November 2022

Customer expectations around the speed and cost of shipping fulfillment are constantly changing as large retailers such as Amazon Prime and Walmart, just to name a few, have started to offer free 2-day shipping.

As consumers, when we want something, we want it now.

As sellers, fulfilling those demands is easier said than done.

Most people don’t realize just how much of an impact the order fulfillment process has on the bottom line of an ecommerce business. While it may not be the most glamorous function, it can make or break a company. It’s never been more important to get ecommerce order fulfillment right.

For instance:

• 61% of shoppers will abandon their cart if shipping, taxes, and other fees are too high.
• 53% of shoppers say that speed of delivery is an important factor when it comes to evaluating their online orders.
• 38% of shoppers will never shop with a retailer again if they had a poor delivery experience.
• 25% of shoppers have canceled an order because of slow delivery speeds.

Getting ecommerce order fulfillment right has never been more important

With some help, getting ecommerce order fulfillment right has never been easier. The best place to start is understanding how it all works.

The Order Fulfillment Process

Whether your eCommerce fulfillment process is done in-house or taken out of house, the process remains focused on storing inventory, picking & packing products, and shipping online orders to the customer. Third-party logistics (3PL) companies exist to help you get the process done right and reduce your shipping costs at the same time. Outsourcing your order fulfillment process will allow you to spend time on what really matters, running your business and acquiring more customers.

Ecommerce order fulfillment applies to both business-to-business (B2B) orders — where large quantities of product are shipped to big-box retailers — as well as business-to-consumer (B2C) orders that are shipped directly to a single shopper’s home.

For B2C orders, the end consumer may place the order on the merchant’s website or through an online marketplace.

After the customer completes their purchase, the fulfillment process begins.

Step-By-Step

If you are new to the fulfillment world, you may not have put much thought into how an online order ends up at your doorstep.

There are many moving pieces — from routing and managing inventory to choosing the correct packaging for the lowest practical dimensional weight — that make up the entire fulfillment process.

Each step of the fulfillment workflow has its nuance, including receiving inventory, warehousing products, picking and packing items, and shipping orders.

1. Receiving
Before you can fulfill orders from your online sales channels, you need inventory.

If you choose to fulfill orders in-house, your inventory must be on-hand.

If you are outsourcing fulfillment, inventory must be sent to the provider that will fulfill on your behalf.

2. Inventory storage
Inventory storage, also known as warehousing, is the organization and storage of your products.

Each unique product or SKU must have a separate dedicated storage location.

For larger operations, this will be on a shelf, in a bin, or on a pallet.

Proper inventory storage will keep your products secure and protected and help give you visibility into what is available to ship to your customers.

3. Order processing
Once an order has been submitted, it will get processed.

These steps involve picking, or the retrieval of items from where they are stored, and packing, or getting the order ready to ship.

Often a packing slip is used, which notes the quantities and storage locations of each product ordered.

This may also include instructions on which packing materials to use — boxes, bubble mailers, poly bags, packing tape, bubble wrap, airfill, etc. — or any custom packaging and inserts to create the intended unboxing experience for the end customer.

Finally, a shipping label must be added to the package.

4. Shipping
Once the order has been processed and is ready to send, the merchant must get it shipped.

This may involve a run to the local post office or UPS Store, or having a carrier pick up the orders from the fulfillment location.

Once the order ships, you should receive tracking info that can be shared with customers to keep them up-to-date with their deliveries.

5. Returns processing
If a customer returns an order, you must be prepared to process it.

They may ship it directly back to you or the fulfillment provider where it will be evaluated.

Depending on the item quality, return reason, and your returns policy, the product can either be restocked as available inventory or disposed of due to malfunction.

CONTACT SHIPJOY TODAY

If you need help with your order fulfillment, don’t hesitate to contact us at ShipJoy. We have the experience, dedication, and knowledge you need to ensure your packages get where they need to go and your customers return time and again.

If your company ships products nationally, you know the fulfillment environment has never been more demanding. Customers’ expectations for rapid delivery have risen to never-before-seen levels, and their impatience and frustration when you fall short of those expectations can send them looking at your competitors with fresh eyes. Those expectations heighten the need to have national fulfillment services that are both fast and efficient.

For many shippers, national fulfillment services no longer simply means providing delivery of orders throughout the country. It now means fulfilling orders at the same reliable speed no matter where in the US a customer is located. Figuring out how to provide that level of service means examining your processes and resources closely and considering opportunities to up your fulfillment game.

Here are key questions to ask when determining the distribution infrastructure required to provide national fulfillment services.

The Need For Speed

The first question to consider is how important fulfillment delivery speed is to your brand’s online sales. Amazon has created a new normal of two-day, one-day and even same-day delivery. If buyers can get your product easily from other brands, then you need to at least meet their delivery time standards. That may require more than one warehouse across the country. If your brand is unique or carries some cachet with buyers, then delivery speed may be less of an imperative since they can’t get that anywhere else.

More Than One Fulfillment Center

A recent ice storm in Dallas made it dangerous for many workers to come into the warehouse there. It so happened that, on this day, two large customers had significant, planned volume spikes. Having additional fulfillment centers to divert orders to may be the difference between you and your competition.

That’s just one example. Different weather events, fire, a COVID outbreak or other disruptions can bring fulfillment operations to a complete halt if you rely on one warehouse for nationwide fulfillment. Only you know the short-term and long-term implications for your business if you were unable to fulfill orders for a day or even a week.

When To Expand

When you expand to more than one fulfillment center, it adds complexity. For brands that are still gaining traction in the market, expanding too soon may not be wise. You need to learn some things about your business so that you begin to see patterns in your customers’ demand.

Which regions of the country generate which kinds of orders?
Which SKUs move the fastest?

How do order volumes rise and fall throughout the year?
Once you have this solid foundation and your current operation starts straining at the seams, that’s a good time to consider geographic expansion.

What Can You Afford?

In theory, national fulfillment services are possible with a single facility. But unless you want to spend a fortune for expedited delivery, the customers who live farthest from that facility will wait longer to receive their goods. And that might be OK. But with one fulfillment center, you’ll be paying a lot more for parcel shipping.

Parcel shipping is by far your biggest fulfillment expense. The cost of adding warehouses to your distribution network will increase for the facility, labor, inbound shipping and inventory. But those costs are typically outweighed by the parcel shipping cost reductions associated with putting products closer to customers. With parcels, it’s those high-zone moves that really take a bite out of your wallet.

Getting Started

You’ll still see some eCommerce sellers trying to succeed at national fulfillment with a single-warehouse model. This practice still happens because several years ago, using a single, centralized warehouse was common for many retailers, especially those managing less than 100,000 orders annually. And many of those retailers haven’t evolved with current market conditions. Back then, consumers expected to wait a few extra days for goods they purchased online to arrive from a far-off fulfillment house.

Then, Amazon started to change all that with its two-day shipping model. After that, big omnichannel giants like Walmart and Target changed to keep up with Amazon. Eventually, skyrocketing eCommerce demand during the COVID-19 pandemic put that outdated fulfillment network model to rest. Put simply, nobody wants to wait five days for toilet paper anymore (or hardly anything else they buy online, for that matter).

National eCommerce fulfillment is no longer just about shipping to every state. Instead, it’s about getting your products to every national destination intact and on time, within the same predictable shipping window. Your customers in Florida want their goods just as fast as those in Northern California, and providing that capability has become essential to the overall customer experience. If your national fulfillment services fail to meet and exceed those consumer expectations, you’ll eventually get pushed out of key markets by competitors who didn’t make the same mistakes.

Third Party Logistics Companies – 3PL

The added costs and complications of a multi-warehouse, eCommerce fulfillment networks are less of a burden if you work within a national fulfillment 3PL. A national 3PL could:

Do an distribution network analysis analysis to help you decide the optimal number of warehouses you should have and where they should be

Provide immediate distribution in new regions of the country using an in-place network of fulfillment centers
Reduce your warehouse costs by allowing you to share overhead costs with other companies at a multi-client facility
Reduce your parcel costs by shipping under their discounted parcel shipping rates
Provide the ability to scale your fulfillment operations to support any rate of growth, including the addition of new facilities and the introduction of automation to efficiently manage high-volume fulfillment.
Create customized national fulfillment services that meet your exact needs, allowing the fulfillment partner to act as an extension of your core operation.

Accommodate multiple distribution needs, such as offering eCommerce fulfillment, distribution to your retail partners, marketing material distribution, and more from the same facilities.
Best of all, 3PLs that offer national fulfillment services give you the freedom to focus on growing your business while they serve as your growth guide, providing the fulfillment advice and infrastructure you need.

Contact ShipJoy Today

If you need help with your order fulfillment, don’t hesitate to contact us at ShipJoy. We have the experience, dedication, and knowledge you need to ensure your packages get where they need to go and your customers return time and again.