{"id":7766,"date":"2019-02-05T18:31:01","date_gmt":"2019-02-05T18:31:01","guid":{"rendered":"https:\/\/michaeljbrumm.com\/dclcorp-phase2\/blog\/amazon-fulfillment\/order-fulfillment-guide\/"},"modified":"2021-05-20T18:24:02","modified_gmt":"2021-05-21T01:24:02","slug":"order-fulfillment-guide","status":"publish","type":"post","link":"https:\/\/michaeljbrumm.com\/dclcorp-phase2\/blog\/fulfillment\/order-fulfillment-guide\/","title":{"rendered":"Complete Guide to Order Fulfillment: Tips, Strategies and More"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The term order fulfillment represents the entire process of receiving, processing, <span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/michaeljbrumm.com\/dclcorp-phase2\/blog\/fulfillment\/order-fulfillment-picking\/\">picking<\/a><\/span>, and <span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/michaeljbrumm.com\/dclcorp-phase2\/blog\/shipping\/beginners-guide-to-shipping\/\">shipping<\/a><\/span> of an order to a customer. It can be handled by an individual company itself, or it can also be outsourced to a <\/span><span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/michaeljbrumm.com\/dclcorp-phase2\/blog\/3pl\/guide-third-party-logistics-3pl-fulfillment-providers\/\"><span style=\"font-weight: 400;\">third-party logistics (3PL)<\/span><\/a><\/span><span style=\"font-weight: 400;\"> provider.<\/span><br \/>\n<span style=\"font-weight: 400;\">For any business, a solid ecommerce fulfillment strategy is important to achieve success in a competitive marketplace and build customer confidence.<\/span><\/p>\n<h2><b>Determining your order fulfillment strategy<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Because each company has its own needs and goals, there is no simple fulfillment strategy that can be utilized across the board. However, there are many factors to consider when making the decision on which of the various options is right for your company or online store.<\/span><\/p>\n<ol>\n<li>\n<h3><b> Business size and sales volume<\/b><\/h3>\n<\/li>\n<\/ol>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">How many products do you sell?<\/span><\/li>\n<li>Do you sell products <span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/michaeljbrumm.com\/dclcorp-phase2\/blog\/fulfillment\/difference-b2c-b2b\/\">business-to-consumer (B2C) or business-to-business (B2B)<\/a><\/span> or a combination of both?<\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">How many orders are you fulfilling each month?<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">What do you predict as far as growth in products and orders over the next quarter and next year?<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The amount of different products you offer as well as order volume constitute an important factor in establishing which order fulfillment solution will work best for your company. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you are on the low volume end of the scale, it might make more sense to fulfill orders yourself as opposed to outsourcing the process. Selling a limited number of products and shipping only a few orders each month is a good indication that you fall into this category. Self fulfilling can be more cost-effective since your fixed costs are lower &#8211; (for example, you don\u2019t need a warehouse or complicated <span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/michaeljbrumm.com\/dclcorp-phase2\/blog\/inventory\/save-time-money-inventory-management-tips\/\">inventory management<\/a><\/span> system to track order flow).<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However if you are looking to scale up, and are predicting an increase in product offerings and shipping volume it may \u00a0be difficult to maintain self fulfillment and you might get past the point of being able to fulfill efficiently and in a timely fashion.<\/span><\/p>\n<ol start=\"2\">\n<li>\n<h3><b> Sales channels &amp; technology<\/b><\/h3>\n<\/li>\n<\/ol>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">What ecommerce platforms are you using?<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Are you using a website, shopping portal, marketplace, another type of online store, a physical storefront or a combination?<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">When it comes to a fulfillment strategy, it should be able to support your various sales channels, especially when it comes to technology. Having order fulfillment technology that can easily integrate across your various channels can be a huge help in managing the entire ecommerce fulfillment process. It can help make it more efficient and cost-effective, as well as enhancing your customer experience and improve customer satisfaction.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The technology that you implement as part of your order processing strategy should help you to make the process easier, instead of complicating it.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It should streamline the process so that as soon as an order is placed it can automatically be sent to you or your fulfillment provider to then be picked, packed and shipped as quickly as possible.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Ensuring that your fulfillment service and operation has the right inventory management software is also important. You should be able to see your available inventory across locations and have a safeguard in place to avoid stockouts. This is an important factor in quality control when it comes to your fulfillment operations.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Additionally warehouse management software (WMS) can help control day-to-day warehouse operations including inventory management, shipping, sorting, and storing.\u00a0<\/span><\/p>\n<p>Order fulfillment software can help with the time-consuming tasks of inventory and warehouse management, order picking and processing, shipping and tracking and even returns processing.<\/p>\n<p><span style=\"font-weight: 400;\">In general, sellers need to be able to implement technology that connects purchasing and manufacturing operations with product demand, which enables you to make more informed decisions.<\/span><\/p>\n<ol start=\"3\">\n<li>\n<h3><b> Customer location<\/b><\/h3>\n<\/li>\n<\/ol>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Are your customers clustered in a single local area, or are they in multiple regions of the country?<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Where your products are shipped from and where they are shipped to are probably the most significant factors when determining your ecommerce order fulfillment process.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Try to minimize the number of <span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/michaeljbrumm.com\/dclcorp-phase2\/blog\/shipping\/shipping-zone-guide\/\">shipping zones<\/a><\/span> that your average order travel. This helps to deliver on high <\/span><span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/neilpatel.com\/blog\/expectations-and-customer-service\/\"><span style=\"font-weight: 400;\">customer expectations<\/span><\/a><\/span><span style=\"font-weight: 400;\"> by reducing shipping times and costs.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you are shipping your orders from a single rural area you are most likely paying significantly higher premiums. If that is the case, it might make sense to think about fulfilling orders from more densely populated and centrally located urban areas.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Splitting your inventory across multiple locations can be a big way to cut costs and shipping times. Using this strategy allows you to use ground shipping more often, which is much cheaper than air shipping.<\/span><\/p>\n<h2><b>What are the most common order fulfillment options?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The vast majority of ecommerce businesses utilize one of three main options to provide order fulfillment. \u00a0They are merchant fulfillment, dropshipping, and outsourcing to a third-party fulfillment (3PL) provider.<\/span><\/p>\n<ol>\n<li>\n<h3><b> Merchant Fulfillment<\/b><\/h3>\n<\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">This is also sometimes referred to as self-fulfillment or in-house fulfillment and means that the seller is handling the entire fulfillment process without assistance from a fulfillment service.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This is a common place to start when a business is just getting off the ground.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Usually merchant fulfillment orders are stored and packed from a home, or small business location.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This option provides more individual control of the fulfillment process, but can become difficult and expensive to scale as your sales volume increases.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When that occurs you can choose to move your operations into a larger fulfillment center which means costly warehouse space, equipment, staff, technology and more.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Another option would be to <span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/michaeljbrumm.com\/dclcorp-phase2\/blog\/fulfillment\/outsourcing-order-fulfillment-guide\/\">outsource your fulfillment operations<\/a><\/span> to a 3PL.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Many sellers choose outsourcing because it often has lower upfront costs and is much easier to manage and scale than continuing to use merchant fulfillment on a larger scale.<\/span><\/p>\n<ol start=\"2\">\n<li>\n<h3><b> Dropshipping<\/b><\/h3>\n<\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">In dropshipping, inventory is produced, warehoused, and shipped directly from the manufacturer. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">When an order is placed, the information is sent to the manufacturer who then ships the product directly to the customer.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This can be an attractive option to some businesses, especially if they are reselling products that are made by a third party. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">In many cases the manufacturers are located overseas which can mean that shipments take longer and are more expensive than orders that are fulfilled domestically.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The main reason that businesses shy away from dropshipping is the fact that it provides minimal control across the entire supply chain process, especially in regards to inventory management.<\/span><\/p>\n<ol start=\"3\">\n<li>\n<h3><b> Third-party fulfillment<\/b><\/h3>\n<\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">Third-party fulfillment basically means that the entire fulfillment process is <span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/michaeljbrumm.com\/dclcorp-phase2\/blog\/fulfillment\/time-to-outsource-fulfillment\/\">outsourced to a fulfillment company<\/a><\/span> that is separate from the business itself. This can include receiving, warehousing, picking, packing and shipping, as well as many other services depending on the needs of the seller.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This option is often chosen by sellers because it allows them to hand off fulfillment processes that can be complex, costly, and time consuming to handle by themselves. Sellers effectively lower their fixed costs and their costs become variable, typically structured by the 3PL as a cost per transaction (order). 3PLs can provide a multitude of order fulfillment services that make processing your customer orders much easier to manage as well as helping you save time. They can reduce shipping costs for your online orders, while allowing you to offer options like two day shipping or even next day shipping.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This can free up time for the sellers to innovate, improve existing products, and focus on more growth related operational tasks.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">By handing off these tasks to a 3PL that has logistical expertise, leading-edge fulfillment technology and aggressive carrier discounts on shipping rates, it can make it much easier to scale your business and increase shipments as demand grows.<\/span><\/p>\n<h2>Bottom Line<\/h2>\n<p><span style=\"font-weight: 400;\">If you are considering outsourcing your order fulfillment to a third-party logistics provider (3PL), it can seem like a daunting task. There are many factors that go into <\/span><a href=\"https:\/\/michaeljbrumm.com\/dclcorp-phase2\/blog\/choosing-a-third-party-logistics-3pl-or-fulfillment-partner\/\"><span style=\"font-weight: 400;\"><span style=\"color: #3366ff;\">choosing which 3PL is best for your<\/span> <span style=\"color: #3366ff;\">business<\/span><\/span><\/a><span style=\"font-weight: 400;\"><span style=\"color: #3366ff;\">.<\/span> <\/span><\/p>\n<p><span style=\"font-weight: 400;\">A 3PL should properly support your businesses\u2019 growth, help you navigate the complexities associated with logistics and supply chain, and ultimately, keep your customers happy by getting your products in their hands quickly and accurately.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">If you are interested in seeing if a 3PL is the right fit for your business\u00a0<span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/michaeljbrumm.com\/dclcorp-phase2\/company\/contact-us\/\">send us a note<\/a><\/span><\/span><span style=\"font-weight: 400;\">\u00a0to connect about how we can help your company grow. You can also view <\/span><a href=\"https:\/\/michaeljbrumm.com\/dclcorp-phase2\/services\/ecommerce-fulfillment\/\"><span style=\"font-weight: 400;\"><span style=\"color: #3366ff;\">DCL\u2019s list<\/span> <span style=\"color: #3366ff;\">of services<\/span><\/span><\/a><span style=\"font-weight: 400;\"> to learn more, or check out <\/span><span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/michaeljbrumm.com\/dclcorp-phase2\/resources\/integrations\/\"><span style=\"font-weight: 400;\">the many companies we work with<\/span><\/a><\/span><span style=\"font-weight: 400; color: #000000;\"> to ensure great logistics support. <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The term order fulfillment represents the entire process of receiving, processing, picking, and shipping of an order to a customer. It can be handled by an individual company itself, or it can also be outsourced to a third-party logistics (3PL) provider. For any business, a solid ecommerce fulfillment strategy is important to achieve success in [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[20],"tags":[174,171,6],"class_list":["post-7766","post","type-post","status-publish","format-standard","hentry","category-fulfillment","tag-guide","tag-tips","tag-3pl"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Understand everything there is to know about ecommerce order fulfillment<\/title>\n<meta name=\"description\" content=\"Determining the right order fulfillment strategy for your business can be complicated, but this post will help guide you through making the best decision.\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, 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