What is order fulfilment?
What is order fulfilment?
Order fulfilment is a process completed by every business providing a product to consumers. From the moment you first make contact with the customer and they purchase your product, the order fulfilment stage begins, right up until they have the goods in their hands.
Of course, depending on your business and the product, the order fulfilment stage can vary greatly. For instance, a takeaway restaurant would cook the food in house, bag it up and deliver it to your door. This is the order fulfilment process.
With most businesses, especially those run online, it’s not possible to personally deliver each product to the customer. With hundreds and possibly even thousands of orders each week, you could require the services of an order fulfilment company, to help you manage the demand.
Outsourcing your order fulfilment
As a business grows, there comes a time when a decision must be made to change the way products are delivered to the consumer. If you have been running a small business for a while now, you’ve probably got a little fed up with packaging, labelling and posting individual parcels. Not only can this be time consuming (preventing you from working on other aspects of your business) but it’s not a cost-effective solution either.
Therefore, if you’ve reached a point where you’re asking whether outsourcing the order fulfilment is worthwhile, the likelihood is the answer will be yes.
There are many reasons you may consider an order fulfilment company and just some of these include:
- Reducing overall costs
How cost effective is it to package each parcel individually and send out to your customers? Not very, and a much better option is to utilise an order fulfilment warehouse to take care of your deliveries. The company will be able to distribute products in bulk, saving you loads of money on your post and packing fees.
- Helping your business grow
Packaging and posting individual parcels is time consuming and not giving you the opportunity to effectively grow your business. This is where order fulfilment companies change the game, taking the workload and leaving you with free time to do more important tasks. As your business continues to grow, the outsource company will be better equipped to handle the increasing demand.
- Eliminating shipping errors
As the workload increases, so does the risk of making an error. This is the last thing you need when dealing with customers daily and could result in products being sent to the wrong address. This would just leave you with dissatisfied consumers, expensive return shipping and more hassle along the way.
- Increasing customer satisfaction
Today’s customers now expect a lot. If they don’t buy from you, thanks to the Internet there are plenty of other options for them to consider. Likewise, if you don’t provide an excellent service they’ll be very unlikely to consider your business again. An order fulfilment company helps improve customer retention rates with extra perks such as order status and tracking numbers. You can be sure packages will be sent on time and in line with the customer’s expectations.
- Improving international shipping options
If your business has already explored international shipping, you’ll realise just how much potential there is. However, it’s a complicated market and depending on the country you’re sending to there’ll be certain rules and regulations in place. Failure to adhere to these and the parcel could be held in customs for weeks on end. By utilising an order fulfilment company you’ll have the confidence in international shipping and be better positioned to broaden your company’s horizons.
It’s important to remember that although the order fulfilment company is taking care of the packaging and posting of deliveries, you’re still in complete control of your business.
Customer shipping options
For instance, one of the main selling points to customers, especially when trading online, is the shipping option you offer.
Some businesses value shipping as an extra way to charge customers and boost their margins, whilst others will strive to offer competitive prices as a way to attract new consumers.
There are three options most online businesses will consider for online orders:
As you would expect, a free shipping option is always the most desirable for the customer. Anything free is an extra perk in the eyes of the consumer. For that very reason, free shipping has become common online as a way to reduce shopping cart abandonment.
So who pays the shipping? Businesses will:
- Increase product costs to cover for free shipping
- Increase product prices slightly and take the rest from their margins
- Take the entire cost from their profit margins.
Another tactic used by online businesses is to offer free shipping when ordering a certain amount. This will increase each order’s overall volume.
Real Time Carrier Rates
Couriers are particularly popular with online businesses, especially on Amazon and eBay. There are many couriers out there to consider and varying costs for each. As such, you can compare prices to get the most cost-effective solution. Couriers will collect packages and deliver straight to the customer, with online tracking offered by many.
Flat Rate Postage
Of course, the traditional method is to charge a flat rate. This is often ideal to give customers peace of mind they’re not being overcharged for post and packing (which no one wants to see). Flat shipping is best used when products are the same or of similar size – Thereby prices wouldn’t fluctuate from order to order.