e-Commerce Fulfilment Guide – Overview, Types, Challenges, and Solutions
When it comes to online shopping, convenience is today’s number one priority for customers—and companies have stepped up their game to deliver products faster.
But grass isn’t all green in that regard. Challenges still persist and are continuing to expand, as e-Commerce gradually becomes the mainstay for shoppers. Temporary retail survival strategies like curbside pickups have become a permanent measure for customers.
Yes, delivery today isn’t just doorstep; customers expect multiple e-Commerce fulfilment options for both online and offline purchases—think fast (1-day) delivery, the status of which is updated in real-time and is available for return if it doesn’t fit their bill.
For retailers and e-Commerce businesses, this equates to the need for greater speed, efficiency, and accuracy at every step of the customer journey—right when inflation is high, budgets are shrinking, logistics costs have skyrocketed, and supply chain disruptions cause delays.
The pressure is definitely on. However, savvy retailers and e-Commerce players will see this as an opportunity for growth, as addressing these key challenges is a sure-shot way to improve customer experience and, in turn, revenue.
For such go-getters, here’s an in-depth article on e-Commerce order fulfilment, what it is, the types, the common challenges, and how an e-Commerce solution provider like Ordazzle can flatten the hurdles and set you up for success.
What is e-Commerce fulfilment and Its Types?
Simply put, e-Commerce fulfilment is the process of receiving, processing, and delivering orders placed by shoppers online. Typically, the order first goes through a warehouse, where it is packed, picked, and shipped to the customer. It’s a critical mechanism in the e-Commerce supply chain and has a direct impact on the customer experience.
Orders that are fulfilled accurately and quickly are more likely to make the customer happy and come back again. Delays, on the other hand, dissuade customers from interacting with your brand again.
As mentioned earlier, there are various ways to do fulfilment, including:
1. Self-fulfilment/In-House:
Ideal for established businesses with steady order volumes, this model offers total control over the inventory, picking, packing, and shipping processes, as everything is directly managed within company facilities. While it can save costs at scale, the initial investment in infrastructure and staff may be prohibitive for smaller operations.
2. Third-party Logistics (3PL):
Small to medium-sized businesses often turn to third-party e-Commerce solution providers to handle order fulfilment, warehousing, and shipping, allowing them to concentrate on core activities like marketing and product development. This cost-effective solution helps manage resources but can suffer from high unit costs and potential communication issues with providers.
3. Marketplace Fulfilment:
Businesses using services like Amazon’s FBA or Walmart’s fulfilment services can leverage extensive customer bases. For instance, FBA sellers gain access to Amazon Prime’s vast user pool. However, fees are high, and control over branding and customer experience is limited, making this less suitable for businesses prioritising brand visibility.
4. Dropshipping
Here, retailers sell products without holding stock, as suppliers ship orders directly to customers. This approach minimises capital requirements and broadens product offerings but offers limited control over stock availability and delivery times, making it favorable for new or small online-focused businesses.
5. In-store and BOPIS (Buy Online, Pick Up In Store):
Lastly, in BOPIS, retailers use their physical locations to fulfill online orders, enabling faster local deliveries and reducing the need for dedicated e-Commerce fulfilment centers. BOPIS lets customers pick up online purchases in-store, thereby merging the convenience of online shopping with the immediacy of physical retail. Both models are best for retailers with existing stores looking to offer a seamless omnichannel experience.
Also Read: How e-Commerce Companies Can Make the Most of e-Commerce Solutions
Common Challenges in e-Commerce Fulfilment
1. Managing Reverse Logistics
Returns are an important aspect of all e-Commerce supply chains. However, for many retailers, it’s secondary to the main purchase process. But it’s a critical process that requires all hands on board, as a favourable return policy often influences buying decisions. Yet, it presents challenges such as high handling costs and the need for efficient space management.
Also, returns are customer experiences that start with a negative sentiment and, therefore, must be re-won and affirmed.
By integrating data across platforms and channels (preferably with a dedicated channel management system), you can automate many of the processes involved in reverse logistics, therefore reducing the productivity overhead. Moreover, you can put in place customer-friendly return experiences across channels to reaffirm loyalty.
As for the spatial and cost impact of storing returned items, many retailers have even issued refunds while allowing the customer to keep the returned item. It is proven profitable in many scenarios, especially if it’s a low-value product.
2. Scaling e-Commerce Fulfilment
As e-Commerce skyrockets, with projections to reach the Rs 24.1 trillion mark by 2028, retailers must scale their e-Commerce fulfilment operations to keep up with the burgeoning demand. This quest for scale is hurdled by challenges like a squeeze on warehouse real estate, outdated tech systems hindering automation, supply chain delays, and consumer demands for speedy, sustainable delivery.
To tackle these, retailers must repurpose structures like vacant malls into distribution centers and pivot to micro-fulfilment strategies closer to customers. Advancing digital transformation, enhancing system integration, and expanding robotics are crucial for smoothing out kinks in fulfilment.
Additionally, diversifying suppliers and employing modern management solutions will ensure a steady flow in the supply chain, keeping the wheels of commerce turning efficiently.
3. Providing Omnichannel Experiences
Today’s customers demand a seamless omnichannel experience where data and interactions are consistent across all platforms.
But providing such an effortless experience is easier said than done, especially if you’re working with disconnected systems and are transitioning to a multichannel setup. Such a fractured way of doing e-Commerce can lead to inefficiencies in the value chain and, ultimately, customer frustration.
Channel management systems that integrate and unify data across channels allow you to offer the same service levels, whether in-app, online, or in-store. Ensure that the people, processes, and technology all work together to deliver a seamless experience.
Lastly, the core of the omnichannel experience lies in keeping the customer informed every step of the way. Failing to communicate or not providing enough information will break the omnichannel experience.
The best way to solve this is to automate communication flows from start to finish, which ensures that customers always know where their order is and what to expect next.
Ordazzle can Help: Do e-Commerce Fulfilment the Right Way with our Order Management Solutions
Building a successful fulfilment chain from scratch or even the middle is an enormous challenge. You have to upgrade the technology, align the processes, and train the right people to make the transition seamless.
Despite these measures, delays and disruptions are still common.
We know you can take a hint, but we’re still reiterating it because it shows how important it’s to maximise e-Commerce sales and operational efficiency. Yes, we at Ordazzle can help you streamline your fulfilment operations with our state-of-the-art order and channel management systems.
Get in touch with our ever-ready team of product experts to know more.