Order fulfilment
If you are operating a business that involves selling your products directly to the customers, chances are you are engaged in order fulfilment operations in some capacity. As a critical part of the sales process, customer journey, and experience, order fulfilment can have a direct impact on customer satisfaction. But what exactly is it?
What is order fulfilment?
Starting the moment, a customer places their order, order fulfilment encompasses the process from the customer placing an order to them actually receiving their products. This includes receiving and processing customer orders, receiving and processing corresponding goods at a warehouse, and delivering them to the customer. And if a customer is not satisfied with the product they receive, order fulfilment also manages the return transactions.
Successful retail order fulfilment is at the heart of the survival, success, and growth of any business that has an e-commerce element. As a result, despite being expensive and complex, order fulfilment is often one of the top priorities for modern businesses.
Why is order fulfilment important?
Order fulfilment has the potential to have a direct impact on customer satisfaction and, consequently, the bottom line of a company. Errors or delays in order fulfilment can result in a drop in customer satisfaction, with company reputation taking a significant, whereas lost orders or returns can have a direct impact on the bottom line. On the other hand, quick, timely, and dependable order fulfilment can drive customer loyalty – encouraging them to purchase more – and boost the company's bottom line. Therefore, understanding customer expectations and optimising your order fulfilment operations accordingly is crucial to survive today.
How does the order fulfilment process work?
Order fulfilment is a complex process with many moving parts and industry-specific intricacies. Despite these differences, in a nutshell, the order fulfilment process comprises four steps:
Receiving
Inventory is an integral part of order fulfilment. So the first step – receiving – involves accepting, storing, and managing incoming inventory at a warehouse or fulfilment centre to keep things organised and simplify order fulfilment.
Picking
The next step – picking, where a fulfilment centre receives an order – is the actual start of the fulfilment process. Here, a picking team gets the order and packing slip that contains information like the name of the ordered items, their quantities, and location to start collecting the items and compiling the order.
Packing
The next step is to pack the order making sure the packaging material protects the product and adds minimal weight. Third-party fulfilment centres may charge you extra for such packaging material.
Shipping
The last step in order fulfilment is shipping the packed order to customers. Here, you can either partner with a shipping carrier or compare costs from different carriers to give your customers to most affordable pricing option. After shipping the order, you have the option to share the tracking information with customers either manually or automatically.
What are the four main types of order fulfilment?
The type of order fulfilment operations you employ can depend on a variety of factors, including the nature of the products you sell, your business size, and the location of your customers. Although it may be difficult to clearly pinpoint every order fulfilment mode, here are four primary types of order fulfilment models a business may adopt:
In-house order fulfilment
In in-house order fulfilment mode, the business has dedicated employees to manage every aspect of order fulfilment, including order processing, inventory management, and shipping. This model is best suited for well-established companies that have the resources and need control over the entire process. On the other hand, home-based small businesses may use this model due to resource restrictions.
Drop shipping
Drop shipping is similar to outsourcing, except that you do not have to worry about managing the inventory. When a customer places an order, you get the items from a third-party supplier – a manufacturer or distributor – and ship them to the customer.
Outsourced order fulfilment
In the outsourced order fulfilment model, a third-party logistics company is responsible for inventory management, order processing, shipping, and refunds. A smaller business that does not have space, manpower, or resources to handle order fulfilment can opt for this model.
Hybrid fulfilment
Any company that uses a combination of one or more fulfilment options uses a hybrid model. This affords them more flexibility and lets them focus on core business functions or customising their products for better efficiency.
No matter the order fulfilment model your business needs, choosing the right sales and fulfilment solutions to support your operations is crucial in adding value to your supply chain and optimising your sales process. From pre-sales to managed logistics services, the right partner can help you ensure the reliability and sustainability of enterprise operations.
