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The 5 Steps in the Order Fulfillment Process

May 6, 2020 Published by

Delivering package

Order fulfillment can be a large and complicated process. Getting your product into customers’ hands requires a lot of planning, labor and technology. As a result, it’s easy to make mistakes that can possibly damage your business’s reputation as well as cost you financially due to lost or returned orders. To avoid mistakes and fulfill orders efficiently, you’ll need to follow the 5 order fulfillment process steps.

However, before describing the steps for successful fulfillment process, it’s important to understand what order fulfillment is and the tasks it involves.

What is Order Fulfillment?

Order fulfillment consists of all the steps a company takes between receiving an order and getting it into a customer’s hands. This process involves warehousing, picking and packing the product, shipping it, and sending out confirmation emails (among other tasks).

Fulfillment begins way before a customer even places an order, starting with receiving inventory.

Step 1:  Receiving Inventory

There are 2 main ways to handle inventory. The first is to receive and store inventory “in-house.” This means you are responsible for taking stock, evaluating the condition of products, labeling, and managing your own inventory system. If you don’t want to manage your own inventory, it’s possible to outsource these tasks to an order fulfillment partner.

Step 2: Storing Inventory

Once inventory is received at the warehouse, other tasks must still be completed. If you decide not to outsource fulfillment, you must slot the inventory efficiently and keep an eye on what items go in and out so orders are shipped without delay. It’s important to index items as they are slotted so you remember where they’re kept and how many units are left.

Step 3: Processing the Order

If you’ve decided to outsource fulfillment, this stage can be bypassed. Simply pass through order requests to your fulfillment partner who handles the rest.

If you’re managing your own inventory, you must:

  • Pick items in the order
  • Transport products to the packing station
  • Perform damage inspection
  • Box and move items to the shipping station

Step 4: Shipping the Order

At this stage, you must contract a third-party carrier who will be responsible for shipping orders. Depending on the size, weight and specific requirements of the order (as provided by the shipping station), your carrier will determine the best shipping method. The shipping station then updates the order status so sellers know when orders are shipped.

Step 5: Handling Returns

Online buyers expect returns to be easy. Over two-thirds of shoppers say they will hesitate from buying if they have to pay return shipping fees. More importantly, nearly 20 percent of shoppers will not make a purchase without the option to return it to a store. You must design a clear returns policy that’s accessible to buyers and customer service staff.

Order Fulfillment Solutions

Order fulfillment is a multi-stage process that you can execute in various ways. If you need to fulfill orders, there are two main solutions you can choose from.

  1. In-house fulfillment: This solution includes completing all stages of the fulfillment process internally. If you choose this route, you must invest in the warehouse space, software, automation and manpower necessary for order fulfillment.
  1. Third-party fulfillment: This is the best solution if you do not have the resources to fulfill orders internally. Outsourcing fulfillment to a third-party logistics company (3PL) can simplify the costly and time consuming process of order fulfillment. Relying on a reputable 3PL gives you more time to promote your brand and focus on business.

No matter what products you are selling, remember to not take order fulfillment lightly. Consider all 5 stages and their respective challenges before setting up an internal process or choosing a 3PL.