As the internet flourished, people began to think of doing a lot of things over it. Various intelligent persons came out with many interesting and creative ideas, and as a result, e-commerce also came into existence.
E-commerce, as we all know, is the buying/selling of goods and services over the internet. It has provided businessmen a cost-effective way to reach out to global markets without having to open shops or outlets everywhere for their products.
In an environment where there is several competition, customer expectations are ever-increasing, and to keep them loyal with a particular brand has become more difficult. A businessman has to continuously device various ways to improve the process of doing business.
One of the basic requirements for the success of every e-commerce endeavor depends upon warehousing. A well-managed stock of goods is always important to provide ample support to the back-end processes of a company to ensure that every order fulfillment operation delivers the product to the right customer.
So, what are the basic steps or strategies of order fulfillment that can effectively handle the pick, pack, and shipping operations of a company? Let us come to different fulfillment services one by one.
In-House Order Fulfillment-
As the name says, in this type of strategy, the ownership and maintenance of the warehouse or the storage facility are full with the online retailer. He is responsible for the recruitment, training, and management of the labor and also the affairs of that facility.
All-day to day business activities like inventory tracking, receiving inbound freight, processing customer orders, billing, shipping, etc. are also carried under his sole supervision. It offers the seller full control over every phase of the fulfillment process as every business operation passes through his watchful eyes.
This technique is useful for those who deal in products that need careful handling or specific storage conditions. Having full control of the overall operations of a business is a good idea, but managing every affair of business yourself and having full responsibility also involves some limitations and risks.
Since every step of this fulfillment process will be controlled by the online retailer himself, so before going for this model, the retailer must weigh all pros and cons. Can I do justice with the costs, efforts, and time required for the proper upkeep and also the expansion or updating of the in-house facility as the business grows?
Do I have enough staff to provide quality service during peak time? Can I deliver the available resources well in time? Above all, Can I effectively concentrate on areas important for the growth of my business besides handling day to day functions of the back-end process?
If the answers to these questions are in affirmative – well, you can have your in-house fulfillment facility. But even if there is slight doubt or if the answer to any of the above questions is negative – this order fulfillment strategy is not good for your business.
Drop Ship Order Fulfillment
This technique is the simplest out of all, with very little or no botheration for the online retailer. The retailer just takes the orders of the customers over his website or web portal and then directly forwards the order information to a third party, usually the original producer or manufacturer of the product or the wholesale supplier, to complete all the formalities from processing, packing, and shipping.
The shipment of the order also goes directly from the retailer’s vendor to the customer. The retailer is completely bypassed; he neither has any information about the shipment nor does he see the product. In this model, the online retailer does not require any warehouse. The actual vendor or supplier of the product is responsible for the entire shipping process.
Dropship fulfillment can be a perfect strategy for small online retailers who have financial constraints and also limited resources. In this model, the online retailer acts as a mere mediator between the customer and the supplier, and the full control over each order remains with the actual supplier only. However, drop-ship fulfillment, too, has its limitations and drawbacks.
Outsourced Order Fulfillment
In this model, the entire process of fulfillment is handed over to an out of house party or vendor who is a professional with vast experience in the order fulfillment process. This fulfillment provider is responsible for the full management of all aspects of backend operations. Outsourcing of the fulfillment to a professional service provider enables the online retailer to focus on other major areas and problems associated with his business.
With back end operations completely handled by a third-party fulfillment expert agency, the businessman or the retailer can utilize his energy and resources to concentrate on other business strategies that are more likely to help him in the growth of his business. The main reason behind opting for this model is cost reductions.
Many companies do save a lot of money as they do not have to invest in their warehouses, no need to hire more workers, no extensive training, and nothing like a frequent upgrade of technology and infrastructure in their business facilities. It is advisable to look for a fulfillment agency that can provide services in tune with your business’s long-term goals.