eCommerce Order Fulfillment 101

What Is eCommerce Fulfillment and How Does It Work?

Fulfillment is as important to eCommerce as the kitchen is to a restaurant. One would not, cannot, does not exist without the other.

Few people really understand what takes place after they order a meal and before it arrives at their table. Similarly, eCommerce fulfillment remains largely a mystery. It exists somewhere in the shadows behind cool websites, engaging social media, and clever marketing campaigns.

Global eCommerce sales are expected to total roughly $5.5 trillion this year alone. As such, we think understanding how the whole system works is crucial to being competitive in today’s marketplace.

A cohesive eCommerce fulfillment strategy can be the difference between success and failure in 2022. If you're looking to improve your eCommerce business and chances for success, you’re in the right spot. 

With any new subject, it’s best to begin with the fundamentals. So, in this introduction, we will take a look at the basics of eCommerce fulfillment. We will discuss some best practices and touch on solutions to ensure it is conducted optimally.

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The True Value of eCommerce Fulfillment Strategy

Common knowledge tells us that anything worth doing is worth doing right. 

Certainly, some exceptions to this rule do exist (see: karaoke, bowling), but we wholeheartedly agree with the sentiment. Our field of expertise at SkuNexus is all things online retail. Let us assure you that the value in getting eCommerce fulfillment strategy it right is monumental. Its impact can and will be felt in nearly every aspect of your business (far beyond the online store).

It is not a simple task, nor is it simple to sustain. A successful eCommerce fulfillment strategy requires organization, focus, and discipline. Flexibility, creativity, and persistence, too.

However, the potential payoff is bountiful. Higher customer satisfaction, more efficient operations, happy employees, and a business that grows.

Do you want to get a deeper understanding of eCommerce fulfillment strategy? Do you want to learn how to use automation as a cornerstone of your strategy?

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What Industry Experts Are Saying About eCommerce Fulfillment

The eCommerce landscape is vast and growing larger every day. If you have an online business, on any level, keeping up with the latest news (while critical) is difficult to do. The amount of information, spread over a sea of topics and from a myriad of sources, can be overwhelming.

In this article, we briefly touch on an eclectic mix of topics. We discuss the $2 trillion global outsourced fulfillment and logistics industry. We discuss micro-distribution business models with fulfillment centers focused on a few city blocks. Instead of giving you our take on what’s happening, we provide you viewpoints from other respected experts in the field.

From Shopify to McKinsey, here are a handful of interesting facts, trends, and forecasts for eCommerce businesses to consider. We hope you find this information interesting, useful, and thought-provoking.

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Leverage eCommerce Fulfillment to Grow Your Business

A 360° View of the Order Fulfillment Process

In a previous article, we discussed eCommerce fulfillment systems in fairly broad terms. We’re hopeful that you enjoyed dipping your toes into the topic and are now ready to go for a swim.

At SkuNexus, we want to bring you along progressively and help you gradually build your knowledge base. So, let’s take a deep dive together into the aspects of eCommerce fulfillment. 

Now, we will discuss the specific order fulfillment types, including self-fulfillment, third-party logistics, and dropshipping.

We will address a variety of considerations for particular processes (pick, pack, ship and BOPIS). We will also touch on specific scenarios (multiple locations, international sales, and niche product categories).

Most importantly, we will illustrate how a good software can drastically improve your business' sales and efficiency. A good software should act as an inventory management system, order management system, shipping management system, and eCommerce warehouse management system.

After reading this article, you will understand steps to take to optimize your fulfillment strategy, improve customer experience, and grow.

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How an Order Management System Lowers Fulfillment Costs

In a retail environment transformed by eCommerce, merchants must assess and optimize every aspect of their businesses. Survival and success depend upon continual analysis, adjustment, and innovation.

Brands are now managing exponential increases in sales and communication channels. Simultaneously, their customer base demands total convenience, real time information, and ever-faster delivery. These challenges make it easy to put the fundamental need for cutting order fulfillment costs on the back burner. 

However, the retailer that ignores costs does so at its peril. Reviewing the specific eCommerce fulfillment costs is an excellent place to start a process of improvement.

Money can be saved across the entire backend, from warehouse storage space, to storage costs, to shipping fees, to return fees. Implementation of a fulfillment management software and automation of warehouse operations is the lynchpin.

eCommerce fulfillment is a field where every second and every penny counts. It is critical to grasp the total impact that management software and automation can have on your bottom line. Here, we will discuss how an inventory management software (like SkuNexus) can lower order fulfillment costs and optimize productivity. It will also maximize ROI for your eCommerce business.

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Self-Fulfillment vs. Fulfillment Partners

Whether as an established retailer or a startup venture, a move into eCommerce is not a decision to be made lightly.

A number of elements must be integrated into the plan. The construction of an eCommerce fulfillment strategy is among the most important. All the design and work that goes into front-end development is meaningless if the backend warehouse management system is dysfunctional.

For many brands, the question of whether they can succeed at managing eCommerce order fulfillment in-house becomes a quandary. At SkuNexus, we want to give guidance and help clarify that picture.

Self-fulfillment is a viable option for a range of businesses. In fact, many already possess the foundational resources necessary to make it happen.

For others, the market presents a host of available fulfillment options. Third-parties offer picking, packing and shipping, from dropshipping to 3PLs to fulfillment by Amazon (FBA). These various solutions can suit nearly any type of online store. However, they often come with storage fees and pick and pack fees.

The integration of an order management system is critical to the success of whatever order processing method(s) you choose. 

In this article, we'll discuss the distinct advantages and disadvantages of each fulfillment model. We'll also explain the ways SkuNexus can provide the management software system to complement whichever route you choose to take.

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Choosing an eCommerce Fulfillment Management Software System

Partnerships are a two-way street. Businesses must assess not only a potential partner's offerings, but also their own situation, in order to select the right one.

When it comes to choosing an eCommerce order management software partner, many questions must be asked. However, just what those questions are can be a question in itself. 

At SkuNexus, we want to give you as much help as possible in this endeavor. Here we present two useful tools for the decision-making process.

First, we present questions for your team to ask itself about your current/future capabilities, order processing, and inventory control metrics.

Then, we have a checklist of a broad array of features (e.g. automated order routing) that a worthy fulfillment management software partner should bring to the table.

After carefully going through both sections, you and your team members will understand where you stand. You will also grasp what you will require from an order management system (OMS) as you advance in the eCommerce landscape.

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8 Questions To Ask Fulfillment Management Software Providers

At SkuNexus, we see and hear about the full range of eCommerce fulfillment issues being confronted by small business owners. From dry ice to dropshipping, someone somewhere is in need of assistance with their fulfillment service.

When seeking that assistance, it can be difficult to know what questions to ask. At SkuNexus, we're used to fielding a whole range of questions and welcome every one. Specific inquiries help us to get to the root of business processes and project plans that need improvement. 

We also want to provide you with some guidance re: the things we get asked about most frequently. These questions represent some of the most common concerns for eCommerce stores of all sizes and industries. They very well may resemble your own apprehensions.

In this article, we give you 8 major business goals your peers are pursuing through fulfillment management software. We also explain how we handle them at SkuNexus.

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Business Costs of eCommerce Fulfillment

The costs of doing business are never more important to consider than during an inflationary period. Every opportunity to scrutinize and decrease those costs must be taken.

In the world of eCommerce, a great deal of those cost-saving opportunities lie in order fulfillment. The backend is awash with costs and a multitude of ways to address them.

At SkuNexus, we think the best way to reduce the costs of eCommerce fulfillment is with a powerful order management software. The right fulfillment management software can provide significant savings by optimizing your use of time, labor, materials, and even space itself. This fact is regardless of how your brand is managing its fulfillment strategy.

In this article, we will take a look at the total costs, both monetary and otherwise, of various fulfillment models. Even fulfillment fees and account management fees of 3PLs. Then, we will discuss the value of a powerful order management system (OMS) like SkuNexus. SkuNexus can not only lower fulfillment cost per order (CPO), but also eliminate fulfillment errors through automation.

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How to Improve Your eCommerce Fulfillment Performance

Any online store competing in eCommerce must always be improving. Business today moves at breakneck speed. Resting on what was achieved last year, or even last quarter, is simply not an option.

Often overlooked in favor of customer service issues or marketing strategies, eCommerce order fulfillment is ripe for assessment and optimization. The resultant improvements can have a positive impact on your entire organization.

However, knowing what to measure and how to measure it is not always obvious. At SkuNexus, we help brands analyze their order processing and solve their issues every day of the week. Our management software system provides the tools for eCommerce businesses to build, grow, and scale upon any number of orders.

We would like to share our knowledge in this area. We present here a series of steps, formulas, measurements, and KPIs to consider. These will allow you to better gauge and improve your performance in eCommerce order management and warehouse operations.

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Streamline Your Order Fulfillment Process for Efficiency

For many eCommerce retailers, the unknown unknowns can be plentiful. Even the most seasoned executives can't possibly know every facet of their business or fulfillment software. Most merchants are simply unable to stay up-to-date on every latest innovation in warehouse operations and management software solutions.

Specialization is key to success and there is no shame in this. Today's marketplace demands a great deal of time and effort to compete. Retailers often have little energy left to think about all the ways you could be doing order processing differently. They also don't leave much availability for researching, evaluating, and implementing an inventory management system, warehouse management system, or the like.

At SkuNexus, we create powerful order management software. Our order management system can streamline your task management, picking, packing and shipping in ways you may not even have considered. All across the eCommerce order fulfillment spectrum are opportunities for optimizing operations, addressing inefficiencies, and making your life easier.

In this article, we’ll explore multiple methods your brand can employ to optimize its order fulfillment. The majority of which involve the powerful combination of management systems and automation.

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Use Technology to Manage Order Routing and More

Managing eCommerce order fulfillment properly requires accuracy, speed, and rigid discipline. That’s just the bare minimum to function, without taking customer satisfaction into account.

The order management system (OMS) you are using must be aligned with your goals and integrated with your eCommerce fulfillment process. All too often, brands continue using outdated, ill-suited technology as their customer order volume grows. They eventually hit a breaking point.

At SkuNexus, we are deeply familiar with the order routing, picking, packing, and shipping problems that merchants face. They often don’t realize that currently minor headaches, if allowed to continue, will turn into migraines.

In our previous piece, we talked about general ways to streamline order fulfillment processes. Now, we will explain specific ways our software can be used to manage your order fulfillment services more effectively. We have functionality from our smart warehouse management system to automated shipping label printing. It's important for our readers to understand how technology like this can help them better process orders.

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