Ecommerce
Shiptheory

Order Fulfillment Process Strategies for a Growing eCommerce Company

by Edward Tain

April 6, 2020

In the decade and a half since Amazon’s Prime service launched, it has turned the e-commerce sector upside down. Customer fulfillment has completely changed as a result.

Before 2005, e-commerce businesses didn't generally offer the kind of shipping terms that Amazon was now offering to its customers; low-cost next-day delivery, and free two-day delivery.

With a market leader such as Amazon offering this, how could the rest of the sector cope?

To be able to turn around products quickly takes a refined and highly-developed order fulfillment process.

Customer demands shifted. If businesses did not offer free shipping, then they no longer met expectations. If they could not hurry their orders within one or two days, then customers might go elsewhere.

With Amazon dropping to next day delivery as standard, it pushes growing e-commerce companies to push their supply chain to its limits.

To match customer expectations, you need to invest in your fulfillment process.
In this article, we’ll explore order fulfillment strategies for a growing e-commerce company.

What Is Involved in the Order Fulfillment Process

Order fulfillment is a vital part of any e-commerce business. It follows a customer’s order from picking, to packing, to shipping.

For an order to be fulfilled in the first place, there needs to be an inventory of stock held in your warehouse. The process of efficient order fulfillment begins with the stock coming into the business.

Order fulfillment also includes inventory control, as well as the systems used to maintain warehousing standards and keep stock organized, and the methods used to ensure accurate stock levels.

To speed up order times and create an accurate and efficient supply chain, growing e-commerce businesses need to put in place rigid strategies to manage fulfillment.

In-House Order Fulfillment

In the traditional order fulfillment model, your customers will place their orders. These will be picked in your central warehouse facility. This order is then packed, labeled, and then sent out via courier.

To ensure the greatest speed, the warehouse needs to be organized to pick. For example, if your pickers use a location code rather than an SKU number or product name, it will make the process more efficient.

Consideration needs to be made about the location of the most picked items. Bestsellers should require the shortest walking distance while slower-moving lines can be further away.

When new inventory arrives, it is assigned a location code, and when sales are made and picking lists created, they will send the picker to a specific location in the warehouse.

Inventory accuracy is essential in improving fulfillment speeds. This means carrying out regular stock counts.

Utilizing the right technology for the creation and printing of shipping labels will save considerable time too. Having a joined-up, intelligent system could save you time and money.

Develop Micro-Fulfillment Centers

For many in the business of order fulfillment, opening large distribution centers that ship out stock to the entire country will be the logical solution.

A significant distribution hub means all your stock is in one place. You are only paying for one piece of real estate, and one team of employees.

The downside to a large central distribution hub is that it won’t be close to most of your customers. Even if you pick a central location with excellent road links, you are still very likely to be a considerable distance from most of your customers.

But, instead of opening one large center that covers a vast area, open several smaller centers.

Using micro-fulfillment centers, located close to multiple major urban areas, will dramatically reduce delivery times. You will benefit from multiple teams of pickers completing orders at once.

Of course, there is a likelihood that real estate costs will be higher. But, if you can make your fulfillment centers work for you, these should be seen as a longterm investment as they will help you grow.

Connect with Third-Party Logistics Providers

Are you struggling to meet the demands of your customer's expected delivery speeds?

Trying to improve speeds can stretch your infrastructure, and if you don’t have the warehouse space, the logistics, or the workforce, then it may be hard to grow.

Using a third-party logistics provider can be a beneficial way of utilizing the existing infrastructure of another business to serve your customers.

Team up with a third-party logistics provider, and they will provide you warehousing space to receive your goods in and to store your products.

When orders come in, they can pick them and ship them.

This type of logistics provider will serve other customers in the same way and have experienced teams and warehousing space. This offers savings in your fulfillment costs alongside access to an established logistics infrastructure.

Use Brick-And-Mortar Stores

If your business owns and operates brick-and-mortar retail outlets, then you can capitalize on your pre-existing workforce and warehousing space to bolster your supply chain.

Orders come into stores close to the customer, the staff there will pick the order from the store’s stock and either ship the order or provide a click-and-collect service within a short timeframe.

Utilizing your existing store infrastructure to maximize sales has been something that grocery stores have had particular success with companies even managing to pick and deliver small orders within one hour in select areas.

Automate Your Warehouse

For the fastest speeds in order fulfillment, look at automating your warehouse.

By retrofitting your warehouse with a robotic order fulfillment system with RFID barcodes, you will not only speed up your order picking, but you will also improve your accuracy.

Another benefit of automated warehousing is that it will save on your wage bill.