Order fulfillment Process
Order fulfillment is an important phase in a successful e-commerce business, first you fulfill then it is the time you meet your customers and finish the transaction, and if you are new to the business then you might have not enough idea about how an order placed online reaches your doorstep. In the phase of order fulfillment, you create a lifelong relationship with the customer.
Order fulfillment services are third-party vendors such as online sellers which fulfill an order for other companies. Third-party vendor’s involvement reduces infrastructure and cost as well improve the efficiency, Your order fulfillment strategy determines how quickly and easily you can scale your business. As technology is evolving customer is expecting better and faster deliveries, the idea of waiting for a package for days is gone to the oblivion now.
Before knowing the popular order fulfillment strategies let’s look at the stages involved in order fulfillment.
1. Receiving- To fulfill the orders you must need an inventory and if you are filling orders-in hose, you’ll be manufacturing the products yourself.
2. Inventory Storage – Proper inventory storage is the key, employees must be able to find the products, pick and pack them, and get products ready for shipping as quickly as possible.
3. Processing- Order processing involves order being submitted and then process of picking and packing as quickly and efficiently as possible.
4. Picking and Packing– Once the order is submitted the order is packed and ready to be shipped.
5. Shipping- Order is packed and ready to send, it shipped to the customer.
6. Returns- If the customer pulls up a return request all the steps will be done in reverse order, from picking and packing to storing it into inventory.
Popular order fulfillment strategies.
Thanks to the ever-evolving technology, there are multiple options to choose from, all you have to do is just choose the right strategy, which depends upon your order volume, products and if you can do all that or want someone else to do it for you.
Direct Fulfillment
Direct/Self or In-house order fulfillment also known as self-fulfillment, this strategy is the starting point in small businesses, thought large corporations also use it.
This type of fulfillment occurs when the trader has complete control over the order fulfillment process, trader completes each step of the fulfillment process by going door to door himself, this demands effort and lots of attention.
Advantages for Direct Fulfilment
1. Offers total control over order fulfillment processes.
2. While starting small when you don’t have a budget for third-party vendors you can rely on this because you are only paying for shipping.
3. You don’t need much knowledge to complete this order fulfillment process.
Np negotiations as large corporations shipping through third-party vendors can become a competitive advantage.
Disadvantages of Direct Fulfillment
1. It takes lots of time and energy and requires constant attention.
2. Limited options for shipping to customers.
3. Packaging of all the products will take the time that you can direct toward other things.
Dropshipping
When a customer places an order you pay for fulfillment as the order comes, merchant purchases a specific item their customers order from manufacturers who send it to the customer, after shipping you are charged for the product.
You don’t need to have a warehouse for this type of strategy, this works if you are planning to sell products from numerous brands.
Advantages of Dropshipping
1. Easy to scale.
2. No need for a warehouse.
3. Easily affordable.
4. More products and faster.
Disadvantages of Dropshipping
1. No option for customization.
2. No control over warehouse-like direct fulfillment.
3. You can only buy from companies with drop-ship capability.
Third-party Outsourced fulfillment/3PL
Third-party Logistics involves the third-party providers, involving handling the detail over to third parties. Third parties provide solutions regarding warehouses, packing, and distribution.
When the customer places an order it goes to third-party provides which then handles the order from their location to shipping to the customer. The third-party involves steps mentioned above such as receiving, picking, packing, return, and quality control.
Advantages of 3PL
1. No investment required for warehouse space.
2. It provides data to track the shipment.
3. Includes manpower as more men are committed.
Disadvantages of 3PL
1. Reduced control over products is packed and shipped.
2. Additional costs for fulfilments, storage, etc.
3. You are not the only client, so your order can be shared with others at the warehouse.
Tenax transport provides you all warehousing and transportation management services. Contact us today for more information and updates.