What is Order Fulfillment and Why is Mastering It Critical to Your Business?

What is Order Fulfillment and Why is Mastering It Critical to Your Business?

Order fulfillment is about the steps involved in receiving, processing and shipping orders. Take note. Over half of online shoppers earmark speed of delivery when evaluating orders. Here’s what you need to know and why it’s critical for your small business.

The Order Fulfillment Process

Getting everything right means understanding the process. If you’re going DYI, you’ll need a way to receive inventory. You can keep your goods in house or use an outsourced company. Keep it in house and you’ll need a warehouse with an inventory system. And you’ll need a way to process, pack and ship orders.

Outsource companies will handle all of that for you. They look after managing the inventory, processing the orders and shipping.

Calloway Cook is the founder of Illuminate Labs.  He outlined the biggest issue for small businesses.

“Processing orders is incredibly time-consuming,” he writes. “I’m the Founder and only employee of my company. If I label and drive to the post office to ship each order it would take hours. The opportunity cost of that is great for small start-ups. And that time is better spent on operations & marketing work to scale the business.”

He says the solution is outsourcing. The starting cost to outsource order fulfillment is low. There is usually a fixed price each month and a percentage on sales. There’s another advantage according to Calloway.

“Using a third-party for order fulfillment is good for your customers. Our partner company Shipmonk has warehouses across the U.S. It ships to a customer based on which location is closest. This means they can get a package to a customer faster and cheaper than I could.”

Advantages of Outsourcing Order Fulfillment

Outsourcing your order fulfillment frees up time so you can focus on your business. It speeds up your delivery time and lowers shipping costs too.

Staying in house? There’s an upside here too. You know every aspect of your operation from start to finish. It’s a cheap way to keep your costs low when you’re a start-up. Be warned. You can quickly outgrow in-house operations if your company takes off.

Most small businesses need some help to get goods and services from Point A to Point B. Here’s a good list of the best order fulfillment services for 2019. And here ‘s some things to consider when picking a partner.

Get Expert Help

You don’t need to spend hours scouring the search engines looking for a good outsource company.  There are online portals like FulfillmentCompanies.net . Get a list of services that have been categorized by different industries.

Ask the Right Questions

Don’t just take the first search results you find. A list of questions about the company’s pricing structure, if they ship internationally and who they use is important. Take your time and make up a list of questions important to your business. You might want to make it a team effort by asking employees for input.

Think Turnaround

You also need to consider the promises you make to customers about shipping times. If you promise them one day shipping, you’ll need to find out fulfillment service that do that for you.

In House Tips

If you’re going to handle order fulfillment yourself, you’ll need to have inventory on hand. That means setting up a warehouse or designating a storage area. Putting the slower moving items on top shelves is good. Your packaging area should be as close as possible to the loading dock.

You’ll need an inventory system and software is a great tool.  Tracking inventory in real time is possible. It helps small business to be proactive. Ryan Chan from UpKeep Maintenance Management explains:

“Order fulfillment is more than just delivering on sales inquiries,” he writes. “It is about proactively anticipating the needs of customers before they arise. With the digital revolution of businesses, customers can more easily order online.”

He says CMMS (computerized maintenance management software) lets businesses make proactive decisions and fill orders in a fast-paced environment.

“With features like inventory tracking and KPI dashboards, a CMMS makes work orders a more easily-categorizable system.”

Order Fulfillment Trends for 2019

Here’s a few of the big trends that you need to keep an eye on this year and into 2020.

Big Data Gets Bigger

Even after just a few years, you’ll have more customer data then you know what to do with. That’s why data analytics will become even more important going forward. Being able to see big and small sales trends will help you to shift gears on the fly. Here’s a link to a Google cloud service.

Automated Order Picking

It doesn’t really matter if you’re going to go in-house or outsource your order fulfillment. Automated picking is going to speed things up so you’ll need to fine-tune your entire process. It’s at the point now where customers can use an app to order their groceries.

As this trend ramps up, small business will need to produce more and stay on top of inventory to fulfill orders

Image: Depositphotos.com

This article, “What is Order Fulfillment and Why is Mastering It Critical to Your Business?” was first published on Small Business Trends

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