Success in life often comes down to one simple question:
Can you deliver the goods?
For online retailers, delivering the goods is the final step in the integrated series of backend operations collectively known as eCommerce fulfillment. Fulfillment includes eCommerce ordering, picking, packing, shipping, and more.
Online shoppers generally don't think (or care) about what happens once they make a purchase. As long as they receive a confirmation email and tracking information, and the order arrives when it is supposed to, it’s all good, right?
As part of a merchant’s eCommerce strategy, however, fulfillment is mission critical. Errors in the process can lead to stockouts (no inventory), overstocks (too much inventory), costly inefficiencies, diminished revenues, and lost customers.
With any new subject, it’s best to begin with the fundamentals. Within this article, we'll discuss eCommerce fulfillment basics, best practices, and solutions.
We'll start with the purchasing department.
Procurement
An organized and successful eCommerce fulfillment strategy begins here.
The purchasing department’s role may sound straightforward, but there is more to it than you might think. Uninterrupted information flow to and from the warehouse(s) is crucial. Purchasers rely on precise, real-time inventory data to make decisions on what products need to be ordered.
In addition, the warehouse is a complex system unto itself. The floor team needs to know exactly what inventory will be arriving at the loading dock and when. Accurate buying information allows it to properly configure inventory within the warehouse and schedule employees.
Receiving & Warehousing
When a shipment gets to the warehouse/distribution center, the receiving department confirms and records what has come in. Accurate accounting and continual tracking from the onset are vital. Any mistakes in receiving will only become amplified further down the fulfillment chain.
Once scanned into inventory, the “putaway” process begins. This step must be performed correctly. Knowing which products you have, in what quantities, and precisely where they are, is a bedrock of eCommerce fulfillment. An organized putaway strategy increases inventory accuracy, allows for a smooth “picking” process (more on that in a minute), and optimizes limited storage space.
It’s worth restating - warehouses are complex systems unto themselves. An effective eCommerce fulfillment strategy will also employ warehouse/inventory management best practices to create operational efficiencies.
For example -
Cycle counting is a valuable method of inventory auditing that allows specific items to be counted on a rotating basis. This method is widely considered more favorable than a full physical inventory count. Not only does cycle counting minimize disruption to fulfillment operations and save valuable time, but it also maximizes inventory accuracy.
The inventory data generated from cycle counting can be distributed throughout a merchant’s business. This data allows:
Additionally, optimized warehouse/inventory management allows for flexibility in the warehouse itself. Improved organization yields clarity, better decision-making and operational agility.
Trying to make quick decisions and implement changes in a disorganized system only yields one thing - further disorganization.
Order Management
Once a customer places an order from your eCommerce store, many things start happening. An optimized order management process involves a series of automated decisions and actions based on a variety of different inputs.
Where the customer is located (and where the items are in stock) will determine where an order is sent for processing. While we have only mentioned warehouses so far, eCommerce business models have expanded. Any number of physical locations can now serve as fulfillment centers.
At this point, a pick list for the order is generated and we get down to picking and packing.
Picking & Packing
Picking is the process of employees locating and “picking” the item(s) on the pick list.
Bar codes on both the pick list and products help a picker find the right item(s) to fill the order.
The picker then takes the order to the packing station. Here, it is boxed, labeled for delivery and transferred to the shipping department.
Shipping (and Dropshipping)
Once at shipping, packages are sorted for pickup by various carriers (FedEx, UPS, USPS, etc.). Carriers collect the packages and complete the fulfillment process by delivering the goods to your doorstep. Voila!
Dropshipping is a way to fulfill orders from an eCommerce platform by routing them to a third-party supplier.. This supplier picks, packs, and ships the order directly to the customer. It is a viable option for many businesses facing budget, staffing, or other constraints.
BOPIS (Buy Online Pickup In Store)
We realize that many eCommerce merchants exist 100% online. However, the hybrid model of eCommerce and brick-and-mortar stores has surged in popularity with customers. The BOPIS market was valued at nearly $250 billion globally in 2021.
Brands with both physical and online stores should offer BOPIS as a fulfillment option. However, doing so requires the ability to track inventory and route orders across multiple locations, including brick-and-mortar stores.
Returns
The returns process is a significant component of any eCommerce fulfillment strategy. Customers expect returns to be as simple and quick as possible. eCommerce businesses need systems in place to assess returned merchandise and put it back into inventory.
eCommerce Fulfillment Management Software
The days of manual fulfillment are over. eCommerce fulfillment management software can play a powerful role in automating and improving every process mentioned above.
For example:
This is a sample of the many functions that software can perform throughout the order fulfillment process. The right software is customizable and adaptable to meet the needs of various eCommerce brands as they grow.
We hope this has been a useful primer. If you’d like to learn more about eCommerce fulfillment and how SkuNexus can optimize and automate processes for your business, book a personalized demo with us today.
If you'd like to go deeper and keep learning more about ecommerce fulfillment, then continue reading on :)
From cart to customer—the journey of an eCommerce order is pivotal in the realm of online retail. Each step, from initial selection to final delivery, encapsulates the essence of fulfillment. Imagine a customer clicking 'buy now' on a trendy gadget. Instantly, the backend springs to action, ensuring that what follows is a seamless flow of processes that ends with a satisfied customer and a job well done.
This journey starts with an order management system capturing all details: product, customer information, and payment. Next, the order's data zips through to the inventory management system to confirm stock levels. Once confirmed, the picking process begins in the warehouse, followed by packing and finally, shipping. At every stage, precision is key because a single slip can ripple back as customer dissatisfaction.
Understanding the core components of eCommerce fulfillment—ordering, inventory management, and shipping—is essential. Let’s break these down:
Ordering: This is the heartbeat of fulfillment. As soon as an order is placed, the system needs to reflect this in real-time, ensuring that inventory counts are always up-to-date. This prevents the chaos of overselling or underselling.
Inventory Management: The backbone of the operation. Effective inventory management means knowing exactly what is in stock, where it's located, and how quickly it needs to be replenished. For instance, using advanced RFID technology, companies can track products in real-time, dramatically reducing the chances of error.
Shipping: The final leg of the journey involves getting the product from warehouse to doorstep. Efficient shipping depends on choosing the right carriers and optimizing delivery routes. This is where logistics software plays a crucial role, offering solutions like automated carrier selection based on cost, delivery speed, and customer location.
In today’s digital age, software solutions are not just helpful; they are essential. They streamline complex operations and make scalability possible. Here’s how technology is changing the game:
Automation: Software like SkuNexus automates several steps in the fulfillment process, from inventory updates to shipping label creation. Automation reduces human error and speeds up operations.
Integration: Seamless integration between different platforms (like eCommerce platforms and ERP systems) ensures that data flows smoothly across all channels. This integration allows for real-time updates and better decision-making.
Analytics: Modern systems provide analytics that help predict trends, manage inventory more effectively, and optimize the entire supply chain. For example, predictive analytics can forecast demand spikes, allowing retailers to prepare and prevent stockouts.
This technological empowerment not only simplifies operations but also enhances the customer experience, leading to higher satisfaction and repeat business. Next, we'll delve into the building blocks that form the foundation of successful eCommerce fulfillment.
Strategic purchasing sets the stage for efficient eCommerce fulfillment. Think of procurement as the art of acquiring the right goods, at the right price, at just the right time. It’s not just about finding the cheapest supplier but about finding one that offers quality products and reliable delivery schedules.
For instance, a sports apparel e-store must time their purchases of winter gear to arrive just before demand spikes in late autumn. They use historical sales data to forecast demand and negotiate with suppliers accordingly. This foresight prevents excess stock during off-peak seasons and stockouts during peak seasons, optimizing both space and financial resources.
Good inventory management is like having a detailed map of an unknown city—it guides you through the complexities of stock levels, storage locations, and replenishment schedules. Tools like RFID and barcoding ensure that this map is always accurate and up-to-date.
For example, consider a high-volume retailer using an automated reordering system. This system tracks product levels in real-time and automatically places orders when stocks dip below predetermined thresholds. Such systems reduce the need for manual counts and the risk of human error, ensuring that the business can meet customer demand without interruption.
The pick, pack, and ship process is where the rubber meets the road. It's crucial to get this right because it directly affects delivery times and overall customer satisfaction.
Picking: Employees navigate the warehouse with digital pick lists generated by the order management system. This system directs them to the shortest routes, saving time and reducing fatigue.
Packing: At the packing station, workers use customized instructions to select the right packaging materials, minimizing waste and ensuring product safety during transit.
Shipping: Finally, the packaged order is handed over to the selected carrier. Automated systems compare shipping rates in real-time, choosing the most cost-effective option without sacrificing speed.
Each of these steps is streamlined through integration with warehouse management systems like SkuNexus, which not only speeds up the process but also reduces the potential for errors.
These foundational elements of fulfillment—procurement, inventory management, and efficient picking and packing—are vital cogs in the eCommerce machine. By mastering these, businesses can significantly enhance their operational efficiency and customer satisfaction. Next, we'll explore how innovations in technology are revolutionizing these fundamental processes, making them smarter and more adaptable.
In the digital age, smart warehousing is revolutionizing inventory management. Integrating Artificial Intelligence (AI) and the Internet of Things (IoT) enhances not just accuracy but also the efficiency of warehouse operations. Imagine sensors and cameras throughout a warehouse that track products as they move in and out, updating inventory levels in real-time.
For example, a smart warehouse might use AI to predict which items will be in high demand, adjusting storage locations to make picking more efficient during busy periods. IoT devices could also automatically adjust environmental conditions to ensure product quality, such as maintaining optimal humidity for sensitive electronics.
An effective Order Management System (OMS) is crucial for seamless eCommerce operations. SkuNexus stands out by offering an all-in-one solution that automates crucial aspects of order processing. From the moment an order is placed, SkuNexus can determine the best shipping method, generate packing lists, and even prioritize orders based on delivery deadlines.
This system not only speeds up the processing time but also significantly reduces the potential for human error. Retailers can see a noticeable improvement in customer satisfaction as orders are processed faster and with higher accuracy, enhancing the overall shopping experience.
The future of eCommerce fulfillment is exciting, with several innovative trends on the horizon:
Predictive Analytics: This technology uses past data to forecast future demand, allowing businesses to optimize inventory levels and reduce costs. For instance, predictive models can identify potential sales spikes from seasonal trends or marketing campaigns, allowing companies to prepare in advance.
Drone Delivery: Although still in its early stages, drone delivery promises to speed up shipping times dramatically. Companies like Amazon are already experimenting with drones to deliver packages within hours of order placement.
Sustainability Practices: As consumers become more environmentally conscious, green logistics are becoming crucial. This includes everything from biodegradable packing materials to optimizing delivery routes to reduce carbon emissions.
These advancements promise not only to enhance operational efficiency but also to transform how consumers receive their products, making the process faster, more reliable, and more sustainable. Up next, we'll dive into frequently asked questions that help demystify eCommerce fulfillment and provide actionable insights for both newcomers and seasoned professionals in the field.
Balancing inventory levels is more art than science, requiring a keen understanding of market trends, customer behavior, and predictive analytics. Overstocking ties up capital and increases storage costs, while understocking can lead to missed sales opportunities and dissatisfied customers.
SkuNexus helps mitigate these risks through sophisticated demand forecasting tools that analyze historical sales data and market trends. By setting automatic reorder points and tracking product performance, SkuNexus ensures that you maintain optimal stock levels—neither too high nor too low. For instance, if a product starts trending on social media, the system can prompt an immediate inventory review to prevent potential stockouts.
In the world of eCommerce, speed is a currency. However, rushing orders can lead to mistakes, which in turn, can erode trust and customer loyalty. SkuNexus integrates advanced sorting algorithms and barcode scanning to enhance the speed and accuracy of order processing.
For example, during the packing process, SkuNexus can guide workers through optimized paths in the warehouse, ensuring the quickest retrieval times. Simultaneously, real-time scanning reduces errors, ensuring that the right products are always picked. This dual approach minimizes the risk of returns due to incorrect orders and enhances overall operational efficiency.
Returns are an inevitable part of eCommerce, but they don't have to be a pain point. Efficient returns management can actually enhance customer satisfaction and encourage repeat business. SkuNexus offers a streamlined returns process that includes automated return labels, quick restocking of returned items, and immediate updates to inventory levels.
Best practices involve clear communication with customers throughout the returns process. For example, SkuNexus sends automated updates to customers at every step of the return, from initial receipt to the processing of their refund or exchange. This transparency builds trust and reduces customer anxiety associated with returns.
By tackling these common fulfillment hurdles, businesses can not only improve their operational efficiency but also enhance their customer experience, leading to higher customer retention and satisfaction. Next, we will explore some frequently asked questions about eCommerce fulfillment to further clarify any doubts and provide actionable advice.
For small businesses, finding a cost-effective fulfillment model is crucial. The best choice often depends on factors such as order volume, product type, and available resources. One popular model is dropshipping, where products are shipped directly from the supplier to the customer, reducing the need for inventory management and storage space.
Another efficient model for small businesses is utilizing a third-party logistics (3PL) provider. This option allows businesses to leverage professional fulfillment services without the overhead of running their own warehouse. SkuNexus offers integration capabilities with various 3PL providers, making this option particularly seamless.
For those who prefer greater control, in-house fulfillment can be cost-effective if managed properly. SkuNexus provides tools to optimize in-house operations, from inventory management to shipping, ensuring even small teams can handle orders efficiently.
Technology plays a pivotal role in minimizing fulfillment errors. By implementing systems like SkuNexus, businesses can dramatically improve accuracy across all stages of the fulfillment process. For instance, barcode scanning ensures that the correct item is picked, while real-time inventory updates prevent orders from being processed if stock is unavailable.
Automation of the order entry process reduces the likelihood of human error in data transcription. SkuNexus, for example, can automatically sync orders from multiple sales channels into one centralized system, ensuring consistency and accuracy. Advanced routing algorithms also determine the best shipping methods, further reducing errors and optimizing delivery times.
Yes, fulfillment can indeed be environmentally sustainable, and many businesses are now adopting green practices. Sustainable fulfillment practices include using biodegradable or recycled packaging materials and implementing energy-efficient warehousing techniques.
SkuNexus supports these efforts by enabling efficient routing and inventory management that minimize waste. By optimizing storage layouts and picking paths, SkuNexus reduces the energy used in warehouses. Furthermore, the software can help coordinate bulk shipments and consolidate orders to decrease the number of delivery trips required, thus reducing carbon emissions.
These practices not only help protect the environment but also resonate with eco-conscious consumers, potentially boosting brand loyalty and customer satisfaction. As we wrap up this comprehensive guide, let’s move on to encapsulating the key insights and next steps to empower your business through effective fulfillment strategies in our final thoughts.
Throughout our journey today, we've uncovered critical insights and strategies to revolutionize your eCommerce fulfillment operations. Here’s a quick recap:
Balance and Accuracy: Effective inventory management ensures you have the right products in the right quantities. Utilizing technology like SkuNexus can prevent overstocking and understocking, safeguarding your capital and customer satisfaction.
Speed and Precision: Accelerate your fulfillment without compromising on accuracy. Tools that automate picking, packing, and shipping reduce errors and enhance efficiency.
Sustainability: Embrace green fulfillment practices. By optimizing your processes and choosing sustainable materials, you can protect the environment while catering to the eco-conscious consumer.
Leverage Technology: Use SkuNexus to streamline every aspect of your fulfillment process, from procurement to shipping, ensuring a seamless operation.
Remember, each of these elements contributes to not just meeting but exceeding customer expectations, which is vital in today’s competitive market.
Ready to take your fulfillment operations to the next level? Here's how you can start:
Integrate SkuNexus: Begin by integrating SkuNexus into your current systems. It’s designed to seamlessly sync with your sales channels and supply chain operations, providing a robust platform for managing orders, inventory, and logistics.
Review and Optimize: Analyze your current fulfillment processes through the analytics features provided by SkuNexus. Identify any bottlenecks or inefficiencies and use the insights to make informed improvements.
Train Your Team: Ensure that your team is well-trained on how to maximize the benefits of SkuNexus. A well-informed team can leverage all features to optimize your fulfillment processes effectively.
Interested in seeing how SkuNexus can transform your business?
We invite you to book a personalized demo. Experience firsthand how our platform can simplify your operations, reduce errors, and save time and money. Whether you're a small startup or a large enterprise, our solutions are tailored to meet your specific needs.
Take this opportunity to see SkuNexus in action and explore customized solutions that fit your business model. Let us help you enhance your fulfillment strategy, ensuring you not only meet but exceed your business goals.
Ready to revolutionize your fulfillment process? Contact us today and set the foundation for a more efficient, reliable, and customer-centric operation. Together, let's take your eCommerce business to new heights!