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Around 70% of consumers check estimated delivery dates before buying online, and meeting those expectations can be the key to closing the sale.
In this article, we will walk you through the eCommerce fulfillment process, explore the different types, and share examples to help you find the best fit for your business. We will also share various fulfillment optimization tactics and the challenges you should prepare for.
By the end of your read, you will be ready to create your fulfillment strategy and meet customer expectations when they order from your eCommerce store.
eCommerce fulfillment is the entire process of storing, packing, and shipping online orders to customers. It directly affects customer satisfaction and, ultimately, your sales.
When the entire fulfillment process is done right, it guarantees fast, accurate deliveries that can give you a stream of repeat customers. Plus, with a reliable fulfillment center, you can navigate eCommerce challenges.
In contrast, poor fulfillment causes delayed shipments, unhappy customers, and negative reviews—issues that can harm your business growth.
To better understand eCommerce fulfillment, here is its 5-step process:
Consider how each model aligns with your business structure and available resources to create a more efficient fulfillment process.
In-house order fulfillment, aka self-fulfillment, means you handle the entire fulfillment process internally. You store, pack, and ship orders yourself, managing the supply chain from start to finish.
With this approach, you have full control over everything, including:
You can use this to react quickly to changes in customer demand and adjust your fulfillment costs.
Invest in storage space. Then, set up an inventory management system to track stock levels and customer orders from your eCommerce platform.
You can then start receiving products from suppliers and store them in your storage. Make sure you check stock levels consistently to guarantee availability.
Then, you pack each order yourself—choosing the right packaging, adding any necessary shipping labels, and making sure it’s ready to go. Finally, you ship orders directly to your customers.
If you choose this fulfillment type, ShipSaving can help you score exclusive discounts of up to 89% off with USPS, UPS, and DHL Express, get real-time inventory insights, and make label and barcode generation a breeze.
Ideal for eCommerce businesses that sell custom products or add that personal touch to their packaging. Bigger companies also benefit by using their own warehouses to handle larger inventories while reducing overall fulfillment costs.
Transparent Labs, a brand that sells supplements, exemplifies the in-house method. They have a designated team that manages their entire fulfillment operations, including storing inventory, processing orders, and packing products, all within their own fulfillment center. For deliveries, they partner with various carriers, but the core fulfillment operations stay completely in-house.
This is an eCommerce order fulfillment method where you don’t hold any inventory. When your customer places an order, your fulfillment partner handles storing, packing, and shipping the product directly to them.
Dropshipping keeps operational costs low because you don’t need to invest in owning fulfillment centers or manage inventory. It lets you focus on marketing and customer experience.
Here’s how the dropship model works:
To jumpstart this method, choose a dropshipping platform that offers reliable suppliers, a smooth shipping process, and affordable rates. Make sure it also seamlessly integrates with platforms like Shopify and makes it easy to find products to list on your online store.
Dropshipping is ideal as a side business or if you’re an entrepreneur with limited capital. It’s also useful if you’re looking to test new products without heavy upfront investment or you are in a niche market where high inventory risk isn’t feasible.
Warmly is a great example of a dropshipping store in the niche market. They partner with global artisans and merchants to offer unique home items sourced from countries like Thailand and China. Their order fulfillment process involves shipping directly from these locations.
3PL lets you outsource your fulfillment services to an external company and they handle everything from warehousing to order packing, shipping, and even returns. With this, you and other online retailers can save time and reduce operational headaches.
But what makes it different from dropshipping?
With dropshipping, you don’t own the inventory—customers order, you pass it to the supplier, and they ship directly to the customer. In contrast, with 3PL, you own the inventory, the 3PL provider receives it from you, and they handle storage, packing, and shipping.
Pick a reliable eCommerce fulfillment provider that aligns with your business needs. Find providers known for fast, accurate deliveries. Check their track record and reviews to see what other businesses are saying.
Then, compare fulfillment costs. Make sure the provider’s fees align with your budget while still offering quality service. Pay attention to storage fees, shipping rates, and any extra charges.
Since this is a research-intensive step, get help from a virtual assistant. A VA can research and compare multiple providers for you. This way, you can streamline your decision-making while doing other strategic business tasks.
Once you have a 3PL provider, they will store your inventory in their warehouse and use a warehouse management system (WMS) to track stock. When an order comes in, your provider picks, packs, and ships the product to your customer. They will also handle returns if there are any from unsatisfied customers.
Growing businesses with large order volumes or those wanting to expand globally benefit most. It’s also ideal for companies that want to avoid the costs of owning a storage space.
Brummell is a great example of a brand using 3PL. After receiving their inventory, Brummell quickly transferred it to their third-party logistics provider’s fulfillment center and started shipping orders just 2 days later.
By opting for 3PL, they didn’t need their own warehouse space. Instead, they expanded into their provider’s network to reduce shipping times and costs.
Hybrid fulfillment is a combination of in-house fulfillment and 3PL. With this, you manage some aspects of your eCommerce fulfillment services internally while outsourcing other parts to a fulfillment solution provider.
For example, maintain control over high-touch areas like custom packaging while outsourcing tasks like international shipping. Use this to reduce your fulfillment costs and scale more effectively.
Identify what you can handle in-house. For example, handle custom packaging and quality checks in-house to guarantee a personal touch for premium products. Meanwhile, you can outsource the bulk of your storage and shipping to a fulfillment company.
You should also outsource the most time-consuming tasks. So consider using a 3PL provider for international shipping or bulk orders.
Once you’re done with those 2 tasks, keep the lines of communication open with your 3PL provider. Regular updates help guarantee every order gets processed and shipped smoothly.
Ideal for businesses with specific fulfillment needs, like custom or handmade products that need extra care. It’s also perfect for growing eCommerce businesses that want to stay hands-on but need support with scaling.
Here’s a great example: Whole Wood Playhouses’ handcrafted wooden playhouses are made with high-quality, large materials that require extra care during the fulfillment process.
By managing this in-house and shipping directly from their Tampa warehouse, they maintain control over their products' quality, craftsmanship, and ensure everything is packaged just right.
But when it comes to residential deliveries, they smartly outsource to third-party partners. This helps them scale without stretching their resources too thin.
While reading these best practices, review your current fulfillment workflow and note how the practical points here can make your process more efficient.
Leverage data and trends to forecast what products customers will want, when, and in what quantities. Use this to prepare, so you are never caught off guard by sudden spikes or drops in demand.
With this, you can reduce stockouts and overstocking. Plus, it creates a competitive advantage so you can meet customer expectations faster than your competitors.
Use advanced tools like Inventory Planner to forecast demand. They use complex data points, like market trends, customer behavior, and economic conditions, to help you predict customer needs.
Also, tap into your big data to dive into your historical sales and customer behavior. Look for patterns in seasonal buying trends or popular items.
To do this, use sales CRM software to track buyer data and uncover insights into purchasing cycles to fine-tune your eCommerce order fulfillment strategy. For instance, if your CRM data shows a spike in winter coat sales every November over the past 5 years, stock up earlier to prepare for that seasonal rush.
Organizations using automation solutions reported a 12% increase in workforce capacity.
So use automation to handle repetitive tasks, like order processing, inventory management, and shipping. This frees up your time to focus on growing your brand while making sure everything runs smoothly in the background.
Additionally, this reduces errors and keeps everything moving faster. This eCommerce fulfillment best practice can improve customer satisfaction too with quicker, more accurate deliveries.
Use ShipSaving. With auto-inventory updates, you will always know what’s in stock.
Plus, you can connect all your sales channels into 1 platform instead of having you manage each channel. ShipSaving also lets you compare top carrier rates instantly, customize labels, and integrate printer plugins for smooth shipping.
Allow your customers to place online orders and pick up their purchases directly from your local physical store.
How does this optimize your eCommerce fulfillment process?
It creates a more flexible, cost-effective option. It’s cheaper and faster—customers get their products sooner, and you save on picking and packing for shipments. Plus, it helps bring local customers into your local store.
Streamline your online-to-store process. So let your customers choose in-store pickup at checkout. If your eCommerce store is on Shopify, they have requirements, guidelines, and instructions to activate this option.
Dedicate a specific spot in your store for easy pickups too. This speeds up the fulfillment process for both your staff and customers.
Once your in-store pickup option is set up, have a clear plan to notify customers when their order is ready. Whether you use a call, email, or SMS, keeping customers in the loop ensures they know exactly when to come by.
Even small errors in storing, packing, or processing orders causes delays, increase fulfillment costs, and gain unhappy customers. But if you train your team, they can understand the whole fulfillment process.
Plus, the updated skills can make them work faster, more accurately, and with greater confidence. Fewer mistakes create smoother operations so your business can handle more orders without sacrificing quality.
Schedule training sessions or workshops to introduce your team to the latest eCommerce trends and technologies. You can bring in industry experts to discuss topics like the latest eCommerce inventory practices.
Also, use newsletters or internal communication channels to share updates, advice, and industry insights to keep the learning ongoing and relevant. Another way is to hire interns to give your experienced staff more time to focus on training and quality control.
Organize your space into specific areas based on the:
For example, place your best-selling sneakers in a high-traffic zone near the packing station, while slower-moving items like winter coats stay further back. Use this setup to let your team move faster and reduce the time spent searching for products. Here’s a warehouse setup idea:
Group similar items together, like clothing in 1 zone and accessories in another. This helps your team know exactly where to go when fulfilling specific orders to cut down on travel time within the warehouse.
Designate zones for each fulfillment step too. Have separate zones for picking, packing, and shipping.
For picking, place high-demand items on shelves closest to the inventory entrance. Create a dedicated packing station with all supplies—boxes, tape, labels—nearby. Lastly, position the shipping zone next to the loading dock, where packed orders can be quickly scanned and loaded onto trucks.
Review these eCommerce fulfillment challenges and pinpoint the ones that impact your brand. Then, highlight the actionable steps to help you address them.
Each eCommerce platform, like Shopify or Amazon, has its own systems, rules, and data flow. So if your data isn’t synchronized, you risk overselling or delays in shipping.
How do you solve this?
Use an all-in-one tool, like ShipSaving, to sync all your sales channels. With it, you can manage orders, inventory, and shipping across eCommerce platforms.
You can also use the tool to automate your inventory updates so that when a sale happens on 1 platform, stock levels adjust in real-time across all channels. This prevents overselling or overlooking shortage of stock.
Did you know that brands can lose 50% of sales on backordered items?
Managing backorders during high-demand periods is especially tricky because stock depletes quickly, causing delays. Poor management can harm the customer experience because buyers expect clear communication.
To prepare for this, offer extra support during high-demand periods. Use live chat, chatbots, or personalized updates to keep customers in the loop.
Be transparent about backorder timelines too. Inform customers upfront about delays and provide an estimated restock date. With these acts, you can make sure they feel valued so it can somehow offset disappointment from backorders.
Fraudulent orders—like fake credit card transactions or stolen customer details—often result in chargebacks, leaving you to absorb the cost of lost products and shipping fees.
For example, if your warehouse ships a fraudulent order, you lose money on the product and waste resources fulfilling a fake request.
How do you fix or avoid this?
Use an Address Verification Service (AVS), like the one from Stripe, to match the billing address on the credit card with the one provided in the order.
With all these insights in mind, it's time to decide your next steps. Review which eCommerce fulfillment model suits your business best, and pinpoint where you can make improvements using the best practices we covered.
But be sure to evaluate the practices you put into action so you can see what’s working and what’s not. From there, make adjustments as needed to keep things running smoothly.
To jumpstart your road to better eCommerce fulfillment, partner with ShipSaving. ShipSaving helps you score the best shipping rates while freeing you from time-consuming tasks like inventory checks. Choose your plan now and start growing your eCommerce business.
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