Order fulfillment is the process of receiving goods, then processing and delivering orders to customers. The process starts when a customer places an order and the process ends when they receive what they purchased. Despite that, this process can get deeper. If the customer wants to return a product, order fulfillment manages the return transaction as well.
Here’s the base 5 steps involved in order fulfillment:
Order fulfillment can be an expensive and complex process. Some companies handle order fulfillment in-house, while others outsource the process to a third-party logistics company or 3PL.
Let’s take a closer look at the benefits and challenges associated with order fulfillment.
Here at Thill Inc., we work with a lot of companies that need Shopify fulfillment, meaning their ecommerce platform is Shopify and we help them fulfill orders. Since these companies are outsourcing their fulfillment, this type of order fulfillment is called outsourcing fulfillment.
In total, there’s a few different types of order fulfillment.
- Outsourced Fulfillment – Just as we touched on, outsourced fulfillment refers to outsourcing your fulfillment needs to another company, usually a 3PL or an order fulfillment company. If companies don’t have enough storage, this is usually who they will our course too.
- In-House Order Fulfillment – Also referred to by self fulfillment, this type of order fulfillment refers to companies that do their own order fulfillment. With an in-house order fulfillment process, employees are responsible for the order fulfillment process. With this model, staff handle ordering, storage and shipping.
- Dropshipping – Another common type of order fulfillment is known as dropshipping. While dropshipping is similar to out coursing, there is no inventory to manage. Since there is no inventory, inventory management is not needed. In this scenario, inventory is not in stock. Rather, when an order is placed, the merchant will purchase the product from a 3rd party supplier. It is the supplier that handles the order and ships it out to the customer.
- Hybrid Fulfillment – If a company is using more than one order fulfillment process, this would be referred to as a hybrid fulfillment model. A great example of this would be a company that is doing self-fulfillment but also outsourcing some fulfillment responsibilities to a 3PL.
Why Order Fulfillment Is Vital To Your Success
You may be wondering, is order fulfillment important? Not only is important, it’s a core pillar to any company’s success.
We’re past half way in 2020 and customers want their orders fast. And when we say fast, we’re talking 2 days or less. That is the world we’re living in and it’s not going to stop. Companies such as Amazon are looking for ways to ship products within 24 hours or less.
If you want to gain a competitive advantage over your competition, you can do it by keeping your customers happy, happy, happy. Duck Dynasty nod there, but it’s true, how can you make customers happy? You get your products to them as quickly as possible. You manage returns (returns processing) fast and efficiently.
When you optimize your order fulfillment, you can;
- Reduce Operational Costs
- Lower Your Shipping Costs
- Enhance Great Customer Service
- Build Your Customer Base
- Sell More Products
- Keep Customers Coming Back
Order Fulfillment Can Be A Challenge But It’s Well Worth It
Order fulfillment can be complex, but even complex order fulfillment processes can be optimized.
What are your biggest challenges? Here’s what our clients bring up time and time again.
- Inventory Management – If you want to lose new customers immediately, running out of stock will do it for you. Your company has to maintain healthy inventory levels so you’re not losing customers to your competitors.
- Demand Planning – Companies must know the demand of their products at all costs. It’s a delicate balance of keeping enough inventory on-hand while not overstocking.
- Logistics Planning – Your shipping process is equally important to the sale, perhaps a little more. You need to make sure your shipping methods, efficiency, speed, and customer care are sound. If you don’t, it doesn’t take many customer reviews to give your company a bad reputation.
- Supply Chain – You can do everything right and it happens, you run out of inventory and you can’t fulfill customer orders. When product demand spikes and depletes your inventory, you need to have the ability to replenish that inventory fast.
How To Win At Order Fulfillment
It can be tough getting your order fulfillment dialed in. Here’s a few key facts that will help you.
Make The Best Decision For Your Company
Every company is in a different scenario, which means you have different needs and wants. If your company can’t keep up with demand and you’re struggling to fill orders, hiring an order fulfillment company is likely the right decision.
If you’re not sure what to do next, reach out and get the help you need. We have over 50 years of experience and have worked with many companies over the past 5 decades to help with all of their fulfillment needs.
If You Hire A Fulfillment Partner, Make Sure They Integrate With Your Ecommerce Platform
This is super important because you want onboarding to be an easy transition. If your fulfillment partner doesn’t have an integration for your ecommerce platform, that can be a serious problem.
For example, here at Thill, our order management software works with a number of ecommerce systems, such as;
- Shopify Order Fulfillment – Our OMS integrates with the Shopify platform.
- Ebay Order Fulfillment – Our OMS integrates with the Ebay platform.
- Magento Order Fulfillment – Our OMS integrates with the Magento platform.
- Amazon Order Fulfillment – Our OMS integrates with the Amazon platform.
- WooCommerce Order Fulfillment – Our OMS integrates with the WooCommerce platform.
- CrateJoy – Our OMS integrates with the CrateJoy platform.
The Data Should Lead Your Way
What we love about our fulfillment software is the fact that it gives you the data you need to make data driven decisions.
If you know how to read and analyze your data, you’re going to make the right decision moving forward. For your company, real-time data is key to decision making and if you don’t have the software to make that happen, you can’t leverage it. More than likely, your competitors are using real-time data, don’t be left behind.
Automation Is Your Friend
Here at Thill, our warehousing is second to none, relying on automation in every facet of what we do.
You want to adopt automation in your business, especially as it pertains to order fulfillment. This automation will allow you to optimize your fulfillment.
Don’t Be Timid To Seek Guidance
If you’ve been thinking about outsourcing your order fulfillment but you’re not sure where to start, reach out to us.
You don’t know what you don’t know, right?
You can reach us during regular business hours calling (920) 967-9201 or by clicking here to use our web form.
Be sure to visit our blog as we have educational content on a wide range of topics related to fulfillment.