Guide to ecommerce order fulfillment – definition,
Guide to ecommerce order fulfillment – definition, process, problems and best strategies
June 30, 2022November 24th, 2023
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1. Definition of order fulfillment in ecommerce
The moment an online shopper presses the "Buy" button in an online store or marketplace is precisely the moment when the entire e-commerce order fulfillment process begins. It ends only when a buyer successfully gets hold of a product. The e-commerce order fulfillment process consists of five main phases:
Receiving the products from a supplier
Storage of the inventory in a specific place
Order picking and packing
Delivery to a buyer
Management of returns, refunds and exchanges of unwanted goods
The rightly organized order fulfillment ecommerce process is a vital tool for building successful business.
2. Steps in the process of order fulfillment in e-commerce
Let's now take a look at the four basic steps of e-commerce order fulfillment. Optimizing each of these steps should be a priority, because even the smallest mistakes in e-commerce order fulfillment can leave your customers dissatisfied and lead to lost sales.
2.1. Reception and storage of inventory
The first step in e-commerce fulfillment is picking up the goods from the supplier and placing them in a designated storage location. For someone who has chosen to outsource to 3PL, this could be a fulfillment center. For others who have chosen to do fulfillment themselves, it could be a warehouse. For someone running a smaller business, it might even be a garage. But regardless of what your warehouse looks like, make sure you always put your goods up for sale right away so you can start shipping to customers faster.
To avoid picking errors and locate inventory more quickly, each item should have an identification number and be placed in an assigned location in your warehouse. Fulfillment Box, for example, uses special software for such purposes. It allows you to track each item in real time and reorder it immediately. This way, you can be sure that there are always enough products in stock to satisfy customer demand. This enables very fast order fulfillment in the warehouse, so orders can be processed within a day.
The location of the warehouse is critical to the speed of delivery. Since most customers do not want to wait more than two days for their orders, the warehouse should be located as centrally as possible and close to the main customer base. For example, Fulfillment-Box has an extensive worldwide network of warehouses. Four of them are located throughout Europe. This has the advantage that shipping costs are lower and delivery is faster, as the products are transported from the warehouse closest to the buyer.
2.2. Picking and packing
The second step of the order fulfillment process in the warehouse begins when an order is received. This step involves selecting the right product and packing it in suitable and durable packaging. Then the package is labeled and prepared for shipment. This is the moment when some critical mistakes can happen. For example, if the wrong item is packed. Or choosing the wrong packaging can cause damage to the item. This can have consequences such as return, exchange or refund. In the worst case, you may even lose a customer.
The third step of order processing is transporting the goods to the customer. This process could perhaps be as effortless as a short walk to the local post office. But only for someone who owns a rather small business and sells light goods in small quantities. Those who have a fairly high volume of sales or sell massive and heavy items may need a dedicated carrier to pick up the items from a warehouse. 3PLs typically work with proven carriers on a long-term basis and have favorable rates due to the large volume of shipments. So for larger companies, outsourcing to 3PL can be very profitable.
Another point to consider is international delivery. Different countries have different regulations, duties and taxes. So before you ship all over the world, make sure you know all the terms of sale and choose a good freight forwarder. For example, 3PL Fulfillment Box ships international orders with reliable and well-known DHL service.
Last but not least, notifying the customer about the shipment is important. Integrating such a service into the order processing will surely reduce the number of calls from buyers with questions about the delivery status.
Today's online shoppers are looking for free e-commerce delivery and want to receive a desired item extremely quickly.
According to a recent survey:
More than 90% of online shoppers expect products to be delivered to them within two or three days.
30% anticipate to get their order delivered the same day.
66% of shoppers expect free delivery for all online purchases.
In addition, nearly 70% of shopping carts are abandoned because of shipping charges.
So, efficient and well-organized order fulfillment e-commerce process will not only expand your business, but also to keep your customers satisfied.
2.4. Returns processing
Even though the return process is very inconvenient for both the buyer and the seller, it is unavoidable and completely normal in e-commerce order processing. When done right, even the returns process can be beneficial. Online shoppers feel more secure when they purchase goods from someone who handles returns in a straightforward and organized manner. To mitigate the negative effects of this process, you should provide your customers with prepaid return labels and let them know when they will receive a refund or replacement.
Returns should be processed very quickly so that the customer can receive a replacement or their money back quickly. The faster a product is returned to the warehouse, the faster it can be resold or disposed of. Returned products in perfect condition should be restocked and resold. Slightly damaged merc