The Value of Outsourcing Your eCommerce Order Fulfillment
For any business handling their eCommerce order fulfillment in-house, you know there are more than just one or two critical steps involved in getting orders to your customers. And if anyone of those steps faces a hurdle, it can delay your orders from getting out the door and into your customers’ hands. That impacts your brand experience – and ultimately your bottom line.
Outsourcing your order fulfillment can deliver considerable value for your business and prevent hurdles from happening. When you outsource, each crucial step in the fulfillment process is taken care of by an expert third-party logistics (3PL) provider, so you have more time to focus on other aspects of your business.
Let’s look at the 5 main steps of a typical order fulfillment process:
1. Receiving Inventory
The first step of any eCommerce order fulfillment process is the receipt of inventory from the client. A unique bar code identifier – UPC/EAN or SKU – is assigned by the client prior to the fulfillment center receiving the product. The identifier is typically incorporated into the existing tag or packaging of the merchandise and must follow the placement guidelines outlined by the fulfillment provider.
Before inventory is stored, it’s counted and verified to make sure the number of items received matches the number of items shipped from the client’s manufacturer/supplier. Inventory must also be quality checked to see if any product is damaged.
After the inventory is received, a 3PL will use its RF-enabled warehouse management system (WMS) to read the bar codes and keep track of product location, inventory counts, and customer orders at any given time in their facility. This valuable system gives clients transparency and a real-time view of their critical data.
2. Storing Inventory
The traditional warehouse model of storing inventory by similar products or brands is a thing of the past. Once all inventory is received and accounted for by the WMS, having the right storage system in place is critical for fast and accurate eCommerce order fulfillment. 3PL’s are experts at innovative inventory storage and management.
Configuring inventory from highest-picked to least-picked will save time and money. Position your top-selling inventory in a location that’s easily accessible and get slower-moving inventory out of the way. If there are certain times of the year when peak volume hits, inventory storage should be restructured to optimize volume throughput.
3. Processing eCommerce Orders
Having the ability to process orders fast often comes down to the technologies that are in place. A business that works with a 3PL has the benefit of integrating the 3PL’s fulfillment software with their eCommerce shopping cart or platform. By doing this, orders are automatically received at the 3PL’s warehouse and the fulfillment process can be faster, seamless, and transparent.
The warehouse automation technologies that many 3PL’s have also make it easier for orders to physically be moved, scanned, packed, and shipped. Most businesses don’t have the in-house resources needed to automate and maximize order processing in the same way that a 3PL does.
4. Shipping Produts
Rate increases continue to be handed down by all the major parcel carriers, and package size has a big impact on what a business pays to ship orders out the door. To help ease the pain of price increases and complex shipping guidelines, more businesses are using 3PL’s.
Many 3PL’s have the ability to leverage their shipping power to cut costs – sometimes by as much as 35%. They rate shop to find the best shipping method at the most competitive price. They can also secure more flexible shipping times for their customers because of their close ties with carriers.
5. Managing Returns
For many online shoppers, the return policy for an item they ordered is just as important as the price they paid for it. That’s why having a solid returns management program is critical. The easier the return, the better the chance of keeping a customer.
Using a 3PL for returns processing can save considerable time. They not only manage the returns from a physical processing standpoint, but they can also handle the customer support piece of the return. This means your customer gets expedited service and you get a better reverse logistics operation.
About Promotions Fulfillment Center
At PFC, our clients’ success is our #1 priority. Since 1974, our team has delivered outstanding quantifiable results, with turnkey solutions in web & eCommerce fulfillment, promotions, and contact center services – all backed by leading technology. Retailers and eCommerce brands that partner with PFC have historically achieved considerable cost savings in excess of 35% and have significantly improved their program ROI.