Fulfillment is the backbone of your brand's operations, ensuring that products are delivered to customers efficiently, cost-effectively and accurately. Omnichannel fulfillment operations directly impact the customer experience, having an affect on satisfaction and loyalty. Timely and well-handled deliveries enhance the overall shopping experience and can lead to higher customer retention rates. Moreover, effective fulfillment processes contribute to brand reputation, differentiation and competitiveness in the retail ecommerce market.
Imagine a near-perfect customer journey: The consumer discovers your product, engages with your content, social accounts and reviews, the checkout is a breeze (they’re delighted and excited!), and then…the post-purchase experience is a disaster. It’s a late delivery, damaged product or the wrong item altogether – no matter the issue, it factors highly into the customer experience. And since it’s their final memory, it’s the one that sticks.
The post-purchase experience greatly influences shoppers. A recent survey of consumers found that 79% admitted they wouldn’t purchase from a brand again after a bad post-purchase experience. The quality of your ecommerce fulfillment operations directly affects building a loyal customer base. In short, the period from purchase to delivery can make or break your brand.
Ecommerce fulfillment is the process of receiving, processing and delivering online orders to customers. It starts with storing inventory in warehouses or fulfillment centers, where products are picked, packed, and prepared for shipment. Once an order is placed online, it’s transmitted to the fulfillment center, where workers retrieve the items from shelves, package them securely and label them for shipping. After packaging, orders head to their final destination through shipping carriers and services. Ecommerce fulfillment orders are tracked and managed throughout this process to ensure timely and accurate deliveries. Additionally, many fulfillment providers handle returns processing, where items are received back from customers and restocked or processed for resale.
Fulfillment starts when an order is received. Ideally, you have a robust Order Management System (OMS). It should give you end-to-end order tracking regardless of channel and the ability to change orders, shipping methods, etc., easily. From there, fulfillment includes the following steps:
Brands store and manage inventory in designated locations within a warehouse or fulfillment center. Upon receipt, each item is assigned a unique identifier (SKU) and placed in a specific area based on factors like size, weight and demand. Inventory levels are continuously monitored and updated in real-time using inventory management software to track stock levels and ensure accuracy. When orders are received, inventory management systems coordinate the retrieval of products from storage locations for order fulfillment, optimizing efficiency and reducing errors.
Picking is the retrieval of items for an order. The right type and number of products are “picked” from the warehouse to prepare for shipment. Packing includes placing the item(s) in the proper container for shipping, such as a box or bag, often with additional protective materials to prevent damage during transit. Labels are printed and added, readying the order for the carrier. While the pick-pack-ship process seems relatively simple, it requires consideration and the proper method to optimize efficiency and keep it cost-effective.
Shipping gets your items into your customers’ hands. Carriers pick up packages for delivery and are tracked until they reach your customer. The software updates the status and adjusts inventory levels accordingly.
Reverse logistics is a reality for today’s ecommerce brands. Since customers don’t always have the same ability to physically see or try products before purchase, retailers must factor in returns. Your fulfillment operations facilitate returns management: The process in which a customer sends an item back and it is received, inspected, refurbished, re-packaged, re-ticketed, disposed of or placed back into inventory.
Ecommerce fulfillment models are various strategies for storing, picking, packing and shipping orders to customers. The most common models include in-house fulfillment, drop-shipping, third-party fulfillment (3PL) or a hybrid of these approaches.
In-house fulfillment (also called dedicated or self-fulfillment) is when a company handles its own fulfillment operations internally. Brands handle storing inventory, picking, packing and shipping within their own facility.
Dropshipping is when a business doesn’t store products, but instead they are held with the manufacturer until an order is placed and then shipped directly to the customer. In this retail fulfillment method, the brand doesn't keep the inventory it sells stored. The item may pass through the fulfillment or distribution center for processing, but is immediately shipped out.
Third-party logistics (3PL) outsources logistics and supply chain management functions to a specialized company. These companies provide services such as transportation, warehousing, fulfillment and distribution.
Several factors should be considered when choosing the right fulfillment model for your brand:
Evaluate the geographic proximity of fulfillment centers or inventory storage to your target customers or customer base to minimize shipping costs and transit times. Look at whether you need a multi-node network and where your products need to be to guarantee one- or two-day shipping.
Ecommerce retailers first starting out may not require warehouse space and an automated process. However, as businesses grow, you must ensure that your fulfillment model can accommodate fluctuations in order volume, facilitating efficient order processing during peak seasons, promotions or other events. Another consideration should be how much scalability you may need and look at which model best supports that.
Assess the capabilities of the fulfillment model in handling order processing, inventory tracking and management to maintain accurate stock levels and prevent stockouts. Consider the nature of your products, including size, fragility and storage requirements, to ensure compatibility with the chosen fulfillment model. Think about the number of SKUs you may have or how many returns you will likely get. Beauty fulfillment, apparel fulfillment and footwear fulfillment differ greatly from electronics or healthcare fulfillment.
Evaluate the overall cost structure, including fulfillment fees, storage fees, shipping rates and any additional charges associated with the fulfillment model, to determine its financial viability.
By carefully considering these factors, businesses can choose a fulfillment model that aligns with their specific needs and objectives, optimizing their logistics operations for success.
Fulfillment expectations have changed. Customers are looking for an exceptional post-purchase experience that only streamlined fulfillment operations tailored to your unique business needs can handle. Whether you're scaling your operations or seeking cost-effective solutions, Cart.com offers customizable fulfillment services for your logistics. Take the first step towards efficient order processing and seamless shipping by partnering with us. Contact the expert team at Cart.com today to delight your customers from discovery to delivery.