Term

What is Order Fulfillment?

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Order Fulfillment

Fulfillment refers to a procedure when a certain product is packed and delivered to a customer, who ordered this product previously online. Goods are stored in warehouses, which either belong to companies or third-party providers and are packed and delivered from there to the client’s address.

There are companies that specialize in solely fulfillment services for other companies, for example, Fulfilly, eFulfillment Service, Red Stag Fulfillment, etc.

Types of ecommerce fulfillment

The most popular practices of fulfillment in ecommerce include dropshipping, self-fulfillment, and third-party fulfillment.

Self-fulfillment is when all operations, from warehousing to shipping, are performed by the business itself. Big companies usually have their own warehouses to store goods and while having their own courier service for domestic transportations, they also cooperate with global carriers in terms of international shipping. If we’re talking about small businesses, they can store their products in rented storage, or an office, which can also serve as a place of self-pickup, depending on the number of goods,. 

Third-party fulfillment is when a company outsources a service provider to store and deliver goods for them. This model is suitable for midsize enterprises with big volumes of products to ensure on-time delivery for each customer. Third-party fulfillment is also useful for business owners in terms of expansion – if they want to store goods they can always negotiate with service providers regarding storage expansion and inventory management.

Dropshipping is different from other models because merchants don’t have storage in this case and are not responsible for shipping. In this case, sellers perform the role of intermediaries between suppliers and customers and their goal is to bring more customers in order to earn a bigger share. When customers order from an ecommerce store specialized in dropshipping, the business owner takes his share from the order to then address it to the supplier, which delivers the product to the customer.

 

Steps of fulfillment

There are 5 components in the process of fulfillment:

  • Companies receive products. Ecommerce stores can choose to store their inventory in-house, cooperate with a third-party service provider, or dropship items. 
  • Inventory storage. If the company decides to store products on its own, it also takes care of refilling the inventory once some goods are out of stock.
  • Processing the order. This is the process when clients order products and businesses start packing them. If we’re talking about dropshipping and third-party providers, sellers process the inquiry for products to the supplier or partnering fulfillment company.
  • Shipping order. Usually, customers are provided with several options of how they want to receive their orders. These include self-pickup, shipping to the post office or courier delivery. Customers choose the preferred option basing on the number of choices provided by the seller.
  • Handling returns. If a customer isn’t satisfied with his/ her order it’s important for businesses to have a clear returns policy to keep a high level of customer satisfaction.

 

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