If you’re just starting out on your ecommerce journey, it can be easy to only see insurmountable problems, while solutions seem fleeting at best. You may, for example, have the false belief that small businesses have no choice but to do all their fulfillment in-house, with fulfillment companies only accepting large multinational corporations as clients and partners. Or perhaps think that they would hypothetically accept smaller customers, but that the price would be so prohibitive that only large corporations could afford their services. We’re here to tell you that that’s simply untrue. Read on for our overview of ecommerce fulfillment and scalable warehouse solutions that will take your business from good to great in no time at all.
There’s so many moving pieces when it comes to getting your order from the online order fulfillment warehouse, through the logistics and transportation process, and then finally being safe and sound on your customer’s doorstep. Online order fulfillment, the process of picking, packing, and shipping orders, goes as follows.
First is receiving. You have to have inventory before you send any out to your customers, right? Whether you manufacture your products with your own two hands or order them from elsewhere, it’s mandatory that you have products available to sell before actually selling them.
After receiving, it’s time for inventory storage, or warehousing. This is the organization, quantification, and storage of your merchandise. SKU numbers, barcodes, and other identifiers are often assigned at this point, to make sure that every item in your stock is properly accounted for.
Once orders are submitted, you then move on to order processing. This is the stage in the chain where picking, or retrieval of goods from the bins and containers in which they’re stored, and packing, where items are prepared for shipment using an appropriately-sized box and a healthy amount of dunnage, are done. Smart packers will take extra care when it comes to deciding which kind of packaging, e.g. bubble mailers, cardboard boxes, poly bags, etc, are best for the job.
Shipping comes next. The packages have to be transported to the courier service, either by making a run to the post office or by arranging a pick-up if you don’t want to make a trip out of your way. You may receive a tracking number at this point, which you can either pass on to the customer yourself, or if you have your integrations set up, will be automatically sent along for you.
Last but not least is the matter of returns processing. As much as we all wish that our customers would be satisfied with our products 100% of the time, sometimes an item arrives broken, is the wrong size or color, or the buyer decides they don’t need it after all for reasons that have nothing to do with the merchandise itself. If you handle returns smoothly and without delay, that customer is far more likely to buy from you again in the future.
There are three main types of fulfillment strategies international or domestic shipping notwithstanding. Which fulfillment model is right for you depends a lot on where you are in your ecommerce journey, how many resources you already have at your disposal, and how much time and effort you have available to put in up front.
In-house or the self fulfillment model means that you or your employees take care of everything yourself. This is especially common in smaller businesses or businesses where products are manufactured in-house, as it’s easy to simply pack and ship them out of your garage or from your dining room table. This negates the need to ship merchandise back and forth between where it’s made and where it’s stored, but this type of fulfillment model can quickly take over your life if you’re not careful. Many sellers find that they spend most of their day picking and packing, which takes away valuable time that could be spent on product development, marketing, or customer service. As you grow your business, if you want to continue to do everything yourself, you’ll essentially have to pull an Amazon and rent and staff your own warehouse. This works out excellently for many business owners as they reach order volumes that can sustain this kind of activity, but if the idea of founding your own warehousing subsidiary makes you weak in the knees, there is another way.
A fulfillment method that’s more easily scalable over time is the third-party or 3PL order fulfillment strategy. When you’ve noticed you spend far too much time packing boxes, too much of your garage or office is filled with inventory, or if you have absolutely no desire to get into the distribution business, going third party may very well be for you. When you outsource, your chosen 3PL partner handles everything for you. Storage, packaging, and transportation, alongside other value added services, can be negotiated for less than you think. What’s more, due to their high shipment volume, they likely are able to negotiate significant discounts with courier companies which translates into extra savings for you at the end of the day. This is an efficient and omnichannel fulfillment strategy that makes it easy to grow over time.
The last supply chain fulfillment strategy we’ll be talking about today is dropshipping. When you dropship, you as the merchant never actually have possession of the products you’re selling in your store. Instead, you act as a sort of curator and middleman, forwarding your customers’ orders to the manufacturer, who then fulfill and ship directly to the buyer. Manufacturers are often located overseas to keep costs down, so customers are often in the position of waiting a couple weeks for their merchandise at least. Still, so long as you’re up front about waiting times, dropshipping is an excellent way to dip your toes into ecommerce due to the low barrier for entry. However, this means you’re likely to have a fair amount of competition from other sellers, so do your best to find a way to stand out.
By correctly utilizing these three strategies for order fulfillment ecommerce companies can grow bigger and better than ever before. We here at P2Pseller would be happy to get you started on your 3PL journey. Register a free account with us today to browse our catalog of warehousing partners with absolutely zero commitment required from you up front. Together, we can bring about an ecommerce revolution worth being proud of.