When planning to start an online business or planning to integrate e-commerce into your already existing business, one of the many things you might want to find solutions to and prepare for before you fully launch your e-commerce store is your supply chain.
Supply chain management includes how to source for your products, warehousing, processing, and delivery to customers who want those items.
Most likely the first reason you have this paradigm shift into e-commerce is to enlarge and expand the sales capacity for your store both multichannel, omnichannel, and single-channel stores.
Let’s break down the sales channel for a better understanding.
– Single channel e-commerce: having only an online store
– Multichannel: both online and brick-and-mortar stores
– Omnichannel: all sales channels both in digital and non-digital space
Making a profit is the goal of every business. Sure, you do want to make a profit from your Shopify store. However, certain perks come with making revenue from your online store. One of which is customer satisfaction and gaining customer loyalty.
Order fulfillment is one of the measures of gaining customer loyalty. The procedures involved in order fulfillment ensure that from the point of a customer picking and paying for an item, the item is delivered to them based on the delivery details without any glitch or mix-up
What Is E-Commerce Fulfillment?
E-commerce fulfillment is the whole procedure that involves selecting an item, packaging, and shipping the item to customers who have ordered them. E-commerce fulfillment includes managing your inventory, sourcing for products, packaging, and logistics for the delivery of products.
E-commerce fulfillment for companies varies depending on their sales capacity. For some Shopify stores, run an in-house order fulfillment service or work with a third-party logistics (3PL) company to partner and help them achieve their shipping goals.
E-commerce order fulfillment usually involves third-party processing your orders. When you get an order from a customer, the e-commerce fulfillment service picks the item directly from your store, packages it, and ships the products to the customer. For Shopify stores, having an e-commerce fulfillment service requires the integration of software into your Shopify store to process orders as quickly as possible.
Benefits Of E-commerce Order Fulfillment System
1. Keep A Tab On Inventory
Since inventory will be automated, you will know which of your products sell well for each period. You can identify fast-selling items from how quickly the inventory changes.
With this, you can quickly spot a trend for a particular product or its complements when they quickly run out of stock.
2. Reduced Human Attention To Order Fulfillment
Some of the procedures for order fulfillment for e-commerce stores are repetitive. Procedures such as processing orders, maintaining inventories, handling returns, and so on can be automated.
Automating these recurring steps will ease the stress of handling thousands of orders at the same time. At the end of a period, a report on orders will be generated to help manage future order fulfillment.
3. Manage Inventory Across E-commerce Platforms
If you are a merchant with an omnichannel store, you will need to manage your inventory across all the platforms. Since you run your products from one inventory, updating the SKU manually might not be efficient. With an order management system, you can automatically update sold-out items and find out how many items are left in your stock.
This way, a product won’t be out of stock and will remain available on any of the e-commerce platforms.
4. Improved Customer Service
The automation system for order management ensures that your customers get notified and updated about every stage of their orders.
Keeping customers in the loop while an order is being fulfilled increases brand trust and customer loyalty. They can easily track where and what is happening to their orders at the moment.
Also, an effective order management system can help you quickly identify the closest shipping company to the customer. Thus, you can deliver the order to the customer faster than the expected delivery days.
How E-Commerce Order Fulfillment Works
It requires that you have the products that you sell online paid for and stocked in a warehouse your third-party logistics company can access. Each time you receive an order, the e-commerce fulfillment service you engage will pick up the item from the warehouse, package and deliver it to the customer.
Shopify allows store merchants to engage the services of an e-commerce fulfillment service as long as the warehouse can process orders through email.
This is what makes e-commerce fulfillment quite different from order fulfillment.
Difference Between E-Commerce Fulfillment And Order Fulfillment
Order fulfillment is the traditional way of handling ordered items by a customer from your Shopify store. This is usually handled by the store merchant or a team that works in-house. Most times Shopify stores that are just starting, tend to hand in their own orders manually.
This is because some of them may have unique packaging procedures or enough sales that can still be handled by an individual or a team. However, some benefits come with this technique of order fulfillment, it might not be able to survive when there are multiple sales channels or massive sales.
E-commerce order fulfillment sends the ordered item directly to the online shopper. Once the item is picked up from the warehouse, it is shipped straight to the customer. This has a minimal distribution chain. Order fulfillment, on the other hand, sends an order to the distribution center for the customer to either pick the item up or for the item to be processed by a shipping agency.
Order fulfillment has the retailer handling the product first before shipping it. That is the retailer would have stocked the item somewhere and when they get an order, it is packaged and sent to the customer. E-commerce fulfillment services reduce the long procedure of delivering a product without having to stock them in a warehouse you operate.
E-commerce fulfillment warehouses are distribution centers, it does not require that you own a warehouse of your own compared to order fulfillment where you create distribution centers from which your items are packaged and shipped.
Returns and exchange processes are handled by the e-commerce fulfillment services, unlike order fulfillment where returns are sent back to the retailer. When it comes to inventory too, it is usually handled by the fulfillment service not the retailer in terms of e-commerce fulfillment.
How Do I Choose A Fulfillment Service?
Why do you think you need an e-commerce fulfillment service?
According to Ship Rocket, 94% of customers fault store owners for poor shipping logistics. And the reason for the high cart abandonment rate is longer shipping days for a product.
This implies that if your shipping game is not on top, you might struggle to satisfy your customers. To gain customer retention and loyalty is to engage in a fast delivery service hence the need for e-commerce fulfillment services.
Some of the reasons why you might need an e-commerce fulfillment service to handle your orders are;
– When you do not have enough space to stock/store your products
– Massive and growing sales capacity beyond what you can handle
– How fast is your current shipping procedure? If it is not fast enough then you might need to create options of fulfillment services that are closer to your customers
– If managing orders and getting your products shipped to your customers are taking up too much of your schedule.
– Are you seeking to expand into the international e-commerce space?
– Location of most of your customers
While you have to consider the cost of shipping when choosing an e-commerce fulfillment service, there are several other factors to be checked.
1. Proximity to the cluster of customers’ locations: Ensure your fulfillment service provider has centers that are close to your customer’s location.
2. Service quality: Go through their business goals and how well they treat their clients to know if their goals are in line with the value you want to give your customers.
3. Clear communication: Your service provider should be able to give details of order fulfillment from the inventory to storage, pick up and packaging then to shipping of orders.
4. Storage capacity: The service provider must own a storage facility that is able to handle your inventory. So when choosing a fulfillment service provider, knowing their capacity helps you factor in storage costs in your planning.
5. Versatility of the fulfillment service provide in your industry or market niche: The provider must be experienced in e-commerce fulfillment that is related to your market niche. This helps you ascertain whether they will be a good fit for your store.
6. Work conditions and terms: You should note if your provider provides fulfillment services for 24 hours/day or if there are breaks in-between their work hours. This helps you know how to plan and send the orders to ensure swift response and results.
7. Customer support: It is advisable to go for a fulfillment service provider with customer support that is always available to attend to your problems.
8. Cost of taking up the service: Going for the cheapest service provider might not always work out fine. It is best you engage a trusted fulfillment service provider who is in sync with your business goals
E-commerce is an industry growing like wildfire. Each day the numbers are skyrocketing which means it is a working space with bigger potential.
With these potentials are the need to grow an online business that is able to satisfy customers and also help retailers achieve their goals of sales and revenue. One of the major landmarks for Shopify merchants and online store owners is to get their products delivered in the best state.
Therefore, it is crucial for you as a store owner to take your order fulfillment seriously as you grow and expand.