfillment specialist has the skills and connections needed to make it simple.
They can help your company with better insights into tracking, lower costs on shipping, accurate inventory with a connection between your store and the WMS, customs and other paperwork, and more.
What Is the Fulfillment Cost in eCommerce?
So how much does all of this cost? When you’re looking at all that a fulfillment specialist and warehouse can do for you, you may wonder about the cost for your business. Well, in eCommerce, fulfillment is a big chunk of the game so there is a cost associated with it. However, that cost can actually help your business in the long run.
Some of the costs that you are already familiar with for your eCommerce store include the website and eCommerce platform, marketing or advertising, bookkeeping, inventory, storage space, and shipping. You may have had to hire someone to help you with inventory, production, shipping, or customer service.
Now, as you grow, you will either have to expand with more in-house staff to help with customer service and order fulfillment, as well as add more storage space, or you can outsource the process to a fulfillment partner.
Different fulfillment models can impact the cost, but for most businesses, there comes a time when outsourcing just makes sense. You might even save money when you factor in the cost of space, utilities, technology, etc.
eCommerce Fulfillment Model Can Impact Cost
There are three primary order fulfillment models, and the one your business uses will need to depend on your needs. When you are deciding between the options, these things should be considered:
- The type(s) of products you sell.
- The average volume of orders per month.
- Current inventory management.
In-House Order Fulfillment
Also known as self-fulfillment, this is when you handle all of your order fulfillment and warehousing yourself with your team. This is common for businesses that are just starting out and for smaller businesses with low order volumes.
Many times, in-house fulfillment is done at home or in your garage when you are a small eCommerce business without a physical store. This can be time-consuming and challenging, taking up more time as you grow and get even more orders. But it is lower cost and can be done by just about any business, which is appealing for many newer businesses.
It can be complex, requiring both spaces for inventory storage and order fulfillment software, which are added costs for businesses as they grow.
Third-Party Fulfillment Services
Once your eCommerce company has grown too much for in-house order fulfillment (you will know it’s time when you struggle to keep up with the orders that are coming in), the next step is often outsourcing to a third party.
Third-party providers (also known as 3PL logistics providers or 3PLs) can help with everything from storage in a network of warehouses to packing and shipping orders as they come into handling returns when a customer is dissatisfied with their order. This often helps businesses speed up the order fulfillment process while still being able to focus on growing their business or creating new products.
These are the order fulfillment specialists we talked about earlier who can help with a range of logistics-related tasks.
Dropshipping
The third fulfillment model can only happen when you do not manufacture or store your products. Your products sold to your customers are shipped directly by the manufacturer once an order is placed online.
This means you and the customer are both more reliant on the dropshipper, leaving you to just become a seller of the product in this case. Dropshipping can often reduce overhead costs, but limits customization and quality control.
Is Shopify a Fulfillment Service?
Well… yes and no. Shopify is not in itself a fulfillment service, but they do have a part of their business that does order fulfillment. Is that the right fit for your Shopify store? When you created your Shopify store, you were asked to select your fulfillment model.
Shopify's own Shopify Fulfillment Network was probably listed as an option, and it might be a good solution for some businesses but not for others. There are other ways you can fulfill Shopify orders for your customers.
Automatic Order Fulfillment
One option you will see when setting up your Shopify storefront. This is only for certain types of orders. But if you can select automatic order fulfillment, you won’t have to sit at your computer processing orders every day or so.
It only works if you sell something digital (recipes, digital artwork, patterns for sewing, or cross-stitching). If you sell something that needs to be packed and shipped, automatic order fulfillment won’t work for you.
Manual Order Fulfillment
The most common type of order fulfillment process Shopify users select. It is the best method for businesses that have something physical to sell. With manual order fulfillment, you will be able to prepare and ship the orders yourself. You can input the tracking information so your customer is notified when it ships.
If your company makes custom orders, kits, or subscription boxes, or might have a preorder sale at some point, manual order fulfillment is one of the best ways to go.
And finally, the last option for Shopify fulfillment is by partnering with a third party. This may seem similar to using the Shopify Fulfillment Network, but with this option, you can choose which third-party logistics provider you want to use. In using this method, you can use experts who have the fulfillment infrastructure in place for quick and effective order fulfillment.
You will be able to take advantage of not only their expertise but also their warehouse space, labor, technology, and equipment so you can save space, time, and money of your own. For many eCommerce stores, this makes the most sense once they have reached a certain order volume.
How Shopify Order Fulfillment Works
When you are using Shopify for your eCommerce platform, the order fulfillment process is triggered when an order is placed. Once that happens, the process that actually will be followed depends on which of the above methods you selected for your store.
When you visit the orders page on the Shopify admin backend, the do-it-yourself approach begins with your team reviewing the orders to package the items and ship them. You would then gather and package all the items for safe travel, print the shipping labels, and get them ready for the carrier. Depending on your carrier and the system you have in place, you either take them to a post office or schedule a pickup from the carrier.
When you outsource fulfillment to a 3PL, they typically handle all things warehousing, shipping, and tracking. There should be an integration between your Shopify and the warehouse’s system, so they get a notification and can start processing, packing, and shipping the order as soon as it’s placed. They should handle just about everything in the fulfillment process for you.
When you dropship, the supplier or dropship partner sends orders directly to your customer when an order is placed, and you don’t have much involvement at all.
Picking the Right Fulfillment Model
Each fulfillment model, whether you use Shopify or other eCommerce platforms, has its advantages and disadvantages. As you decide which fulfillment model is right for you, you should consider a few key questions:
Where are Your Customers?
Do you need international shipping, or are your sales more regional to one area? Some 3PLs and shipping carriers are unable to accommodate international shipping, while other 3PLs may have a network of warehouses you can use to reduce shipping time to the customer.
What Shipping Methods Are Important to you?
Do you want to offer two-day or free shipping for your customers? When you use a 3PL, some of these things may be easier as you will have access to more shipping options. If you handle it in-house, you will have to negotiate with carriers or eat some of the costs yourself.
How Much Inventory do you Have?
Does the warehouse have space for the number of products you store at any given time? If you store all of your own inventory for in-house fulfillment, consider the cost of the space you rent versus how much fulfillment services cost (which usually include the storage of a certain amount of inventory).
Do you Have Special Requirements?
Are any of your products customized, kitted, or otherwise need some sort of special attention before shipping? Some customization can be done by 3PLs, while others you may need to keep doing yourself.
What Software do you use for eCommerce, Inventory, etc.?
Can the warehouse integrate into your existing technology? This is critical for successful fulfillment, as it can automatically trigger the process if everything is connected the right way.
Different fulfillment specialists will have different capabilities and integrations, so finding one that meets your needs is critical to having a good order fulfillment process and experience. If your store is on Shopify, Magento, eBay, WooCommerce, or some other platform, make sure that the right integrations are possible, otherwise, this partnership can create more challenges and headaches instead of solving them for you!
4 Key Benefits When Outsourcing Order Fulfillment
If you are considering outsourcing your order fulfillment because it has become a hassle for your business, there are some key benefits that you will gain with the right fulfillment partner. You will gain access to experts, fast and safe shipping, better inventory practices, and more efficient processes.
Expert Help
When your team handles order fulfillment in-house, you need to be the ones who are knowledgeable about the best practices, process orders promptly, and stay on top of everything else that goes into running your business, like marketing, product development, and more.
By outsourcing, you gain access to expert help, giving you more time to focus on those other important things. Order fulfillment professionals have the experience and skills that are needed for effective and efficient order fulfillment for your business, and they are regularly informed on the latest trends and technologies for eCommerce fulfillment so your business can stay ahead of the curve.
Fast & Safe Shipping
Getting items to your customers in good condition is probably the most important part of order fulfillment for a customer. Getting it there fast is also important. So to do this, you need to offer a quick turnaround time after an order is placed, with options for free shipping and two-day shipping whenever possible.
When you hire the pros for order fulfillment, items can be packed safely and securely, so they get to customers quicker, in one piece, and at a lower cost with their network of shipping carriers.
Inventory Best Practices
While you understand the importance of managing inventory, you likely have dozens of other important tasks that need your attention on any given day. With a logistics provider, you will have at least as much information about your inventory stocking levels than when you stored them in-house, and probably even more data!
When the fulfillment center integrates into your eCommerce platform, inventory levels are automatically reflected on your website, so that you and your customers know exactly what’s in stock right now.
If you have questions or concerns about your inventory levels, fulfillment centers can give you data and current best practice trends to follow.
More Efficient Processes
Fulfillment centers have the tools and technologies to understand the best practices of how to efficiently and accurately process orders. They stay up to date on what the current technology is, and how to best work with eCommerce stores like yours for better processing of orders. This helps everything run smoothly and keeps customers happy.
Solving Challenges Associated With eCommerce Fulfillment
A lot of challenges can arise during the eCommerce fulfillment process. Sometimes these may be issues that are out of your control, like supply chain issues (as we’ve seen in recent years) or weather conditions impacting transportation (like snow or ice storms).
But there may also be problems that you could control, like accurate inventory or shipping rate negotiation. You don’t have to address these challenges on your own, though, when you partner with a 3PL for order fulfillment.
Supply Chain
Unfortunately, it happens. Supply chains impact many parts of eCommerce, from where the products come from to the boxes orders are shipped in, and even to the people you employ and the ones working at the warehouse. If you watch the news, it seems like supply chain challenges are becoming more and more common.
Fulfillment specialists may have access to technology that allows you to predict some of the supply chain issues – and get ahead of them. You can learn where items are coming from and where they are going, tracking them the whole way. You can even gain more insight into your inventory and order management, and logistics software so that when supply chain issues happen, you have a plan to solve them.
Logistics Planning
When the busy seasons arrive, many shipping carriers get overwhelmed and costs for shipping packages go up. Sometimes the relationship that a 3PL has with carriers can help to offset some of the frustrations business owners see during the holidays or busy seasons (like back to school, sports season, or playoffs, etc.).
3PLs can help solve challenges associated with slow or missed deliveries, broken items, or damaged packages because they have an established relationship with the carrier.
Inventory
When you run out of a certain item unexpectedly or are under the impression that you have more inventory than you do, you may find yourself needing better inventory management practices. Inventory tracking can be a challenge for a small team trying to do it all yourself.
When you have a fulfillment partner with specific technology to keep track of inventory levels and notify you of low stock, you are less likely to experience inventory challenges.
Demand Planning
This may be something that many eCommerce businesses need but aren’t already doing. If you find yourself with too many or too few items at certain times of the year, demand planning can help cut down on the frustrations.
Logistics software at fulfillment warehouses cuts the cost of storing inventory as items sit unpurchased by letting you know when seasonal trends predict an increased demand for certain items. You can send these items right before the demand, so you aren’t paying for unnecessary storage.
Better Order Fulfillment Processes Can Increase Profit Margins
Now if solving some of these challengings and getting benefits like access to the pros isn’t enough, you may be able to increase your profit margins. Hiring a 3PL provider has an upfront cost for set up and monthly fees for the ongoing services provided, but even that can help save your business money in the long run. Here’s how:
3PLs often negotiate shipping rates at a lower cost than what your company can find on its own. Your customers want fast, free shipping – like what they get with Amazon Prime and Walmart+. But you may not be able to provide that on your own. However, with a 3PL negotiating rates and developing relationships, you can offer lower cost, or even free, shipping at fast speeds.
Many 3PLs have networks of warehouses so your goods can be distributed across the country, cutting down on shipping speed to your customers. Combining the negotiated rates with the distributed inventory means your customers win with faster, cheaper shipping – saving you money on shipping costs and putting that money into your business.
In addition to saving on shipping costs, you can save on errors. Mistakes cost money. From lost inventory to damaged goods, you can lose out on money when human error happens. However, accuracy goes way up when you have access to the resources and technologies that 3PLs have. Inventory is better managed, orders are picked accurately, and packages are shipped correctly.
Some of the other costs you can save on – directly impacting your bottom line – include warehouse workers (employed by the warehouse instead of you), storage space (included as part of your 3PL fees), technology (your warehouse will supply WMS and advanced inventory management), tools (all of the warehouse equipment like shelving or bins, forklifts, and pallets are used by warehouse staff for multiple of their clients), and time (both yours and your employees can dedicate time to other tasks).
While logistics are a necessary evil for eCommerce, it doesn’t have to fall on your shoulders alone. Handling all of these tasks can be time-consuming, challenging, and confusing if you don’t have the right experience, knowledge, or support. But by outsourcing logistics like fulfillment, you can spend more time on the parts of your business that you love and that matter to you.
ShipNetwork for eCommerce Fulfillment Services
By using ShipNetwork’s eCommerce fulfillment services, you will be able to reach 98 percent of US regions in under two business days. Our system seamlessly integrates into most eCommerce marketplaces, so that you can get the most out of fast shipping and shopping cart integration.
Our shipping partners can provide faster shipping speeds with great tracking information for your customers. With our accuracy guarantee, your customers will receive the right order at the right time – so that your company looks good to your customer base.
We offer the best eCommerce fulfillment services that can increase your sales, improve your customer service, and reduce your costs. Request a quote from ShipNetwork today to get a shipping analysis and start receiving smarter and faster retail fulfillment solutions.
.webp){kind=spacer}
As your business grows, you may find that you need to expand your services. Your customers expect a lot out of you, and you probably do too. To meet everyone’s expectations, you need to have high standards for customer service.
For many eCommerce shops, what customers expect most is fast shipping and products that align with what they ordered. When you need fast, accurate shipping for your orders, you might need to find expert help for order fulfillment. But did you know that this doesn’t have to be handled in-house?
You can use eCommerce fulfillment services to improve customer service, order accuracy, and business efficiency.
What Is eCommerce Fulfillment Services?
eCommerce fulfillment services typically include a process that begins when an order is placed on your eCommerce storefront by your customer and ends when the order has been successfully delivered to that customer. A lot of companies attempt to handle these tasks in-house, and that can work at first.
When an eCommerce store is just starting out, handling your own order fulfillment can be easy and even fun! But as your business grows, these tasks can become too tedious and take up too much time for most eCommerce stores. When order fulfillment pulls employees from other important tasks or your company is bringing in orders faster than you can send them out, it may be time to consider finding a partner for eCommerce fulfillment services.
When following the eCommerce order fulfillment process successfully, your customers will be happy and come back for more. However, to get to that point, you need to fill orders quickly and efficiently to fulfill customer expectations. The order fulfillment process can be a complex one, but meeting all the steps will keep your customers – and your employees – happier.
eCommerce Fulfillment Process Steps
The eCommerce fulfillment process can be boiled down to three main categories: receiving, processing, and shipping. Each step falls into these categories and each requires certain skills and tools.
Receiving
Within the “receiving” category, you first need to send the inventory to the warehouse or fulfillment center. The warehouse will receive the items, input them into the warehouse management system (WMS), and store them in the location designated for your business.
This is a critical step for successful order fulfillment, because without an accurate record of what inventory is on hand or organizing that inventory in an efficient way, then the rest of the process can fall apart. If you choose to continue to handle order fulfillment in-house, you will still need to organize and store your inventory and keep accurate track of what’s in stock.
Processing
The processing phase starts once an order is placed. In order for this to run efficiently, you need to make sure your eCommerce platform and the warehouse management system are integrated. This will allow an order slip to be created as soon as an order is placed, making sure that orders can be filled quickly.
Typically, processing begins with an automated check of the address, inventory, and other important factors, so issues can be identified early on. Then, the more manual process begins. An order fulfillment worker will take the packing slip and gather all the items in the order. They will securely package them into the correct-sized box or envelope in order for safe shipping.
If this step isn’t done correctly, then customers might receive the wrong items, damaged items, or no items at all (if their order is somehow missed).
Shipping
After the order has been processed and packaged, it’s time for shipping. Depending on what options your company offers – or your fulfillment center offers – your customers may have access to different carriers or shipping speeds. You will need to make sure to select the correct carrier (USPS, FedEx, UPS, DHL, or others) and the right speed (two day, priority, standard, etc.). Then the label can be affixed to the package and it’s ready for the carrier!
If you handle fulfillment in-house, you will either need to organize a pick up or drop off the package with the carrier. If you use a fulfillment center, most have designated areas for packages for each carrier. Shipping doesn’t end here, though. Your customer is notified of their tracking number and can track their package as it makes its way to them.
Once it’s delivered, if your customer is happy with their order, the process is complete! (If they are unhappy and need to return something, then the returns management process should be triggered – and this can often also be handled by a fulfillment center.)
How eCommerce Fulfillment Services Help With the Process
When you use an eCommerce fulfillment specialist for their services, you can be confident that each of the steps involved in receiving inventory, processing orders, and ensuring successful delivery will be completed effectively and efficiently.
You won’t have to stress over the time or money you have to invest in order fulfillment, especially as your eCommerce business continues to grow.
What Does an eCommerce Fulfillment Specialist do?
An eCommerce fulfillment specialist can fulfill many roles for your organization. They can take some of the pressure off of your customer service teams by handling inquiries about order status or returns. They can save space and money on warehouse space, by taking care of storing your inventory for you.
All of these tasks have to be handled by someone, so having a partner who knows exactly how to do these can make the process easier.
Tasks Fulfillment Specialists Take On
Warehousing
eCommerce fulfillment specialists are able to efficiently set up a warehouse. They have the skills and tools needed to ensure that every step is taken for maximum space usage and safe warehousing (for both the inventory and the people working there).
Warehousing requires space, equipment (including pallet racks, forklifts, shelves or bins, packing space or table, shipping space, etc.), and specific technologies.
Managing Inventory
Keeping an accurate account of your inventory is important for any business. Specialists can help you make sure that there aren’t misplaced items, stock level errors, or incorrect intake of inventory.
This will allow you to know exactly what you have in stock – so you know when it’s time to send some of the most popular items to the warehouse so they can be ready for when orders come in.
Storage
Depending on what you sell, you may need to have specific storage conditions. This can apply to more than just perishable food items! If you sell antiques, wood items, or other things made of materials susceptible to the elements, making sure that your storage facility can protect them will be important.
Fulfillment specialists have access to temperature or climate-controlled facilities so all of your goods are stored in the right conditions. They can eleven help you ensure that federal guidelines and regulations are met during the storage of your inventory.
Fulfillment
Even though it’s in their name, order fulfillment is just one of the many tasks that a fulfillment specialist can take on. Fulfillment warehouse workers can make sure that products are picked and packed accurately so they can be quickly and safely shipped to your customer.
As far as your customer is concerned, this is the only thing that matters. So making sure that this task is handled in the right way means that your customer is happy. During seasonal or holiday rushes, promotions, or other busy times, having an effective partner in order fulfillment can make or break your business and the happiness of your customers.
Logistics
Whether you handle order fulfillment in-house or you outsource, there are a lot of different elements to the logistics. Unfortunately, it can be time-consuming and complex to make sure your products are getting from one place to the next. Negotiating costs with shipping carriers, at a time when costs across the board are rising, can add unneeded stress.
Making sure your inventory level is accurately reflected in your store can get challenging, especially when orders are coming in faster than you can fill them. With all of these logistical challenges that eCommerce stores are facing, a fulfillment specialist has the skills and connections needed to make it simple.
They can help your company with better insights into tracking, lower costs on shipping, accurate inventory with a connection between your store and the WMS, customs and other paperwork, and more.
What Is the Fulfillment Cost in eCommerce?
So how much does all of this cost? When you’re looking at all that a fulfillment specialist and warehouse can do for you, you may wonder about the cost for your business. Well, in eCommerce, fulfillment is a big chunk of the game so there is a cost associated with it. However, that cost can actually help your business in the long run.
Some of the costs that you are already familiar with for your eCommerce store include the website and eCommerce platform, marketing or advertising, bookkeeping, inventory, storage space, and shipping. You may have had to hire someone to help you with inventory, production, shipping, or customer service.
Now, as you grow, you will either have to expand with more in-house staff to help with customer service and order fulfillment, as well as add more storage space, or you can outsource the process to a fulfillment partner.
Different fulfillment models can impact the cost, but for most businesses, there comes a time when outsourcing just makes sense. You might even save money when you factor in the cost of space, utilities, technology, etc.
eCommerce Fulfillment Model Can Impact Cost
There are three primary order fulfillment models, and the one your business uses will need to depend on your needs. When you are deciding between the options, these things should be considered:
- The type(s) of products you sell.
- The average volume of orders per month.
- Current inventory management.
In-House Order Fulfillment
Also known as self-fulfillment, this is when you handle all of your order fulfillment and warehousing yourself with your team. This is common for businesses that are just starting out and for smaller businesses with low order volumes.
Many times, in-house fulfillment is done at home or in your garage when you are a small eCommerce business without a physical store. This can be time-consuming and challenging, taking up more time as you grow and get even more orders. But it is lower cost and can be done by just about any business, which is appealing for many newer businesses.
It can be complex, requiring both spaces for inventory storage and order fulfillment software, which are added costs for businesses as they grow.
Third-Party Fulfillment Services
Once your eCommerce company has grown too much for in-house order fulfillment (you will know it’s time when you struggle to keep up with the orders that are coming in), the next step is often outsourcing to a third party.
Third-party providers (also known as 3PL logistics providers or 3PLs) can help with everything from storage in a network of warehouses to packing and shipping orders as they come into handling returns when a customer is dissatisfied with their order. This often helps businesses speed up the order fulfillment process while still being able to focus on growing their business or creating new products.
These are the order fulfillment specialists we talked about earlier who can help with a range of logistics-related tasks.
Dropshipping
The third fulfillment model can only happen when you do not manufacture or store your products. Your products sold to your customers are shipped directly by the manufacturer once an order is placed online.
This means you and the customer are both more reliant on the dropshipper, leaving you to just become a seller of the product in this case. Dropshipping can often reduce overhead costs, but limits customization and quality control.
Is Shopify a Fulfillment Service?
Well… yes and no. Shopify is not in itself a fulfillment service, but they do have a part of their business that does order fulfillment. Is that the right fit for your Shopify store? When you created your Shopify store, you were asked to select your fulfillment model.
Shopify's own Shopify Fulfillment Network was probably listed as an option, and it might be a good solution for some businesses but not for others. There are other ways you can fulfill Shopify orders for your customers.
Automatic Order Fulfillment
One option you will see when setting up your Shopify storefront. This is only for certain types of orders. But if you can select automatic order fulfillment, you won’t have to sit at your computer processing orders every day or so.
It only works if you sell something digital (recipes, digital artwork, patterns for sewing, or cross-stitching). If you sell something that needs to be packed and shipped, automatic order fulfillment won’t work for you.
Manual Order Fulfillment
The most common type of order fulfillment process Shopify users select. It is the best method for businesses that have something physical to sell. With manual order fulfillment, you will be able to prepare and ship the orders yourself. You can input the tracking information so your customer is notified when it ships.
If your company makes custom orders, kits, or subscription boxes, or might have a preorder sale at some point, manual order fulfillment is one of the best ways to go.
And finally, the last option for Shopify fulfillment is by partnering with a third party. This may seem similar to using the Shopify Fulfillment Network, but with this option, you can choose which third-party logistics provider you want to use. In using this method, you can use experts who have the fulfillment infrastructure in place for quick and effective order fulfillment.
You will be able to take advantage of not only their expertise but also their warehouse space, labor, technology, and equipment so you can save space, time, and money of your own. For many eCommerce stores, this makes the most sense once they have reached a certain order volume.
How Shopify Order Fulfillment Works
When you are using Shopify for your eCommerce platform, the order fulfillment process is triggered when an order is placed. Once that happens, the process that actually will be followed depends on which of the above methods you selected for your store.
When you visit the orders page on the Shopify admin backend, the do-it-yourself approach begins with your team reviewing the orders to package the items and ship them. You would then gather and package all the items for safe travel, print the shipping labels, and get them ready for the carrier. Depending on your carrier and the system you have in place, you either take them to a post office or schedule a pickup from the carrier.
When you outsource fulfillment to a 3PL, they typically handle all things warehousing, shipping, and tracking. There should be an integration between your Shopify and the warehouse’s system, so they get a notification and can start processing, packing, and shipping the order as soon as it’s placed. They should handle just about everything in the fulfillment process for you.
When you dropship, the supplier or dropship partner sends orders directly to your customer when an order is placed, and you don’t have much involvement at all.
Picking the Right Fulfillment Model
Each fulfillment model, whether you use Shopify or other eCommerce platforms, has its advantages and disadvantages. As you decide which fulfillment model is right for you, you should consider a few key questions:
Where are Your Customers?
Do you need international shipping, or are your sales more regional to one area? Some 3PLs and shipping carriers are unable to accommodate international shipping, while other 3PLs may have a network of warehouses you can use to reduce shipping time to the customer.
What Shipping Methods Are Important to you?
Do you want to offer two-day or free shipping for your customers? When you use a 3PL, some of these things may be easier as you will have access to more shipping options. If you handle it in-house, you will have to negotiate with carriers or eat some of the costs yourself.
How Much Inventory do you Have?
Does the warehouse have space for the number of products you store at any given time? If you store all of your own inventory for in-house fulfillment, consider the cost of the space you rent versus how much fulfillment services cost (which usually include the storage of a certain amount of inventory).
Do you Have Special Requirements?
Are any of your products customized, kitted, or otherwise need some sort of special attention before shipping? Some customization can be done by 3PLs, while others you may need to keep doing yourself.
What Software do you use for eCommerce, Inventory, etc.?
Can the warehouse integrate into your existing technology? This is critical for successful fulfillment, as it can automatically trigger the process if everything is connected the right way.
Different fulfillment specialists will have different capabilities and integrations, so finding one that meets your needs is critical to having a good order fulfillment process and experience. If your store is on Shopify, Magento, eBay, WooCommerce, or some other platform, make sure that the right integrations are possible, otherwise, this partnership can create more challenges and headaches instead of solving them for you!
4 Key Benefits When Outsourcing Order Fulfillment
If you are considering outsourcing your order fulfillment because it has become a hassle for your business, there are some key benefits that you will gain with the right fulfillment partner. You will gain access to experts, fast and safe shipping, better inventory practices, and more efficient processes.
Expert Help
When your team handles order fulfillment in-house, you need to be the ones who are knowledgeable about the best practices, process orders promptly, and stay on top of everything else that goes into running your business, like marketing, product development, and more.
By outsourcing, you gain access to expert help, giving you more time to focus on those other important things. Order fulfillment professionals have the experience and skills that are needed for effective and efficient order fulfillment for your business, and they are regularly informed on the latest trends and technologies for eCommerce fulfillment so your business can stay ahead of the curve.
Fast & Safe Shipping
Getting items to your customers in good condition is probably the most important part of order fulfillment for a customer. Getting it there fast is also important. So to do this, you need to offer a quick turnaround time after an order is placed, with options for free shipping and two-day shipping whenever possible.
When you hire the pros for order fulfillment, items can be packed safely and securely, so they get to customers quicker, in one piece, and at a lower cost with their network of shipping carriers.
Inventory Best Practices
While you understand the importance of managing inventory, you likely have dozens of other important tasks that need your attention on any given day. With a logistics provider, you will have at least as much information about your inventory stocking levels than when you stored them in-house, and probably even more data!
When the fulfillment center integrates into your eCommerce platform, inventory levels are automatically reflected on your website, so that you and your customers know exactly what’s in stock right now.
If you have questions or concerns about your inventory levels, fulfillment centers can give you data and current best practice trends to follow.
More Efficient Processes
Fulfillment centers have the tools and technologies to understand the best practices of how to efficiently and accurately process orders. They stay up to date on what the current technology is, and how to best work with eCommerce stores like yours for better processing of orders. This helps everything run smoothly and keeps customers happy.
Solving Challenges Associated With eCommerce Fulfillment
A lot of challenges can arise during the eCommerce fulfillment process. Sometimes these may be issues that are out of your control, like supply chain issues (as we’ve seen in recent years) or weather conditions impacting transportation (like snow or ice storms).
But there may also be problems that you could control, like accurate inventory or shipping rate negotiation. You don’t have to address these challenges on your own, though, when you partner with a 3PL for order fulfillment.
Supply Chain
Unfortunately, it happens. Supply chains impact many parts of eCommerce, from where the products come from to the boxes orders are shipped in, and even to the people you employ and the ones working at the warehouse. If you watch the news, it seems like supply chain challenges are becoming more and more common.
Fulfillment specialists may have access to technology that allows you to predict some of the supply chain issues – and get ahead of them. You can learn where items are coming from and where they are going, tracking them the whole way. You can even gain more insight into your inventory and order management, and logistics software so that when supply chain issues happen, you have a plan to solve them.
Logistics Planning
When the busy seasons arrive, many shipping carriers get overwhelmed and costs for shipping packages go up. Sometimes the relationship that a 3PL has with carriers can help to offset some of the frustrations business owners see during the holidays or busy seasons (like back to school, sports season, or playoffs, etc.).
3PLs can help solve challenges associated with slow or missed deliveries, broken items, or damaged packages because they have an established relationship with the carrier.
Inventory
When you run out of a certain item unexpectedly or are under the impression that you have more inventory than you do, you may find yourself needing better inventory management practices. Inventory tracking can be a challenge for a small team trying to do it all yourself.
When you have a fulfillment partner with specific technology to keep track of inventory levels and notify you of low stock, you are less likely to experience inventory challenges.
Demand Planning
This may be something that many eCommerce businesses need but aren’t already doing. If you find yourself with too many or too few items at certain times of the year, demand planning can help cut down on the frustrations.
Logistics software at fulfillment warehouses cuts the cost of storing inventory as items sit unpurchased by letting you know when seasonal trends predict an increased demand for certain items. You can send these items right before the demand, so you aren’t paying for unnecessary storage.
Better Order Fulfillment Processes Can Increase Profit Margins
Now if solving some of these challengings and getting benefits like access to the pros isn’t enough, you may be able to increase your profit margins. Hiring a 3PL provider has an upfront cost for set up and monthly fees for the ongoing services provided, but even that can help save your business money in the long run. Here’s how:
3PLs often negotiate shipping rates at a lower cost than what your company can find on its own. Your customers want fast, free shipping – like what they get with Amazon Prime and Walmart+. But you may not be able to provide that on your own. However, with a 3PL negotiating rates and developing relationships, you can offer lower cost, or even free, shipping at fast speeds.
Many 3PLs have networks of warehouses so your goods can be distributed across the country, cutting down on shipping speed to your customers. Combining the negotiated rates with the distributed inventory means your customers win with faster, cheaper shipping – saving you money on shipping costs and putting that money into your business.
In addition to saving on shipping costs, you can save on errors. Mistakes cost money. From lost inventory to damaged goods, you can lose out on money when human error happens. However, accuracy goes way up when you have access to the resources and technologies that 3PLs have. Inventory is better managed, orders are picked accurately, and packages are shipped correctly.
Some of the other costs you can save on – directly impacting your bottom line – include warehouse workers (employed by the warehouse instead of you), storage space (included as part of your 3PL fees), technology (your warehouse will supply WMS and advanced inventory management), tools (all of the warehouse equipment like shelving or bins, forklifts, and pallets are used by warehouse staff for multiple of their clients), and time (both yours and your employees can dedicate time to other tasks).
While logistics are a necessary evil for eCommerce, it doesn’t have to fall on your shoulders alone. Handling all of these tasks can be time-consuming, challenging, and confusing if you don’t have the right experience, knowledge, or support. But by outsourcing logistics like fulfillment, you can spend more time on the parts of your business that you love and that matter to you.
ShipNetwork for eCommerce Fulfillment Services
By using ShipNetwork’s eCommerce fulfillment services, you will be able to reach 98 percent of US regions in under two business days. Our system seamlessly integrates into most eCommerce marketplaces, so that you can get the most out of fast shipping and shopping cart integration.
Our shipping partners can provide faster shipping speeds with great tracking information for your customers. With our accuracy guarantee, your customers will receive the right order at the right time – so that your company looks good to your customer base.
We offer the best eCommerce fulfillment services that can increase your sales, improve your customer service, and reduce your costs. Request a quote from ShipNetwork today to get a shipping analysis and start receiving smarter and faster retail fulfillment solutions.