Order Fulfillment: What Is It & What's the Process

Mastering Order Fulfillment, the Key to Customer Satisfaction

Running an e-commerce company can be odd: the more successful you are and the more products you sell, the more you can feel underwater managing all your orders. Order fulfillment—the backbone of ecommerce—is critical to your success. This crucial process can either make or break your brand. But working with a third-party logistics (3PL) provider can help you not just keep your head above water with your order fulfillment strategy, but ride the wave of incoming orders with style.

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What Is Order Fulfillment, and Why Is It Important?

Order fulfillment is the complete process your products go through, from the moment a customer places an order to the moment it lands in their hands. This multi-step fulfillment process involves every element, from inventory management to the final delivery of the order. 

The Importance of Order Fulfillment 

We probably don't have to underscore too heavily why order fulfillment is important. Your customers clearly want your product, and in the age of next-day and two-day shipping, they probably want it now. But you might not realize all the ripple effects a smooth order fulfillment process can have on your business:

Customer satisfaction

A seamless order fulfillment process equals happier customers. When orders are delivered on time and in perfect condition, it makes your customers feel valued, and they are more likely to return for more.

Smooth-running operations

‍Organized order fulfillment makes it easier to monitor inventory, manage packing and shipping, and keep your entire operation running smoothly.

Scalability

A reliable order fulfillment process sets the foundation for your business to grow and expand. It gives you the confidence to dream bigger, aim higher, and reach farther.

Order fulfillment isn't just about sending a product, it's about delivering a promise. After all, order fulfillment is the long-lasting impression you leave on your customers. And let's face it, who doesn't want to be remembered fondly, right?

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Key Components of the Order Fulfillment Process

A 3PL like All Points can help with your entire order fulfillment process, but it's good to understand each of the steps in the order fulfillment process in-depth to vet your potential 3PL partners properly.

1. Receiving Inventory 

Fancy a well-organized, stocked-up warehouse? That's what the receiving inventory process is all about. This is where your products are properly accounted for, parked, and left ready to pick, pack, and ship when orders start rolling in. 

Why You Need a 3PL for Receiving Inventory 

Managing stock can be as thrilling as watching grass grow or paint dry for business owners more focused on growth. This is where a 3PL comes into play. These logistics companies bring a lot to the table: they have expertise in inventory management and storage, sophisticated systems for tracking inventory levels to ensure you always have enough for your incoming orders, and they save you money by shouldering the overhead of the warehouse space and staff.

There are other advantages of letting a 3PL receive your inventory:

• Scaling: When your business scales and expands, the demands of inventory management scale too. With a 3PL like All Points, you just sip your espresso, watch your business grow, and let them do the heavy lifting.
• Accuracy: Ever sent a pair of socks instead of a luxurious perfume to a customer? Oops! A 3PL is like a hawk-eyed detective, ensuring such blunders don’t occur. Many also use a cutting-edge inventory management system to ensure you're never running low on products.
• Efficiency: Time’s ticking, folks! The faster products move from storage to dispatch, the happier your customers are. A 3PL can do this at warp speed.
• Experience: Most 3PLs have been around the block and seen it all. They’re seasoned pros who know their way around even the trickiest of logistical challenges.

2. Inventory Storage 

Remember those shelves your products were chilling on? Well, it's not all that chill. It's a strategic order fulfillment game called inventory storage. This is where your products are organized based on SKU, product type, size, and frequency of sales. Imagine a librarian at work, sorting books, but instead, it's your products. 

Proper inventory storage isn't just about cramming your products into the cracks and crevices of your warehouse. It's about optimizing available space, reducing the time it takes to pick and pack orders, and ultimately speeding up that delightful bing-bong of the delivery at your customers' doorstep.

Benefits of Inventory Storage with a 3PL 

We've covered some of this above. Inventory management is costly for e-commerce businesses to handle in-house, and storage of your products is a big line item. But aside from saving you from renting a storage facility and recruiting, interviewing, and hiring staff to manage it, there are other benefits to trusting a 3PL like All Points to handle this for you:

• A team of expert logisticians handles your products
• Your inventory storage is managed to maximize speed and efficiency
• You're relieved of the operational burdens and can focus on growth and development

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But let's not stall and dive deeper into these benefits...

Remember: Consistent, professional order fulfillment can be a potent customer retention tool. A reliable 3PL would not only help you improve upon this but also free up time for you to focus on scaling your business.

3. Order Processing 

This step in the order fulfillment process is truly where a 3PL partner can shine and give you a leg up over competitors still trying to do in-house fulfillment.

When an order swoops in, it's time for your products to leap off those shelves and get ready for action. They are picked, packed, and set up to roll out to customers. And, yes, your 3PL will help ensure an efficient order fulfillment process through picking and packing, but there's more to order processing than that.

First off, 3PLs provide necessary storage space. And instead of dusty storage rooms or, yikes, the corners of office spaces that some companies use for order fulfillment in house, 3PLs have immaculate warehouses that would make Mary Poppins proud. They provide:

• Picking and packing: Where each item is hand-selected and carefully packed for its journey.
• Quality control: Ensuring that every product is in perfect condition before it heads out the door.
• Inventory management: Keeping track of what's in, what's out, and what's gathering dust.

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Order fulfillment processes are much smoother and easier when everything's in its place, and everyone understands the storage system---and that's 3PLs to a T. They're like champion Tetris players who manage your storage. Suddenly, even the craziest surge of orders becomes a walk in the park.

Benefits of Order Processing with a 3PL 

What may look like magic in the fulfillment process is usually the work of a state-of-the-art management system a 3PL is using. Yes, a seriously organized staff member can make some parts of inventory management and order fulfillment look easy in-house, but it's nothing compared to what a management system can do. (We're not undermining someone's organizational skills, just underscoring how efficient these systems are in helping pick, pack, and ship.)

With 3PLs on your team, you'll make your business operations smoother than a Michael Bublé Christmas album. 

4. Shipping 

Next is your product's final journey through land, sea, or air to reach its new home. "To outsource or not to outsource", is the question you're asking if you're here reading this article. But the answer is simple: freeing up your time spent on shipping logistics allows you more space to prioritize other aspects of your business.

Outsourcing your order fulfillment process to a third-party logistics provider like All Points truly is bringing an expert to the team, even if you don't see them in the office daily. And their resume is quite impressive:

• Efficiency: 3PLs are agile and efficient. They streamline the shipping process, help minimize shipping costs, and ensure quick, timely delivery, which all but guarantees customer satisfaction.
• Experience: They've been around the block a few times, dealing with every possible hiccup in shipping orders and racking up marathon miles of experience. This expertise helps them navigate any logistical challenge thrown their way with the skill of a seasoned rally driver.
• Network: With a web of connections stretching globally, they can access distribution networks you never knew existed. This enables faster, smoother, and more cost-effective shipping for your business.
• Technology: Armed with the latest tech gadgets, 3PLs can track and manage your shipments with digital precision. It's like having a personal GPS for each product, helping you meet and exceed customer expectations every step of the journey.

3PL Standard Order Fulfillment Service Offerings 

Outsourcing your order fulfillment to a team of trained specialists is a smart move, but there's more to it than choosing to go with a third-party provider. There's a wide range of options between handling your entire order fulfillment process in-house and handing everything over to a third-party partner. Many 3PLs will let you pick and choose from the services below to create an order fulfillment relationship based on your unique business needs:

It makes sense to bundle many of these together; if your business needs inventory warehousing, you likely also need picking and packing. You may not need freight forwarding if your operations are only domestic, but if you have plans to expand globally, you may still want to select a third-party partner that can provide those services when you're ready for them.

5. Returns Management 

But wait, what if our little product didn't fit right or got damaged on its journey? That's where the knight in shining armor, Returns Management, swoops in. It's there to save the day, ensuring your customer expectations are still met with quality customer service to make sure they stick around.

Remember, an effective order fulfillment process is like a well-rehearsed dance number. It's a smooth, coordinated effort from all departments to get your products from the warehouse stage into your customers' eager hands. But this naturally needs to include some planning for if things go wrong. If you plan for these events—or have a partner that can—you're more likely to retain them through another purchase thanks to the customer service you offer.

Handing this part of the order fulfillment process to a 3PL like All Points just makes sense. They can make sure the returns process goes smoothly with their reverse logistics experience to ensure customer satisfaction. And if it's a matter of the wrong size or fit, you know your product will be perfectly restocked back at the warehouse without a hiccup.

The Benefits of Having a 3PL Handle Returns 

Handing this part of the order fulfillment process to a 3PL like All Points just makes sense. They can make sure the returns process goes smoothly with their reverse logistics experience to ensure customer satisfaction. And if it's a matter of the wrong size or fit, you know your product will be perfectly restocked back at the warehouse without a hiccup.

Here's exactly how 3PLs can lighten your load when customer orders don't work out:

• Ease: Returns are a breeze with a 3PL. They can handle all the legwork, from getting your customer a return label to the process of receiving the returned item.
• Efficiency: 3PL workers know where everything is and can get your product back to the warehouse in a timely manner and back on the shelf faster than you can say "return processed."
• Experience: Handling returns isn’t just a job, it's a fine art. 3PLs have the experience to handle the trickiest of return scenarios. And trust me, some of them can get really tricky.
• Customer Service: With a team that specializes in returns, your customers will be happy with the seamless process, no matter the volume of orders.
  
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Why 3PLs are a Smarter Choice for Order Fulfillment

If you've made it this far, you may still be on the fence about handing over your order fulfillment to a third-party partner instead of handling it internally. Long story short, handling the order fulfillment process in-house takes a lot of time, experience, and focus. If you're contributing to that in any way, that's valuable time you, as a founder, don't get to spend on the vision for your company and its growth. If you're paying for the resources this kind of set-up takes—not just stashing a couple of storage shelves in a corner of the office—you'll wind up paying more for the team and space.

Delegating order fulfillment and returns management to 3PLs leaves you with more time to focus on your business. You may check off more boxes if you help with shipping orders, but your time would be better spent considering your marketing budget, preparing an investor deck, or brainstorming your next best-selling product. Think quality over quantity. Working with an outside order fulfillment business is the smarter, wiser, and more efficient choice.

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The Benefits of Outsourcing Order Fulfillment to a 3PL

We've gone over this in-depth in other articles, so we'll keep it pretty high-level here. Outsourcing your order fulfillment process to a 3PL can bring a lot to your business and you, its owner. We're scratching the surface here since some of the benefits depend on your unique ecommerce brand, but most companies will find that working with a 3PL means:

Better Customer Satisfaction

Picking, packing, and shipping is time-consuming and slow unless you have the built-in efficient systems that 3PLs do. No matter the order volume, these companies can keep up with customer demand and ensure speed is a working part of your order fulfillment strategy.

More Time to Be Strategic

Turning to a 3PL for order fulfillment isn't letting go of your order fulfillment strategies altogether. You'll still get transparency into this core aspect of your business without needing to be hands-on. That means your mental energy can go to the next big product idea instead of worrying about your inventory levels or whether your customers will get products in a timely manner.

The Magic of Scale and Flexibility 

You might be able to handle your order fulfillment in-house now, but what happens when your orders take off, or you get a holiday surge? As your business grows, so does a 3PL's capacity to handle your inventory—they stretch to accommodate you! That's the beauty of outsourcing fulfillment: you get not only the best order fulfillment out there but also have unlimited room to grow without the worries of logistics limitations. 

Lower Costs, Higher Margins 

Using a 3PL for your order fulfillment process can also help reduce operating costs in multiple areas:

1. Pooling Resources: 3PLs work with multiple businesses, meaning they can negotiate lower shipping costs, and pass those savings onto you.
2. Eliminating Infrastructure Costs: Forget about maintaining your warehouse, equipment, or personnel. With a 3PL, those are their headache, not yours.

So, in the long run, you save big, helping boost your profit margins compared to running fulfillment in-house.

From Local to Global 

Maybe you're ready to tackle international shipping; maybe you're not there yet. Either way, having a 3PL partner makes that step from local to international shipping easier. They not only have the experience to fulfill orders across the globe without missing a beat but also know what else to watch so your inventory levels stay where they should be as customer orders increase.

Rest assured, there are types of order fulfillment through a 3PL partner that fit your business needs, allow you to scale, and also stay in the loop so you know how your fulfillment services are going at any time.

Technology Your 3PL May Use

We mentioned that technology is a huge advantage 3PLs have to ensure a successful order fulfillment process. Generally, this looks like a network of options that manage different parts of the journey of a customer's order from the warehouse to their doorstep. Some of the systems a 3PL might use are:

• Warehouse management system (WMS): These systems enable 3PLs to provide a hyper-efficient order fulfillment process. They govern where your products are stored for picking, packing, and shipping that happens without a hitch, and they also manage the workforce in the warehouse.
• Inventory management system (IMS): These systems track inventory levels and enable inventory management across your entire supply chain so you're always perfectly stocked on products.
• Automated order fulfillment: These systems can compile and fulfill orders, routing them through the fulfillment center closest to the customer for maximum speed and efficiency.
• Ecommerce integrations: These systems make order management seamless by allowing companies to sync their product listings across all sales channels and integrate them with their bulk data. It sounds complicated because it is, but it's what makes fulfillment companies like All Points top-tier experts in what they do.
  
  

When you're vetting a potential 3PL, be sure to ask about the technologies they use. As you can see, they're critical to keep up with customer demand while monitoring inventory levels to provide an order fulfillment service that keeps your customers coming back for more.

Future Trends in Order Fulfillment

Trusting a 3PL with your order fulfillment process also means you'll have more exposure to future trends and technologies to streamline your fulfillment process further. Three key trends are expected to dominate the logistics horizon:

1. Automation and Robotics: From packing to dispatching, these robots cut fulfillment costs, reduce errors, and improve efficiency. That's not to say a 3PL representative who knows your products inside and out wouldn't still be involved in your order fulfillment, though.
2. Eco-friendly Practices: Reduced packaging waste, recycled materials, and carbon-neutral shipping are on the way. This can be especially critical for ecommerce brands with eco-friendly customers who may choose to order more from a company with clean practices.
3. Advanced Analytics: Data-driven insights can optimize everything from warehouse layout to delivery routes, making the delivery experience even better for customers.

Not every 3PL will be equipped to implement these new trends the second they break onto the logistics scene, but they'll be better equipped to take advantage of them before companies doing order fulfillment in-house.

3PL: Your Rocketship into the Future 

Working with a third-party logistics company for your order fulfillment process is like having a time machine. It catapults your business straight to the future. Here are just a few reasons why:

• Third-party logistics providers are typically early adopters of new tech and practices, like the latest order management system. This means you won't have to worry about getting left behind.
• Going with a 3PL alleviates the pressure of constantly updating your warehouse technology. You can focus on your brand while they handle the logistics.
• With their robust infrastructure, 3PLs can readily adapt to shifts in the market and trends, so you're always ahead of the game.
  
  

Order Fulfillment Trends Benefits of 3PL Automation and Robotics Leverages latest technology without the need for your in-house investment Eco-friendly Practices Implements sustainable methods without disrupting your business processes Advanced Analytics Provides data-driven insights to improve strategy and operations.

Remember, to stay ahead in the eCommerce race, it's critical to align yourself with a 3PL partner who can navigate these future trends. It's not about predicting the future, it's about creating it!