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Online eCommerce Order Fulfillment
eCommerce has delivered products and services into the hands of consumers. But, online stores still have to overcome specific challenges. In a brick-and-mortar store, customers walk in, choose what they want, pay, and deliver the product to their homes. They fulfill their own orders. As an online store, you don’t have this luxury. You have to fulfill each of your customer’s orders quickly and accurately. For starters, modern consumers demand quick 2-day shipping and delivery with VIP treatment and the best experience.
According to statistics, 72% of shoppers will visit a retailer that offers on-time delivery. And, 38% of online shoppers will never buy from a store again after a poor delivery experience. A study by Arvato found that 25% of online shoppers have canceled their orders because of the store’s slow delivery. There is too much at stake, right? So, you have to satisfy consumers’ demand for timely delivery and the best experience. The best online eCommerce order fulfillment can help you meet customer expectations and enhance satisfaction.
What is Online eCommerce Order Fulfillment?
Online eCommerce order fulfillment is the process that delivers your products to customers. It starts long before the customer places their order and continues even after the product is delivered. This process is what drives your eCommerce business. It enables online stores to sell their products online and comes with several steps, including receiving products, picking, packing, shipping, and managing returns and exchanges. You can use either an in-house or third-party fulfillment model.
Online eCommerce Order Fulfillment Models
There is a range of different order fulfillment strategies and models. Brands must choose those which suit their business model and also the needs of their customers. There will also always be the consideration of budget; what model best suits your current budgetary restraints? Remember, adopting one model now does not preclude a later change.
1. In-house fulfillment
The simplest form of in-house fulfillment is when you pack the items ordered by your customers in boxes before shipping to them. This simple model is also known as self-fulfilling and is commonly used by startups and small online stores. Most online entrepreneurs used this model when they started their eCommerce businesses. But in-house fulfillment is not restricted to startups operating from the garage. Some established companies have large-scale in-house fulfillment operations and teams that operate like mini-factories. For example, Jeff Bezos handled Amazon’s eCommerce order fulfillment process himself in the early days. Then, he established an in-house team to fulfill customers’ orders. Now, Amazon fulfills all its orders in-house and also offers fulfillment services to small retailers. But the eCommerce landscape has evolved in so many ways ever since Amazon disrupted the sector. Self-fulfilling will make it difficult for your online store to thrive in today’s highly competitive marketplace. As your online business grows, you’ll need to consider adopting another eCommerce fulfillment model.
2. Third-party fulfillment
While self-fulfilling can meet the needs of a dozen customers, it cannot deliver consumers’ demand for timely delivery when you’re dealing with over 100 orders per month. To avoid delays, missed deadlines, and cancellations, you should outsource your eCommerce order fulfillment to a third-party logistics (3PL) company. In the third-party fulfillment model, your 3PL provider undertakes the entire order fulfillment process for you. This model allows you to handover order fulfillment to a specialist with the resources and expertise to satisfy your customers’ demands. 3PLs cover all aspects of eCommerce order fulfillment, from inventory warehousing to returns. If you’re running out of storage space, outsource your inventory warehousing and fulfillment to a 3PL. You can also outsource to a 3PL company if self-fulfilling orders are distracting you from running and growing your business.
Should You Outsource Your eCommerce Order Fulfillment?
When choosing between outsourcing to a 3PL or self-fulfilling orders in-house, weigh the pros and cons of each model. Analyze how they compare based on costs, time efficiency, customer satisfaction, expertise, and reach. These factors can make or break your eCommerce business.
Cost-effectiveness: While self-fulfilling offers lower upfront costs, it is costly in the long term. You’ll need to invest in warehouses, labor, equipment, and more. The cost of in-house fulfillment also increases steadily as your business grows and orders increase. Third-party fulfillment is cost-effective across the board. 3PL & Ecommerce Fulfillment charges a small fee to fulfill each order. So, your 3PL gives you access to world-class fulfillment capabilities without the costs of building the infrastructure.
Time efficiency: Packing and shipping orders yourself is time-consuming. It can distract you from activities that generate revenue and grow your business. On the other hand, third-party fulfillment is undertaken by specialists. 3PL & Ecommerce Fulfillment uses robust technologies to fulfill your orders quicker than most in-house teams. You can use the time saved to grow your business.
Customer satisfaction: Modern consumers demand fast delivery offerings like 2-day or next-day shipping. Handling order fulfillment yourself is time-intensive and cannot support 2-day or next-day deliveries in the long term. Outsourcing your fulfillment to a 3PL provider is an effective way to meet your customers’ demand for superfast delivery. 3PL & Ecommerce Fulfillment can help you offer free 2-day delivery, increase your competitive edge, and poach some customers from your competitors.
Nurturing expertise: Shipping and logistics are not only expansive fields but also highly dynamic. You cannot handle your entire order fulfillment process and also keep up with the trends and best practices in the shipping and logistics sector. When you outsource fulfillment to a 3PL provider, you won’t need to keep track of any trends or practices. 3PLs are always up-to-date on all matters of logistics and shipping. They are experts in order fulfillment. You can create a small in-house team to work alongside 3PL & Ecommerce Fulfillment and learn. It can help you nurture expertise in-house quicker than teaching your team everything from scratch.
Expand your reach: To grow your eCommerce business, you have to expand into other markets. Although online shopping offers your products to customers from across the world, how will you deliver orders to their doorsteps from your garage or basement? Self-fulfilling orders restrict your expansion. On the other hand, outsourcing fulfillment to a 3PL can expand your reach state-wide, nationally, or globally. 3PL & Ecommerce Fulfillment has facilities across the US and global partners. They can deliver orders to your customer on the other side of the world.
So, should you outsource to 3PL & Ecommerce Fulfillment or continue self-fulfilling orders yourself? Based on the analysis of third-party vs. in-house fulfillment models, outsourcing your eCommerce order fulfillment to a 3PL is the best approach. It can help your store thrive in today’s competitive marketplace. But how do 3PLs undertake online eCommerce order fulfillment?
3PLs’ eCommerce Order Fulfillment Process
Even though 3PL companies are not all the same, their eCommerce order fulfillment processes follow the same procedure. 3PL & Ecommerce Fulfillment leverage technologies to integrate inbound and outbound logistics processes into a single, seamless process to benefit your store and customers. Here are the top operational activities in the eCommerce order fulfillment process from receiving the products to returns.
Step 1: Receiving
Before customers can order, your inventory must be available in your 3PL’s fulfillment center. They can’t ship inventory that they don’t have, right? Your 3PL will require you to fill out a form before you send your products to their warehouse. This documentation process allows your 3PL to start fulfilling your customers’ orders as quickly as possible. It also streamlines the process of receiving, organizing, and storage of your inventory. 3PL & Ecommerce Fulfillment will store your inventory in fulfillment centers close to your customers to reduce delivery time.
Step 2: Picking
The actual online eCommerce order fulfillment process begins when your customer places an order on your store’s website. The next step varies depending on how your 3PL’s technology integrates with your online store. If your 3PL’s software doesn’t always seamless integration, you will have to manually upload your orders to their system. Some 3PLs have robust software that integrates seamlessly with your online store and manages your orders, shipments, and inventory levels in one platform. This integration automates the process by pushing your orders to your 3PL’s fulfillment software. Whether you load manually or it is automated, your 3PL will assign a warehouse picking team or a picker to fulfill this step as soon as they receive the order. The team uses a picking list that highlights the items ordered by your customer, including the number of units or quantities. To make the picking process quicker and easier, the location of the items at the fulfillment center or warehouse is indicated on the list. So, pickers check the list, navigate to the item’s location, and collect the ordered products.
Step 3: Packing
In this step, your 3PL’s warehouse picking team deliver the items to the packing area and hands over the fulfillment process to experienced packers. The items are packed securely using materials that you agreed upon with your 3PL provider. One of the reasons why online stores should choose their 3PL providers wisely relates to the cost of packing. If your 3PL charges for packing materials separately, the cost of fulfilling orders can fluctuate depending on the package used. As a startup online store, the last thing you need is additional charges eroding your profits. You can avoid this unfavorable situation by partnering with 3PL & Ecommerce Fulfillment to access standard packing materials as part of fulfillment services. 3PL & Ecommerce Fulfillment also allows you to use custom packing materials to customize orders for customers at a fee.
Step 4: Shipping
Your 3PL should use specific materials like bubble wrappers, Styrofoam, and tamper-proof tape to keep your products safe and secure during shipping. They should choose carriers by considering the cost and their delivery speed. This customized strategy ensures they ship urgent orders using the fastest carrier and use affordable carriers if the order is not urgent. It will keep your shipping cost as low as possible and ensure urgent orders are delivered on time. Private carriers like DHL are the fastest, while government carriers like USPS and Royal Mail are the cheapest. Your 3PL should also purchase and print shipping labels to track each order. You can use 3PL tracking information to stay on top of your orders at all times. Access to accurate tracking info in real-time eliminate cases of lost products on transit.
Step 5: Returns
Tech-driven providers like 3PL & Ecommerce Fulfillment offer returns and additional services such as exchanges. As an online store owner, you understand the importance of an effective returns policy. Statistics indicate that your returns policy can influence the purchase decision of more than 60% of online shoppers. To avoid losing more than half of potential buyers, partner with 3PL & Ecommerce Fulfillment to offer your customers effective returns and exchanges.
Streamlining the receiving, picking, packing, shipping, and returns can give you an edge over the competition. Outsourcing this process to 3PL & Ecommerce Fulfillment offers several benefits.
Benefits of Outsourcing eCommerce Order Fulfillment
Outsourcing eCommerce order fulfillment to a 3PL comes with several advantages for businesses of all sizes. Here are eight benefits of outsourcing your order fulfillment to a specialist:
- Free your resources. From time, labor, and finances, outsourcing can save you a lot across the board. You can reinvest freed resources in other areas to catalyze long-term growth.
- Enhance scalability. Unlike in-house fulfillment, outsourcing allows you to scale up quickly to exploit limited opportunities. You can exploit seasonal spikes in demand without hiring additional staff or scaling your infrastructure. Your 3PL will take care of everything.
- Increase delivery speeds. 3PLs have several fulfillment centers across your target market. You can choose centers that are closer to your customer base and reduce the distance and delivery time.
- Eliminate errors. Your 3PL’s robust software and inventory management systems allow you to automate order fulfillment tasks and eliminate human error. You can rely on the 3PL’s expertise and professional team of pickers and packers to avoid picking and packing errors.
- Implement multi-channel fulfillment. Outsourcing to a 3PL gives you access to robust solutions for integrating the multichannel processes, managing multiple touchpoints, and a centralized view of orders. You can use these solutions to implement multichannel fulfillment.
- Effective inventory management. From understocking, overstocking, and overselling, you can say goodbye to these issues by outsourcing order fulfillment to a 3PL company. They are experts in inventory management.
- Mitigate risks. 3PL providers leverage technologies like AI and machine learning for monitoring their clients’ supply chains. You can rely on these solutions to anticipate and respond to issues like bad weather and mitigate the effect of this risk factor.
- Optimize your supply chain. Your 3PL can help you streamline the processes and bottlenecks that contribute to inefficiencies. They provide the tools and expertise you need to optimize your supply chain.
To enjoy all these benefits, partner with the right 3PL company for your business. You can always rely on 3PL & Ecommerce Fulfillment to meet your needs and more.
Conclusion
Online eCommerce order fulfillment delivers your products to your customers. It drives your eCommerce business so you need the best fulfillment strategy to stay ahead of the curve. The best approach is to outsource your eCommerce order fulfillment to a third-party logistics company like 3PL & Ecommerce Fulfillment. With 3PL & Ecommerce Fulfillment by your side, you’ll enjoy all the benefits that outsourcing has to offer. We can help you succeed and thrive in today’s highly competitive marketplace. Contact us today to get started!
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Online eCommerce order fulfillment delivers products to your customers. Outsourcing can benefit your online store. You can outsource order fulfillment to a 3PL to reduce costs, delivery times, and errors, enhance scalability, expand your reach, and… Read more.