There are a few different things to think about when it comes to order fulfillment for your eCommerce business. You need to take time to think about what options will make the best fulfillment strategy for your business. Three of the most popular strategies are:
- Direct Fulfillment: this is a strategy where a business will take all orders on themselves and run them in-house. For smaller businesses or businesses that are run from home, this can be something that works well as there will be a number of orders that can be coped with. However, it can work for larger corporations if they have the space for a warehouse to do it all themselves.
- Drop-Shipping: this is a strategy to fulfill orders where you will pay for the order to be completed, as and when the order comes in, and it will go directly to a vendor or manufacturer to complete the sale. When you have a customer place an order, this will be sent to the ‘drop shipper’ who will pack the order and send it out for you. The drop-shipper picks, packs, and ships the product on your behalf. If you are running an eCommerce business where you don’t want to hold a lot of inventory, if any at all, then drop shipping could work for you.
- Third-Party Logistics: this strategy, also known as 3PL, is where the details of the order get handed over to a third party provider. So although you will have the inventory and be responsible for purchasing the inventory, you will use the third-party provider to pick the order, pack it up and then ship it.
Knowing what will work best for you does depend on your business and the needs that you have. You might even find that using a combination of methods can work well for you and your eCommerce fulfilment strategy. To know what will work best for you, it can be a good idea to think about inventory first. For instance, if you have a business where you build and design your products in-house, then using direct shipping or 3PL could work best, simply because your inventory can’t be bought anywhere else (for drop shipping).
Scalability is another factor to consider. Although your business may be small to start with, direct fulfillment may not actually be best if you are planning growth or don’t have the space for inventory. Planning ahead for the future is a must, when thinking about your eCommerce fulfilment strategy. Technology is another aspect to think about when it comes to your order fulfillment.
Fulfilling orders in-house might be your plan, but having the right technology and software to help you organize and process orders (such as CRM) is important. If you don’t have the right technology in place, that can be where ShipJoy comes in to help. We have software that collects data from across your operation and presents it in simple, actionable insights.
When you’re thinking about order fulfillment strategy, there are several factors to consider; not a right or wrong way of doing things. Plan for the future, as well as taking into consideration your customers and price points, and it can help you to make the right choice.