With digital shopping, buyers now have access to items they might never have been able to purchase from physical stores in their locality. A digital shopping platform enables businesses to expand their markets quickly, but there’s one significant challenge—the fulfillment process.
The fulfillment process covers everything from sourcing inventory, storing it, processing orders, to shipping. This process consumes much of a business’s time. While many businesses start by handling everything themselves, the need to scale becomes unavoidable as demand grows.
Below, you’ll find useful tips to improve your fulfillment process as your e-commerce store continues to grow.
Main Types Of Order Fulfillment Strategies
Depending on market demand and the business’s resources and capacity, a store can choose from the following fulfillment strategies, often in conjunction with efficient supply chain management.
- In-house fulfillment: Also known as the direct-to-consumer model, this method involves the business’s staff handling all fulfillment processes.
- Third-party fulfillment: To reduce the workload, some stores outsource the entire fulfillment process to a third-party provider. You can learn more about how this partnership can help your business scale through various online resources.
- Dropshipping: A cost-effective strategy where online merchants rely on manufacturers to supply and ship the products sold on their e-commerce platforms. The seller creates an e-commerce store, lists items from the manufacturer or another retailer, and forwards order details to the dropshipper upon purchase. The dropshipper handles shipping, while the seller is charged accordingly.
- Hybrid: In this model, a business uses a combination of the above strategies. For instance, a retailer might handle fulfillment in-house for VIP or new customers, rely on third-party providers during peak seasons, and use dropshipping for certain product lines.
5 Ways To Scale Your Fulfillment Strategy
Each stage of the fulfillment process should be carefully planned and executed. Choosing the right strategy is critical, as mistakes can significantly harm your business. Here are five ways to continuously improve your fulfillment strategy:
1. Choose The Right Partner
If your e-commerce store opts to outsource part or all of its fulfillment operations, it’s essential to select the right partner. Keep in mind that outsourcing means relinquishing control over some aspects of the process.
When evaluating partners, consider factors like efficiency, accuracy, speed, flexibility, and reliability. The provider should also offer competitive shipping rates across multiple regions.
2. Maintain Accurate Inventory
Inventory management plays a crucial role in your business’s success. You can’t sell what you don’t have, so staying on top of your inventory is essential. Accurately tracking stock levels allows you to reorder in advance, produce high-demand items on time, or push excess inventory. Implementing an inventory management system can give you real-time data to make informed decisions.
3. Automate Processes
Digitalizing all fulfillment stages can streamline operations and boost efficiency. Using software for inventory management and order processing simplifies picking and packing. Automation also enhances customer satisfaction by reducing errors and lowering return rates, especially during peak periods like the holiday season.
4. Integrate Fulfillment Systems
While many brick-and-mortar businesses may still rely on paper-based processes, online retailers should avoid this approach, particularly if they’re aiming to scale. Ensure your fulfillment software—such as inventory management—integrates smoothly with your e-commerce platform, payment systems, order processing, shipping, and returns. Integration helps minimize shipping errors and boosts overall efficiency.
5. Know When To Use The Right Fulfillment Strategy
A strong digital marketing strategy is important, but so is offering added value through exceptional customer service and fast, accurate shipping. For local orders, in-house fulfillment might suffice. If you’re new to e-commerce but aiming for rapid growth, third-party fulfillment could be the better choice. Dropshipping works best for niche products or large, bulky items.
Conclusion
Choosing the right fulfillment strategy and scaling it appropriately are vital steps in improving your market share and operational efficiency. By providing fast, accurate deliveries at competitive prices, you can add value for your customers and drive revenue growth.
While there’s no one-size-fits-all fulfillment strategy, keeping the points discussed in this article in mind will help you make better business decisions and enhance your fulfillment process.