Ecommerce Fulfilment: Simplified Definition
Ecommerce fulfilment is the process of delivering products from the retailers to the customers. It includes processes like receiving packages in the fulfilment centres, picking, processing, and packaging. Shipping times and methods are part of your ecommerce fulfilment operations. It is an integral part of the business and is essential to the whole operation.
Ecommerce Fulfilment: Technical Definition
ClickPost defines Ecommerce fulfilment as all systematic activities and processes associated with receiving, picking, processing, packaging and delivering customer orders and includes a wide array of activities including but not limited to data maintenance, supply chain management, inventory management, as well as forward and reverse logistics.
Why is Ecommerce fulfilment important?
Ecommerce fulfilment is the backbone of every ecommerce platform. It is the most crucial activity that all ecommerce stores have to perform in order to grow their online business, establish their brand identity and expand their customer base. Hence fast and efficient ecommerce fulfilment is necessary to ensure quality service and customer satisfaction.
What is the process of Ecommerce fulfilment?
As defined above ecommerce fulfilment is a systematic process that has several steps and stages which is required to be completed in order to ensure that the ordered package is delivered smoothly from fulfilment centres to the customer’s doorstep. The different steps of ecommerce fulfilment are:
Receiving: The process starts with receiving the customer’s order. The received order is then transferred to the order fulfilment centre where all your inventory is stored.
Storage of Inventory: The inventory at the fulfilment centre is then sorted and organized to ensure that all the orders and packages are safe and ready to be shipped at once.
Processing of orders: After the customer orders a product it is processed. Once it is processed, the order is retrieved from the fulfilment centre, it is packaged and made ready for shipping, and finally, a packing slip or shipping label is attached displaying all the necessary information and instructions.
Shipping: Once the order is processed, picked and packaged, it is shipped to the customer via local post office or your preferred choice of carrier partner.
Returns Processing: The last stage of the process is returns processing. In case the customer returns the product, it needs to be processed, picked up from the customer, evaluated or assessed for damage and then depending on the package quality, return reason, and your returns policy, the product can either be restocked in the inventory for resale or disposed of due to malfunction.
These are the steps that are involved in the ecommerce fulfilment process.
What are the challenges associated with ecommerce fulfilment?
Ecommerce fulfilment may seem pretty straightforward on paper but it is not always the case. There are several challenges associated with the fulfilment process that can prevent businesses from fulfiling their orders in time. Some of the common logistical problems are:
It is expensive to manage in-house order fulfilment
Keeping pace with the change in order volumes and inventory management is difficult.
Not using the right technology will lead to delays, lack of automation and data that drive decision making and transparency.
Types of ecommerce Fulfilment models
There are several models through which an online business can carry out ecommerce order fulfilment. These models can vary depending on various factors, such as the size of your business, number of orders, inventory size, and other requirements. Some of the common ecommerce fulfilment models are:
Self-fulfilment model: In this type of fulfilment model, the business itself manages all the fulfilment processes, starting from receiving the order to inventory management, shipping and returns management.
3PL fulfilment model: 3PL fulfilment refers to third-party fulfilment. In this model, the business outsources its fulfilment processes to a 3rd party that provides various fulfilment services.
Dropshipping: In dropshipping fulfilment model the retailer or manufacturer directly ships the order to the customer.
How much does Ecommerce fulfilment cost?
The cost of ecommerce fulfilment can vary based n several factors. It mainly depends on what ecommerce fulfilment model you are using but also on the size and weight of the products, and the rate you're selling them at. If you are using a 3PL fulfilment services provider then the cost may depend on the fees they charge.