Direct-to-consumer brands are likely aware of some of the work that eCommerce fulfillment providers offer to online retailers. Once a customer clicks the “Buy” button in a vendor’s online marketplace, this order becomes part of a larger process that involves receiving and storing inventory, processing orders, picking and packing orders into boxes, and sending items to their final shipping destination. But there’s a lot more to order fulfillment than just packing and shipping, and the services offered by first-rate eCommerce fulfillment providers are really revolutionizing the way that online retailers ship the goods that they send out to consumers. So, what all does order fulfillment entail? Here’s a look.
The Order Fulfillment ProcessA third-party logistics (3PL) or eCommerce fulfillment provider quickly becomes an integrated part of your business, giving you the opportunity to scale your operations up and down as needed—all while keeping your operating costs low. Order fulfillment is much more than just putting orders into boxes. A modern 3PL fulfillment solution also involves cutting-edge software that makes the process of getting products to a customer’s doorstep simpler and easier, integrating with your online marketplace. When an order is placed, items are indeed located in the warehouse and packed to be shipped. But, a worthy eCommerce fulfillment processing provider will also offer expertise, guidance, data, and unbeatable rates for services like:
- Receiving and inventory management
- eCommerce store fulfillment and integration
- Order fulfillment
- Returns processing and reverse logistics
- Predictive analytics and inventory forecasting
- Shipping rate negotiations
- Warehouse management
- Picking and packing services
The Need for Effective Order Fulfillment for DTC BrandsConsumer buying patterns and expectations have shifted dramatically over the past few years. Generally, online shopping is projected to continue to increase as we work our way towards a truly global, digital-first economy. At the end of 2020, eCommerce made up 15 percent of all retail sales. By the end of 2021, it’s estimated that this figure will rise to 17 percent. But consumers are doing more than just shopping online more frequently. They also have a different outlook on acceptable shipping times and rates. Consumers want their orders shipped fast—and they want shipping to be free. A 2019 survey of 3,000 consumers, as reported in Forbes, found that:
- 36 percent of consumers said they would give up ride-sharing for a year to get free shipping on all online orders
- 25 percent of respondents would give up coffee for free shipping
- 22 percent of consumers would go so far as to give up Netflix for cost-free shipping.
How In-House Order Fulfillment Can Be TryingAre you overpaying for order fulfillment? Chances are the answer is yes. In one study shared on Inbound Logistics, the average cost for an online retailer to fulfill an order is a whopping 70 percent of the average order value. What’s more, 40 percent of these retailers say that fulfillment costs are negatively impacting the success of their business. Order fulfillment can be a challenge—especially if you try to manage it in-house—and could also be an expensive endeavor. How can in-house order fulfillment pose a problem to you and your team? When things start to get complicated or you see a rapid spike in demand or order volume, this can put undue pressure on your team. And, it’s likely that when this happens, your team won’t be able to get orders out on time. You’ll end up with late deliveries and unhappy customers. These late deliveries can have a big impact on business. According to The Business Journals, almost one in four polled consumers said they would stop ordering from the company, while another 14 percent would even go so far as to shop at a competing brand for that specific product. When order fulfillment gets out of control and deliveries arrive late, it harms customers’ perceptions of the brand and can even reduce customer loyalty. Other ways that attempting to DIY your order fulfillment can negatively affect your operations?
- You’ll encounter mistakes with inventory receiving and packing
- You’ll have to deal with constant turnover, plus plenty of hiring and training of employees to anticipate seasonal spikes
- You’ll struggle with inefficiency picking and packing practices and pay for extra labor
- You’ll have to deal with ever-changing warehouse space (and pay an unnecessary premium for warehousing)