If you have a product you are selling, you will need to know about the order fulfillment process and how you can make the best choices to get your products to the world. You may also be considering the option of being the middle man. You would lie to get products from the manufacturer to the consumer. Either way, knowing about the order fulfilment process is knowledge that is essential to the profitable operation of your business.
What Is Order Fulfilment?
When we are talking about order fulfilment, we are speaking of the process that starts with the consumer placing an order for a product (the point of sale) and ends when that product reaches the hand of that consumer. That is a simplified explanation of the concept.
Depending on what the product is the process may vary a bit. For instance, when you order a product from a catalogue you have to deal with packing and shipping, but even a fast food restaurant has order fulfillment process. A consumer places an order, the order is produced, and finally the customer gets their food.
No matter what industry you are in, or the product you are delivering, there is one thing that is the same across all businesses. That concept is that the faster your customer gets their product the happier they are.
3 Types of Order Fulfilment
There are three types of order fulfillment that any business should be aware of. Having a clear understanding of these types can help you determine what is best for your business.
- Self-fulfilment – This is the process of handling the product and shipping it yourself. This is a process that anyone can do for themselves. It is cost effective and you are in control of the quality of packaging. The shipping is done through a third party such as the United Postal Service, Fed-Ex, or UPS. The downside to this method is that it cost you time and you need to have your own warehouse space for product.
- Outsourced Fulfillment – This method is where you hand over the process of filling an order, packaging, and shipping the order to a third party company. This is effective because it reduces the amount of work on your part, and saves you time. The downside to this method is that you hand over quality control to another company which will decrease your ability for branding, it costs money, and there are costs to over stocking should you have too much product.
- Drop Shipping – This method is when your consumer orders a product from your site and the product is shipped directly from the manufacturer to the customer’s door step. Some of the benefits of this method are hands-off of the product. You will be able to offer your customers a wider variety of products. And there is a lower risk for you as the seller because you only pay for the product you sell. There is no cost for inventory or a warehouse.
The Order Fulfillment Process
There are many steps required to fulfill a consumers order properly. Most commonly a lot of the steps are put together but let’s break it down for better understanding.
- Inventory – You might not think of this as order fulfillment, but it is one of the most important steps of the process. If you don’t have product, you cannot fill consumer orders.
- Receive the order and check for availability of product.
- Process payment for the order.
- Check your pricing and be sure you can still offer it for the price you have advertised. If not, make adjustments for future orders.
- Verify products ordered. – If there is more than one product you will need to decide where the items will come from. If they are from different companies or all in your warehouse.
- Track your inventory. Be sure to take the items sold from your inventory to maintain an accurate count of product.
- Go back and double check that your order has been properly tracked in the inventory.
- Create a bill or invoice for your customer so they may verify the order once it is received.
- Confirm the shipping address.
- Decide which carrier you will use to ship the item.
- Complete the order changes from the customer after the sale, update with new product, or substitute for unavailable items.
- Physically pick the order. This is where you will collect the items for delivery and set them aside to be packaged.
- Package the order and include any branding extras if you are fulfilling yourself.
- Ship your order.
- Delivery of the order to the customer. Make sure items are delivered on time.
- Take care of any returns.
- Update your inventory once again.
You will want to be sure to be as accurate as possible. Make sure you are quick in filling your orders for happy customers. Below are a few tips to help you make your order fulfillment process work like a charm.
Tips for Ecommerce Order Fulfillment
- Have a daily routine. The more regular things become, the less chance for error or unexpected delays.
- Shop around for carriers. Check to see if the pricing is worth the service. Make sure to have accurate shipping fees so you are not absorbing any costs.
- Make sure your business is transparent. No hidden fees or unexpected charges.
- Make sure you keep your delivery and return promises. People make mistakes. But if you stand behind your promise of your policies, the mistakes are more forgivable for the consumer.
- Make sure you have the tools you need.
- Stay focused to keep from making errors.
- Always look for areas to improve your order fulfillment process to save time, money and increase quality.