What is Order Fulfillment and Why Does it Matter to Your E-commerce Store?

eCommerce Order Fulfillment is the entire process of receiving, processing, and delivering orders to customers who have made purchases online. The ultimate goal of eCommerce order fulfillment is to deliver the products to the customer on time and in good condition.

Summary

eCommerce order fulfillment is the process of receiving, processing, and delivering orders to customers who have made purchases online. This process includes receiving the order, picking and packing the items, shipping the order, and providing tracking information to the customer. It’s a critical aspect of any online business, as it directly impacts customer satisfaction and ultimately, the success of the business.

In this post, we will explore the different types of eCommerce order fulfillment, including self-fulfillment (in-house), third-party logistics (3PL), dropshipping, and hybrid fulfillment. We will also discuss various fulfillment methods and workflow examples to give you a comprehensive understanding of eCommerce order fulfillment and how it can impact your online business.

Types of eCommerce Order Fulfillment

1. Self-fulfillment (In-House): In this type of fulfillment, the business handles all aspects of the fulfillment process, including receiving and storing inventory, picking and packing orders, and shipping. This is a good option for businesses that have control over their inventory and have a dedicated team to handle fulfillment.
2. Third-Party Logistics (3PL): This type of fulfillment is when a business outsources their fulfillment process to a third-party provider who handles all aspects of fulfillment on their behalf. This can be a good option for businesses that do not have the resources or expertise to handle fulfillment in-house.
3. Dropshipping: This is a fulfillment method where the retailer does not keep the products in stock but instead orders them from a supplier who ships them directly to the customer. This is a good option for businesses that do not want to handle inventory or shipping.
4. Hybrid fulfillment: This type of fulfillment is a combination of self-fulfillment and third-party fulfillment. A business may handle some aspects of fulfillment in-house, such as storing inventory and handling order processing, while outsourcing other aspects, such as picking and packing or shipping.

Fulfillment Methods

1. Shipping: This is the most common fulfillment method where orders are shipped directly to the customer.
2. In-Store Pickup: This is a type of fulfillment where a customer can place an order online and then pick it up in-store rather than having the order shipped.
3. Batch Shipping: This is a fulfillment method where multiple orders are grouped together and shipped out together in a batch.
4. Cross-Docking: A method of order fulfillment where products are received at a warehouse and immediately shipped out to the customer, without being stored in the warehouse.

Fulfillment Workflow Examples

• In-house fulfillment:

1. Order is placed
2. Order is received and processed
3. Inventory is checked and items are picked from the warehouse
4. Items are packed and shipped
5. Tracking information is sent to the customer

• Dropshipping:

1. Order is placed
2. Order is sent to the supplier
3. Supplier ships the product directly to the customer
4. Tracking information is sent to the customer

• Hybrid fulfillment:

1. Order is placed
2. Order is received and processed
3. Items that are in-stock are picked and packed in-house
4. Items that are out of stock are ordered from a supplier and shipped directly to the customer
5. Tracking information is sent to the customer

Why Fulfillment Matters to Your eCommerce Business

eCommerce order fulfillment is a critical aspect of any online business, as it directly impacts customer satisfaction. Poor fulfillment can lead to delayed or lost shipments, damaged products, and unhappy customers. A good fulfillment process, on the other hand, can ensure that orders are processed and shipped quickly and accurately, leading to happy customers.