Sales and Fulfillment

How to choose the right order fulfilment strategy for your business?

A bad delivery experience—whether delayed delivery, product damage, or lost packages—can be detrimental to a brand's image in today's vibrant e-commerce ecosystem. Delivering an adequate delivery experience is no longer enough; a stellar and streamlined experience is crucial for your brand’s success.

The right order fulfilment strategy is the cornerstone of this experience. But how can you choose the right fulfilment strategy and service to help you stand out and build a competitive advantage?

Understanding order fulfilment

Order fulfilment is a five-stage process that encompasses the journey from a customer placing their order to getting the finished order in their hand – or even return processing. The five stages critical for an order fulfilment process to work include:

• Receiving: Accepting and storing incoming inventory.
• Picking: Picking each item in the order once a customer places an order on the e-commerce store.
• Packing: Securely packing the order to ensure it reaches the customer safely.
• Shipping: Affixing the right labels to each packaged order and mailing them to the customer.
• Returns processing: Planning for the possibility of returns (shipping options for customers and product restocking or disposal).

Managing each of these stages efficiently is crucial to delivering the customer experience you want, optimising the cost centre for your brand, and scaling your operations.

Common order fulfilment strategies

Depending on your business size and needs, there are four order fulfilment models you can choose from. Each has its own set of advantages, resource needs, and drawbacks for different operational models. These common order fulfilment strategies include:

In-house

The in-house strategy involves you taking care of every aspect of the fulfilment process internally. This is usually suitable for startups or small businesses with limited fulfilment needs or large corporations that have the resources to establish a complete fulfilment team and give complete control over the order fulfilment process.

Third-party

Third-party fulfilment or outsourced fulfilment involves reliance on a third-party order fulfilment vendor for all fulfilment-related activities. This strategy can limit your control over the fulfilment experience; therefore, choosing the right fulfilment service is critical.

Drop shipping

Drop shipping puts the responsibility of fulfilment on the manufacturer, lowering the barriers to entry, minimising overhead costs, and eliminating the middleman, which can often be beneficial for the buyer. However, you may lose complete control over inventory management and order fulfilment, which can hamper customer experience.

Hybrid

A hybrid strategy is the combination of two or more fulfilment models above. You can choose the in-house model and rely on outsourced fulfilment during peak periods or decide to drop ship bigger and bulkier products. This offers you control over the fulfilment process while effectively managing customer expectations.

Choosing the right order fulfilment strategy

There is no one-size-fits-all approach to choosing the right fulfilment strategy. Each business must understand its unique circumstances to ensure efficient fulfilment. Here are X factors to consider helping you choose the order fulfilment strategy best suited for your business:

Typical customer behaviour and order

Understanding typical customer behaviour can help you understand customer expectations and design the delivery experience to align with them. Additionally, understanding a typical order—order volume, profile, items, and time—can help you plan and tailor the fulfilment strategy to better serve your customers.

Business size and order volume

The number of products you offer, the orders you ship every month, and the orders you expect to ship in the upcoming month, quarter, or year will dictate the best fulfilment strategy for you. For example, if you offer limited products and have low order volume, it may be more profitable to keep fulfilment in-house instead of relying on outsourced fulfilment. In contrast, if your operations are growing quickly, third-party fulfilment might be the better option.

Current infrastructure and resources

The infrastructure and resources you have – including the technology to support different sales channels and expert personnel – will dictate the fulfilment model you choose. The technology you choose must streamline fulfilment and not complicate it. Choosing the right order fulfilment service is critical here to ensure you have access to the right tools and expertise to stay agile and competitive in today's marketplace.

Location

Where you ship from and to are vital considerations in your order fulfilment strategy. Customers want quick deliveries with minimal shipping charges. In-house fulfilment might make sense if you are delivering locally, whereas relying on multiple fulfilment centres and outsourced fulfilment might be a better option otherwise.

Customisation needs

If you sell custom products or need custom packaging for fragile products, in-house fulfilment will give you more hands-on control for a better delivery experience. However, with the right fulfilment service, you can ensure quality control and an unforgettable unboxing experience as you scale your brand.

How can Infosys BPM help simplify order fulfilment services?

In today’s vibrant e-commerce marketplace, the right order fulfilment service is the cornerstone of delivery experience and brand success. Infosys BPM sales and fulfilment services can help you optimise supply chain planning, enhance inventory visibility, ensure accurate forecasting, and reduce revenue leakage. With these specialised services, you can optimise fulfilment infrastructure and technology to deliver a stellar delivery experience.