What is E-Commerce Fulfillment?
If you look up “fulfillment” in a dictionary, it’s described as “the act of doing something that you have promised or intended to do”. In the case of e-commerce, each sale represents a promise that the customer will receive the goods they’ve paid for—so fulfillment is the act of ensuring that you deliver on that promise.
E-Commerce fulfillment is made up of many individual services and workflows, and covers a chain of activities that’s set in motion when an online order is received. The process includes a number of stages, such as the receiving and storage of inventory, order management, picking items from the warehouse, packing boxes, and shipping goods to their final destination.
Online retailers may choose to carry out the entire fulfillment process themselves, or they might outsource the job to a third-party logistics (3PL) provider or specialist order fulfillment company. Either way, the success of the operation depends on the strategy, system, and technology used to fulfill customer orders.
Why is E-Commerce Fulfillment Important?
It’s not too much of an exaggeration to say that fulfillment is the most crucial part of the e-commerce retail business. Customers are growing increasingly demanding, largely because they have more choice of online retailers and products than ever before (e-commerce revenues are set to reach $6.54 trillion by 2022).
Therefore, efficient fulfillment is a key differentiator between you and your competitors. As well as a seamless browsing and checkout process, customers expect that you’ll always have the advertised items in stock, that you’ll offer a choice of competitive shipping options, and that you’ll get the goods to them (in perfect condition) when you say you will.
It’s a big ask, right? But it could make the difference between the success and failure of your e-commerce business. Effective e-commerce fulfilment can help you to:
Keep customers happy
This is really the #1 goal of any customer-facing business—your customers are your biggest asset, after all. Providing them with a great experience will encourage them to spend more, and recommend you to their friends.
That’s absolutely not going to happen if you keep running out of stock, failing to meet agreed delivery times, or sending out incorrect or damaged items. In fact, it only takes one mistake to lose a customer for good (59% of customers who had a bad experience with a retail company decreased or completely halted purchasing from them).
If your fulfilment process is working smoothly, you have a much better chance of getting it right first time, every time.
Source: financesonline.com
Save time and money
Logistics can often soak up a lot of money, but when your e-commerce fulfilment is working well, you actually boost your profit margins instead. An efficient system will improve productivity, while automating processes can help you reduce the number of staff required.
You’ll also save money because there’ll be fewer returns (meaning you won’t have to cover return shipping fees, pay to dispose of faulty items, or be left with obsolete stock). Fulfilment can also be a revenue-driver by improving conversions and sales from happy customers.
Beat the competition
In 2020, global e-retail sales grew 27.6% compared to the previous year, and that’s not just because of the pandemic. More and more businesses are moving online, so it’s vital that you’re competitive—and that includes in fulfillment.
With so many e-commerce platforms and marketplaces available, it’s likely that the products you sell are also available elsewhere. So, fast shipping times and low rates (and delivering on your promises) will definitely help you stand out from the crowd.
Scale your business
Let’s say you started small, selling products on just one website. But now you want to reach more customers by selling on a range of channels. That’s a great idea, as customers have come to expect multichannel shopping opportunities.
And if you have an efficient e-commerce fulfillment system in place, it won’t be so difficult to manage all these channels. For example, smart inventory management will help you ensure that stock availability is updated whenever & wherever a purchase is made, so that all channels show the same real-time information.
Plan for the future
Effective fulfillment means having a clear overview of your inventory, optimized storage, a well-trained pick-and-pack team, and reliable shipping partners—with all those parts fitting together seamlessly.
When you know that each part of the operation is running smoothly, then you’ll have the confidence to plan for the future. That might simply mean knowing how much stock to order for a new season, or you could look at adding extra product lines or selling to an international market.
Common E-Commerce Fulfillment Challenges
Source: Bloomberg.com
E-Commerce fulfillment has various challenges which can hamper your efforts to get it right. Here are a few of the most common:
Poor visibility of inventory
Not knowing exactly what you have in stock, or where it’s located, is a big problem for retail businesses, especially in the fast-paced e-commerce sector. Without keeping a close eye on your inventory, you won’t be able to tell if items go missing—or if you have a backlog of unsold products.
For example, if goods are ordered but the system doesn’t track them in real-time, you could go on selling them (and then have to explain to the customer why the item they’ve paid for is not available after all). Or you could mistakenly leave perishable stock sitting on pallets.
This is a particular issue for multichannel and multi-location selling, when you’re juggling various online marketplaces (and maybe physical stores, too). You need an advanced tracking system with a centralized view of inventory and orders.
Inaccurate forecasting
The issue of having too much or too little stock can also be caused by inaccurate predictions. Maybe you didn’t bargain for a spike in orders, such as Black Friday or Cyber Monday, or you failed to spot a new trend (everyone going mad for a product endorsed by a celebrity).
On the flipside, perhaps you ordered a certain toy in bulk because it was popular with kids last year, and now they’ve all moved on to something else. Sometimes these fluctuations are unavoidable, but it makes sense to focus on the things you can control—analyzing customer data (sales and preferences) to create more accurate forecasts.
Warehouse issues
If your warehouses are not managed effectively, there’s more risk of delays and damaged stock. Haphazard storage means it takes longer for the staff to locate items when an order comes in, and miscommunications with picking and packing documentation can lead to the wrong products being sent out.
Using automation, such as barcode scanning, can help you speed up the processes and reduce errors. And a professional fulfillment partner will give you expert management and fully-trained staff, as well as warehouse security.
High shipping costs
Thanks to Amazon, two-day shipping is now the industry benchmark, and customers expect their items within 48 hours on average. They also want to get this option at a low price—which means that your business has to absorb much of the shipping cost.
Plus, if you’re a global business, you have to bear in mind that the cost of shipping to countries on the other side of the world is going to be expensive. You’ll need to negotiate with shipping carriers to get the best rates, which is a task that fulfillment providers can help out with.
Delivery delays
No matter how good your systems are, some delays are inevitable. These can be caused by bad weather, disruption of the global supply chain (such as the Suez Canal blockage), or even a driver shortage like the one suffered by the UK in the wake of Brexit.
The main thing to remember is that if the worst happens, you should keep your customers in the loop. As long as you’ve done everything you possibly can at your end, they’ll understand that sometimes these things happen.
Returns
Just like delays, some returns are unavoidable. Sometimes customers return a perfectly good item because they just didn’t like it, or because they ordered more than one for comparison. But some returns are the result of an inefficient system and poorly trained staff.
A customer could receive the wrong color variation, or a faulty or damaged item that wasn’t properly inspected—or the package simply arrives too late for their grandma’s birthday. You’ll then face negative reviews and complaints, as well as shouldering the return postage cost.
In order to avoid any confusion or dispute, it’s best to have a clear returns policy in place (and a good returns management system like Brightpearl’s).
What is The E-Commerce Fulfillment Process?
Although there will be some variation depending on the type of business and products, the e-commerce fulfillment process has six main stages:
Source: fitsmallbusiness.com
Receiving
When stock arrives from your supplier, you’ll receive it at a designated storage facility—a warehouse, a fulfillment center, or even your own home if you’re a very small business.
Your staff will count the items to make sure that the numbers add up and that the products match the descriptions provided. They will also carry out an inspection of the goods, to check they haven’t been damaged in transit.
Each SKU is then recorded on an inventory list. It’s good practice to use inventory management software and barcode scanning technology for this, as it’s faster and less prone to errors than doing things manually.
Storing
Goods are usually stored on pallets, shelves, or in bins. It’s important to ensure the correct inventory storage to avoid damage or spoilage, so fragile or perishable goods will require special care. Security is also vital to guard against theft and fraud.
An efficient warehouse management system is necessary to give you complete visibility of stock levels and make it easy for staff to find items. You might use FIFO (first in, first out) or LIFO (last in, first out) rules, arrange stock by expiry date, or make high-demand items more accessible.
Picking
When a customer places an order through your online store, the system generates a “picking slip” with information to help staff select the right items. Your fulfillment software should update in real time to show which products have been picked.
Depending on your company’s order volumes, you can use single order picking (where the staff concentrate on one order at a time), multi-order or batch picking (several orders picked at once to increase efficiency), or zone picking, where SKUs and workers are assigned to specific zones.
Your company may also deal with kitting, when multiple components need to be manually prepared or put together before being packed and shipped.
Source: instructorbrandon.com
Packing
The packing team receives details about how each order should be packaged, ensuring that the chosen material protects the item while remaining as small and light as possible to keep shipping costs down.
Each parcel must include a “packing slip” or manifest, although some companies now use electronic packing slips. The document shows SKU numbers, weights, dimensions, and the number of units, and should be checked by the packer before the parcel is sealed.
Packing staff are also responsible for labeling the packages correctly, with special labels required for international shipping. Many fulfillment providers offer automation for this stage.
Shipping
This stage sees you actually deliver the item to the customer, either by personally taking parcels to the post office (for small companies) or having a shipping carrier collect the orders from a fulfillment center.
Today’s customers demand attractive shipping options, and most order fulfillment services will identify the best carrier for delivering your packages based on weight, speed, and location. Standard ground shipping is often free, but you might charge more for expedited shipping such as two-day, overnight, or guaranteed same-day delivery.
Once an order has been dispatched, you should receive tracking information, which you can share with customers.
Returns
Returns are a fact of life, especially in e-commerce—online shoppers return 15 to 40% of purchases, compared with 5 to 10% of items bought in physical stores. The bigger your fulfillment operation, the more time you’ll spend dealing with returns.
Your warehouse team or 3PL provider needs to be fully trained on processing returns efficiently, so that customers receive refunds or sales credits quickly and your accounts are always up to date.
Your management system can be set up to automatically restock items in good condition, while unusable goods may be disposed of or recycled.
Source: salescycle.com
Common E-Commerce Fulfillment Methods
E-Commerce companies have several options for fulfillment. Startups and very small firms often choose to handle the whole process themselves with in-house or self-fulfillment, while larger or growing businesses may decide to outsource all or some of the operations to a partner. The global e-commerce fulfillment services market is expected to reach $113.59 billion by 2027.
There’s no one-size-fits-all solution, as your choice will depend on business-specific challenges and goals. You also have the option of employing a hybrid model, combining more than one of the methods detailed below.
Third-party
If you’re spending too much time on the logistics of fulfillment, or running into some of the common issues we looked at earlier, outsourcing the process to a fulfillment partner is your best option. Third-party logistics (3PL) firms take on the responsibility for most or all aspects of fulfillment, from warehousing to order processing and shipping.
Your inventory is typically stored at an e-commerce fulfillment center, which gives you access to more space so you can purchase in bulk. Orders placed with you are automatically forwarded to your partner, and inventory levels are synced with your e-commerce store.
3PL partners use advanced automation to boost efficiency, and can negotiate cheaper shipping rates because they ship large quantities for multiple vendors. Shipping times are also reduced, because you can pick a fulfillment center that’s close to the majority of your customers.
Yes, you have to pay for their expertise, but you’ll save money on warehouse rental and staffing, and you don’t have to license your own warehouse management software. You’re giving up control to the 3PL, so it’s vital that you trust them to deliver on quality of service and customer satisfaction.
Alternatively, fourth-party logistics (4PL) firms manage and optimize a business’s supply chain from end-to-end, including all 3PL services (compared to a 3PL provider who focuses on the day-to-day operations of supply chain logistics).
Source: bigcommerce.co.uk
Amazon
Fulfillment by Amazon (FBA) is an example of third-party fulfillment. It handles e-commerce orders for Amazon sellers, who send their products directly to Amazon’s fulfillment centers to be stored, picked, packed, and shipped. With Brightpearl you can also use FBA on orders from your own e-commerce website.
It’s good for smaller retailers who need an extra hand, and want to attract Amazon Prime customers. You can take advantage of discounted shipping rates from partner carriers, a reliable returns policy handled by Amazon, and a vast global warehouse network.
In-house
With in-house fulfillment, your business completes each step of the process on its own. That means storing inventory, accepting orders, packing boxes, and arranging delivery. This keeps costs to a minimum, but the workload eats into the time you could be spending on customer acquisition and marketing campaigns.
If you require more storage space, you can either rent or buy a warehouse (you’ll be responsible for recruitment, staffing, equipment, software, and insurance). Although this method is most commonly used by small companies with low order volumes and SKU counts, some large businesses also prefer it as they have complete control over all operations.
Dropshipping
Dropshipping is when the fulfillment process is carried out by the manufacturer who makes your products or their ultimate suppliers. They receive your orders, pick and pack the goods, and deliver direct to the customer. You just handle the sales, without ever actually being in possession of the stock.
Thanks to the lack of overheads, dropshipping is accessible for any company—if you’re willing to relinquish control. With the shipping process entirely in the hands of someone else (often based overseas) you may experience longer transit times and higher costs. Dropshipping also makes it more difficult to offer customized products.
How to Choose an E-Commerce Fulfillment Provider (3PL)
Source: lateshipment.com
A quick search on Google will show you the vast number of 3PL providers out there. So how do you choose the best one for you? Well, you might make your decision based on the location of the company’s fulfillment centers, the promised turnaround time, or whether it specializes in the type of product you sell.
Cost is also an important factor, and this will depend on the fulfillment provider’s policies and resources as well as your company’s specific needs. Because costs for different aspects of fulfillment are often listed separately (insurance, special packaging, branded boxes, kitting), you need to watch that they don’t escalate out of control.
You should also analyze your sales trends before you choose a 3PL company. Where are most of your customers located? Which shipping methods and rates do they tend to choose? Will this provider be able to give you the coverage you need?
What to look for
As we’ve said, different businesses will be looking for different things. But good e-commerce fulfillment providers will typically provide the following:
The right location
E-Commerce companies often think that a fulfillment center based out in the countryside will give them the best value for money. Yes, it may be cheaper to lease space in a rural center, but you’ll actually end up paying more in shipping costs.
Most carriers calculate shipping based on how many zones a package has to travel through to reach its destination, so choosing a center that’s more accessible will mean fewer zones and reduced costs. That’s why urban fulfillment centers are becoming more popular, as they allow businesses to quickly and affordably ship to customers in big cities with large populations.
If you’re aiming for national distribution, a single warehouse location is probably not going to be enough. Look for a fulfillment provider with a network of centers across the country.
Source: supplychainquarterly.com
Maximum efficiency
The whole idea of outsourcing to a fulfillment partner is to make your business more efficient, so make sure your chosen provider has the right systems in place to streamline the fulfillment process.
For example, they should be able to place received goods into inventory as quickly as possible—you don’t want them sitting around at the unloading bay.
You should check that the picking and packing process is automated to avoid delays and mistakes, and that the fulfillment center has processes for handling damaged goods and a low shrinkage allowance (shrinkage is when your inventory is reduced through damage, spoilage, or theft).
Ideally, your chosen provider should be able to offer next-day turnaround, or even same-day shipping. Efficient returns management is also needed to get goods back on the shelf in the optimum time.
Visibility
Although you’re handing over responsibility for your operations to the fulfillment provider, you’ll still want a degree of visibility in the process—especially if you’re running a hybrid model and fulfilling some orders in-house.
Your provider should enable you to view inventory and orders in real-time on a central dashboard, so you can see what you have in each of their centers. Choose a 3PL with regular syncing, and ask for data on their error rates. It’s also worth considering how they store and share customer data.
Integration
Ideally, your 3PL company should integrate with every platform on which you sell (from your own website to marketplaces like Amazon and eBay), and connect incoming orders for any sales channels it doesn’t support.
It’s also useful to have a system that integrates with your POS technology if you have brick and mortar stores, and your CRM to keep on top of customer satisfaction.
Source: inboundlogistics.com
Robust support
Look for a fulfillment provider that offers great support when you need it, as well as clear lines of communication, seamless access to data, and an easy onboarding process.
As well as being there to deal with any questions or problems you might have with the service, fulfillment centers can also handle queries from your own customers—some of them will even operate a full contact center on your behalf.
Questions to ask providers
Here are a few more things you might want to ask about before signing up with a 3PL provider.
Can I see a breakdown of costs?
The total cost of outsourcing to a fulfillment provider can vary widely, and you’ll want to see a full list of everything you’re paying for. Some centers charge per unit or per pallet, while others base pricing on the amount of space taken up by your goods.
Can you handle reverse logistics?
If your 3PL company can take care of returns, that’s one less thing for you to deal with. It’s much simpler if returned items can go straight back into your inventory.
What shipping methods/rates/times do you offer?
Because 3PLs ship large quantities for multiple retailers, they can usually negotiate the best rates from shipping carriers—make sure they pass those savings on to you. Also ask about shipping times and ensure the provider can deliver on your promises.
Can you do custom packaging?
This is a great way to enhance your brand identity and impress customers with custom boxes and personalized notes (hopefully your customers will do their “unboxing” on social media and recommend your business!). You’ll probably have to pay extra for this service.
How robust is your security?
How does the provider mitigate against theft and fraud? Do they have security guards or CCTV? It’s also worth asking about their data protection safeguards.
What’s your contingency plan?
Finally, what protocols does the company have in place for when things go wrong? Do the fulfillment centers have a backup power source, for example?
Source: api2cart.com
See how Brightpearl can improve your inventory management efficiency
Common E-Commerce Fulfillment Costs
Costs vary according to the fulfillment model you choose, you will either bear all the costs yourself or pay to hire a service.
Storage costs
If you’re doing self-fulfillment, you’ll need to rent space in a warehouse or purchase your own facility to store your stock. If you’re outsourcing, you’ll pay a monthly or annual storage fee to your provider (fulfillment centers usually charge per SKU or pallet, or by space required).
You may need specialist storage, such as refrigeration for perishable goods, which will cost a little more. Wherever your inventory is stored, you need to take average shrinkage cost into consideration, to account for losses caused by damage or theft.
Labor costs
Unless you’re a solopreneur, you’ll need to factor labor costs into your budget—and if you outsource the operation, your provider will build this cost into your bill.
Any fulfillment operation requires warehouse staff to handle receiving, putaway, picking, packing (including kitting), and returns. You also need a back-office team to look after things like admin, data analysis, and customer support.
Automation can drastically reduce labor costs, either by minimizing the number of workers, or increasing the productivity of the ones you have.
Shipping costs
This is the biggest outlay involved in the fulfillment process, and it’s important to figure out exactly what you’re paying for, so that you can try to reduce the cost. Carriers usually include shipping calculators on their websites, or you can ask your 3PL provider for a breakdown.
E-Commerce shipping carriers base their prices on factors including package size and weight, origin and destination address, transaction fees and duties, tracking, and insurance. If your goods are dispatched from a fulfillment center near to your customers, delivery costs will be lower.
Source: economist.com
We know that e-commerce businesses need to offer fast, low-cost shipping in order to be competitive. More than half of US shoppers (54%) have abandoned online shopping carts because of delivery costs, while a quarter canceled orders because delivery wasn’t fast enough for their needs.
The decision you have to make is whether your business is going to absorb some or all of the cost, or whether you’re going to pass it on to your customers. If you bear the cost for your cheaper products you’ll lose money, but hiking product prices up too steeply could put shoppers off.
However, the good news is that most customers are willing to pay more in order to get free or discounted shipping, strange as that sounds. So you could help to cover your costs by setting a minimum-spend threshold, which encourages customers to add extra items to their cart.
Packaging costs
Packaging can also end up costing more than you anticipated—if you’re not careful, it can add a significant cost to an inexpensive item. You need to strike a balance between protecting your products from damage and minimizing the packaging weight. And, again, you have to decide whether to offset the cost of packaging by charging more for the product.
Sometimes the price is calculated by the shape and size of the parcel as well as the item weight. This is known as DIM weight pricing (dimensional weight pricing), where the length, width, and height of the parcel are multiplied to get a number which equals cubic inches. That number is then divided by a DIM divisor (chosen by the carrier) which gives you the total “weight” in pounds.
If you only sell one type of product, it’s easy to work out how much the packaging will cost. For example, if you sell T-shirts, they will always fit into flat envelopes or polymailers with no extra protection required. If you sell laptops, they’ll always need to be packed carefully in a sturdy box.
Source: elextensions.com
But if your product lines vary widely in shape and weight, you will have to use different packaging for each one. You’ll find it helpful to maintain an up-to-date list of product measurements and weights, so that you can work out the prices you should be charging (and share the information with customers).
Carriers such as USPS, UPS, or DHL offer free packaging, although it won’t have your branding. As well as considering customization, you may want to research eco-friendly packaging—it can cost more, but customers are increasingly keen to do business with companies that care about the planet.
Returns costs
We’ve already talked a little about the cost of returns—you might offer free or low-price returns to attract more customers, but it’s got to be paid for somehow! And if the item was damaged, faulty, or late, then obviously it’s on you to foot the bill.
Returns also have another layer of cost, which is the time and effort it takes for your team to receive returned goods, check for damage, restock them if appropriate, and log them in your inventory tracking system. Disposal and recycling of unusable items may also incur a cost.
E-Commerce Fulfillment Strategy
Whether you’re outsourcing fulfillment or taking a hands-on approach, you need a solid strategy to ensure the whole process operates effectively. It’s important to think about exactly what you want to achieve, and to do some research into the technology and solutions required to do this.
When you’re streamlining or upgrading processes, the transition should be as efficient as possible to minimize disruption. You also need to consider the future scalability of any system you deploy.
How to develop a fulfillment strategy
Your strategy should be designed to balance the needs of your online business and those of your customers. For example, you need to find the most cost-effective way to ship your products while meeting increasingly high customer expectations.
Source: selecthub.com
You also need to choose the most suitable fulfillment model, which could involve a hybrid of in-house and third-party fulfillment. Analyze sales trends, customer locations, and preferences to help you make the decision. Do some research on shipping fees to see how you can get the best deal.
Before your strategy can go live, make sure the whole team is comfortable with how it’s going to work. You could roll out the new system with one product line to start with, and carefully track the progress before applying the strategy to the whole business.
Best e-commerce fulfillment strategies
Although it can be helpful to look at how others in the industry are handling things, remember that what works for someone else won’t necessarily work for you. Your ideal strategy is very much dependent on the nature of your business and the goals you aim for. That said, here are some general tips to help you develop a winning strategy.
Provide a choice
Customers love choice, whether it’s plentiful product variations or a range of channels through which they can browse and buy. They also love convenience, so you can keep them happy by offering different options for shipping and returns.
For example, a customer might be willing to pay extra for same-day delivery when they suddenly realize they’ve forgotten someone’s birthday, but they’d choose standard ground shipping for non-urgent items.
The ability to collect or return an item in-store is also a winner with customers. The BOPIS (buy online, pick-up in store) and BORIS (buy online, return in store) methods offer greater flexibility, although both require an extra level of inventory management and staff training.
Source: retailtouchpoints.com
Balance your costs
If you want to be able to offer all these options to your customers, you have to make sure that the business can cope with the costs. Guaranteeing free delivery can put a particular strain on the budget, but 75% of customers now expect it when shopping online, even on orders under $50.
However, there are ways around this. You could choose to bake the cost of shipping into the product price, using the average shipping cost—or set a minimum spend threshold for free shipping to increase the average order value.
You can also minimize costs in the warehouse and back office by giving staff the means to do their jobs more efficiently. Which leads us on to. . .
Use the right tech
From inventory tracking to printing shipping labels, order fulfillment software can save you a lot of time, as well as reducing the number of human errors. Look for solutions with advanced features and smart technology, such as barcode and RFID scanning—plus an order management system that can easily log returns back into your general inventory.
There are plenty of options to choose from, but it makes sense to pick a comprehensive system that’s built especially for retail and wholesale operations (like Brightpearl). You’ll soon see an uptick in productivity and profit margins.
Use your data
The best fulfillment systems come with analytics and reporting capabilities, which help you to utilize customer data to make better business decisions. By collating data in one place, you can easily spot trends and look back at previous sales figures.
This makes it easier to create accurate forecasts, so that you don’t accidentally order too much or not enough stock. And by harnessing customer preferences through a CRM tool, you can go the extra mile and personalize things like delivery notes and packaging to make customers feel appreciated.
Make a contingency plan
Source: entrepreneurshiplife.com
As we mentioned earlier, sometimes things go wrong. What matters is how you cope with it. Your strategy needs to include contingency planning for every potential problem you can think of—from common issues like spoilage, theft of inventory, or parcels going astray, to disasters like a warehouse fire, a severe weather event, or a postal workers’ strike.
Make a plan detailing exactly what you will do in each of these scenarios, and who should be in charge of the response. Hopefully you won’t experience any of the above, but with a robust contingency plan in place, at least you’ll be ready to swing into action if necessary.
Be transparent
Communication and transparency are important at all stages of fulfillment, especially when there are problems. 90% of customers believe that a company’s trustworthiness is reflected by how they react in a crisis.
However, you should also keep customers informed about things like pricing, estimated delivery times, out-of-stock items, and anticipated spikes in demand. Customers particularly appreciate last-mile tracking, which enables them to see exactly where their package is and get a clearer idea of when it will arrive.
Why is having a fulfillment strategy important?
A fulfillment strategy is important for addressing challenges, setting goals, and measuring progress. Without a clear plan, you won’t know what you’re aiming for, and you won’t be able to judge how close you are to achieving it.
Your strategy should give details of existing obstacles in the fulfillment process, and exactly how you intend to address each one. For example, you might set targets for perfect order fulfillment (the percentage of orders that get everything just right), or the speed of the picking and packing process.
That way, your team can see what needs to be done, and who is responsible for doing it. And by analyzing the results, you’ll see which areas are improving and which still need some work. A clear strategy will also help you with budgeting, and provide a blueprint for what to do in a crisis.
Source: linkedin.com
Benefits of Having Ecommerce Fulfillment Software
If you’re trying to run an e-commerce business without software, you’re setting yourself up for problems. Startups and very small companies might attempt to handle the fulfillment process with manual admin and spreadsheets, but they’ll quickly realize it’s extremely time-consuming and prone to error.
E-Commerce order fulfillment software helps you with:
Efficiency & productivity
The right software speeds up your processes, from logging inventory to creating shipping labels, and everything in between. This results in a huge boost in productivity, not to mention a reduction in errors—and a combination of those two benefits will help your business to reduce costs. You’ll gain a more efficient warehouse, a happier workforce, fewer returns, and customers who stick with your brand.
Visibility
Smart software enables you to connect your e-commerce stores with the people working in the warehouse or fulfillment center, by syncing tracking information in real-time and giving you full visibility into inventory levels. It allows you to see exactly what you have and where it is, at any given time.
Visibility is helpful for your customers, too, as you’ll be able to share tracking information with them. 78% of consumers want to receive updates on the status of their orders when purchasing goods.
Accurate forecasting
By ensuring an accurate picture of your inventory and orders, you can make more accurate predictions about the amount of stock you need at each stage of the year. Software with advanced analytics helps you identify trends and peaks, and also helps you to manage your budget and keep an eye on whether you’re meeting your business goals.
Source: prisync.com
Customer retention
The benefits above have a direct correlation with customer satisfaction. Visibility and forecasting will help you avoid overselling and delays in picking products, while the extra efficiency at all stages of the process will mean customers always get the right parcel at the right time, in optimum condition. The cost savings from improved productivity will also enable you to offer lower shipping costs.
When you consistently deliver on your promises, customers will reward you with great reviews and word-of-mouth recommendations, as well as their loyalty—and retaining existing customers is more cost-effective than finding new ones.
How to Choose The Right E-Commerce Fulfillment Solution
We’ve already discussed the idea of outsourcing to a fulfillment provider, and how to choose the right one. But if you want to keep some or all of your e-commerce fulfillment in-house, you could opt for implementing your own advanced system.
That way, you get to keep more control, while ensuring that your processes are fully streamlined for maximum efficiency. The best solutions also integrate with major 3PL partners, so you can outsource as much or as little as you wish.
Ideally, your business needs a system that can automate and improve all stages of fulfillment, while also handling your entire retail operations. For example, look for a solution that includes business intelligence for accurate forecasting, and integrates with the other business apps you use.
What to look for
Full automation
A good e-commerce fulfillment solution will allow you to automate all those tedious tasks that a machine can do better, freeing up the humans to concentrate on other aspects of the business.
For example, barcode scanning technology for the warehouse, which enables staff to locate and record items quickly. Look for auto-replenishment (to avoid stockouts) and the ability to create purchase orders automatically.
Dedicated support
If the customer service you receive keeps you happy, you then have a better chance of keeping your own customers happy! Choose a solution that comes with a dedicated account manager who’s always on hand to help with queries, and provides ongoing training for your team.
Cost-effective
Your chosen solution should give you the right fulfillment tools for your operations, so that you don’t have to pay for a ton of different apps (and waste time toggling between them). If it’s made for retail customers, you won’t wind up paying for irrelevant features that you won’t even use.
The solution also needs to be scalable as your business grows, so look for a system where it’s simple to add extra users and warehouses as and when you want them—without paying over the odds.
User-friendly
Your solution needs to make it simple for you and your staff to use, so that you can get up and running with the new system in the shortest time and with minimal disruption. The idea is to save time, after all!
Whether you’re using the in-house or outsourced fulfillment method, it should be easy to view and analyze your data, and you should have great visibility for inventory tracking and order management. Look for a solution that makes life easier for your own customers, too. Such as through one-click payments and efficient returns management.
Questions to ask providers
You’ll probably have far more questions to ask, but here are a few examples of things you need to know.
How advanced is your technology?
Although you want the system to be simple to use, there’s no point paying big bucks for a solution if it’s not actually that advanced. Look for providers that incorporate the latest tech, including plenty of opportunities for automation.
What do other customers think of your service?
It’s always worth asking this question. Your provider will be able to show you testimonials from satisfied clients, and you can then get in touch with them if you wish. You should also look at a range of online reviews.
What partners do you work with?
Maybe you’re already working with a particular shipping carrier or 3PL firm, and you’ve built up a good relationship with them. In this case, look for a solution provider that partners with that firm (and others, because one day you might want to switch).
What integrations do you have?
You need a solution that will successfully integrate with all the e-commerce platforms you use, providing a two-way flow of information between them to avoid any discrepancies. Integrations with POS and CRM systems are essential (or better yet, having them built-in).
Do you offer a service guarantee?
Make sure your provider offers you a robust SLA and at least 99.99% guaranteed uptime, alongside 24/7 support. The last thing you want is for the system to crash just when you’re facing your busiest period—but if it does, you should have the peace of mind that your provider will fix things quickly.
Why Choose Brightpearl?
Brightpearl is the ideal solution for e-commerce fulfillment, because it’s a purpose-built Retail Operating System. As well as automating your entire order-to-cash process, it includes a raft of helpful features for data-driven inventory forecasting, managing suppliers, and building great customer relationships.
Whether you’re running your entire fulfillment operation in-house, or outsourcing some or all of your fulfillment., Brightpearl’s tools will simplify and streamline the process, allowing you to focus on growing your business. The smart Automation Engine alone currently saves Brightpearl customers two months a year, on average. As well as this, it reduces human errors by 65% and lowers labor costs by 50%, both of which are hugely important as we talked about earlier.
Brightpearl can also help you integrate your systems with trusted 3PL and shipping partners. You can manage Fulfillment By Amazon directly from Brightpearl, and if you want to use dropshipping for certain orders, this can also be automated for efficiency and speed. You can arrange for orders to be fulfilled from multiple locations and across multiple channels when certain conditions are met.
If you’re looking to scale your business then this will often mean branching out into new sales channels or using new tools. With a lot of e-commerce fulfillment solutions this means waiting for months or even years while they build a custom integration that then needs testing and fixing. Brightpearl is different, they have a huge range of Plug & Play e-commerce integrations which can have you up and running in minutes. Whether it’s connecting to a new Shopify, Bigcommerce, or Magento store or to a top 3PL or shipping provider, Brightpearl has you covered.
As we’ve talked about already, accurate inventory forecasting is key to avoid over or under-stocking. With Brightpearl’s Demand Planner you can invest in the right products by taking account of your sales history and creating purchase orders in just a couple of clicks.
Benefits of using Brightpearl
Let’s take a look at a few key benefits of Brightpearl (there are loads more!)
Retail-focused
As we mentioned, Brightpearl is designed specifically for retail and wholesale businesses. Its smart features were developed with you in mind, so you can rest assured that the platform incorporates everything you need—with no costly customizations required.
Speed and accuracy
The Automation Engine is incredibly powerful, and enables you to speed up repetitive tasks such as receiving, picking, and packing. As well as improved productivity, you’ll see fewer errors which can result in returns and/or customer complaints.
Cost reduction
Better efficiency equals lower costs and bigger profits. Not only will Brightpearl help you process orders faster with fewer staff, it will also enable you to reduce the mistakes that lead to excess stock and too many returns. And when you keep customers onside, they’ll spend more with you.
Scalability
Every type and size of e-commerce business can benefit from Brightpearl, as it’s flexible and scalable enough to support your operations at all stages. And if you’re branching out to sell on more channels, Brightpearl has you covered.
Happy customers
With Brightpearl’s powerful, data-driven inventory forecasting, you can avoid disappointing customers by running out of stock. Automation and integrations with shipping partners will mean deliveries are faster and more accurate, so it’s easier to meet or even exceed customer expectations. Brightpearl even has its own built-in CRM to help you build personal relationships.
Constant support
Brightpearl offers 24/7 support, with retail and technology experts accompanying you from scoping to implementation and beyond. You’ll even get access to a dedicated Customer Success team, who’ll carry out regular checks to ensure you’re making the most of the solution.
Checklist
| Feature | Brightpearl offers: |
| Inventory management
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| Order management
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| Fulfillment and shipping
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| Warehouse management
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| Forecasting
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| Financials
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The Takeaway
E-Ccommerce fulfillment is a tricky thing to get right, but we hope we’ve shown you why it’s so important, and how you can improve each stage of the process.
Once you’ve decided whether to go for in-house or outsourced fulfillment and created a robust strategy, Brightpearl is ready with the tools and tech you need to make it a success. Visit the website to see a demo and book a chat with the friendly team.
FAQs
What’s the difference between an e-commerce fulfillment center and a warehouse?
A warehouse is a building where goods are stored prior to distribution. They’re typically used for long-term storage, and have a single owner and user.
A fulfillment center belongs to a 3PL or fulfillment provider, who handles the complete order fulfillment process on an e-commerce retailer’s behalf. They’re more of a stopping-point for goods, and are designed to turn inventory over quickly.
Which one is more cost-effective?
Fulfillment companies charge a separate storage fee for each item, so they’re usually more expensive than a warehouse. But you have the flexibility of being able to adjust storage requirements as your needs change.
You’re also tapping into their expertise and strong relationships with major shipping carriers, giving you access to discounted shipping rates. However, you’ll be giving up some control.