Processing and shipping orders each day can easily take up a huge portion of your time and energy, not to mention a sizable part of your operating expenses. Many online retailers chalk this up as a necessary evil though and continue to overwork themselves to handle these tasks on their own.
The problem with toughing it out like this? You’re busy enough as it is. Handling your order with your current strategy, are you prepared for a fast increase in demand or a sudden influx of sales—or will this lead to a backlog in orders? Do you have the time you need to focus on developing new products or marketing strategies?
It’s not like you can push back incoming orders a day or two. Late deliveries mean decreased customer satisfaction and often the loss of repeat customers.
One of the most recent, notable developments in consumer eCommerce expectations is next-day delivery. 43% of consumers choose next day deliveries because when they make a purchase online, they want to receive it right away. Businesses lose $75 billion due to poor customer service, and slow shipping is a large part of this for eCommerce brands.
The solution to these challenges? It’s time to consider a fulfillment-as-a-service provider to help you with every step of the order fulfillment process.
What is Order Fulfillment?
Before we get too far into what can improve your order fulfillment strategies, it’s wise to take a look at what order fulfillment really is—and all the steps in this process that are contained within that one umbrella term.
Order fulfillment refers to the process of handling customer orders from beginning to end, from the time your customer completes their order and a package is prepared at the warehouse to the time it reaches their doorstep, plus it refers to returns management as well.
When it comes to order fulfillment, online merchants can handle these processes themselves in-house, or they can outsource this work to a third-party logistics provider that has the storage, technology, and people to fulfill orders quickly and affordably.
What does order fulfillment entail? The stages of order fulfillment are as follows:
- Receiving: This first stage refers to accepting your incoming inventory and then performing necessary tasks like counting items and checking for quality and adding and recording SKUs for each product.
- Inventory Storage: Once products have been received, they are stored until they are purchased. This step includes storing products and organizing them for easy picking and packing. It may also involve other services like inventory management, to keep track of how many units of each product a retailer has on hand, and determining when to reorder products.
- Picking: Picking means processing an order the moment it’s placed online, which may be done using inventory management software. Every item in a customer’s order is gathered at the warehouse from their various locations within the warehouse.
- Packing: Packing means wrapping and boxing all items so they are protected while in transit. Sometimes this involves elements of personalization, like how products are assembled in the box or packing items into custom boxes.
- Shipping: This can be one of the most challenging portions of the order fulfillment process. It refers to managing shipping logistics and shipping carriers to find the best prices and fastest delivery times
- Returns Processing: Managing returns means dealing with returns quickly and effectively so that customers are not discouraged from purchasing with your brand again. They don’t want to wait for shipping labels or refunds, so this stage of order fulfillment requires as much precision as shipping. Return rates at stores are around 8 percent, but this figure increases to somewhere around 25 percent for items bought online, which means returns management is as much a part of the order fulfillment process as any other step, even if only some orders are returned. Returns management also involves reentering returned items that can be resold back into inventory.
Important Considerations in Your Order Fulfillment Strategy
Do you need the help of a third-party logistics (3PL) provider to improve your fulfillment processes? Outsourcing fulfillment might seem like an unnecessary cost until you factor in what order fulfillment services can do for you. Here are a few considerations to weigh:
Managing Order Volume
Can you handle your current order volume on your own? Can you still do so if you see a major influx in orders? If you are shipping more than 200 packages per month, it’s time to let a 3PL service handle your order fulfillment.
Taking Advantage of Modern 3PL Technology
Modern 3PL technology has lots of features and tools that can simplify and expedite the order fulfillment process. With automated and streamlined order fulfillment, plus analytics to do things like forecast demand, it’s hard not to love how technology can transform your operations. Since warehouse location can impact shipping costs, modern 3PL’s powerful analytics can also be used to help retailers predict which warehouses to utilize to keep shipping costs low.
When is it Time for Outsourced Order Fulfillment?
Are you devoting too much time to order fulfillment? It’s hard to find time to develop new products or market to new customers if you are spending all your time on order fulfillment.
Are you paying too much in shipping costs? A 3PL can help you pay less because they are connected to shipping providers and can leverage lower shipping charges while still delivering on fast shipping times
Are you selling your products at a high volume? How many SKUs do you sell? What are your predictions for how your business will grow over the next months and years? If you are selling a lot of product and you expect to sell even more in the future, a fulfillment-as-a-service solution may make handling the volume of orders you’re handling much simpler.
Your Order Fulfillment Partner
At OceanX, our services start with order fulfillment, but that’s only a portion of what we can do for your eCommerce business. Our technology-fueled 3PL and 4PL solutions have helped industry-leading brands scale their fulfillment operations with features like:
- A modern fulfillment-as-a-service solution
- A real-time business intelligence platform
- A scalable customer care service solution
As a technology-first, direct-to-consumer fulfillment partner for those in the health and wellness industries, we’re here to help you at every stage of the fulfillment process. We’ve even helped companies quadruple their daily order output rates. Are you looking to do the same? Perhaps it’s time we talked. Contact us today to discover what we can do for you.