1. What is eCommerce Fulfillment?

As the process of picking, packing, and delivering customer orders that are placed through an online store, eCommerce fulfillment is the bridge between the customer purchasing a product and actually receiving it. Many different elements need to be put into place in order for eCommerce fulfillment to be successful, from warehousing and storing products to ensuring accuracy in order processing and delivery.

In today’s world, with more people shopping online than ever before, eCommerce fulfillment plays an important role in supporting the booming digital economy. With customers expecting high levels of service, retailers have to ensure efficient order fulfillment processes in order to remain competitive. There are a variety of strategies available but each comes with its own challenges and benefits to take into consideration.

Our Total Guide to eCommerce Fulfillment & eCommerce Fulfillment Services aims to provide a clear overview of these different elements by discussing several types of fulfillment strategies as well as key components that retailers need to consider when developing their own strategy. This guide will also address potential challenges and how they can be overcome in order to provide customers with a hassle-free experience.

2. What are the Benefits of eCommerce Fulfillment?

Automated Processes for Tracking Orders, Inventory, and Shipments  

Using automated processes is the key to ensuring accurate routing and tracking of online orders from eCommerce platforms, syncing inventory in real time, and coordinating shipping services. This allows retailers to identify any discrepancies and makes it easier to update customers on delivery estimates. Automation also eliminates the potential for costly manual errors in warehouse management. 

Enhanced Accuracy with Real-Time Updates Across All Platforms & Sales Channels 

Having up-to-date information in real-time provides eCommerce companies with greater visibility into their fulfillment network operations. With real-time updates across multiple platforms and sales channels, retailers are able to monitor inventory levels and track the shipping process in a more efficient manner. This helps to ensure that orders are processed accurately and delivered on time.

Improved Customer Satisfaction with Accurate Delivery Estimates

Providing accurate delivery estimates helps build trust with customers by enabling them to plan ahead for when their order will arrive. Accurate delivery estimates also help reduce customer inquiries as they know exactly when their order is expected to arrive. This leads to higher customer satisfaction which, in turn, can result in repeat business or referrals from satisfied customers.

Reduced Transportation Costs Through Strategic Shipping Partnerships

By building relationships with strategic shipping partners, businesses are able to take advantage of discounts on rates or bulk shipments which can contribute to sizable savings in overall transportation costs. Additionally, these partnerships allow for greater flexibility when it comes to expanding into new markets or handling sudden spikes in demand.

Leverage Technology to Track and Manage Inventory Remotely

With the help of automated processes such as barcoding and RFID technology, businesses have the ability to track inventory more accurately and efficiently while also keeping in-house fulfillment operations running smoothly in multiple locations. This ultimately provides increased visibility into orders and improved accuracy in order processing which translates into higher customer satisfaction rates.

Uniformity in Pricing Across Multiple Vendors

By outsourcing eCommerce fulfillment services, businesses can gain access to a variety of vendors offering uniform pricing. This eliminates the need for negotiation and other potential costs associated with working directly with different suppliers. Additionally, it allows businesses to shop around and find the best price that fits their budget.     

Reach Customers Quickly and Efficiently

With access to a global network of fulfillment centers, businesses are able to reach customers across the globe quickly and cost-effectively. This allows for shorter lead times and reduced shipping costs by having orders shipped from the nearest location. Furthermore, leveraging technology enables real-time tracking and inventory management without having to be physically present at each warehouse.    

Lower Overhead Costs Associated With Hiring Staff or Warehouse Space 

Outsourcing your eCommerce fulfillment also eliminates the need for additional staffing such as warehouse workers and pickers/packers. This reduces labor costs and helps streamline operations without sacrificing quality service. Furthermore, if you do require warehousing space for inventory storage, there are plenty of third-party providers who offer flexible solutions ranging from short-term rentals to long-term leases at competitive prices.

Increased Flexibility to Adjust Staffing and Services as Needed  

The benefits of outsourcing eCommerce fulfillment don’t stop at cost savings; having an external partner provides additional flexibility when it comes to adjusting staffing levels or services based on demand fluctuations or seasonal changes in business. This ensures that your business is equipped to handle whatever challenges may arise while keeping operational costs low.   

Streamlined Operations for Order Processing, Packing & Shipping

Automation technologies such as robotic picking and packing can help streamline order processing, packing, and shipping. This allows many eCommerce businesses to meet customer demands quickly and efficiently while also reducing their labor costs. Additionally, automation technologies can provide real-time updates on orders, inventory, and shipments ensuring accuracy throughout the fulfillment process.           

Ability to Scale Up or Down Depending on Demand

With automation technology, online businesses have access to an extensive network of fulfillment centers across the US and around the world. This gives businesses the ability to make quick adjustments in terms of staffing levels and services based on seasonal changes in demand or other fluctuations in business operations.           

Maximize Efficiency of Personnel Through Automated Technology

Automated technologies can also help maximize the efficiency of personnel by eliminating manual processes that are time consuming and prone to errors. Not only does this reduce operational costs but it also ensures that orders are fulfilled accurately and promptly which leads to improved customer satisfaction.   

Expert Advice on the Latest Industry Trends and Technologies

eCommerce fulfillment providers offer comprehensive support services that include expert advice on the latest industry trends and technologies. This can help business owners stay up to date with new developments in the market, such as advances in automation technology, strategies to reduce shipping costs, and more.

Educated Support Personnel to Ensure Optimal Performance

Fulfillment companies also provide training and support for personnel to ensure their performance is optimal at all times. This includes providing guidance on order processing, inventory management, customer service, packaging requirements and other important elements of eCommerce fulfillment.

Utilize Insights to Help Business Owners Make Informed Decisions

By utilizing insights from data and analytics, eCommerce fulfillment providers can help business owners make informed decisions based on real-time metrics. This includes tracking sales trends, analyzing customer preferences and evaluating supply chain operations for efficiency improvements.

Personalized Packaging Options

A great way to show customers that you care about them is through personalized packaging options such as wrapping paper or gift boxes. This small gesture adds an extra level of attention that can help boost customer loyalty.

Clear Return & Exchange Policies

Providing customers with easy-to-understand return and exchange policies is essential for building trust and boosting satisfaction levels. Customers should be aware of the terms and conditions related to returning or exchanging items so they feel comfortable making a purchase from your store.

Proactive Customer Communication & Support

Ensuring that customers are kept informed throughout the entire order fulfillment process will make them more likely to remain loyal to your brand. Make sure to keep customers updated on where their order is at all times, while also providing support if they encounter any issues along the way.

3. What are the Different Types of eCommerce Fulfillment Strategies?

Traditional Warehousing

Traditional warehousing involves storing products in warehouses or other designated physical locations before they are shipped to customers. Warehousing strategies generally include inventory tracking, warehousing services, and order fulfillment. Warehousing can be an effective way for businesses to manage their inventory, as it allows them to keep track of their inventory levels, optimize the storage capacity of their warehouses, and minimize the cost of shipping through strategic location selection. Additionally, in-house order fulfillment can help speed up order processing times and increase customer satisfaction. Warehousing strategies can be further enhanced with the use of automated systems, such as robots, to quickly pick and pack orders for faster delivery.

Dropshipping

Dropshipping is an eCommerce fulfillment strategy in which an online store does not keep any stock of the items that it sells. Instead, when a customer purchases an item from the store, it purchases the item from a third-party supplier and has it shipped directly to the customer. Outsourcing fulfillment is beneficial to the store owner because it eliminates the need to keep inventory, as well as the costs associated with buying, storing, and shipping inventory. It also allows the store to offer a wider selection of products at a lower cost, as it does not have to purchase the items in bulk.

Cross-Docking

Cross-docking is a type of eCommerce fulfillment strategy that utilizes a warehouse distribution network to quickly move goods from the point of receipt to the final destination. This strategy eliminates the need for goods to be stored in a warehouse for an extended period of time, as goods are instead moved directly from the supplier to the customer or final destination. This strategy is beneficial for businesses that need to quickly fulfill customer orders, as it eliminates the need for long-term storage and reduces the time and cost associated with traditional fulfillment methods. Additionally, cross-docking can minimize inventory costs as goods don’t have to be moved or stored multiple times within the supply chain. By reducing the amount of handling of goods and by streamlining the process, businesses can experience an increase in efficiency, improved customer satisfaction, and cost savings.

Omnichannel Fulfillment

Omnichannel fulfillment is an eCommerce fulfillment strategy that enables customers to purchase items from multiple channels and receive them through one unified delivery process. It seeks to provide the customer with a seamless shopping experience, no matter which channel they use. It ensures that customer orders are fulfilled quickly and accurately, from the time the order is placed to the time it is delivered to their door. The customer experience is improved by eliminating any confusion that may arise from multiple channels, allowing the customer to place an order from any channel and receive it in a timely manner. Additionally, this type of fulfillment strategy enables eCommerce businesses to better track inventory, allowing them to better manage their stock levels, as well as offering customers more options for delivery. Omnichannel fulfillment also allows eCommerce businesses to better serve their customers, providing them with an enhanced customer experience that is tailored to their needs.

4. What are the Key Elements of eCommerce Order Fulfillment?

Automated Order Processing

Automated order processing provides eCommerce businesses with a streamlined and efficient way to track, manage, and fulfill orders. It reduces the workload of fulfillment staff, increases accuracy, and reduces the time it takes to process orders. Automated order processing also gives customers assurance that their orders are being handled quickly and accurately. This is a key element of eCommerce order fulfillment, as it helps to ensure customer satisfaction and keeps businesses competitive in the marketplace.

Inventory Management & Tracking Systems

An Inventory Management & Tracking System is a key element of eCommerce order fulfillment because it enables businesses to keep track of their inventory in real-time. This way, businesses can accurately track orders and ensure that customers receive the products they ordered in a timely manner. With an Inventory Management & Tracking System, businesses can also identify potential inventory issues, such as out-of-stock items, and quickly address them. This system can also help businesses automate their order fulfillment process, making it more efficient and cost-effective.

Strategic Shipping Partnerships

Strategic partnerships are essential to eCommerce order shipping and fulfillment. They help to ensure that orders are delivered to customers quickly and reliably. eCommerce shipping partnerships provide access to a wider range of carriers and services, which helps to keep shipping rates down and increase the efficiency of fulfillment operations. Shipping partnerships also enable access to discounts, which can help to reduce shipping costs and improve profitability. Additionally, they provide access to better tracking and reporting options, which can help to improve customer experience.

Return and Exchange Management

Returns and exchanges management is a key element of eCommerce order fulfillment because it allows customers to be satisfied with their purchases. Returns and exchanges ensure that customers are given the opportunity to make sure the product they received is of the highest quality and meets their expectations. By providing customers with an easy and efficient process, businesses can maintain a good relationship with customers, leading to repeat customers and increased sales.

Customer Communication & Satisfaction

Customer communication and satisfaction are key elements of eCommerce order fulfillment because they are essential for providing a positive customer experience. Customers need to feel valued and be kept informed throughout the ordering process to ensure their satisfaction. Good communication also allows customers to ask questions, make changes, and provide feedback. In addition, good communication provides customers with the assurance that their order has been processed and shipped, and their satisfaction with the final product is key to ongoing customer loyalty.

Optimized Packaging

Optimized packaging is an essential element of eCommerce order fulfillment because it allows for more efficient packing and shipping. It reduces the cost of shipping and helps ensure that orders arrive on time while reducing the amount of waste associated with packaging. Additionally, it can help improve customer experience by making the packaging more aesthetically pleasing and adding conveniences such as pre-applied labels and return instructions. Optimized packaging also helps reduce product damage, which can help reduce the cost of customer returns.

Realistic Lead Times and Delivery Estimates

Realistic lead times and delivery estimates are key elements of eCommerce order fulfillment because they help to ensure a positive customer experience. Providing customers with accurate information allows them to plan their purchases in advance and have reasonable expectations for when they will receive their items. This helps to build customer trust and loyalty, while also minimizing customer disappointment and frustration. It also helps eCommerce businesses to optimize their resources and plan their inventory and supply chain more efficiently. 

5. What is an E-Commerce Fulfillment Service Provider (Third-Party Logistics or 3PL)?

An E-Commerce Fulfillment Service Provider is a third-party logistics company (3PL) that provides warehousing, shipping, and order fulfillment services for e-commerce businesses. They offer businesses a cost-effective solution to manage the physical aspects of their e-commerce operations, such as storing products, packaging orders, and shipping them to customers. Services provided by an order fulfillment company include pick and pack, inventory management, label printing, order tracking, and returns processing. They can also provide customers with customer service and technical support.

A 3PL third-party logistics partner can be a great asset to an online retailer. The cost reductions 3PLs provide can free up resources and time for merchants, allowing them to focus on other areas of their business. 3PLs can also provide expertise in areas such as supply chain management, customer service, and technology, allowing online retailers to benefit from their experience and knowledge. Additionally, 3PLs can offer visibility and transparency into their entire supply chain solutions process, allowing online retailers to make better-informed decisions and improve their operations. In short, 3PLs can be an invaluable partner, helping you to streamline your operations and providing a wealth of experience and knowledge.

6. What Should You Consider When Looking for the Best eCommerce Fulfillment Services?

Assess Your Order Fulfillment Needs First

It is vital not to forget the fact that YOU are the customer here, and as such, hold all the cards. A self-assessment is crucial before making even the first inquiry toward working with a 3PL fulfillment center. 

• Level of Order Fulfillment: Has your order volume grown to a point that is still manageable or are you struggling to keep up? Figuring out that threshold is absolutely necessary to making any decisions here.
• Amount of Existing Storage Space: Calculate not only the available warehouse space but also the cost of carry for your inventory.
• Capacity for a Demand Surge: This can require additional hiring as well as more space, and if you are handling order fulfillment manually, a sustained increase can be crippling.
• Types and Sizes of Products/Orders: Your products’ weights and dimensions, not to mention typical order combinations and the total quantity of SKUs, will all play a factor in pricing discussions with a 3PL.

Current needs are of course the most pressing, but future needs must not be ignored. Projecting your growth and what you will require a few months to years down the road will also help in picking a partner for the long haul. This information should be shared in any conversations so the 3PL can make an assessment of its own capabilities (e.g. if you have a wide range of new products or plan to expand your eCommerce business into an international market). 

Weigh The Pros and Cons of Outsourcing to a 3PL eCommerce Fulfillment Service

Any business decision of this magnitude has its benefits and drawbacks. The cost savings and operational expertise 3PLs offer might be offset by the risk of diminished customer service, for example. These are trade-offs that each merchant must weigh individually.

Advantages of using a 3PL warehouse include:

• Reduction of overhead expenditures (e.g. warehouse rent/labor) can free up capital for investment elsewhere.
• Collective volume and order frequency allows them to negotiate lower shipping costs.
• Large networks can provide fulfillment locations far beyond a merchant’s own reach.
• The best e-commerce fulfillment partners can strategically distribute your inventory across their network based on geographic sales data.
• The ability to manage international fulfillment and its associated challenges (customs, import laws, et al). 
• Using a 3PL as a testing vehicle for international markets is a valuable strategy that should be considered by any merchant looking to grow overseas. The cost-effectiveness of testing a small amount of product in a foreign country by working with a local 3PL vastly outweighs trying to navigate the system on your own.

Such convenience comes at a price, of course. 3PL fulfillment warehouses can provide support in several areas, but they are not without disadvantages.

• Loss of control over one’s inventory and processes is something many merchants will not allow.
• An upfront investment is required to onboard your eCommerce store with a 3PL inventory management (e.g. software integration, SKU upload).
• You are a customer of a service provider with its own business plan. The 3PL’s fulfillment costs can and will increase over time.
• 3PL companies have a myriad of clients across a range of retail markets. If you have highly specific needs, a general provider may not be able to meet them.

A Worthy Third-Party Logistics Services Provider Will Offer Full Transparency

Clearly-defined pricing is a hallmark of any honest service provider, regardless of the industry, but transparency in regard to third-party logistics can go far beyond just costs. When the eCommerce merchant/3PL relationship is a true partnership, the results can be significant.

Being that an inherent element of using a 3PL is ceding control over one’s inventory and order fulfillment, establishment and maintenance of trust is key. Transparent 3PLs use software to give customers access to what is happening in the warehouse, as well as to the relevant data, metrics, and KPIs for their businesses.

Full transparency can also provide a useful audit trail for quality control. In a transparent 3PL, if errors are occurring during processing, data (made available to the merchant) can show what happened and steps may be taken to rectify the mistakes.

A transparent 3PL lets customers know how their products are being handled, its inventory management will keep them apprised of stock levels, and this all amounts to providing merchants with deep insights into things that are not fully within their control.

7. What are 5 Qualities of the Best eCommerce Fulfillment Solution Providers?

Professionalism Matters When Choosing a Fulfillment Partner

The best eCommerce fulfillment providers are the epitome of professionalism. Their commitment to customer service, accuracy, and reliability ensures that orders are fulfilled seamlessly, quickly, and with utmost care. They take pride in their work and strive to maintain the highest standards of quality. Whether it's packing, shipping, order management, or reporting, they always deliver excellence with a personal touch. On top of that, their friendly and knowledgeable staff provide helpful assistance and advice, making the entire process hassle-free and stress-free. With the best eCommerce fulfillment providers, you can be confident that your orders will be fulfilled with the utmost professionalism.

An eCommerce Fulfillment Provider Should Be Extremely Flexible 

A viable 3PL should offer unprecedented flexibility in meeting your fulfillment needs. Their deep understanding of the eCommerce market allows them to develop solutions that are tailored to your individual requirements. Their range of services includes same-day shipping, next-day delivery, and international shipping. They also offer a variety of payment options, so you can find the best one for you. And with their 24/7 customer service, you can always count on them to be there for you when you need them. 

The Best eCommerce Fulfillment Companies Keep Up with the Latest Technology

The best 3PL providers have access to the latest technology and use it to their advantage. As digital innovations continue to emerge, it's essential for businesses to stay ahead of the curve in order to maximize efficiency and customer satisfaction. The best service solutions not only provide access to the most up-to-date tech, but also offer comprehensive support and training to ensure that their customers are able to use new tools to their fullest potential. Keeping up with the latest technology is the key to successful eCommerce fulfillment, so make sure to choose a provider that is on the cutting edge.

Order Fulfillment Services Should be Custom-Tailored to Meet Your Needs

Great 3PL providers offer customized services to meet the customer's needs. By taking the time to understand each customer's unique needs and creating a plan that works for them, these providers help ensure businesses are getting the most out of their services. With a custom-tailored plan, businesses can save time, money, and energy by having the right services for their needs. Plus, the customer service and support these providers offer are unparalleled. With custom-tailored services, businesses can rest assured they are getting the best eCommerce Fulfillment services available.

A Dynamic Fulfillment Model Demands a Strategic Network of Locations

A strong, strategically located network of third-party logistics providers allows for seamless, efficient, and cost-effective management of the supply chain. By having multiple locations, customers can quickly get the products they want without having to wait longer to receive them. This, in turn, results in greater customer satisfaction and loyalty. Moreover, having a strategic network of locations allows for better inventory management, cost savings, and greater efficiency in the supply chain process. With such quality features, Best eCommerce Fulfillment service solutions is the ideal choice for businesses that require fast and reliable delivery of their products.

8. What are Some Examples of Challenges to Overcome in eCommerce Fulfillment?

How to Achieve the Optimal Balance of Fulfillment Speed vs Cost

To achieve an optimal balance of speed vs. cost in eCommerce fulfillment, businesses need to research and understand the needs and expectations of customers, as well as weighing up the different fulfillment options. Businesses should look into using a mix of different fulfillment solutions such as third-party logistics, dropshipping, and in-house. Moreover, businesses should use technology solutions to streamline their operations, such as automated warehouse and order management systems. By doing so, they can ensure efficient order processing, on-time delivery and cost savings. Finally, businesses should constantly review and optimize their fulfillment operations to ensure they are getting the most out of their investment.

Staffing Shortages/High Turnover Issues Can Cripple a Business

Staffing shortages and high turnover can have a devastating impact on businesses, from missed deadlines and customer dissatisfaction leading to a loss of profits, to the costs of constantly training and onboarding new employees. To mitigate this, businesses should consider creating a competitive compensation and benefits package, investing in training and development, building a positive corporate culture, and offering career advancement opportunities, among other strategies, to create a supportive and engaging work environment that will help to attract and retain the best talent.

Staying Up To Date With New Technologies & Processes is Crucial for eCommerce Success

Keeping on top of the latest trends, technologies, and innovations in the industry helps businesses stay competitive and enables them to provide better customer service, increase sales and boost profits. By understanding the needs of customers and staying ahead of the curve, businesses can effectively use their resources and investments to ensure long-term success.

9. How Can SkuNexus Optimize Your eCommerce Order Fulfillment Process?

Total Flexibility Lets You Fulfill Any Way You Like

Our software provides the flexibility to let you fulfill your orders any way you want. SkuNexus connects to any third-party fulfillment houses that you use (even proprietary systems). If you own your own warehouses, you can choose from over 150 global shipping carriers to move your products. With our communication capabilities, customers are always notified when their order is in transit, regardless of how it’s fulfilled.

Automated Solutions Turn Stores into Mini-Warehouses

Skunexus turns your physical stores into mini-warehouses, reducing the time it takes for customers to receive orders once they’ve been placed. With custom user roles and interfaces for in-store and warehouse employees, managers, and admins, it only takes a minute for them to understand exactly what they need to do. 

Seamless Integrations Ensure Free Data Flow

Time and again, integration problems between different software systems can wreak havoc on logistics processes. Order routing breakdowns result in delayed fulfillment, broken shipping promises, and diminished customer satisfaction. And, that is just for starters.

Our enterprise management software systems are specifically designed for their flexibility and ease of integration with other platforms. Our order, warehouse, inventory, and shipping management functionality can be customized for use by both online retailers and 3PL providers.

If you would like to get a closer look and learn more about what SkuNexus can do for your business, please schedule a demo.