1) Overview of eCommerce Fulfillment in Detail
The most common factor amongst successful eCommerce businesses is that they have excellent fulfillment services. eCommerce fulfillment is a critical part of every online business, which includes all operations that come into play after a customer places an order on a website or app. Generally, this includes picking the product from the warehouse, packing it, shipping it to the destination storage facility, and finally delivering it to the customers. Often, it also includes operations like storage, inventory management, order management, returns, and post-order tracking.
Regardless of whether or not you’re selling the best quality products and have your website running smoothly if your fulfillment operation isn’t good enough, your online business is destined to be a disaster. Although eCommerce fulfillment may not be the most exciting part of running an online business, it is an essential element to ensure long-term success. Through this post, let’s try to understand why that is so, along with some basics of eCommerce fulfillment. If you’re looking for assistance with picking an eCommerce fulfillment provider, you’ll find that in this post too, in addition to a list of our top 10 picks.
2) Importance of Fulfillment Services for an eCommerce Business
Now that we know what eCommerce fulfillment is, let’s try to understand why it is important for a business to have a good fulfillment process. Research has discovered that 94% of the time, customers blame retailers for poor delivery. 38% of shoppers ditch an order if the package takes longer than a week to be delivered. Moreover, nearly 73.6% of consumers agree that delivery is the most important factor for a good shopping experience. All these statistics should be sufficient to give you an idea of how important “delivery” is to keep customers happy. Furthermore, the first impression a customer has of a brand is based on how the package arrives. If the product is hampered, sales and marketing will also directly suffer. Thus, to ensure you have happy and loyal consumers, an optimized fulfillment chain is required, so that the online and offline elements are in sync and selling and delivering can happen smoothly and simultaneously. eCommerce fulfillment operations play a critical role in all of this.
Now, let's have a look at the different operations that are included under eCommerce fulfillment.
3) Operations included under eCommerce Fulfillment
3.1)Storage Services (Warehousing)
Warehousing is storing products in an organized manner for better accessibility, quick tracking, and maintenance of inventory. This way, inventory can be handled in a more convenient and confusion-free manner. This is the first operation of the fulfillment process.
Inventory management includes making a consistent record of all the products. This way you can stay up-to-date about the stock and replenish it when necessary. With inventory management, forecasting customer demand becomes easier and demand & supply can be organized accordingly.
Order management involves efficiently handling the orders received through the website. You need to ensure that no order is missed out and all of them are processed accurately before they’re out for delivery. Order management must be in complete sync with the warehousing and inventory system so that the information is up to date at all times. An organized order management operation saves a lot of time for any online business.
3.4)Picking and packaging
Once the order is received, the product is picked from the warehouse and then packed with the appropriate packaging material. Thereafter, the packed product is labeled to make sure the required details are fixed onto it for smooth and hassle-free delivery. It is important that the picking and packaging are done with accuracy so that the wrong product is not sent to the customer. If this isn’t done properly, it will leave a negative impression on the customer and they may not return to your business.
3.5)Shipping and logistics
Shipping and logistics are the most crucial steps of the fulfillment process. Once the order has been picked, packaged, and labeled, it is ready to be delivered. The delivery executive takes the package to the courier hub, and from there, the product is further shipped to the customer’s doorstep. All the orders must be picked by the delivery executive on time so that they can be delivered to the customer on time without any damage. It is best to ship the products with a courier service you trust so that problems don’t arise later.
The eCommerce fulfillment process doesn’t end yet! It also accounts for any returns that might happen. If a customer doesn’t like a product or doesn’t need it anymore, they should (and generally do) have the option to return it. This is where returns management comes into place. Effective logistics and returns management help improve the shopping experience for the customer, and this in turn, helps build a positive brand image for your business.
Now, let’s move on to discussing the various eCommerce Fulfillment models.
4) eCommerce Fulfillment Models
To be fair, there’s no ‘single’ correct way to go about fulfillment. Several models exist for handling the operation, depending on the number of orders, inventory, and the business’s requirement for processing of orders. Based on these parameters, you can pick a model from the below-given list that’s best suited for your business.
Remember, each model has its own set of pros and cons, thus it is important to implement one that fits all your requirements.
4.1) Self Fulfillment
As the name suggests, in this type of model, you manage all the fulfillment operations on your own. This means that you will have to do your own warehousing, inventory, order management, packaging, shipping and returns. Although this model is quite apt and affordable for small businesses that are just starting, it isn’t a very sustainable option. And that is because eventually, as the orders increase, you will have to invest in larger storage spaces and resources, without which, you may risk sending out wrong orders or causing unnecessary delays. Hence, analyze everything and then pick this model if needed.
4.2) 3PL Fulfillment
This refers to third-party fulfillment, which means you outsource the job to a third party. That party will then manage your warehousing, inventory and other operations. Companies that offer 3PL fulfillment work with several merchants, and hence, they have better-managed centers to process orders faster. Depending upon the size and type of your business, you can approach 3PL providers for partnering with your online store. Most 3PL companies offer advanced solutions such as temperature-controlled storage for B2B and B2C.
Further, they can also customize their services based on your requirements; for instance, if you just want the warehousing facility and not shipping, the company will send the products to you as and when you require them without handling shipping to customers. More often than not this model is a reliable one, because, with it, your eCommerce business has an opportunity to scale up or down according to demand. There’s no need for investment, things stay flexible, and you get access to trained resources to carry out all these processes. Plus, since your 3PL provider is closer to your customers, the orders are processed much faster.
In this type of model, your product is directly shipped to your customers by your wholesaler or manufacturer. This means that you don’t have to physically hold the inventory. So when an order is placed, it is transferred to the supplier or manufacturer, where he processes it and delivers it to the customer without you having to get involved. This model is the most suitable for a new business that has not yet figured its way around storage and processing. However, it can get difficult in the long run because it doesn’t allow the business to have full control over inventory, which in turn may reduce the scope for branding.
5)Choosing the Best eCommerce Fulfillment Model for Your Business Growth
Now that you know the different types of models available, it is time to pick one that is most suitable for your business requirements. Just so you know, the cost is ideally the most important factor while deciding, because based on your budget you can find a provider while meeting your business goals.
A few things you should keep in mind before taking a decision are:
- For the self-fulfillment model, you will have to take care of all operations by yourself. Hence, it will require the most amount of investment as compared to the other two models, since all the operations involved in the fulfillment process are highly labor-intensive. You’ll likely have to hire a lot of manual labor for this one.
- In comparison, for the 3PL model, you’ll just be required to tie up with a provider, and they’ll take care of all your operations. You only need to pay a processing fee depending upon the storage space you occupy for your inventory. The overall costs in this model are low, for it is less labor-intensive and there are barely any overhead charges.
- Dropshipping could be what you need if you’re just starting out. But you might want to consider your future scope and start building your internal processes already.
And now, let’s try to answer the quintessential question.
6) Do you really need a fulfillment partner?
As your business grows, its operations will grow as well, and this will require you to get in touch with a fulfillment partner. To avoid over-investment, get in touch with providers who can help you cut costs while completing orders faster.
To be sure about your decision to put money on a fulfillment partner, ask yourself the following questions.
6.1)Do I have enough space for my inventory?
If your answer to that is ‘no,’ you should definitely outsource your inventory and warehouse management.
6.2)Does order fulfillment take up most of my time?
If the answer is ‘no,’ you have enough capacity to fulfill the orders yourself. However, if your answer is ‘yes,’ you might want to consider tying up with a partner.
6.3)What are my long-term plans for the business?
If you see your business projecting growth in the future, you should consider roping in a partner.
7) Top 10 Best eCommerce Fulfillment Services Provider Companies [2021 Updated List]
To help you narrow down your options, here’s a list of top eCommerce fulfillment service providers companies in the world. Each one of these has something unique about its order processing services.
Starting in 2014, ShipBob is a well-known and trusted 3PL fulfillment company that’s currently experiencing rapid growth. It offers the best eCommerce features and thus is most often chosen as the go-to fulfillment provider by businesses of varied sizes. Right from inventory to other advanced capabilities, ShipBob can provide them all.
Here’s a quick look at some of the features ShipBob offers:
- Shipping and logistics services at an affordable price
- Fulfillment is available at multiple locations
- Real-time inventory and order tracking
- Great user interface
- Excellent eCommerce integration
While those are some perks, you should know that there are a couple of disadvantages to choosing ShipBob as well. There are certain services such as refrigeration that the company doesn’t provide, and although B2B services are offered, ShipBob doesn’t specialize in them.
Founded in 2014, ShipMonk specializes in fulfillment services, particularly, B2C eCommerce, subscription boxes, and crowd-funding campaigns. Although the company is known for its subscription-based fulfillment services, ShipMonk is capable of helping your online store, no matter how niche the inventory may be.
A few features offered by ShipMonk are:
- Experts in B2C e-commerce, subscription boxes and crowd-funding
- Uses SaaS software for order, inventory and warehouse management
- Integrates with over 75 shopping carts, marketplaces and solution providers
- Warehouses in Florida, California and Pennsylvania
- Inventory or setup fees not required
- Shipping rates are discounted
- Order processing is done internationally
- Several support options are available
- Simple, yet powerful user interface
Working with ShipMonk comes with a few disadvantages too. For one, the service is currently available only for locations in the United States. Also, it’s slightly pricey and has limited scalability as compared to other providers.
7.3) Red Stag Fulfillment
Red Stag Fulfillment is known for its scalability, for it can handle the needs of diverse business sizes through its cloud-based order fulfillment approach. The company offers several eCommerce store features that can help retailers get the inventory to the required destination fast and efficiently. If you require shipping for heavy or complex items, Red Stag Fulfillment is your go-to partner.
Sneak peek at the features provided by Red Stag Fulfillment:
- Video monitoring available
- Same-day shipping and guarantee of order completion
- Extensive experience with bulky products
- Large scalability and warehouse network
Among the downsides of working with Red Stag Fulfillment is the fact that it’s a tad costlier than most 3PL companies, along with a lack of integration with Amazon and Walmart.
7.4) Rakuten Super Logistics
Rakuten Super Logistics is a multifaceted service provider that offers packing, shipping and marketing services. The provider is best suited for enterprises and deeply understands what its customers require. They offer a bunch of smart cloud-based fulfillment tools at affordable custom pricing.
Some features offered by Rakuten Super Logistics include:
- Personalized services to fit the enterprise
- Integrated marketing services offered to merchants
- 1-2 day ground shipping in the U.S.
- Kitting and subscription box services
- Specialty fulfillment services
- Extensive footprint across the U.S
Despite the above-mentioned plus points, Rakuten Super Logistics suffers from the biggest drawback of not being available outside the United States of America. Moreover, no custom packaging is available with this provider, and it’s not recommended for startups. If your business doesn’t fit in any of those scenarios though, this could be the perfect match for you.
7.5) eFulfillment Services
Starting in 2001, eFulfillment Services is a trusted, simple, and reliable fulfillment services provider. Offering integrations with leading marketplaces like Amazon, eBay, Etsy, Buy on Google, etc. this company boasts a 99.7% client satisfaction rating. It’s best suited for startups because there’s no setup fee, no hidden charges, no minimum order requirements, or hard-to-grasp terms.
The best features offered by the company include:
- Available in-house IT team
- No minimum order required, no setup fees or long term contracts
- Affordable pricing range
- Discounted shipping price
This company isn’t recommended for handling large volume orders, for it mainly specializes in smaller shipment needs. Also, it doesn’t offer custom packaging.
Fulfillment.com is equipped with a cloud-based order management system to handle bulk orders from large-scale international eCommerce businesses. The company offers myriad services through 8 placed fulfillment locations. In addition to handling the complete order cycle, this company offers private label products ready for you to buy, in addition to volume discounts on a number of products.
Features provided by Fulfillment.com:
- Available globally
- Can handle high volume orders
- Same-day processing
- Cloud-based eCommerce fulfillment
- Returns processing services
- Pick and pack services
- Subscription box services
While there are largely no drawbacks to using this service, you should know that the deposit fee is non-refundable and there’s limited customer support available.
7.7) Ruby Has
Felicitated with numerous industry awards, Ruby Has is recognized as a leading eCommerce fulfillment services provider by peers and customers alike. Spread out at multiple locations across the U.S. and Canada, it allows brands to ship faster and reduce costs by up to 45%. Ruby Has provides the absolute best prices and is known for its high-quality services.
The company offers several attractive features including:
- Competitive shipping rates
- Integrated APIs
- Multiple fulfillment centers
- High quality pick and pack services
- Same-day fulfillment possible
- Order and inventory management
Largely a winner in all aspects, you might experience the drawback of limited customer support with this company.
Amazon needs no introduction in the world of eCommerce. The company has one of the most advanced fulfillment networks and is a top choice for eCommerce businesses that specialize in high volume inventory and high margin products. Most businesses choose to partner with Amazon for the reputed name as well as stellar services that guarantee high quality.
Some of the features offered by Amazon are as follows:
- Massive global footprint
- Seller tools and reports are available
- Most recommended for bulk orders
- Reputed company name
- Experienced in a wide range of inventory
- Amazon Prime members are offered additional benefits
Though it may seem trivial to some businesses, the slight cons of working with Amazon as a fulfillment partner is that the inventory and other fees keep changing. What’s more, Amazon get the customer data and the support options are limited.
Based in India, Shiprocket is trusted by more than 1 lac brands for competitive prices, wide reach, and top-notch customer service. The provider offers domestic as well as international shipping, along with integrations with 17+ courier partners. Boasting 1-day and 2-day deliveries with 99.9% accuracy, Shiprocket strives to deliver a delightful customer experience, always.
Here’s a quick look at the best features it offers:
- Expedited delivery options at checkout
- Helps reduce shipping costs by 20%
- 3x faster shipping with lower weight discrepancy
- No capital investment needed in warehouse infrastructure
- Scalable to accommodate bulk orders
By far, the only con of using ShipRocket is limited customer support.
If you’re a business that requires overseas shipping, FedEx is the perfect fulfillment service provider for you. The company is known for its international hassle-free shipping, offering enterprises the chance to increase their shipments with faster speed to market.
The best features provided by FedEx are as follows:
- Global footprint
- User friendly
- Excellent delivery network
8) Debunking myths about eCommerce fulfillment
Like any other eCommerce operation, fulfillment also has some myths and misconceptions associated with it, which is why we’re here to debunk them. Listed below are a few common ones.
8.1)Fulfillment and warehousing are the same
This is not true, because warehousing means storing products in an organized fashion, whereas fulfillment refers to the storage and distribution of the products. Warehouses are mainly used for storing and maintaining inventory, whereas fulfillment consists of actions such as order management, inventory management, picking, packaging and shipping.
8.2)It is best if the fulfillment centre is closer to my business
If the fulfillment centre is closer to your business you will be able to have more control of your inventory, however, you will have to pay more for the shipping charges. It is best to have the fulfillment centre closer to your customer’s location so that the delivery is done faster and there are fewer returns.
8.3)Self-fulfillment is the cheapest solution
If you’re a start-up and are not shipping more than 10 orders a day, self-fulfillment is the cheapest and suitable option for you. However, if you’re shipping out over 20 orders a day and spending most of your time in order fulfillment, this could be a huge setback for your business.
8.4)If the fulfillment center is located in a 2-tier or 3-tier city then it will be much cheaper
Storage and inventory management in an isolated location will be much cheaper, however, the cost of shipping will be much higher and delivery of orders could also take some more time.
Ecommerce fulfillment is an essential part of any business, which is why it’s important to understand exactly what it is that your business needs to boost its growth and profitability. Via this blog, we hope that you could get some clarity about eCommerce fulfillment and have picked the most suitable model and partner for the business.