Ecommerce Fulfillment: Choosing the Best Solution for Your Company
For both a B2B or a D2Cecommerce company, a sale is not complete until the purchased items are received by the customer, making the order fulfillment process the heart of your business and key to building trust and affinity with your customer. Whether you manage order fulfillment in-house, with a third-party logistics provider (3PL) or by means of drop shipping, all solutions have one thing in common –they need to be predictable, accurate and efficient.
Jump to a section:
- What is Ecommerce Fulfillment
- Methods of Ecommerce Order Fulfillment
- Finding the Right Solution
- How SEKO Can Help
In the simplest terms, ecommerce fulfillment is the process of completing online orders.
For a web-based business, fulfillment encompasses everything from processing inventory, warehousing, packaging, shipping and delivery to managing returns and exchanges to completing value-add services such as gift-wrapping and engraving.
A seamless ecommerce fulfillment function is more critical than ever as consumers have become more and more accustomed to two-day, and even same-day, delivery options. Delayed or lost orders, poor tracking capabilities or a negative customer service experience can be detrimental to customer loyalty and overall brand reputation.
The most popular methods of order fulfillment include in-house fulfillment, third-party fulfillment and drop shipping. The following section outlines the high-level characteristics of each solution:
In-house fulfillment involves a business fulfilling orders within their own facilities. This includes using its own labor, technology, warehousing and more without the help of an outside partner. In-house fulfillment is best suited for smaller businesses with lower inventory volumes, or those who seek complete control over the entire operation. It’s a great starting point for home-based businesses as it’s a relatively low-cost option. However, in-house fulfillment can become challenging for businesses needing to scale due to limitations on available warehousing space, labor and competitive shipping rates.
|Advantages of In-house Fulfillment
|Challenges of In-house Fulfillment
Third-party logistics (3PL) is a fulfillment method in which an outside 3PL, such as SEKO Logistics, is hired by a company to manage its entire supply chain from end-to-end. The transition to this model often occurs when companies outgrow their in-house fulfillment operation. 3PLs are also extremely beneficial for companies looking to scale their ecommerce businesses, both nationally and globally, while simultaneously improving service levels and the overall customer experience. While 3PLs are an outside provider, they act as an extension of a business, taking on the entire fulfillment process enabling the internal team to focus time and resources on other critical business functions.
|Advantages of Third-party Fulfillment
|Challenges of Third-party Fulfillment
Drop Shipping is a fulfillment method that involves forwarding online orders directly to the manufacturers or product suppliers to fulfill. The retailer doesn’t come into contact with inventory and instead, the supplier manages the entire process from point-of-sale to delivery. Drop shipping can be an attractive option due to its low start-up cost. Conversely, this fulfillment option gives complete control over the shipping and handling process to the supplier which can be detrimental to a company’s reputation if there are excessive delays, lost or broken items, or negative customer service experiences.
|Advantages of Drop Shipping
|Challenges of Drop Shipping
Transitioning fulfillment models to match a company’s growth trajectory is not uncommon, it’s expected. Whether just starting out or looking to chase after aggressive growth goals, it’s important for businesses to evaluate a variety of factors when determining the best ecommerce fulfillment solution. Some of the most notable considerations include:
- Capacity to manage part or all of the fulfillment process in-house (and scale efficiently)
- Availability of warehousing space–whether locally or globally
- Access to internal and customer-facing tracking technology
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