An online purchase is simply the first step in a customer’s journey with you. Once a purchase has been made online, as a business owner you will need to take the digital order and convert it into a physical package that can be delivered to the proper recipient in a timely manner. As such, there is an essential question that all new business owners need to consider: What is order fulfillment and why is it so important?”
Order fulfillment is an entire operation that involves keeping products in stock, preparing products for shipment, and sending products to customers. The order fulfillment process links the customer’s on-line purchase experience with the product’s actual delivery.
A Business Process with Five Moving Parts
Consider that fulfillment is like a chain. In order for the entire process to function properly, each individual link needs to operate effectively.
Inventory Storage
The products that are ordered will be received, counted and then put into specific areas. Having an accurate record of your product inventory can stop you from selling too many items at once and can also help avoid having problems with delivery.
Order Processing
The business confirms payment, checks stock, and prepares the order for picking.
Picking and Packing
Staff select the correct items, inspect them, and pack them for safe transport.
Shipping
A delivery person picks up the package and delivers it to the customer. Customers can use tracking updates to monitor their orders.
Returns Management
Returned products are checked, processed, and restocked or handled as needed.
Who Handles the Work?
Businesses can manage fulfillment in different ways:
- In-house fulfillment: The company stores and ships its own products.
- 3PL: A third party offers logistical support, including but not limited to, storage facilities, packaging of products and transportation of goods.
- Dropshipping: A supplier ships products directly to the customer.
The best solution depends on how many orders are received, what kind of merchandise you sell, how much money you can spend on the project, and how many employees work for you.
What Makes Fulfillment Successful?
Organizations need to have accurate records of their products in stock (inventory), a clearly defined set of steps to complete each step of the order fulfillment process, trusted partners who can deliver orders quickly and efficiently, and effective tools to track orders throughout the entire process.
The team must monitor how many orders are delivered on time, how quickly orders are delivered, and how much it costs to fulfill each order. By monitoring these three factors, the team can identify areas that can be improved upon.
More Than Delivering Packages
When each of the four areas of the fulfillment process functions properly, then customers should receive their orders in a reasonable amount of time. To remain competitive with other businesses, it’s critical for companies to provide prompt service to their customers. A company’s ability to respond to changes in demand, as well as avoid stockouts, is enhanced through having a good fulfillment process. Communication between employees of a company can assist in resolving problems before they negatively affect the company’s customers.
A good order fulfillment system helps small businesses save money on shipping costs, builds consumer confidence in their brand, and provides a foundation for future growth. A strong fulfillment system will also provide a strong base for processing increased orders as the business continues to grow.
