If you have worked for as little as a week in the world of eCommerce, then you’ll almost certainly already know this. But nevertheless, it is an essential truth worth restating – eCommerce order fulfillment is no walk in the park. In fact, it is eCommerce fulfillment that can be considered the revolution within the revolution that is eCommerce itself. Just as eCommerce has changed forever the way people buy and sell things, massively efficient order fulfillment such as 2-day – or even same-day –delivery has set a new standard.
So, what can you do if you are a smaller eCommerce site? The first thing is undoubtedly to corner a market niche and ensure that you are selling something that people will want. After that, the next thing to do is to try to make eCommerce fulfillment, including order processing and shipping, as efficient as possible. Precisely how you do this will, of course, depend on the nature of your business and the fulfillment strategy that you have decided upon. However, Shipping and Handling of Texas, a warehousing and order fulfillment firm, advises that there are in fact a few eCommerce fulfillment models, already in existence, for you to defer to. All you need to do is pick one.
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Settling on an Ecommerce Fulfillment Strategy
But before you decide on what model to follow, you need to consider the specifics of your actual business and settle on an eCommerce fulfillment strategy. This is not the same thing as settling on a model to follow, but rather it is a means of identifying your logistical strengths and weaknesses before choosing a model. Naturally, you should consider things like the location of your warehouse, or warehouses, in relation to your customers. You should also decide upon a way to offer quicker shipping or whether offering free shipping instead might make more economic sense.
But once you have settled on a strategy, it should become pretty obvious what eCommerce fulfillment model will suit you best. Here are the main ones:
In-House Order Fulfillment
Also known as self-fulfillment, this occurs when a merchant completes each step of the order process internally, without the aid of any third-party logistics provider. This is the most common strategy for smaller-scale operations, with merchants typically packing up the orders in their homes.
And the advantages of this method are just that – it is suitable for smaller-scale operations, where profit margins would not cover the cost of warehousing and third-party fulfillment (and where that wouldn’t really be necessary anyway).
This model is the one that businesses will most often progress to once they can no longer handle the order load in-house. Not only does this offer more efficient handling and shipping, but it often allows for increased storage space where inventory can stay until it is purchased. Third-party logistics companies will often operate from several different warehouses, meaning you can have efficient delivery over a much broader geographical area.
Dropshipping is a model that alleviates any need to hold products at all. The products are instead produced, stored, and shipped by the manufacturer. Thus, when a customer places an order, this is forwarded to the manufacturer who then takes things from there. With this model, you relinquish a lot of control, as well as make the final product less “yours”. However, it does alleviate a lot of time-consuming duties.
Ultimately, the thing to remember is this – work out your fulfillment strategy first, and only afterward settle on a model to follow.