A complete guide to ecommerce fulfillment services and their processes

If you are thinking about putting some or all of your sales business online, you probably have many questions about order fulfillment. What’s the best method for your company? How do you make your warehouse or stocking facility perform at maximum efficiency? How do you ensure that orders go out on time? In this article, we will help you answer them.

 

What is ecommerce fulfillment?

Ecommerce fulfillment services cover the entire process of getting an item that’s been ordered online to the customer. Ecommerce fulfillment encompasses everything from receiving the online order to retrieving the goods from their place in the warehouse to boxing and labeling them to shipping and delivering them. Whether your company is business to business (B2B), business to customer (B2C), or direct to customer (D2C), if you’re selling your products online, ecommerce fulfillment is the name of the game.

 

Steps in the ecommerce fulfillment process:

Picking

The first step in fulfilling a customer’s order is to collect the items from their storage locations in the warehouse. This is called picking, and it is carried out by a warehouse operator, or picker. There are two basic ways picking can be done: single order and batch. With the first, orders are taken care of individually, with all items from a given order being picked at once; with the second, a number of one particular item is pulled from its storage location at the same time and then those items are divided into multiple orders. Batch order picking means having to sort items into their individual orders after the initial picking stage. While it requires this second step, if there are a lot of orders to fulfill and many of them have the same item, it’s a cost-saving method. The picking method you choose will depend on the size of your warehouse and the number or orders you have to fulfill.

If you have a large warehouse—and they can be gargantuan nowadays—you also have to make sure that your operators are taking the shortest route as they’re picking. This means listing the items in the right picking order. Thus, if item A is stored close to item B, but item C is way across the facility, it would be logical to list their picking order as A, B, C.

All these considerations are taken care of with a pick list. Created by warehouse managers, a pick list is laid out by item location, name, and quantity needed. Pick lists tell the operator, or picker, first where to go, then what to look for, then how many to pull from storage.

After this, the items are sent to packing.

Packing

Once the items for an order have been collected, they’re placed in a container. It’s important to make sure that the items aren’t damaged during delivery, so packing has to be done with care – and padding.

After the items have been boxed up, a shipping label is created. This label contains:

  • Name and address of the fulfillment company,
  • Name and address of the buyer – where the package is going to,
  • The weight of the package, the entire thing including goods and packing,
  • Unidirectional code, which is a machine-readable code that can be swiped from any direction,
  • A postal barcode,
  • Method of shipping – standard, express, or priority,
  • A routing number, and
  • A tracking number – this is the number customers use to track their package online.

This label is then attached to the package, and the whole thing is weatherproofed with plastic wrap.

Shipping

The package is now ready for shipping. This involves collecting the box and getting it to the buyer’s address. A freight carrier like FedEx or UPS will usually be hired for this, but if the seller is small enough and only has local deliveries, they might take care of it themselves. On the other hand, if a company opts to sell their goods through a major online retailer like Amazon, shipping services are part of the deal: Amazon has its own shipping setup.

Delivery

The final step is to deliver the package to the customer’s door. There, the delivery service may find specific instructions, like being asked to leave the package with a neighbor. Overall, the most important aspect of this last stage is to get the goods delivered on their promised delivery date. Doing this promotes good will – and repeat business.

 

Ecommerce fulfillment models

There are three models you can choose from:

Fulfillment by the seller

When a company is small or doesn’t have many online orders, it can take care of its own fulfillment. If that’s the case, it probably has its own dedicated shipping department, which, depending on the number of online sales it has to organize, might be a small area and not have a dedicated staff. This fulfillment model also works well if the company specializes in unique and valuable items that need extra care.

This system stops working, however, when:

  • The number of orders suddenly shoots up; if this happens, the self-fulfillment system won’t be able to cope and it will collapse.
  • The company doesn’t have a system in place to ensure that all stages of fulfillment run smoothly.
  • The cost of fulfillment is much higher than it would be if using a third-party shipping partner.

2. Fulfillment by a third party

Third-party logistics, or 3PL, stands for an outside company that’s hired to take over all or part of fulfillment.

If a company handles picking and packing in-house and has a large number of packages to deliver to different locations, it’s a good idea to have 3PL take care of those final stages.

Additionally, 3PL companies can provide facilities for warehousing, and they have staff to do the picking and packing tasks as well. The services you choose to use will, of course, determine the fee you pay.

3. Fulfillment by Amazon (FBA)

When it comes to 3PL, the biggest player is undoubtedly Amazon. A complete online marketplace, Amazon is the go-to site for looking to buy something with a click from the comfort of your home, and it is often the first destination for those searching for a particular product. With FBA, Amazon takes care of everything from warehousing to delivery, and it charges two fees: one for storage, and one for the actual fulfillment process.

There are pros and cons to FBA, and the company offers alternatives like Fulfilled by Merchant (FBM) and Seller-fulfilled Prime (SFP). With FBM, the seller lists their products on Amazon’s online marketplace, but takes care of fulfillment itself. SFP is the same, except that Amazon’s shipping policies are used and the Prime badge can be shown against the products on the website. Each of these Amazon services has its own fee structure.

 

How Cin7 can simplify your ecommerce fulfillment

It doesn’t matter which fulfillment model you use, Cin7 inventory management software can be your perfect partner. Its integrated order fulfillment module gives you a clear, overall picture of your entire fulfillment process, including getting goods from your supplier and racking, or warehousing, them. Plus, you can operate your account from a mobile device.

But what if you use a 3PL model for fulfillment services? Well, Cin7 has a solution for you too. The software has 3PL feature that allows you to get real-time information about your inventory anytime, from anywhere, no matter what stage of the operation it’s in. Because it’s cloud based, you can access the system from any device.

 

Wrapping up…

Ecommerce fulfillment service starts when an online order is received by a company, and ends when that ordered item is delivered to the customer. We’ve laid out the steps that are involved in detail and explained the three basic fulfillment methods. While each of these methods is a little different, they all have the same goal: getting your products to your customers in the quickest way possible.

If you’ve been hesitating to set up an ecommerce store because you have concerns about the fulfillment process. keep in mind that Cin7 can provide top-notch services to help oversee and manage your fulfillment, and that it can make the whole process stress-free. Talk to our experts today and book a demo. You’ll be glad you did.