Starting a business that involves receiving and delivering on orders requires a fulfillment strategy. Fulfilling orders on time and offering quality customer service is an organization’s bread and butter.
It sounds simple enough: get the order and make sure the customer receives it. Unfortunately, it’s not always as uncomplicated as that. Slip-ups in the process can result in negative reviews, which will make customers think twice about engaging your service.
What is the fulfillment process?
It starts with receiving and storing inventory. This is followed by processing orders and picking the required items. These must then be packed for shipping. Finally, there the process of dealing with returns.
The challenges eCommerce businesses face
The market is awash with competitors, and there is always someone waiting in the wings to take your place if something goes wrong. It’s essential that eCommerce businesses know the challenges and how to overcome them.
A lot of the problems that eCommerce presents is what happens online. A lot of businesses struggle with digital marketing because owners discount its importance. They struggle to generate traffic on their websites. Those that have a lot of site visitors may have challenges converting the browsers into buyers.
Ecommerce order fulfillment strategies
There are three main options for your business when it comes to order fulfillment strategies. They are dropshipping, third-party logistics, and direct fulfillment. The one you choose depends on the size and nature of your business.
– Dropshipping
This order fulfillment model is increasingly popular. It doesn’t require the business owner to maintain an inventory of stock in a warehouse. Nor does it need the business owner to take responsibility for shipping the sold items to the customer.
So, how does it work? The customer places an order from your online store. The information is immediately communicated with the retailer who sells the product. The package is packed and shipped to the customer in the retailer’s name.
The advantage of dropshipping is that you can offer a wide range of products without having to worry about the expense of keeping and storing an inventory. The disadvantage is that your brand can suffer as a result of events beyond your control. If packaging and shipping aren’t up to standard, your online shop will be judged negatively.
– Third-party logistics
Third-party logistics (3PL) is a model in which the business owner relies on a third-party to fulfill the customer’s order. The third-party is responsible for storage, packaging, and shipping. The business owner is responsible for making sure the product is available and that the online store is marketed.
This reduced level of involvement in the delivery process requires the business owner to maintain constant contact with the 3PL company. Very few 3PL providers have only one client. This means that the business owner will share space and shipping facilities with other retailers.
With 3PL, shipping tends to be faster. It’s also cheaper, meaning that it can increase the online store’s profitability.
– Direct fulfillment
The business owner receives and processes orders in-house. This is the way most businesses start. The owner works from home or small office spaces. They keep an inventory and pack and ship the products themselves. As a company grows, the business owner would need to have a warehouse operation to continue fulfilling orders. Investments in upgrades such as horizontal carousels from Modula are also necessary if the business owner goes for direct fulfillment.
Maintaining complete control over the packing and shipping of products gives the business owner peace of mind. The standards of customer service are their own, and no other parties are needed.
However, direct fulfillment is time-consuming. A business owner would have to compare the cost of labor and space to maintain direct fulfillment with the costs of using another fulfillment strategy.
