Nowadays, one of the most significant challenges brands face is maintaining their client’s happiness. Therefore, it is essential to find strategies to improve e-commerce selling. A robust order fulfillment process can make it easier to meet those expectations. The less time you spend picking and packing orders and dealing with delays, the quicker you can get a customer’s ruling out of your warehouse.
In this article, we’ll present the meaning of order fulfillment and several strategies brands can use to improve their e-commerce sales. Furthermore, we’ll introduce Shipedge WMS, a tool that offers features such as barcodes and different picking methods that will help your company improve the speed of your sales and, as a result, receive positive customer feedback.
Common Questions About Order Fulfillment
Below are some of the central questions about order fulfillment. If you prefer, use the summary to improve the navigation.
What is Order Fulfillment?
Order fulfillment is a company’s entire process to receive, process, and deliver customer orders. This typically involves receiving orders from customers, picking and packing the products, and then shipping them to the customer’s desired location. The goal of order fulfillment is to ensure that customers receive the correct products on time, in good condition, and with accurate documentation.
An effective order fulfillment process can improve customer satisfaction, reduce costs, and increase operational efficiency
READ MORE: Third-Party Logistics (3PL) Essential Guide to e-Commerce Order Fulfillment: PART 1
How Does the Order Fulfillment Process Work?
The process of order fulfillment begins before a customer even places an order. It starts with receiving or producing products with the intention to sell. This carries on through order placement, shipping, and customer service. Some of these processes are listed below in further detail to better explain what the order fulfillment cycle looks like.
Main Processes of Order Fulfillment
1 – Inventory Management
The order fulfillment process commences with receiving goods from suppliers and vendors. Subsequently, companies must precisely record the received goods in their inventory control system and warehouse (or stock) until they are prepared for shipping.
READ MORE: How lot control works with inventory management – 2023 Update
2 – Advance Order
In the stage of advanced order processing, customer details are gathered, the payment method is confirmed, and the product’s availability is checked against the stock levels in the warehouse or inventory system. Additionally, validating shipping addresses is part of this stage.
READ MORE: Maximize your e-commerce success with real-time inventory management
3 – Placing an Order
Order placement includes a customer ordering online or through a sales representative, followed by receiving and processing the order into the system.
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4 – Picking and Packing
Upon receiving the products in the inventory, companies must select the products that must be dispatched based on the guidelines for each order. Once the selection process is completed, the items must be packed based on the customer’s requirements and prepared for shipping. Companies can utilize various packaging materials depending on the nature of the product being shipped. Before delivering the package to carrier service, they must also ensure all essential documentation is included.
READ MORE: 7 effective picking methods for maximizing warehouse efficiency
5 – Delivery and Monitoring
After being processed and packaged, the product needs to be delivered to the customer’s address via a designated carrier. Following that, tracking shipments is crucial to enabling customers to monitor their order status.
Nowadays, most companies offer online portals where customers can track their order status in real-time, following the shipment’s progress from the manufacturing facility to their doorstep.
Companies should also provide transparent communication regarding delays or changes during the fulfillment process to keep the customers informed at every stage.
READ MORE: Warehouse Management Software System: 2023 Trends
6 – Post-Order
In the after-sales stage, invoices are generated if payment was not collected during the order placement. This stage also involves dealing with returns/refunds in case of any order-related issues.
READ MORE: Third-Party Logistics (3PL) Essential Guide to e-Commerce Order Fulfillment: PART 2
Order fulfillment is an essential component of the order-to-cash process that demands meticulous attention to detail and prompt execution at every stage, ranging from receiving goods to delivering them to customers and handling customer service matters. A thorough comprehension of order fulfillment enables businesses to perform better and fosters robust customer relationships. In the next topic, we’ll further explain why order fulfillment is critical to business operations.
Why is Order Fulfillment Such a Crucial Aspect of Business Operations?
As mentioned at the beginning of this article, one of the main concerns for brands today should be to keep their customers satisfied, striving to respond to all their needs as quickly and efficiently as possible. Any brand has the capability to create a well-defined strategy for fulfilling orders. Below are some common strategies to help e-commerce businesses drive more orders.
Advantages of Improving the Order Fulfillment Process
1 – Improve customer service
Customers are more likely to be satisfied with their experience when orders are fulfilled efficiently and accurately. They may even become repeat customers or recommend the business to others! Word-of-mouth is extremely powerful.
2 – Improve the Ability to Scale
The expectation that your company is growing is a given. What isn’t guaranteed is the ability of your processes to keep up with the growth of your business.
There are a couple of ways to prevent bottlenecks when it comes to scalability in e-commerce. For example, many e-commerce companies end up outsourcing order fulfillment altogether in favor of using third-party logistics companies (3PLs) to handle that entire process.
Other companies review their tech stack to ensure they’re getting the most flexibility and efficiency out of their software. If your current software doesn’t allow for much room to grow and can’t handle a high volume of orders, it may be time to consider an upgrade.
READ MORE: How e-commerce businesses scale their operations
3 – Reduce Shipping Costs
When operating in e-commerce, shipping expenses can significantly reduce your profitability. However, transferring these costs to customers could hinder your ability to compete against free shipping rivals.
Therefore, it is essential to prioritize shipping costs when developing an effective order fulfillment strategy. This entails researching diverse shipping providers, shipping methods, evaluating the fees for different shipping services, and selecting the optimal option for each product in your inventory. Often, there is an astonishing amount of money that can be saved by reevaluating your shipping service.
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4 – Ensure Delivery Time of Shipments
Efficient processes can save time and enable you to concentrate on expanding and growing your business, mainly if you outsource or automate the order fulfillment process.
To be taken seriously as a brand, fulfilling products on a business day will be essential, such as communicating the tracking number to the customer and following up when the package is delivered. Some techniques that could help in improving these processes are:
- Barcodes: a set of black and white lines, either printed or generated electronically, that can be read and interpreted by different scanning devices to represent a numerical value.
- Picking methods: such as FIFO or LIFO.
The end of these articles will present some Shipedge benefits and how they could make a big difference to your business’s performance.
5 – Improve Customer Satisfaction
E-commerce is becoming increasingly prevalent in people’s daily lives and brands. To maintain customer satisfaction, brands should prioritize ensuring timely and high-quality deliveries. This can lead to better customer reviews, increased trust in the brand, more sales, and positive word-of-mouth advertising from satisfied customers.
READ MORE: How 3PLS Can Adapt and Thrive in the e-commerce Landscape
6 – Improve Inventory Management
Running an e-commerce platform can easily lead to unmanageable inventory levels, resulting in time and monetary losses. Any mishaps with inventory can lead to lost sales and negatively impact revenue.
Therefore, it is crucial to incorporate inventory management into a robust order fulfillment strategy. A vital aspect of an effective process involves analyzing sales trends to estimate each inventory item’s duration in your fulfillment center before shipping. As a result, the days of over or under-ordering inventory are behind you. By optimizing this category, you can boost sales and decrease storage expenses.
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7 – Increase Fulfillment Rate
When an order is fulfilled and slips through the cracks, it equals lost revenue. Achieving a 100% order fulfillment rate can be challenging without a strategy. However, with an optimized fulfillment strategy, it becomes much more feasible.
Now that we’ve learned some of the critical advantages of companies having a sound order management system, let’s move on to the next stage and explore nine tips for improving this system.
How Can I Improve the Order Fulfillment Process of My Company?
In the world of online businesses, there’s always space to improve. In the following step, we’ll present eight tips that 3PLS or online businesses should implement to improve their order fulfillment processes.
Nine Tips to Improve the Order Fulfillment Process
1 – Enhance Supply Chain Visibility Investment in Fulfillment Software
Consider investing in your business by purchasing fulfillment software to enhance your supply chain visibility. As the saying goes:
We have to spend money to make money. Improving your order fulfillment process is an excellent area to do so.
Investing in fulfillment software like Shipedge WMS is a wise way to optimize your supply chain. With its ability to provide visualization and optimization, this software can offer a better understanding of your supply chain. While it may require spending some money, the cost of not investing in such software could be much higher.
2 – Optimize Your Warehouse Design with a Strategic Layout
An efficient layout of warehouses is crucial for e-commerce operators and owners to make profitable business decisions. That will help you to:
- Streamline operations
- Boost productivity
- Reduce expenses
During the planning phase, it is essential to consider all business requirements for the layout and design of the warehouse to prevent costly changes during facility construction.
An optimized warehouse layout can:
- Increase order fulfillment rates
- Minimize travel time
- Reduce stock losses
- Boost overall efficiency
- Provide quick access to stored goods
Shipedge has been conducting warehouse science research for years to determine the best organization method for your warehouse. Below, we’ve included an instuctional video on how to best set up your warehouse layout.
3 – Determine Your Shipping Capacity
Shipping involves several factors, including inventory, time, and costs. To ship packages, you need to have the inventory on hand and allow time for:
- Packing
- Labeling
- Shipping each package
Shipping costs can also impact your capacity, especially during cash flow turbulence. Consider all these factors to determine the maximum number of packages you can send at any time. As your business grows, you may approach your maximum capacity, so continuously optimizing and expanding your fulfillment process is important to prevent missed orders.
4 – Evaluate Your Order Fulfillment Process to Identify Time-Consuming Areas
In e-commerce, order fulfillment speed is crucial, as customers expect instant gratification. Additionally, longer processes can increase overhead costs due to the need for additional labor hours. To reduce operational expenses and improve order delivery times, thoroughly review each step of your fulfillment process. During the review, identify any steps that seem to take too much time. These delays could be due to an inefficient warehouse layout, product issues, or unnecessary steps that can be eliminated from the process.
5 – Explore Your Shipping Carrier Options to Find the Best Fit
While UPS, USPS, and FedEx are well-known and popular shipping carriers for the US, other options are available. Before choosing a shipping carrier, it’s important to compare your options.
Remember that shipping companies aim to make a profit and are not legally required to offer specific services at certain costs. As a result, carriers may offer different shipping methods, and prices can vary significantly.
Moreover, carriers may have varying costs for standard or express shipping, so it’s best to work with multiple providers for your shipping needs. To save money, consider each product you offer and look for the most cost-effective and efficient shipping options. By exploring your carrier options, you can find the best fit for your business and save significant money.
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6 – Anticipate Seasonal Increases in Sales and Plan Accordingly
Be ready for sales cycles. Each online business can typically expect a surge in sales during the holiday season when shoppers buy gifts. However, other businesses may have different seasonal sales cycles. For instance, a technology shop can increase its sales during Christmas or Black Friday. A business selling camping gear and hiking clothing may sell more in the spring, Mother’s Day, or Father’s Day.
Analyze your sales patterns to determine when your sales are likely to increase. This way, you can plan before the influx of business hits your website.
7 – Understand the Priorities of Your Business
Each e-commerce business possesses distinct characteristics, and your business is no exception. Therefore, it’s essential to consider your business’s unique requirements when making significant decisions, such as optimizing your fulfillment approach.
Suppose you’re a smaller enterprise and own a property with a garage, shed, or another storage- area. In that case, you can decrease overhead costs by eliminating the need for a warehouse location.
Why pay for inventory storage when you can keep it at home for free? On the other hand, if you run a more significant business, it’s impractical to navigate through inventory every time you need to use the restroom, necessitating a warehouse. In this scenario, you should assess your specific needs and choose a warehouse location that caters to those needs. Only invest in a manageable building, or you’ll squander money. Similarly, avoid too cramped spaces, or you’ll encounter other issues.
8 – Use Technology to Your Advantage
Investing in technology, such as RFID tags, voice-directed picking systems, warehouse management systems (WMS), inventory management software, and order management systems (OMS), can be beneficial for businesses. These tools can simplify sales and order fulfillment procedures, minimize mistakes, and offer valuable operational data, resulting in accurate and fast order fulfillment.
9 – Enhance your e-commerce Business’s Fulfillment Approach Today
If your order fulfillment strategy is not yet optimized, you may lose sales and money, costing you hundreds or thousands of dollars each month.
Take charge of the situation, reduce costs, boost customer satisfaction, and alleviate the numerous challenges associated with fulfillment. While the process may appear daunting at first, it’s straightforward, and once completed, you may be amazed at how streamlined your business becomes.
How Shipedge Improves Order Fulfillment Processes
Through Shipedge’s WMS, you will gain access to valuable insights and KPIs to see where improvements can be made in the order fulfillment process. Some key features of our warehouse management system and order management system include:
- Our mobile barcode scanner and app
- A large variety of inventory rotation options such as FIFO, LIFO, FEFO, FLFO, etc
- Real-time inventory sync
- Techniques to improve warehouse efficiency and layout
With our years of experience and advanced technology, Shipedge has the ability to provide a business solution that scales with your company.
To learn more about how Shipedge can automate tasks and increase efficiency in your warehouse, check out our blog page. Otherwise, click below to speak with a solutions engineer to discuss your specific needs.
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