Order fulfillment is the act of getting a purchased order out to a customer. Quick and accurate shipping to customers is a major component of running a successful ecommerce business. Companies can stand out by getting packages out to buyers more quickly than competitors. A good order fulfillment plan is one way an online retailer can stand out from its competitors and attract repeat business.
There are many different factors that go into a successful order fulfillment strategy. Here is a review of some of the most crucial decisions and policies online retailers have to make and set as they build their businesses:
Many new businesses have a volume that's manageable and can be reliably mailed out by one or a few people. This isn't always the case, however, and some growing startup businesses will find that handling a large volume of orders is a major drag on productivity in other areas. There are options available for those who want to focus less on storage and shipping and more on other parts of operations. BigCommerce has management apps for outsourced order fulfillment from a variety of different companies. These services allow businesses to sync their incoming orders and for items to be quickly and reliably distributed. These services carry an extra cost, so a new venture should consider expected sales volume and other factors - such as the time it takes to package an order and get it into the supply chain - when determining whether to use them at first.
In general, using a mix of delivery providers such as UPS, FedEx and the U.S. Postal Service is preferable to exclusively using just a single one. This strategy may involve extra work, but it also provides real cost savings to businesses. There are certain instances where using a single carrier makes sense - here's an example we used of a business that only sells a single type of item - but these are the exception and not the rule. Most businesses will be sending out items of variable size, and even those with limited inventory options will have orders of various sizes, creating weight and volume differences that can add up.
There are advantages and disadvantages to using different carriers. FedEx and UPS, for example, often have quicker delivery times. This makes a big difference when a customer wants to get an order quickly, or a business is simply trying to make a good impression. However, the USPS is reliable and has better reach than the two private companies - in fact, both FedEx and UPS use the Postal Service to reach more rural areas in the U.S. The prices offered by the USPS are often less expensive, especially for low-weight goods, but at higher weights the private carriers may be a better option.
This is a relatively easy question to answer: Having free shipping is a positive differentiator for the majority of ecommerce businesses. A wide variety of polls and surveys have shown that free delivery is an important factor for consumers deciding where to shop. Businesses that don't want to pay for free shipping themselves have some options to spread out the cost or defray it entirely. One approach is to build the cost of shipping into the prices in an online store. This isn't always feasible as it can push price points past competitors, but should be considered. Having free shipping above a certain order price is another effective approach that encourages larger orders without necessarily increasing the cost of all items. No matter what kind of free shipping is offered, it's a best practice to prominently advertise this fact throughout an ecommerce website.
Understanding what competitors with similar stores are doing is crucial. Not only will some research make it easier to craft a competitive shipping strategy, it can also reveal unique considerations based on the items being sold and target customers.
Beyond free shipping, it's often a good idea to have some other options in place. An expedited service can mean grabbing last-minute shoppers for a birthday or anniversary and, by passing on the cost, not having to pay extra for their business. Other considerations need to be made as well. For example: FedEx doesn't ship to PO Boxes, so noting that a business does ship to these addresses can help attract more clients.
The order fulfillment side of ecommerce is mostly hidden from customers. First-time business owners need to understand the intricacies of shipping to have the best chance of becoming successful and growing as a company. Making some early determinations about shipping will help prevent confusion and help businesses focus on providing the best service possible for customers.