Congratulations on buying that new eCommerce business from Website Closers. If you have do not have one yet or still trying/looking to purchase one, you should join our buyer clubs, reach out to a business broker, or check out the eCommerce businesses from our listings. Now that you’re up and running, it’s time to consider the order management process, from inventory storage to packaging the products to shipping items to the customer. That’s where eCommerce fulfillment comes in.
Successful eCommerce businesses all have one thing in common which is terrific eCommerce fulfillment. No worries, eCommerce fulfillment is not as complicated or as challenging as it sounds or people make it out to be. You even need logistics expertise to get started. All you need is determination, and this is a guide to eCommerce fulfillment. When you’re just starting your own business, it can seem overwhelming, and if the time comes to sell your business, eCommerce fulfillment must be organized and streamlined.
eCommerce fulfillment is the segment of your supply chain that receives bulk goods, stores SKUs in a warehouse, picks and packs orders, and delivers products to your customers. Your online order fulfillment processes include getting products onto eCommerce fulfillment center shelves, placing SKUs into inventory, picking and packing orders, delivery, and managing returns. We discuss all these elements and more in detail below.
Whether you’re launching your own eCommerce business or planning to build on the Amazon FBA platform, fulfillment is one crucial aspect of your business that you must understand if you intend to be successful. Doing your research ahead of time can greatly amplify your success and profitability. You may already have learned from some of your mistakes early on in your brand-new eCommerce outlet.
eCommerce fulfillment is the process of receiving, storing, packing, and shipping online orders to customers. It also includes handling customer service and returns. eCommerce fulfillment is a vital part of ecommerce operations, and each step in the process must work together seamlessly. Even a minor delay can result in customer dissatisfaction, which can lead to negative reviews.
Here are some things to consider when managing ecommerce fulfillment:
Fulfillment Strategy: Retailers can choose to manage fulfillment in-house or outsource it to a fulfillment specialist. For example, Walmart uses an omnichannel fulfillment strategy that utilizes its physical stores as local fulfillment centers.
Budget: Cost is a major factor when selecting a fulfillment service provider. Shipping rates, taxes, and other fees can quickly add up, especially if the service isn’t available in certain countries or regions.
Customer Satisfaction: A third-party fulfillment company controls the final handoff of value to customers, so they have the opportunity to make or break customer satisfaction levels.
As an online business grows, one of the key decisions revolves around how to handle order fulfillment. Choosing the right fulfillment strategy can impact your bottom line, customer satisfaction, and overall efficiency. Let’s explore some common fulfillment options and help you determine which is best for your business.
In simple terms, fulfillment is the process of storing, packing, and shipping customer orders. For ecommerce businesses, this is a critical part of the supply chain. An effective fulfillment strategy helps manage your inventory, pick and pack orders, and ensure timely delivery, all while controlling shipping costs and maintaining customer satisfaction.
One option is to handle in-house fulfillment, where the business itself manages all aspects of the fulfillment process. This approach gives you complete control over the inventory, shipping rates, and order management, but it also requires significant resources and staff. Businesses that manage fulfillment in-house typically have their own fulfillment centers, allowing them to pick and pack orders directly. This option works well for small businesses or companies with unique products, but as sales channels and customer orders grow, handling fulfillment internally can become more challenging.
For businesses looking to scale, partnering with a third-party logistics provider (3PL) is an increasingly popular choice. A 3PL manages everything from warehousing to packing and shipping customer orders. Outsourced fulfillment to a reliable fulfillment partner can save businesses time and reduce shipping costs while allowing them to focus on growing their sales. The fulfillment solution offered by a 3PL can vary depending on your specific needs, but it’s an excellent option for businesses that want to streamline the ecommerce fulfillment process and reach new markets without investing in their own fulfillment centers.
Another widely-used option is Fulfillment by Amazon (FBA). With FBA, Amazon handles storage, picking, packing, and shipping for businesses that sell on their platform. The advantage of FBA is access to Amazon’s vast logistics network, which means fast delivery and the ability to leverage Amazon Prime for your customers. However, while FBA can help improve customer satisfaction and reduce shipping rates, it comes with additional fees, which can affect your bottom line.
For those seeking a low-cost, low-risk fulfillment option, drop shipping could be the solution. With drop shipping, businesses don’t need to manage inventory or packing and shipping. Instead, customer orders are fulfilled directly by the supplier. This model allows businesses to focus on marketing and sales without worrying about the logistical challenges of fulfillment. The downside? You have less control over product quality and delivery times, which can impact your brand’s reputation.
The right fulfillment option depends on various factors, including your business model, order volume, and long-term goals. If you’re just starting out, handling fulfillment in-house or using drop shipping can offer flexibility without large upfront costs. For larger or scaling businesses, outsourcing to a third-party logistics provider or using Fulfillment by Amazon may provide the infrastructure needed to grow.
Ultimately, your fulfillment strategy should align with your business goals and improve the efficiency of your ecommerce fulfillment process. By considering factors like shipping rates, the number of sales channels, and customer expectations, you can choose a fulfillment option that supports both your growth and your customers’ satisfaction. Each of these fulfillment solutions offers unique advantages, so the key is to find the one that works best for your business and enhances your order management process.
While fulfillment initially seems like something you’re able to handle yourself, it is possible and sometimes strongly recommended to outsource fulfillment, particularly as your business grows. There are many different companies that you can outsource your fulfillment process to. While managing your own fulfillment, you don’t have to pay any money to anyone, so it keeps your costs down.
However, this consumes a great deal of your time and can ultimately eat into your profitability and your ability to grow the company. While this is a great option early on for your small or new eCommerce outlet, since you’re giving up time rather than money, it likely won’t suit you as you begin to scale. FedEx is one fulfillment option for small business owners because you can benefit from their existing customer support, inventory platform and monitoring throughout the supply chain. They’d also have favorable shipping costs.
However, many people these days are choosing to use fulfillment by Amazon. Amazon has access to so many different consumers that may not originally have been in your reach, but Amazon is a perfect one stop shop for an e-retailer working at a small scale.
Amazon offers a marketplace that has a built-in audience ready and interested in your product line. It can also assist you with logistics, handling fulfillment and final delivery. The active number of sellers using Amazon’s fulfillment service increased by more than 70% in 2016 as just one example of how people are continuing to use this role. Another critical selling point for choosing Amazon FBA is their prime membership. Since around 82% of people who have a prime membership on Amazon will purchase a product through that site, even if they can find it at a better price from another retailer, this makes it easier for you to tap into an existing market.
Be aware that since Amazon collects a great deal of data about sales on their platform, they can see what is selling well in the marketplace, and they might try to improve their own individual product lines based on sales trends. Although your product might take off quickly at first, you might want to continue monitoring things and be sure that you have something in place to help protect you with regard to competition, even when it comes from Amazon directly. When it comes time to sell your Amazon FBA business and once you’ve mastered eCommerce fulfillment, you need to consider working directly with an experienced online business broker like the team working at Website Closers.
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