3 Most Popular eCommerce Order Fulfillment Strategies

Popular eCommerce Order Fulfillment:

Building an ecommerce business is no easy task. Between product development, marketing, and customer service, ecommerce business owners have a lot on their to-do lists. It can be tempting to choose any old order fulfilment strategy simply to get it done.

Order fulfilment can seem like an afterthought, after all. Once you snag a customer and complete an order, you’ve already made your money…right?

Technically, yes. But the buck shouldn’t stop there. Choosing the right order fulfilment strategy for your business can make or break you—getting it right can give you indispensable brand recognition, priceless word-of-mouth, and repeat customers you’ll need to thrive.

Why is it so powerful?

The order fulfilment process is your only human touch in an otherwise digital transaction with the consumer. Nowadays, with storefronts moving from brick-and-mortar to online avenues, brands have fewer and fewer chances to interact with their audiences.

Sure, a well-written landing page, a funny social media post, or a witty order confirmation email can communicate personality, but there just isn’t anything like a handshake and hearty “Thank You!”

Does this mean we should drop all ecommerce efforts and only sell from the corner store? No, you can’t quite recreate the personal touch of a face-to-face sale, but the right order fulfilment process can help humanize your product and brand.

Your product or service delivery is the final and lasting impression of your business on the consumer. The length of delivery time, how your product is packaged, the quality and variety of provided print materials, the ease of exchanges and returns—it all contributes to your brand perception as a whole.

The calibre of your order fulfilment process is a key factor in whether a consumer becomes a loyal customer or is simply a one-time buyer. If they love it, they’ll be back. If they aren’t a fan, they’ll probably be thinking, “Well, I’m glad I only did that once.” And repeat sales are the only way most ecommerce businesses survive.

Lastly, your order fulfilment strategy directly impacts your ability to scale. Today, you may be a one-person operation selling homemade Masala out of your garage, but choosing the right order fulfilment strategy early on can determine your potential to become a dog scarf-making empire in the future.

The Big Three: Popular Ecommerce Order Fulfilment Strategies

There are three major avenues for order fulfilment: direct fulfilment, drop-shipping, and third-party fulfilments (also known as 3PL). Each strategy comes with its own advantages and disadvantages.

Ecommerce businesses of all ages, industries, and sizes use each of these strategies, and some even choose to leverage more than one.

For example, India-based Apparel Company uses a combination of fulfilments strategies to send out orders. According to owner, “He outsource almost all order fulfilments through a fulfilments and drop-ship organization. However, for products that are high-volume sellers, I inventory and ship them myself. Drop-ship tends to be for newer products, until they prove concept, then larger production runs and inventory the products to reduce costs.”

Combining strategies allows businesses to extend their selling and shipping reach without investing in more labour, software, or real estate. A mix of fulfilments tactics also provides you with flexibility and testing opportunities.

But before we go further, let’s review the three main order fulfilments strategies.

Direct Fulfilment

Direct fulfilments, also known as self-fulfilment, is precisely as it sounds: You fill orders yourself. Self-fulfilments is frequently used by businesses on both sides of the size spectrum: The homemade goods sold by a single owner and the massive corporation that can afford to own warehouse space, equipment, and multiple teams for labour.

So self-fulfilment can look very different, depending on the industry, budget, and physical size of a business.

Advantages

There are a few notable advantages to this strategy. With self-fulfilment, you have total control. You know precisely how your products are organized, stored, and packaged, and you have the ability to add a personal touch—via handwritten note, special packaging, or specific seal—to each shipment.

Self-fulfilments, depending on the size of your business, could mean a lot in cost savings. You don’t need warehouse space, specific equipment or software, or even extra labour to help you fulfil your own orders. Because of this, you don’t need to network, negotiate, or have as many business contacts, either. (Obviously, these rules don’t apply if you’re a massive corporation that owns warehouse space and a dedicated fulfilments team.)

Disadvantages

With self-fulfilment, what you save in funds, you spend in time and energy. Self-fulfilments takes a lot of work. You (and/or your team/spouse) are responsible for every function in the order fulfilments process, from picking to packing to handing it to the mailman. And if you want to turn your orders around quickly, you have to be available to fill them practically 24/7.

Depending on your product and production cycle, self-fulfilment also requires ample storage and workspace, like a garage, spare room, or sizeable basement. You also aren’t afforded the shipping discounts that fulfilments centres and drop-shippers negotiate with their partners.

A direct fulfilments strategy is commonly used by ecommerce businesses that… are early-stage start-ups that need to save money OR massive companies that can afford to manage every part of order fulfilments; sell homemade or customized products; prioritize the personalization of their product packaging.

Drop-Shipping

Drop-shipping is when companies pay for fulfilments as orders come in, typically from the manufacturer or vendor itself. Basically, when a customer places an order, your drop-shipper receives a notice. They pick, pack, and ship the product and charge you only for that piece of inventory.

When going with a drop-shipping strategy, ecommerce businesses own no inventory themselves, but are responsible for all marketing, selling, and customer service and satisfaction.

Advantages

With a drop-shipping strategy, you don’t have to manage inventory, or calculate or forecast product movement. You simply pay for product as it’s ordered. Drop-shipping also allows you to sell an extensive product offering without paying for more inventory, labour, or warehouse space.

This strategy is the best way to test new products before investing in a product line and buying in bulk. Drop-shipping also requires low overhead costs. Since you pay when a sale is placed, you avoid a few key operational expenses.

Also, because you don’t have to order and store your own inventory, you only have to pay for product once, when it’s shipped to the customer. Letting a drop-shipper manage your order fulfilments frees you up to focus on sales, marketing, and customer satisfaction—some founders’ favourite facets of business.

Beyond basic picking, packing and delivery

Inventory discrepancy, late delivery or manpower shortages are problems posed when a logistics company is unable to deliver. NWCC goes beyond basic picking, packing and delivery and other value-added services.

To overcome these problem at NWCC offer customised solutions doe order fulfilment:

Designing custom warehouse operations using dedicated or shared resources including specialized storage and handling
Mode and route optimization
Managing a full range of warehousing services, from receipt to storage, order picking and dispatch
E-commerce solutions – pick and pack, re-pack, operational and systems expertise, manifest and parcel carrier rate shopping and cost management
Customization to fulfil unique requirements – collaboratively engineered fulfilment solutions
Vendor Managed Inventory (VMI) strategies
Performing stock audits and quality inspections
Providing full inventory control solutions and systems integration with latest Information Technology (IT) techniques
Managing incoming orders and deliveries with full visibility
Proof of delivery management
Examining and processing returns to re-stocking and re-shipping a replacement