Order Fulfillment Guide
The Essential Guide to Choosing an Order Fulfillment Service
Perhaps the only remaining ace that brick-and-mortar retailers in Ontario have in their stockroom is the promise of instant gratification. Some customers will always be enticed by that tactile sense of walking out of the store with a shopping bag in tow. This is where e-commerce retailers have to up their game — make the goods worth the wait from when a customer presses the checkout button to shipping and delivery.
One of the biggest advantages of e-commerce is the radical transformation of the supply chain. Unlike brick-and-mortar business models, e-commerce requires a much smaller infrastructural and inventory investment.
For one, e-commerce retailers do not need to maintain store upkeep in Ontario, and with that, even large-scale warehousing. Instead, core business processes have shifted towards shipping and fulfillment, which can be done in partnership with specialized logistics providers.
In-House Fulfillment vs. Fulfillment Services
How are orders processed, packaged, and delivered? An optimized shipping and delivery process promotes customer satisfaction and retention. Fast shipping and delivery times are manageable in-house when order volumes are low, but when scaling for growth, an order fulfillment service may be a worthy investment.
A fulfillment service allows retailers to outsource inventory management, packaging, and delivery. So they can focus on other essential processes like design, production, and marketing. These guarantee there are products for sale.
Rather than manage fulfillment in-house, a third-party fulfillment service in Ontario facilitates these key customer touchpoints. This eliminates the need to maintain in-house warehousing and logistics capabilities, whether due to high demand or overhead costs.
What happens in a fulfillment centre?
A fulfillment centre is a warehouse: a fulfillment provider can provide storage space and package and dispatch these as orders are processed. This one-stop delivery command centre assists with your inventory management by alerting you when stocks are running low and shipping out orders to customers within a specific location radius.
Depending on where you are located and your target market, you may opt to register with a single or multiple fulfillment centres. This will ensure customer orders are quickly dispatched from the closest fulfillment centre to them. Similarly, a fulfillment centre can also receive, and process returns on your behalf. Inspect the merchandise for damage, validate customer feedback, and send a replacement. Also, issue a refund without having to involve you. If the returned item is sellable, they can also restock and ship in a future order.
Is a fulfillment service right for me?
Every business model, scope, and revenue stream varies per retailer. Switching from in-house shipping and delivery to a third-party bulk fulfillment service comes down to your operations’ current and future scale.
Naturally, most retailers start out fulfilling their orders. Then they gradually outsource fulfillment as warehousing and logistics costs grow. With outsourced order fulfillment, retailers can focus on other core processes like production while ensuring that customer touchpoints are met.
So, when is it the right time to switch to third-party fulfillment? Here are the telltale signs that it’s time to make the switch and streamline inventory management, shipping, and delivery:
1. Cyclical sales
Fluctuations in sales are expected, especially with seasonal offerings. Still, when the number of orders you process varies significantly throughout the year, the infrastructural and overhead costs of a fully staffed in-house warehouse can be challenging to justify. A third-party fulfillment provider can allocate inventory storage and dispatching services based on shifts in demand and order volumes.
2. Lack of infrastructure
This one is obvious and a non-starter if you think of renting or constructing a warehouse but have not scaled enough or require massive investment to set up in different geographical locations to fulfill demand in multiple markets. Partnering with a third-party fulfillment provider allows retailers to scale operations in other regions by providing local inventory storage and delivery services to optimize the customer experience.
3. Focus on growth
Logistics can be time-consuming, especially as you scale for growth. You wouldn’t want to lose sight of the bigger picture, which involves actual product development, marketing, expansion to other platforms, and cultivating relationships with suppliers and key customer bases. An order fulfillment service can alleviate the inventory storage and delivery burden to help you reach more customers without sacrificing future growth initiatives.
How to Choose a Third-Party Fulfillment Services Provider
Ultimately, the success of outsourced customer touchpoints like shipping and delivery lies with your fulfillment services provider. While you design, produce, and supply the product, a third-party fulfillment provider ensures that these reach customers when they need it. Choosing to partner with the right provider is a matter of trust — and here’s how you know that you can:
1. Similar clientele and industry experience
Some products have specific handling requirements that need to be met to ensure quality upon delivery. If handling is crucial to your products, check whether a fulfillment provider has experience working with similar clients and handling their products to determine if they can help maintain quality standards. Aside from handling, their similar expertise will also help them advise you on inventory restocking patterns and other strategic e-commerce considerations.
Fulfillment services are typically charged by the hour or per unit or pallet based on recurring or ongoing services like receiving, storage, packaging, shipping, and returns, but cost alone shouldn’t be the deciding factor. Beyond pricing, look at their delivery success rates, client feedback, locations, and other factors that shape an informed and genuinely cost-effective partnership.
3. Technology and integrations
Fulfillment services are mammoth operations — they manage logistics for enormous stock quantities, which requires a stable but agile framework for keeping track of fulfillment tasks. Ask your provider about the technology they use, specifically integrations that allow both of you to monitor and restock inventory, predict demand based on order patterns and seasonal trends, and improve vendor management
4. Data and analytics
What type of data and both real-time and aggregate analytics does your fulfillment service provide? Their warehouse management technology and available integrations should give you good insight into the type of data they can supply and when.
While monthly, quarterly, and annual reports are industry-standard, check whether your provider can provide real-time analytics tracking, so you can allocate inventory, purchase supplies, and adjust production schedules as needed. See what customer data they have available based on orders they’ve fulfilled and determine how these inform critical marketing and production decisions to improve the customer experience.