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How to Optimize the Order Fulfillment Process [5-Step Guide]

How to Optimize the Order Fulfillment Process [5-Step Guide]

July 1, 2020

Effective order fulfillment is essential to every e-commerce company. It is even more crucial amidst the current COVID-19 pandemic as its direct impact on global logistics and fulfillment left many e-commerce businesses exposed and unprepared to tackle this challenge. A clever fulfillment strategy, be it in-house or with the help of a 3PL service provider, delivers the right products to the customers quickly, reliably, and at the lowest possible costs.

As companies like Amazon have pampered customers in a way that they now have high expectations regarding fast and free shipping, next-day delivery has become the new standard in e-commerce. In fact, shipping is a key driver or killer of the conversion rate nowadays.

In this article we are listing 5 tips and tricks on how to optimize e-commerce order fulfillment and shift your logistics to the next level. Find out how you can have a bespoke fulfillment solution for your business.

Find a Fulfillment Solution Near Your Customers Not Near Yourself

One mistake many e-commerce merchants initially make is that they look for a warehouse in geographical proximity to them rather than thinking about where the final customers are situated. The rationale behind that is that they often want to check out the warehouses, where they store the products. Being near that location gives online retailers a sense of security and control.

However, using one or multiple warehouses that have geographical proximity to the customers is key to guarantee quick and cost-effective shipping. Therefore, online retailers should aim to find logistics partners, who enable them to be as close as possible to the most important target markets and provide order delivery from nearby fulfillment centers.

Moreover, the restrictions brought about by the COVID-19 crisis have confronted many companies with serious difficulties. Especially cross-border e-commerce and international trade were hit hard, thus many e-commerce businesses will change their logistics approach in the future.

Even companies that did not put their focus on fast shipping before, have now recognized the importance of clever logistics and an effective shipping strategy. For that reason, many of them will reconsider their warehouse locations and fulfillment processes. By doing so, they will reduce the vulnerability of being affected by closed borders and alike. Additionally, shipping to different target markets will be faster, cheaper and more effective overall.

Automate the Fulfillment Process

Not every online shop is directly competing with e-commerce giants like Amazon. However, it is safe to assume that customer expectations, especially regarding shipping, have strongly changed in the last couple of years because of the activities of these large players.

Online shoppers don’t care if they order products at a smaller web shop or at a billion-dollar company – they want to have their parcels delivered as quickly as possible. Even though online retailers often tackle a seemingly hopeless task when trying to match Amazon’s speed and efficiency of shipping, there are ways to compete successfully.

The first step of doing so is automating fulfillment processes. This process comprises receiving, processing, packing, picking and shipping an online order. Furthermore, it also includes the return management process.

It all starts with selecting one of the numerous online shop systems and e-commerce platforms like Shopify or WooCommerce. They help online retailers to set up and manage their online stores. Additionally, they offer hundreds of apps and integrations that help online merchants to automate and optimize these activities.

While many of these integrations are developed directly by Shopify, there are many more so called third party apps available for use. Many of them can efficiently simplify retailer’s lives for no cost at all or by paying a one-time small price.

So, how can the shop system help to accelerate the shipping process? By integrating your shop system with the software of your selected fulfillment service providers, all orders made on your online store will be automatically sent to the warehouse – this happens automatically and simultaneously. Therefore, the picking and packing of the order can start without any delay.

Consequently, the parcels can often be shipped on the same day. In addition, the customers, when they get a confirmation of dispatch, can also live-track their parcel. This will  strengthen the customer’s satisfaction of the order delivery as they can oversee the entire process in real-time.

All in all, by integrating your e-store with a shop system and linking it with your 3pl fulfilment partner, your shipping process will be significantly faster due to process automation and real-time management options. This, in turn, will surely meet the high expectations of the customers.

Use the Services of Multiple Parcel Shipping Providers

It is not always up to oneself to succeed in e-commerce business. Even if your competitors can’t keep up with your online shop and the products you offer, you still depend on many other external factors to satisfy your customers.

One piece of that big puzzle are parcel shipping providers. If you rely only on one of them, you are at high risk of experiencing difficulties at some point. For that reason, we recommend diversifying the risk by using delivery services from multiple shipping providers. 

Even though it won’t be possible to get volume discounts as high as they would probably be if you put all eggs into one basket, there are multiple reasons to use the services of multiple parcel shipping providers.

First reason in favor of having multiple shipping providers, which is especially true if you belong to the majority of online retailers who sell a lot during seasonal peak-times like Black Friday or Cyber Monday, is that bottle-necks by handling huge volumes are less likely to impact your delivery times as you can always switch between your delivery partners, should one of them experience difficulties or significant delays.

Being able to switch the delivery companies on short notice can make the difference between satisfied consumers who will return to your online shop in future and disappointed online shoppers – not to forget the lost revenue.

Second, and quite akin to the first reason, when having more options available, your online business is not as vulnerable to strikes and other problems that occur regularly in this industry. Last but not least, customers oftentimes prefer different parcel shipping providers and delivery methods, often depending on countries and regions.

Besides that, these companies naturally have different strengths and weaknesses. Depending on how many SKUs you sell, and how much they differ with regards to their dimensions and weight, it might be advantageous to ship them with different e-commerce parcel deliveries.

Use a Flexible Warehouse Management System

Warehouse activities have rapidly changed throughout the last years and so has warehouse management. Hence, using a flexible e-commerce Warehouse Management System (WMS) is crucial for online retailers nowadays. In fact, a workflow-driven software is key to increase productivity of all warehouse activities and beyond.

Workflow-driven processes, amongst others, include picking and packing, returns management/reverse logistics, custom packaging and labeling and the automated cartonization and shipping process.

Some of the essential functionalities are real-time information on various important areas like inventory. Besides that, customizable reporting and dashboards on relevant metrics provide a better overview for online retailers. That helps to process high order volumes while keeping the error rate as low as possible. Barcode scanning helps to further decrease the error rate.


Overall, a good WMS enables companies to increase their productivity due to flexible workflows, i.e. custom packaging and batch picking. Moreover, it enables tracking of the products shipped, which is a minimum requirement in today’s e-commerce landscape. 

Additionally, good WMS allows an easy integration with various online shop systems and parcel shipping companies. Another advantageous option that is often offered is the possibility to set up product bundles, which is a popular feature in e-commerce.

Finally, it is of utmost importance that the WMS used fits to the individual requirements of the specific online store. For that reason, online merchants who are planning to grow their business should focus on selecting a WMS that can scale with their company.

Use Packaging as a Powerful Branding Tool

Finally, you should never underestimate the importance of packaging in e-commerce. The reason for that is twofold.

On the one hand, the proper packaging ensures that the products arrive safely to the customer. As such, it protects the items against breakage or water damage and other damage.

On the other hand, and that is where many retailers miss a great opportunity, the packaging can be used as a powerful branding tool. The package is the first thing customers see and touch and as Andrew Grant said, there is never a second chance for the first impression. In fact, nearly as many consumers consider the product’s packaging (10%) as important as the brand itself (12%).

Moreover, more than half (52%) of the online shoppers who receive their order in a customized package say that they are more likely to make another purchase at that online shop in the future. So, don’t let the opportunity to promote brand loyalty and consumer intimacy slip through your fingers.

Instead, capitalize on the online shopper’s need for self-affirmation with unboxing videos on Instagram or any other social media platform. Let them be your unpaid spokesperson while offering an optimized user experience to them.

Also, consider using environmentally-friendly packaging. Fortunately, being eco-cautious will help the environment and it is also becoming an increasingly important purchase factor for customers nowadays. A sustainable packaging design that emphasizes reusability can positively influence the brand loyalty of your customers and will better communicate the brand’s values.

Besides making use of e-commerce packaging as a marketing tool it is also important to find the right strategy when buying the material. As is often the case, material gets cheaper when bought in bulk. It is advisable to make use of that fact, however, also keep in mind that the material needs to be stored somewhere. That inevitably leads to additional costs or blocks storage space that could be used in another, maybe more useful, way.

Conclusion

With fast and free shipping as a key driver for online and cross-channel purchases for the fifth year in a row, the biggest opportunity for brands and retailers lies with creating more efficiencies in the supply chain.

Walker Sands

That quote sums up the importance of logistics for e-commerce companies quite well. Optimizing your e-commerce or multi-channel strategy in regards to logistics and fulfillment is crucial. While it is possible, and in some cases even advisable, to take care of the whole process in-house, an increasing number of online retailers of all sizes opt to outsource this tedious and time-consuming part of doing business.

Especially for companies that are already scaling their business or planning to do so soon, logistics will bring about many challenges and blockers that can easily be prevented. 3PL (third party logistics) service providers offer solutions that cover the 5 aforementioned tips and are a fully-integrated e-commerce solution thanks to their advanced API.

By offering a logistics network of fulfillment centers in multiple international locations, they can effectively address your needs and scale up your business hassle-free. So, whether you end up using the services of a third party or you decide to take care of the logistics with in-house fulfillment, the 5 tips for e-commerce fulfillment will help to make the best out of it.



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