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We help companies find the right e-commerce fulfillment and order fulfillment services companies. Selecting the right ecommerce fulfillment center is challenging, as you have to not only find a reputable company with the right location, but also a company that integrates with all of your sales channels and “wow’s” your customers with the shipping experience. We’ve pre-screened the order fulfillment centers in the marketplace and can match you with top companies that will get you free price quotes today.
Want to learn more about e-commerce fulfillment and order fulfillment services and how they can help your business? Keep reading below!
E-Commerce Fulfillment is the process of receiving orders from an online shopping cart (or Web store) and picking, packing, and shipping them to individual customers across the globe. Ecommerce fulfillment differs from other forms of fulfillment services in terms of the source of the ordering, since it takes place online, as well as the destination of the orders – individual consumers. Other types of fulfillment include retail fulfillment (shipping of orders to business retail locations), marketing and collateral fulfillment (shipping of orders to employees or internal business locations), and various B2B (business to business) fulfillment services, which focus on shipping orders to businesses rather than consumers (B2C – business to consumer).
Order fulfillment describes the general process of fulfilling orders – from receipt of orders, to storing of product, to picking, packing, and shipping orders to their final destination. Order fulfillment differs from e-commerce fulfillment in that it is more all-inclusive – it includes all types of fulfillment of orders, whereas ecommerce fulfillment only describes the fulfillment of online orders through online merchants’ Web stores and shopping carts. The processes are largely the same when comparing order fulfillment with e-commerce fulfillment, although some of the steps vary depending upon the specific channels of fulfillment.
When outsourcing e-commerce fulfillment with a professional fulfillment services operation, there are a multitude of steps in the overall process. Each of these steps will be describes in further detail below, but in general they include: Account set up, Receiving inventory, Receiving orders, Fulfillment of orders (including the information that is included in the package as well as the packaging itself), Shipping of orders, Tracking of Shipments, Inventory control and syncing, and Handling returns.
Professional e-commerce fulfillment centers utilized sophisticated warehouse management systems in order to manage multiple clients’ orders, inventory, and shipping. At the onset of a new partnership, the fulfillment provider will need to establish a connection with your shopping cart so that they will receive orders as consumers purchase items on your Web store, create all of your unique SKU’s in their system, sync all of your desired shipping carriers and shipping service levels, and record any other important information needed to successful manage your account.
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Some fulfillment centers have their own proprietary warehouse management systems, which were custom coded by their own in-house developers. In this case, they may have a great deal of potential to customize to meet your specific needs. However, be certain that they have a solid system that has been successful over large volumes of orders and you may want to make sure that they have adequate technology staff to maintain and remain proactive to all of their client’s needs. Some fulfillment centers utilize warehouse management software that they purchased or lease to use. These software packages run the gamut from extremely expensive and stable but somewhat inflexible to entry level systems that are flexible but may lack some of the speed of implementation of new custom requests. When reviewing the options, be sure to get a demo of all of the potential systems so that you can see for yourself which option best suites your needs.
With so much attention on ecommerce sales, fulfillment companies and warehouse management software providers have spent a great deal of time building platforms that offer easy integration with shopping carts. Especially in the case of the most widely used shopping carts and Web stores, integration may only require a few clicks of a button.
As a part of the account set up process, the fulfillment company will need to obtain all of your product information and SKU’s so that they can load them into their system. Your product information includes all of the items in your inventory, their descriptions, sizes, colors, variants, and any necessary kitting, assembly, or packaging that is required before fulfillment of orders to customers. Once all of this data is loaded in their inventory system, you can send them any inventory of product that you’d like them to warehouse at their facility in order to adequately fulfill product orders. Most companies utilize some sort of forecasting in order to determine the appropriate inventory levels to maintain at the warehouse. So that the fulfillment center knows precisely what to expect in an incoming receipt, they will most likely require a PO (purchase order) listing all of the items on the upcoming shipment. The center will also need to know if the product is bar coded or labeled in any way so that they can clearly identify each unique item and SKU. If your product isn’t labeled or bar coded, most sophisticated e-commerce fulfillment centers have the technology and printing capabilities to print and adhere these labels to all of your products for an additional cost.
Time to receive your initial inventory and any subsequent receipts will vary, depending upon the size of the receipt, the scheduling of the warehouse, and the processes and technology systems used at the fulfillment company. Furthermore, it is important to discuss all of the aspects of receiving prior to the arrival of the first shipment, including how to inspect product for damage and how much inspection is required. The more inspection, the greater the cost of the fulfillment company to process the receipt – but too little inspection could result in incorrect counts of product and unidentified damage. For more information on fulfillment pricing and costs click here.
Most fulfillment houses will be able to send you alerts when your inventory SKUs reach a certain agreed upon low level. Also, be sure that you find out the extent to which their inventory syncs with your inventory, since you always want to be sure that your stock on your shopping cart matches what they actually have in inventory. Nothing is worse than a customer ordering product that shows a positive stock level on the Web store but doesn’t have any inventory on hand at the warehouse.
Most ecommerce fulfillment houses will have a multitude of options for actually receiving your online orders. These options range as listed below. If you need help selecting a shopping cart solution, click here for our guide to shopping cart selection.
One important detail to determine when utilizing more automated methods of order transfer is “when” to actually trigger an order for fulfillment. Frequently, orders get changed – so if the order gets sent to the warehouse too early, it may be shipped before a change can occur. On the other hand, customers are demanding quicker order deliver each and every year, so passing the data as soon as possible is important. In the least, be sure to determine when the fulfillment center’s cut off time is for changing orders and for shipping orders the same day.
Integrating your e-commerce shopping cart is an excellent way to help cut out the middleman between the client placing their order on your web page and the order being processed and shipped out. Having your shopping cart communicate with your e-commerce fulfillment company offers faster turnaround time and that means happier customers who get their orders sooner. This checklist represents what goes into the process of integrating your shopping cart.
Benefits for your company include less worrying and less time spent with e-commerce fulfillment and order processing while being able to track inventory more effectively, ability to track orders more easily and with greater accuracy. Better customer experience with possible real-time shipping rate information will enhance your customer’s experience on your site. Added ability to follow product availability and enhanced order tracking capabilities will better your servicing of your customer’s routine requests.
If you need assistance with connecting your shopping cart to your warehouse or internal order management system, take a look at our review of integration tools for e-commerce.
The packaging and contents of an online order are almost as important for some businesses as the actual contents – so care must be taken when figuring out the standards for printing and packaging orders. Typically, a fulfillment center will place the contents of an order into a standard box and will include at least a packing slip. However, for companies that require more customization, a custom printed box can be utilized in many warehouses. However, some larger companies, such as fulfillment by Amazon, will not allow you to utilize your own custom box. Similarly, many fulfillment companies will allow customers to add their own custom logo to packing slips, and they may also allow you to require the insert of other materials, such as invoices, promotional and other discounts, and even gift wrapping of the package.
The amount of shipping services offered vary from fulfillment center to fulfillment center. In the very least, you will agree upon the shipping companies to be used and the services levels that will be offered. Standard options include USPS, UPS and FedEx, with ground and expedited options usually the standard. If your needs are more specific, such as international shipments, be sure that the center has these options.
Smaller fulfillment houses may not have any technology systems to assist in more robust shipping options. For smaller retailers, this may be sufficient. However, for high volume shippers, it may be important to select a company that offers sophisticated shipping rate options (which provide real-time rate quotes so that consumers can choose the lowest rate or quickest options) or address verification systems (which verify addresses before shipping so that shipping errors are minimized).
One thing that you’ll have to decide before launching your shipping program with your outsourced fulfillment provider is whether or not you’ll ship on their freight accounts. Oftentimes, because fulfillment companies ship products in volume for a multitude of clients, they receive aggressive shipping discounts from the small parcel or LTL carriers. This allows them to offer you a better rate than you might be able to receive yourself. However, if you ship in high volume yourself, you may not be able to receive better rates from the fulfillment center than you get yourself.
Finally, as it relates to shipping, it is important to discuss tracking confirmations. Confirmations are vital to your customers since they allow for the monitoring of the shipping of the order to their address. Most e-commerce fulfillment companies will allow you one of two options for sending your clients tracking email notifications. First, you may want them to send you the tracking information in bulk one ore more times per day (usually sent at the end of the day once all of the shipments have been closed out). Then, you can send tracking emails to your customers directly from your shopping cart. This process is usually automated so that you don’t have to perform any functions manually. Second, they center may also be able to send the tracking email from their system directly to your customers. Some centers have enough technology that they can actually brand them with your specific logo and branding message.
One final detail is to determine who will handle returns. The returns process involves issuing the customer an authorization to returns the goods, inspection of the goods, and either removing the goods from further inventory (if damaged) or returning the inventory back into the warehouse if the inventory is still in good condition. If the process of inspecting and returning the product to “sellable” condition is difficult, it may be in your best interest to handle the returns process yourself, unless the fulfillment center is fully versed in returns processing. Furthermore, if the fulfillment center does handle your returns, you’ll want to be sure that their technology systems can handle receipt of notification of a return so that they are “in the loop” in the communication process for the returns.
No, all fulfillment centers do not specialize in e-commerce fulfillment. Some companies specialize in general product fulfillment, while others specialize in business-to-business and retail fulfillment. Make sure that you check the specialization of any vendors that you’re considering, since ecommerce does require a particular set of skills. We’re happy to help you find the best fulfillment centers.
Another important factor to consider when choosing an ecommerce center to ship your products to your online customers relates to the volume of your shipments and the type of products that you sell. First, some companies work with only high volume shippers – those online retailers that ship thousands of orders per month. Other companies are happy to help smaller businesses and don’t typically have the minimums and set up fees that larger volume fulfillment centers require. Second, no fulfillment company specializes in every type of product. Therefore, you should check to see if your proposed vendors can help with your products. Different product types include products such as dry products, food grade products, climate controlled, refrigerated and frozen products, supplements, chemicals, hazardous products, and many, many more.
Fulfillment firms that focus on e-commerce fulfillment oftentimes have gained a high level of knowledge about the overall online marketing process, and therefore can assist you with other aspects of your business to help you grow your sales. Some companies offer additional services, such as management of your sales channels (Amazon, eBay, etc), online marketing services such as SEO (search engine optimization) and Pay Per Click advertising, digital photography, website design, and management of your products and descriptions. Check with your potential providers to see if they have these service offerings. Even if you don’t choose to use these additional services, it can be invaluable to choose a fulfillment firm that offers them because they may be able to act as a great consultant when you have to make important decisions regarding your online strategy.
Now that you know what to look for, let’s focus in on costs and pricing. Bottom line…you want to get the best rates possible. Usually, the pricing includes receiving fees, storage fees (either per pallet or per square/cubic footage), pick and pack fees, and shipping fees. However, with eCommerce Fulfillment Pricing, you’ll also see fees associated with the integration of your web store with their inventory management system. These fees for integration can range from free (if they already have an existing integration with your shopping cart) to thousands of dollars. While costs are important to consider, don’t forget about how important it is that the system works. If orders or tracking get lost in cyber space, you’re in big trouble. Therefore, don’t forget that you get what you pay for. Click here for a detailed analysis of all of the fulfillment services pricing.
One of the biggest challenges about deciding which company to use is comparing apples to apples when it comes to pricing. Most Supply Chain companies have different ways of charging. This is why getting multiple quotes is imperative. By taking a look at the various proposals from competing companies, you can not only find out all of the costs involved with every vendor (some companies won’t tell you all of the costs up front), but you can also use the competitive bid process to get the best overall rates. Every little bit counts when it comes to your business, so getting the lowest cost solution is essential.
In a general sense, most Logistics companies will charge four main types of Costs – Receiving, Storage, Pick and Pack, and Shipping. Here’s a couple of helpful hints to look for in choosing a provider:
Of course, choosing a solution that specializes in what you need and has fair pricing is only half of the battle when making an ultimate decision as to which company to use. You must also make sure that they perform well. In order to do this, ask for references, talk to some of their customers, check online for registration with the Better Business Bureau and other organizations, talk to some of their employees, and make sure that the Fulfillment Center is in good financial condition.
So what should you expect when it comes to Costs and Pricing. Unfortunately, most vendors charge differently, so you’ll have to run some analysis to be sure that you’re comparing Internet Fulfillment Costs “apples to apples.” We truly wish there were more common ways that these firms used to determine Pricing. Since this is not the case, take a close look at all of the proposals that you receive, paying attention to the fine print. It sometimes helps to compile all of the Quotes in a spreadsheet, using shipping data that from the past or that you project. This way, you can accurately compare all of the options.
First and foremost, while Order Fulfillment Costs and Prices play a significant role in the decision making process, don’t let it be the only factor in your decision. Far too many times we’ve seen companies with a great product outsource their needs to a company that gave them the cheapest prices, but had less than stellar performance and/or service. Remember the age old adage, you get what you pay for. Instead, use our quote service to make vendors compete for your business so that you get the best pricing from companies that can do a great job.
A perfect order is one that:
While the list of items required for Perfect Order Fulfillment is small, there are many factors that contribute to imperfect order fulfillment. Does Perfect Order Fulfillment Exist? The answer is…Only in a Perfect world. The success of order fulfillment relies on the staff, the technology, and the communication between you and the fulfillment center.
Here are some examples of mistakes that can take place when orders are fulfilled.
While it is almost impossible to have perfect order fulfillment, it is possible to find a company that will work closely with your business to achieve the highest level of success and minimize mistakes. You can achieve Perfect Order Fulfillment by partnering with a company that has a proven track record, technological advances, and many happy referrals.
No provider is perfect, so there will be mistakes. But the big question is, “What will they do when a mistake happens?” Will they re-ship an order at their expense? If inventory counts are off, will they compensate you for the loss? Speaking with multiple firms allows you to really compare and contrast the different services of each company.
Picking, packing, and shipping an order seems like it should be a very simple process. After all, at least from a high level perspective, all it involves is getting the right products from the fulfillment center to the correct customer, on-time and undamaged. Seems straightforward, right? Then why does it seem too frequent that either you hear of a mis-shipment horror story or experience one yourself?
The truth is that there are so many things that can go wrong when a fulfillment center ships an order – leaving numerous opportunities for mishaps and disappointments. We thought it would be helpful to explore the potential pitfalls in the order fulfillment process so that you, the business owner, would not only be aware of the areas to consider when selecting an outsourced fulfillment provider but also better manage mis-shipments when they do rear their ugly heads.
The first point of potential failure during fulfillment is when a customer places an order with incorrect information, such as the wrong number or type of items. Even when the customer notices the mistake in time and makes an important change, the fulfillment center may not receive updated information on the order.
In a worst-case scenario, the fulfillment company loses the order. Either it never receives the order (through human error or a technical malfunction) or the order goes missing and fails to be processed. This is why you will want to work with a fulfillment center that has a proven track record of accuracy and efficiency, as well as tested systems for integrating order transmission.
In the fulfillment center, employees may be distracted or may not consistently follow industry best practices, leading them to pull wrong items (the item is incorrect, is in the wrong color or size or comes from the wrong manufacturer, and so on). They may pack the wrong number of items, forcing you to make up the loss in a second shipment while attempting to sooth the customer’s anger.
Problems like these tend to arise in fulfillment centers run by inexperienced managers that do not perform quality checks or centers that do not have a robust scanning process in place to catch picking errors. Errors are compounded when the fulfillment center lacks sufficient technology to assist in the picking process.
Once items are packed up and ready to go, more problems can crop up when the fulfillment center fails to meet various logistical requirements. For example, an employee might choose the wrong level of shipping service and select ground transportation instead of express shipping. Workers may have the wrong ship-to address, which means that the package will be essentially considered lost if the recipient doesn’t return it. Automated systems for selecting the correct shipping method can assist in mitigating this risk, but oftentimes fulfillment companies use disjointed technologies that don’t speak fluently with shipping systems.
You will lose money and see your reputation damaged each time a fulfillment center sends orders to the wrong customer or lacks sufficient information to ship to APO or international addresses.
Furthermore, problems can strike when shipping carriers fail to deliver the product on time or to the correct address. For example, the major small package shipping carriers such as FedEx, UPS, and USPS aren’t perfect – they will fail to deliver timely packages a certain percentage of time. Not only is it important that the fulfillment company work closely with the shipping carriers, but it’s also important to understand and service level guarantees and corresponding credits that might be relevant for failing to deliver on shipping promises.
With so many potential pitfalls that can cause your orders to be mis-shipped, it’s important for your organization to find a fulfillment company that has the right processes in place along with sufficient technology and a properly trained team to address your particular shipping needs. Your long-term success depends largely on how well you can meet customer demand on a reliable and consistent basis.
As an online seller (or someone beginning a business focusing on online sales), you have a lot on your plate. It could be the main reason behind the decision to make a fast switch and outsource your order fulfillment. While it means handing over control to another business, it also means sparing you added costs and hassles (such as staff, warehousing expenses and more).
Unfortunately, it can also mean that you may inadvertently put the success or failure of your business into the hands of others.
How? After all, you have done due diligence about products and offer good customer service, how can e-commerce fulfillment have any negative impact? Wrong items, shoddy packing or handling, lengthy delays in sending orders…these are but a few of the glitches that can affect your bottom line.
Fortunately, we offer these simple steps to ensure you can setup up your e-commerce fulfillment segment effectively, and quickly, and without a lot of issues that could cost you some of your first customers.
Before you start sending your inventory to an e-commerce fulfillment provider and preparing to link your shopping cart to their warehouses, take a moment to review the basic steps involved with a rapid switch to new fulfillment provider:
If you understand that your e-commerce order fulfillment provider is in charge of that many steps of your sales (and returns), as well as inventory management, you begin to see why you shouldn’t rush the process too much. While you can easily setup operations in a matter of days – take the time to review the steps noted, and be sure all of those proverbial ducks are in a row. Let’s spend time looking at each point in a bit more detail:
You are going to need to create or review the contract that will exist between your firm and your fulfillment provider. This is going to outline all of the key details and protocols. The contract should specify all of the issues that follow (below) and include any contingencies in the event of a breach of contract or other issues.
Some of the points you want to emphasize in the contract or account setup include issues like shipping/order cutoff times each day (as this can allow you to provide faster shipping times) and how you prefer communications to occur.
Your account setup also has to include specifics about communication. How and who will communicate with the warehouse and fulfillment provider? What about billing procedures, reviews and major points of contact?
Finally, a key part of setting up your account must be a proper testing period. Test ordering, test order changes and test returns. Test communications, inventory controls and all of those crucial details before launching.
Your e-commerce fulfillment provider may already have some proprietary software that could be used in your online store and which will also deal with everything from packing slips and customer communication to returns. It should also relay details to your end, letting you or your team know when items are sold, what’s going on in terms of inventory and more. Keep in mind that some of the best providers can integrate with popular platforms and shopping carts already in use.
Be sure that any previous order information can be securely transferred as this eliminates the need for clients to create new credentials. Also, you want to be sure that you can always find out where any order might be at any given moment in time. The best systems allow shoppers to make changes and updates (including cancellations) right up to the moment the item is tagged for shipping – this is something to double check if it is important to your customers.
As one of the most substantial steps in getting your new e-commerce fulfillment provider up and running quickly, we are going to dedicate a bit more attention to this part of the process.
At your end, it begins with you doing a thorough inventory and creating a master list of all of your product numbers (SKUs) and all product details. This will even include items out of stock or temporarily unavailable. Be sure you give your fulfillment provider every bit of data – even variations, sizes, colors, kits, combinations and more.
It is going to be your responsibility to coordinate the shipping of your materials to the fulfillment provider’s warehouse, and to be sure that comprehensive inventory data is included. You are also going to be tasked with coordinating and/or arranging the shipment.
Once it arrives at the destination, your new fulfillment team will have to re-inventory and then properly store the product. They are more than likely going to need the time to enter data into their system.
If you have products that require a lot of attention during selection, packing or even during returns, it may be in your best interest to arrange some sort of product training. If the fulfillment center is at a great distance, a manual may be best. However, if you feel it would benefit all involved to do in-person training, it could be a key to success. This is true in shipping, as well, and you may want to be sure the items are packaged in the way you require. If you want specific wrappings, tags and labels inside of packages, be sure this is detailed in your contract and as you setup the fulfillment process. If there are to be additional inserts or special packaging – make sure you are clear about how this will arrive, be ordered, maintained, and so on.
It is going to be in your hands to let your fulfillment provider know which shipping methods you prefer. Before you begin the process or transition, be sure that your chosen provider is able to handle the kinds of shipments you desire. If they are unfamiliar with international packing and labeling, this can become a serious problem. Also, be sure you are guaranteed the kinds of shipping terms you need – orders out at a specific time each day, changes made before orders are shipped, and so on.
Also, pose the question of what happens in the event of an error. What if the wrong items are shipped? What if the wrong method of shipping is used? What if inventory tracking is not done properly and an item sold is not available?
Planning for contingencies and knowing how you want specific issues handled before you begin is another key to success. You can often avoid such issues by acknowledging that they can occur and proactively troubleshooting.
Will your provider handle returns? If so, what is the process they must follow? How are they to communicate issues about returns to you? This is crucial because you need to understand what is returned, why and how to overcome this costly issue. You also need to be sure customers are getting premium service where returns are concerned.
Yes, this is a lot, but if you work with a reputable firm that has experience in the process, and you use these steps, you can be up and running quickly.
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