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What is order fulfillment? Everything you need to know

March 28, 2023 | Published by Faire

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To understand the importance of order fulfillment, imagine you’re an online retailer who sells luxury linen blankets. You decide to try out a new wholesaler and order a few cases of blankets from them. Though the wholesaler promised speedy delivery, you waited two weeks longer than you were supposed to. And when the boxes finally arrive, something’s wrong. The blankets you selected were sage green, but navy blue ones were sent instead. You now have to deal with their slow-to-respond customer service to correct your order. You resolve to never use this wholesaler again and warn other retailers you know to stay away.

That’s the power of order fulfillment. According to a report from Salesforce on the state of the customer experience, nearly half of customers said they would take their business elsewhere after a negative experience and 62% would have no problem sharing their negative experiences with others. Order fulfillment can be an element that differentiates your business, or it can drag you down. Today, we’re sharing best practices for how you can get order fulfillment right. 

What is order fulfillment?

Order fulfillment is everything that happens from the time when someone clicks “Purchase” on an e-commerce site to when they excitedly rip into the package on their doorstep. To put it plainly, it’s the logistics of how and when a buyer receives their order from a seller. 

Why is order fulfillment important?

Order fulfillment is a critical responsibility for any online store, and it can impact your store’s reputation. If a product is packed poorly and breaks in transit or an incorrect item is shipped or it just takes longer than promised to reach its destination, then you fail to meet customer expectations, and that customer is less likely to return. Strong fulfillment processes are another way to delight your customer and build trust. Online stores must excel at order fulfillment to achieve a loyal customer base and remain competitive in the e-commerce landscape. 

How does the order fulfillment process work?

Order fulfillment methods may vary widely based on the size of your business, the types of products you sell, or even the region you operate in. But most order fulfillment processes include these general steps from start to finish:

  1. You have finished products from your team or manufacturer that are ready to ship to customers. You store these products in a warehouse, your studio, or another location until it’s ready to move.
  2. A retailer places an order.
  3. You or your third-party logistics (3PL) team receives the online order and customer data.
  4. You or your logistics team sorts and packs the order.
  5. Shipping labels are printed and affixed to the packages.
  6. The order is shipped to the retailer’s address. If the package is correct and arrives in the window promised, then that’s a happy customer.

7. But don’t forget returns! Your logistics team should know what to do if there’s a return, which will depend on the sales channel. For example, Faire handles returns on behalf of brands.

What are the best strategies for improving order fulfillment?

Streamlining your fulfillment processes can not only bring more satisfaction to your customers, but it can lower your costs and prevent you from wasting time or energy. Here are a few tried-and-true methods for improving your order fulfillment: 

Understand what your fulfillment lead times are

To improve your order fulfillment, you must understand your order fulfillment. If you have a strong grasp on what your typical fulfillment cycle is from when someone places an order to when it’s packed to when it’s shipped to when it’s delivered to the buyer, then it can help you give realistic delivery estimates to buyers so that they manage their expectations. This visibility into your fulfillment lead times can also help you discover cracks in your order fulfillment process. Maybe your orders are delivered quickly once shipped, but there’s a bottleneck at the packing stage that slows down your total lead time. Paying attention to lead times allows you to catch those small problems before they become big.  

Know when it’s time to turn to third-party order fulfillment

As you grow your business, there will come a time when the days of packing orders in your living room must end. You’ll need to outsource your fulfillment to a third-party logistics provider to keep up with demand and scale your business in a sustainable way. No matter how spirited you are, you’ll eventually need to look into distribution logistics for help. Leveraging a third-party partner could make your fulfillment processes more efficient and more cost-effective. If you decide to use Ship with Faire, we’ll have your back with shipping costs reimbursements and affordable shipping labels. Offloading fulfillment allows vendors to stay focused on other parts of their business like product innovation or marketing.

Automate as much of your fulfillment processes as you can

There are areas where the human touch excels, such as placating an unhappy customer or negotiating with a supplier who wants to raise their rates. But there are areas where placing your trust in automated technology will prevent mistakes. Order fulfillment inaccuracies where people receive the wrong color or size can ruin the customer experience. Find out what kinds of e-commerce integrations work for your brand’s website. Perhaps you’re manually sending order lists to your fulfillment partner instead of leveraging a solution that sends data automatically when an order is placed. Or maybe you’re not taking advantage of barcode scanners that can tell you where specific inventory is located in a warehouse. 

Be communicative and transparent about your order fulfillment 

This one doesn’t have as much to do with logistics as it does with customer service. You should make every attempt to ship within the window promised to buyers. But things can happen that are out of your control. Maybe a natural disaster or a holiday rush or a supply chain shortage throws you off your expected timeline. In situations like this, a little communication can go a long way. Update your customer right away if a delivery date needs to change. The Faire app for brands makes it easy to manage your customer service from anywhere.

Reassess how much packaging your products need

This one is not only great for your environmental footprint, but it can be smart for business. Businesses should use exactly the amount of packaging needed to safely get their orders to their buyers and not a single bubble wrap sheet above that. Excessive packaging increases your time investment and your material costs, which means you aren’t able to price your products as competitively as other brands. Not to mention that today’s consumers are savvy, and most of them hate unnecessary plastic. A report from the environmental advocacy group Oceana showed that 87% of shoppers want online retailers to cut down on their plastic use. 

Retain enough inventory to meet demand

Without products on hand, there’s no order fulfillment. Use inventory tracking software to stay on top of inventory management for your brand. Be aware of when bestselling items are running low or when a historically busy season is approaching. Such software should allow you to do what’s called demand forecasting so that you know when you need to restock items. 

Order fulfillment should constantly be evaluated and improved so wholesalers can stay competitive in a constantly shifting market. Having strong fulfillment logistics doesn’t have to be a mystery. By having a strong understanding of what healthy order fulfillment looks like and following industry best practices, you can save time and build brand loyalty.

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