Running an online store requires much more than simply creating a website and establishing payment methods. You must also consider eCommerce fulfillment.
This is just as important and often more involved and difficult to organize than simply making an online store. In this guide to eCommerce fulfillment – what it is, the processes involved, and examples of eCommerce fulfillment providers.
What is eCommerce Fulfillment?
First, we must look at what eCommerce fulfillment is. A basic definition is listed below:
“eCommerce fulfillment is essentially the process of getting an order delivered to the customer once they have ordered it via your online store.”
If we look at a typical eCommerce order, it has a set process:
- The customer visits your online store and browses the products
- They add an item to their cart and make payment
- You receive the payment and order request
- The order is then made by whatever means
- It is then dispatched to the customer
eCommerce fulfillment is essentially steps 3 to 5. However, as you will see below, it is more involved than this. Steps 3 to 5 actually include many sub-tasks and processes.
The Different Process In eCommerce Fulfillment
As mentioned above, eCommerce fulfillment is split into several different processes. These include order fulfillment, order management, inventory management, warehousing, and shipping. We look at each process below and provide examples of companies that provide these services.
Order fulfillment is a general term that is often used interchangeably with eCommerce fulfillment. It is the process of picking, packaging, and delivering the order to your customer. Ultimately, your company is responsible for this fulfilment – even if you work with a third-party company that produces and delivers your orders.
As mentioned, the term order fulfillment is a broad phrase. You can find complete order fulfillment solutions that essentially help with the entire order process. This could be from order management when a customer places an order, through to the final shipping and invoice processing to the customer. The following are some well-known order fulfillment providers:
- ShipBob: ShipBob is the complete eCommerce fulfillment solution. It has transparent prices and an excellent array of fulfilment tools. This continues through the fulfillment process including order management, inventory management, and shipping.
- Fulfillment by Amazon: FBA is great if you mainly sell via Amazon and it has flexible fees. The fees are based on the size and weight of your products. FBA also has excellent inventory management tools.
- Huboo: Huboo is an award-winning eCommerce order fulfillment solution provider. They facilitate a range of different fulfillment methods and can also work with things like barcode scanning. Huboo also offers delivery services if required.
The process of order management is a general term. It essentially relates to the processes involved with any purchases your customers make. This includes recording order information, tracking the order progress, and fulfilling the orders.
Ideally, you should have a central console or program from which you can easily manage your orders. Many online stores have integrated order management tools that allow you to do this as part of their packages. There are also companies that specialize in order management and fulfillment.
Most eCommerce store builders have extensive order management systems built in. For small businesses, using the built-in order management solutions of these website builders is often more than adequate. Larger businesses may benefit from a complete eCommerce fulfilment solution, however, that offers greater control and flexibility. The following are some examples:
- Shopify: When creating a Shopify online store you also have access to order management. This includes tracking the status of orders and taking different actions such as processing payments and deliveries.
- BigCommerce: BigCommerce is an eCommerce platform aimed at medium to large-sized businesses. They have an extensive range of tools including order management and fulfilment. There is a complete order management workflow that gives companies complete insight into their order process.
When you sell a physical product you have inventory/stock. For example, let’s say you sell DSLR camera bags. To meet customer orders, you will have a stock of these. To run your eCommerce store effectively, you must manage your stock. This includes keeping track of current levels, and looking at when you need to re-order / reproduce new stock.
There are many online systems that provide comprehensive inventory management services. Many of these are also automated. They essentially help you keep track of your stock, and keep the right levels to be cost-effective.
Inventory management is often an integral part of complete eCommerce fulfillment solutions. Also, many online store builders have rudimentary inventory management. For example, Shopify has built-in inventory management solutions and it also has a large app store where you can find inventory management plugins. Alternatively, there is a range of third-party software providers that specialize in stock management including:
- Katana: Aimed at inventory management for smaller manufacturers who require raw materials for the production of their goods.
- Zoho Inventory Management: Zoho is one of the most popular tools of its kind that allows for excellent stock management. It also integrates with other parts of your business so you can make informed inventory purchases.
Warehousing is an appropriate feature of eCommerce fulfillment for larger businesses. Small businesses will generally keep lower stocks and not have a large range of products.
However, if you have a larger business with multiple product lines, warehouse management is important. Warehousing helps you keep track of your inventory within your storage facilities. It also helps you store your inventory safely, securely, and allows you to locate the items effectively when they are needed to fulfill orders.
Warehousing is generally only required for larger businesses. If you have a small business that only supplies a handful of products, you may simply choose to keep them in your garage or office, for example. In these instances, warehouse management would be wasted. However, for larger-scale businesses, there are warehouse solutions including:
- ShipBob: ShipBob is one of the most popular eCommerce fulfillment solutions. They offer a comprehensive service that covers every aspect of order fulfillment including warehouse management.
- DSV: DSV is a large carrier company that also offers eCommerce warehousing solutions for businesses.
One of the final processes of eCommerce fulfillment is shipping. This is the actual process of delivering orders to customers! Shipping applies to both physical and online products. Even if you sell online products – you must have a means of delivering to the customer such as an email or a downloadable link for example.
There are many tools and services you can find that help with the shipping process. There are also companies that specialize in delivery services. Again, the need for shipping as part of eCommerce fulfillment depends largely on the scale of your business.
For example, if you only sell products locally, you may simply deliver them yourself and thus there would be no need for complicated shipping management.
If you manage a large volume of orders on a frequent basis, it could be a great idea to make a partnership with a dedicated shipping company. There are many businesses that specialize in shipping and indeed many reputable companies like UPS also offer eCommerce shipping functionality. The following are some popular eCommerce shipping providers:
- UPS: UPS is a globally recognized carrier and they have a dedicated eCommerce delivery solution sector. This is based on the UPS My Choice solution. Using this you can link to your online store and easily manage deliveries for your products.
- DHL: Like UPS, DHL also provides eCommerce shipping management. This comes under the brand MyDHL+. This service enables you to do everything relating to getting your orders to your customers including scheduling deliveries, creating invoices, and scheduling pickups.
- FedEx: FedEx completes the trio of major shipping suppliers and they also offer some excellent shipping services. This includes the ability to purchase packing supplies to package your products for deliveries.
Complete fulfilment services vs using different companies for different processes
A final thing to look at is what type of eCommerce fulfilment services you may need. As you have seen above, some companies offer a complete fulfilment service. This includes order management, inventory management, shipping, and more. Alternatively, there are also companies that just specialize in specific areas of eCommerce fulfilment.
You must look at your business and decide what type of service you require, and how detailed it should be. This depends on several factors including the scale of your business, plans for future development, and the type of products/services you sell.
Smaller businesses with only a few unique products may not need a complete eCommerce fulfilment solution. For example, you could manage deliveries and inventory management yourself. In this instance, you may only need a storefront and order management.
Alternatively, if you have a large business with hundreds of products, you may need a complete package such as ShipBob that can help manage eCommerce fulfilment on a larger scale.