One of the company processes that has a direct impact on customer satisfaction is order fulfillment. This process entails complicated business activities such as product creation, preparation, and handling. Customer satisfaction is considered a vital component of every business. This is why businesses that recognize and meet their customers’ needs will prosper in any industry. Alongside this is client retention, which is also critical for profit growth. If you’re having trouble with any of these areas, keep reading! We rounded up the basics of order fulfillment for new merchants like yourself!
What is Order Fulfillment?
Order Fulfillment is one of the most essential and last parts of the sales process, and a badly designed fulfillment strategy might cost you a customer. Customers’ expectations, however, have risen significantly, and this is no longer sufficient. Order Fulfillment is the method of acquiring, packaging, and shipping orders. When a customer orders a product from your eCommerce business, the order fulfillment procedure pulls the item from the shelf, bundles it, and sends it to the customer’s address. Some of the benefits of establishing an excellent order fulfillment system include…
- Minimized Expenses – Using an outside fulfilled service provider to select, pack, and ship goods may save shipping and operational costs.
- Scalability – Consumers have become more accustomed to shopping online nowadays than ever before. Yet, due to huge merchants, there is greater competition and an expectation that orders will arrive swiftly.
- Improved Customer Service – Businesses must ensure that their clients’ orders are filled correctly, with the items they purchased, and on schedule to sustain customer service. Failure on both of these fronts will result in a terrible customer experience and, as a result, a negative influence on your organization.
According to the size of your company, most of the order delivery procedures might take place under the same roof in a structured warehouse. Many small firms manage order fulfillment in-house using a straightforward approach. Large businesses require a more complicated, multi-tier distribution center structure. In any situation, the key aim is to provide consumers with what they purchase promptly, reliably, and affordably as feasible.
The whole order fulfillment lifecycle consists of five major processes, beginning with strategic acquisition and concluding with shipment. Many firms classify order fulfillment as inventory management, supply chain management, order processing, quality control, and customer assistance.
How Does Order Fulfillment Work?
Completing orders often incorporates managing inventory, handling the supply chain, processing orders, assurance of quality, and support for customers who require assistance to flag issues or conduct item exchanges or refunds. Companies generate income by selling items and services to other businesses or customers directly. Whether you’re selling B2B or B2C, the transaction isn’t complete until the customer receives the sold items. Order fulfillment is the process through which businesses complete the transaction, and it is at the core of every business.
Step 1: Inventory Management
This is the step in which you send your inventory to your fulfillment center to be kept and prepared for processing. It is also known as the goods-in-process stage. When merchandise arrives at the fulfillment warehouse, your personnel must inspect it, take stock, and label it. The measurements, photographs, weights, and barcodes of the items are entered into the warehouse management system. This guarantees that orders are processed accurately and efficiently in the following phases.
Step 2: Supply Chain Management
The Supply Chain Management step entails storing inventories for future distribution. Workers must exercise care to ensure that things are placed in the most appropriate positions in your warehouse space. This will aid in the timely dispatch of orders with no delays. Fast-moving items can be placed adjacent to the assembly station, while less popular products can be placed farther inside your warehouse. This guarantees that fast-moving items are always available for quick delivery.
Step 3: Order Processing
When a consumer puts a purchase online, the order is recorded in the inventory management system that you use. The customer receives an order confirmation, and a request for order processing is forwarded to your fulfillment center. This is the most crucial step in the order delivery procedure. It has the greatest influence on consumer satisfaction. Orders are collected off the shelf and sent to the packing station, where they are packaged and tagged for delivery. This strategy assures speed and precision, reducing the possibility of shipments arriving late or with incorrect products.
Step 4: Creative Control
Most 3PLs will acquire labels for delivery from shipping carriers on behalf of the merchant. Some fulfillment services work with preferred carriers, whereas others compare shipping prices through various providers. The latter ensures that each delivery choice has the most reasonable cost feasible. One significant advantage of third-party fulfillment is that major couriers collect shipments directly from 3PL fulfillment centers and dispatch them. You will get order tracking information once your purchase has shipped. Depending on the technology used by the 3PL, you may manually or automatically communicate this information with clients.
Step 5: Customer Support
If a buyer needs to return an item after it has been delivered, they can do so within the limits of your policies for exchange and returns. The online store then processes this, issuing a refund and updating the inventory accordingly. It is critical that purchasers can quickly start and track exchanges on your eCommerce platform. Customers are more likely to return to your business if the return procedure is simple. Make your returns policy available on your web page so clients know your product or service policies.
Challenges in Order Fulfillment
Order fulfillment concerns range from shortages in supplies and handling inventory difficulties to failures to meet demand and logistical planning. All these factors highly affect the makeup of your eCommerce business.
Poor Supply Chain Management
Developing an industrial supply chain strategy requires weighing cost vs. benefit tradeoffs in operational decisions. For example, a corporation may select a single supplier for a certain product in order to benefit from price cuts due to increased buy volume. That’s also an excellent method for gaining higher priority with the supplier, which could affect delivering orders on time during high-demand seasons. Working with an unestablished supplier, on the other hand, could be detrimental if anything goes poorly for that vendor, from employee strikes to business calamities to supply problems.
Inadequate Logistics
Slow or missed delivery, damaged merchandise, and battered or damp packing can all hurt a business’s credibility and subsequent revenue, and hence its profitability. This makes it critical to properly manage logistics so that shipment does not go wrong and products are not destroyed. Said logistics has a significant impact on customer happiness, so keep a watch on throughout its entirety — or warehouse-to-mailbox — productivity.
Demand Planning
Keeping too many goods on hand raises storage and transportation expenses. It also raises your risk because demand for those things may fall before you sell them. It’s critical to properly forecast and prepare for consumer demand to have appropriate supplies on hand without running out or storing excessive quantities of a particular item.
Unclear Return and Exchange Policies
Unclear policies about returns and exchanges, or refunds can cause more damage to your brand than you think. If customers experience any inconvenience regarding a purchased product, they turn to customer service immediately. However, when your return, exchange, and refund policies do not indicate any duration or description for the conditions of the items to be returned, you might experience a few setbacks. So, it is crucial to clarify the conditions under which your customers can return, exchange, or refund items.
If your firm lacks fulfillment and logistics expertise, it’s usually advisable to contract out the order management operation so you can focus on sales or production—or both. There’s one particular platform that you can work with in terms of order fulfillment. At Shoppable Business, you can run an eCommerce shop and purchase from other vendors within a single platform. This way, you wouldn’t have to worry about the technicalities of order fulfillment and logistics. Whether you’re a seller or a buyer, you’re welcome to join the platform and become a notable business in your industry.
Businesses pay little attention to how a fulfillment company’s fulfillment costs fit into the bigger picture. This is certainly understandable since many eCommerce companies are already working with challenging margins. However, you should always remember that fulfillment costs can quickly spiral out of control if you’re not paying close attention to them.
The benefits of order fulfillment can be great for merchants, but before you start thinking about costs and logistics, it’s essential to have a firm grasp of how this process works and its inherent advantages. The guide above is a good place to start if you’re new to the world of order fulfillment. We want to help you out and make your transition into eCommerce smoother. Remember, if you can’t fulfill orders for your customers, then you’re not going to see much success. Make sure that doesn’t happen. The above tips should help you keep things flowing smoothly when fulfilling orders.
