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What is Order Fulfillment?

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What is Order Fulfillment?

published on 15.01.2013 in Blog by

What is Order Fulfillment?As a leading eCommerce fulfillment company, we at eFulfillment Service (EFS) often work with startup merchants that are new to order fulfillment, and occasionally aren’t too familiar with what it is or how exactly it works.

So we wanted to create a post that answers the basic question, “What is Order Fulfillment?,” starting with two brief definitions:

Order fulfillment is defined as the steps involved in receiving, processing and delivering orders to end customers.

A fulfillment service is defined as a third-party company that provides these order fulfillment steps on behalf of another party, such as an online seller.


These general definitions can apply to many types of orders, from large business-to-business (B2B) orders, to individual direct-to-consumer (D2C) orders.

Because we’re an Internet fulfillment company, for this post we’ll talk in particular about eCommerce order fulfillment, which we’ll more specifically define as the steps involved in receiving, processing and delivering online orders to end consumers at residential addresses.

To help better understand exactly what eCommerce order fulfillment is, let’s walk through the different steps involved, starting with receiving.

Receiving

Whether you outsource your order fulfillment to a company like eFulfillment Service, or you choose to do it in-house, receiving inventory from your manufacturers or suppliers is the first step toward getting orders to your end customers.

Here are the typical things that merchants or their fulfillment providers do once inventory is received at their warehouse:

  • Count each item to ensure the actual number of items matches the number of items ordered from the supplier(s)
  • Inspect the inventory to see if any items have been damaged
  • Add SKUs to warehouse management software in order to keep track of the location, counts and number of sales of each of your items
  • Apply SKU or bar code labels if they do not already have them

It is also not uncommon for items to be kitted during the receiving process. Check out our post, Can Kitting Save You Money on Order Fulfillment?, for more information on kitting.

Inventory Storage

Once inventory has been received, counted, inspected, labeled, and added to your warehouse management software, it is time for it to be shelved.

Proper inventory storage is one of the most important aspects of maximizing the speed and accuracy of your order fulfillment operations.

Each SKU is often designated an individual storage bin to allow for faster, more efficient order processing. Typically only a portion of inventory is placed in bins, with overflow storage residing in a separate area of the warehouse. “Hot SKUs,” meaning those that sell the most often, should be placed closer to order packing stations, which may involve the occasional reorganization of bins, something that software can assist with.

Order Processing

So now your inventory has been inspected, sorted and placed on shelves in the warehouse. Next comes order processing.

The first step in processing an order is receiving that order. Once an order is placed online by a customer, there are a number of ways for eCommerce sellers to get that order to their fulfillment warehouse. The most ideal way is by integrating fulfillment software with your shopping cart to allow orders to be automatically received by your fulfillment warehouse. At EFS, we receive orders a few different ways.

Once the order has been received by your warehouse, the individual items that make up that order are then picked off the shelves by warehouse staff and transported to an order packing station. The packing station will go through a series of quality control checks, determine the best packaging materials, scan items, add packing slips and any inserts, seal the box, and then move it to the shipping station.

There are a variety of methods and technologies involved with picking and packing orders, and what works for one seller may not work for another. This is one of the main reasons eCommerce merchants decide to outsource their order fulfillment, as they simply don’t have the in-house experience, expertise or technology to maximize order processing efficiencies.

Shipping

After an order has been picked and packed, it is moved to a shipping station to prep it for delivery to the end customer.

It is the responsibility of the shipping station to weigh the package and determine the best ship method for the order. While some online sellers have a small handful of products that require basic delivery from just one carrier, such as the U.S. Postal Service, other sellers have orders that come in all shapes and sizes with specific requirements that are sent to customers domestically and internationally, which means shipping becomes much more complex.

It is also the responsibility of the ship station to update the status of an order so sellers know when those orders have been shipped, and so that those sellers and their customers can track the order to the point of delivery.

Returns Processing

When answering the question, “What is Order Fulfillment?,” it’s important not to forget about returns.

For online buyers, the ability to easily return purchased items is an important part of the buying decision. For online sellers, the ability to effectively handle those returns is critical to their fulfillment operations, and to their overall businesses.

Online sellers should establish both an internal and external returns policy. An external policy should be listed on the seller’s website and make clear to customers how and where to send returns, while an internal policy should make clear to your staff or fulfilment provider how returns will be handled once they arrive back at the warehouse.

While the five steps above have been explained at a basic level, each involves numerous intricacies that often need to be tailored for each individual seller, and even for different types of orders. So if you’re ever asked, “What is Order Fulfillment?,” it’s probably easiest to just give the basic definition at the top!

If you’re an eCommerce seller in need of affordable order fulfillment for your business, let us know, we’d love to chat.

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Comments

11 Responses to “What is Order Fulfillment?”
  1. Simon Wright says:

    Hi do you guys have any requirement for custom e-commerce software? Thanks, Simon

    • Steve Bulger says:

      Hi Simon, thank you for the comment!

      One of the nice things about eFulfillment Service is that we have an in-house IT team that is able to do custom integrations. In addition to direct integration with your ecommerce software, we have a couple of other ways that we can receive your customers’ orders, including a CSV import, which allows you to import multiple orders at once.

      If you’d like to learn more, and/or receive a quote for our warehousing and order fulfillment services, please feel free to submit a quote request (http://www.efulfillmentservice.com/get-a-quote/), call us at 866-922-6783, or contact us via email at sales@efulfillmentservice.com.

      Thank you!

  2. Hello, we are establishing a dropshipping business. How does your system work with dropshipping? Or not? Thank you.

    • Steve Bulger says:

      Hello Hani, thank you for your comment. Would you be able to provide a bit more detail? The reason I ask is that the term “drop shipping” can mean different things to different people.

      How we typically work is that we warehouse our clients’ inventory, we integrate with their shopping carts, and as orders come through their shopping carts, we automatically pull them into our fulfillment software and our operations crew will pick, pack and ship the orders. We also have clients that store little to no inventory with us, and we act as sort of a cross docker for them, meaning we break up large bulk shipments and then send individual parcels direct to their customers.

      I’d be happy to chat more about this. Please feel free to either reply to this comment, or you can reach out at sales@efulfillmentservice.com. Thank you!

  3. Mercedes says:

    I ordered something from Ali Express and it just now poped up saying on the tracking “order fulfillment complete” but the date on it says that started about 2 weeks ago, does that mean I should already have my order?

    • Steve Bulger says:

      Hi Mercedes,

      Thank you for your comment. Generally when you see “order fulfillment complete” on the tracking, it means that, yes, the package should have been delivered. However, we actually do not work with Ali Express here at eFulfillment Service, so to confirm the fulfillment status of your order, I would recommend contacting Ali Express directly.

      If you need anything else, please let me know. Thank you!

      Steve Bulger

  4. Rajan says:

    Hi,

    I have a question. Do you also inspect the products before you ship them out, in terms of their condition/state (for eventual damage)?

    Do we then get a notification if some products are damaged or otherwise compromised in some way?

    Thank you.

    Regards,

    Rajan

    • Steve Bulger says:

      Hi Rajan,

      Thank you for your comment. And that’s a great question.

      Yes, prior to fulfillment of our clients’ orders, we will inspect the merchandise as we pick and pack it. If any merchandise is damaged or the quality looks to be compromised in any way, we will pick, pack, and ship a separate unit, and then put the damaged unit aside and notify our client.

      I hope this helps. If you have other questions regarding any of the workflow or processes here at our order fulfillment center, please don’t hesitate to ask!

      Regards,
      Steve Bulger

  5. viola says:

    Hello,
    I would like your order fulfilment service for my online store. what is the cost and procedure? I anticipate your response.

    kind regards

    • Steve Bulger says:

      Hi Viola –

      Thank you for the comment, and for your interest in our order fulfillment services for your ecommerce store. One of our salespeople will be in touch with you shortly!

      Thank you,
      Steve Bulger

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