Order Fulfilment: Meaning and Strategies

In this article, we cover everything you need to know about the meaning of order fulfilment so that you can make an informed, educated decision as to whether your eCommerce fulfilment should be outsourced, managed in-house, or requires a hybrid fulfilment setup.

What Is Order Fulfilment in Supply Chain Management?

Order fulfilment refers to the entire process that starts when a customer places an order and ends when the product is delivered to the customer. It involves storing the goods and managing inventory, processing, picking and packaging, shipping, and handling returns.

For eCommerce companies, efficient order fulfilment is vital as it ensures timely delivery, enhances customer satisfaction and strengthens brand loyalty.

Find out more about choosing the right fulfilment method for your business.

How Is Order Fulfilment Shipping Different from Shipping?

Shipping is just one part of the broader order fulfilment process. While shipping describes transporting the product, order fulfilment starts when the order is placed and ends when it reaches the end customer.

Order Fulfilment Strategies

There are four distinct types of order fulfilment, which relate to which party, or parties, carry out the storage and distribution.

• In-house order fulfilment

With in-house order fulfilment, the retailer's employees handle fulfilment on their premises but may still work with a delivery management company to access discounted shipping rates.

This format can be ideal for merchants who manage their inventory in-house and want total end-to-end control over the entire operation. As the business grows and more storage space is required, they may want to migrate to outsourcing or a hybrid order fulfilment model.

• Outsourced order fulfilment

Outsourcing order fulfilment to a third-party logistics (3PL) company is less capital-intensive than investing in one's own premises. Some businesses outsource their operations, including customer service, storage, reworking, and returns, with varying degrees of involvement. Learn more in our guide to third-party logistics.

A retailer usually outsources one of these elements in the early stages to implement other solutions as their business needs evolve. This creates more time for your workforce to focus on marketing, product development and other ways to grow the business.

• Hybrid Fulfilment

Some retailers need to retain production in-house for bespoke and rarely sold items. The fulfilment house may lack the expertise to handle such work, so the retailer could adopt a hybrid fulfilment model in which the 3PL handles their fast-moving goods. This allows the retailer to better focus on tailored customer orders. Other retailers may adopt a hybrid model to de-risk their expansion.

• Dropshipping

Partnering with a drop shipper is a much more hands-off approach to order fulfilment. With this method, your products are sourced from a supplier and advertised through your eCommerce site. When a customer places an order, it is sent to your drop-ship partner, who will fulfil it on your behalf. 

While typically less profitable than handling and selling your products, drop shipping is an increasingly popular fulfilment method that enables retailers to expand their product range to fill gaps in their market. Drop shipping involves minimal risk for the retailer and is best suited to startups and retailers testing new suppliers without committing capital. No money is tied up with inventory, warehousing or other overheads.

On the other hand, retailers have less control over this order fulfilment process and entrust their reputation to the drop shipper. Should there be an issue with a product or the service, customers will assume the fault lies with the retailer. Product supply is similarly out of your control, so if something goes out of stock, it can take a while to restock.

Order Fulfilment Process: How Does Order Fulfilment Work?

To show the order fulfilment process in action, we have broken down each stage in detail and outlined some of the key benefits your eCommerce business can achieve when you partner with Whistl:

1. Goods in

We receive the goods from suppliers or directly from the manufacturer. Goods are then checked into our inventory management system according to the related manifest; upon arrival, we confirm receipt, unload, inspect, scan, and sort the items before placing them in the warehouse.

• Goods are made available for order as quickly as possible, with a benchmark of four hours after arrival.
• Fulfil any range of products with any level of detail (we can scan barcodes/serial numbers/add relevant barcodes if required). RFT technologies are used for fast and accurate scanning
• Quality checking procedures can be added for all or specific suppliers (we offer quality checks/measurements/weight verification/photography)
• Avoid storage fees by pre-selling and benefiting from our flexible cross-dock solution.

Enquire now about your business needs

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2. Warehousing

Goods are stored in safe, modern warehouses nationwide. 

• You can scale and grow without constraints and not worry about peak periods.
• Space is allocated in the most cost-efficient way to ensure consistent order picking.
• All products with expiry dates are managed using the FIFO (First In, First Out) method, with batches and dates accurately captured.
• Make data-driven inventory decisions and avoid stockouts with our reporting system (provides progress reports/exceptions/outstanding order details).
• Your goods are kept safe, tidy, and stored under the right conditions.

Learn more about inventory management

3. Picking and Packing

The process includes these steps:

• Customer orders are received

Every order is processed accurately and quickly. Your customers can order any time and receive their orders faster with flexible cut-off times tailored to meet their needs.

Thanks to our experienced operational teams in every warehouse, you can rest assured that customer service levels will be maintained during peak periods.

• Items are picked and packed.

Create an outstanding unboxing experience with personalised packaging options (gift wrapping/enclosing promo materials/adding personalised messaging).

Modern technologies ensure our picking process is fast and efficient. You can also benefit from cost-effective and sustainable packaging solutions.

Learn more about picking & packing.

4. Despatch and Delivery

We manage the shipment process for you:

• The order is dispatched.
• The customer receives a tracking number.
• Orders are delivered to consumers, retailers, brick-and-mortar stores, and international destinations. 

Our dispatch and delivery process means:

• You save money on delivery costs through our economies of scale and strong relationships with multiple couriers (backed by 20+ years of experience in the parcels and mail business)
• We select the most cost-efficient delivery options for you (so you don’t have to spend time constantly comparing rates and requirements)
• If anything goes wrong, we handle the carrier issues on your behalf
• Offer your customers the flexibility they crave with a full range of delivery options: express, next-day, click-and-collect from store, and global options with international shipping.

Request your bespoke order fulfilment proposal.

5. Return Management

We manage and simplify the return process for both you and your customers. 

• Labels for returns can be printed and enclosed if needed
• The customer selects the most convenient carrier return option
• Quality checks and photos can be made before goods are re-stocked/refurbished and repaired/shipped to the manufacturer
• Acquire all the returns reasons information to make data-driven decisions to minimise returns
• You can offer your customers convenient return options with the entire process handled without lifting a finger
• Refurbishment services are available on-site or off-site (depending on the degree of refurbishment required)

Learn more about our return management services

​​​Benefits of Order Fulfilment

If you choose to outsource to a fulfilment specialist, your business can enjoy a range of fantastic benefits. 

• Fulfilment services can save time

Working with a specialist, dedicated fulfilment house lets you leverage their experience and expertise. The most significant time-saving benefits come from implementing tailored picking methods, such as zone, batch, discrete, or wave picking.

Furthermore, working with a fulfilment outsourcer means they will have experienced staff ready to carry out all other elements, including receiving, reworking, labelling, returns, and even repacking.

• Save money

A fulfilment centre like Whistl is sufficiently large to give you access to collaborative buying power. Your online store will be one of hundreds or thousands of other businesses utilising the shared eCommerce warehouse.

Our national fulfilment centre locations allow companies such as Ethical Superstore to access discounted shipping rates based on the collective volume of their shipments, as well as customised packaging solutions to minimise their required storage space. This, in turn, saves the retailer money and leaves more room for further growth.

• Optimise processes

Whilst you may outsource your fulfilment, you will still need to run some key elements of your business in-house. This includes processing orders via an order/warehouse management system (OMS/WMS), as well as sales channels and marketplaces such as eBay, Amazon, and OnBuy.

One of the key advantages is that an effective company will assess your technical infrastructure and, in some instances, consult on better technology to help optimise your business from your side. An outsourced company like Whistl will help you:

• Hit dispatch targets with auto-fulfilment of new orders
• Get real-time financial reporting with automatic invoicing
• Group customers for marketing using auto-tagging
• Set triggers to order new items from your suppliers to minimise understocking
• Gauge predicted demand from marketplace analytics and sales volumes to minimise overstocking
• Achieve better overall visibility of your inventory management

• Improve your brand image

Effective inventory management and streamlined fulfilment processes mean you can give your customers a consistently positive experience, meet your customer expectations, and maximise the likelihood of positive reviews.

Poor reviews posted to your site can be damaging, potentially costing future sales. Most importantly, it’s a sign that something isn’t working as it should, and the causes should be investigated to try to rectify the problem.

Partnering with a fulfilment centre with robust carrier relationships and proactive delivery-tracking support means you can offer online shoppers the best delivery options from the start and minimise the risk of deliveries failing.

At Whistl, we also offer outsourced contact centre services to complement our fulfilment offering, ensuring there is always someone to address your customers’ queries.

• Expand your business reach

An internationally focused fulfilment centre will give you access to new markets, customs compliance resources and, in some cases, overseas ‘in-country’ warehouses so that you can minimise your exposure to customs charges, store goods close to overseas online shoppers and mirror the performance of your international competitors.

Some providers are integrated with or optimised to meet the stringent requirements to trade on emerging international marketplaces, such as:

• Mercado Libre in Latin America
• Taobao in China
• Jumia in Africa
• Access more space and get your inventory under control.

If there is no product location identification or structure in your current warehouse, your business may lack space. However, a fulfilment warehouse must operate efficiently not only to ensure customers receive their orders on time but also to ensure goods arrive on time and in an organised, efficient manner. Remember, a failure to receive goods efficiently can cost sales.

At Whistl, we ship over 20 million tracked parcels and over 3.8 billion items annually, including mail, packets, and untracked parcels. We boast a network of fulfilment houses totalling 1 million square feet, demonstrating we’re more than capable of housing your stock and meeting your needs.

If you’ve reached capacity and have outgrown your warehouse operations, it’s time to outsource your inventory and ramp up your organisation today!

Challenges of the Order Fulfilment Process

When managing fulfilment in-house, you must train your staff on the various picking methods to ensure efficient use of time. Getting fulfilment wrong can break your business. Some common challenges within the order fulfilment process include:

Inventory control: Ensuring accurate inventory records is a consistent challenge, especially because inaccurate data can lead to overstocking or product shortages, with associated costs.

Technology: The proper infrastructure is critical to ensure you can receive, handle, pack and deliver goods that exceed your customers’ expectations. Businesses that do not invest in advancing technology and integrations risk falling behind in order fulfilment processes. Leverage seamless order processing, inventory management, and shipping software to create and maintain positive customer experiences.

Order accuracy: Order accuracy, coupled with speed, is integral in the picking and packing process – but it also requires balance to get right. This is critical, as receiving the wrong order, poorly packed goods, or delayed deliveries can lead to consumer dissatisfaction.

Challenges can still occur when outsourcing or adopting a hybrid model, but our team will have less learning to do due to Whistl’s exposure to and experience in diverse markets. This will result in fewer mistakes, which is why outsourcing remains a highly popular option for domestic and international online sellers.

How to Improve Your Order Fulfilment Strategies

Now that you’ve reviewed our advice on the best order fulfilment strategies, it’s time to look at our top tips to improve them and excel in your order fulfilment operations today.

• Synchronise your eCommerce system with your fulfilment operations

Synchronising your eCommerce system with your fulfilment operations means you will be able to trigger email and SMS messages to your customers, such as:

• Thank you for your order
• Your order is now in production
• Your order is ready for collection
• Your order is now with the courier
• Your order is now out for delivery
• Thank you for your order. Please leave us a review

These tactics will help you give your customers the relevance, omnipresence, and intimacy they need to generate more positive reviews.

• Automate your tasks

Automating your tasks can save you time, minimise labour costs, and improve your working conditions, making your employees happier and more productive.

• Enhance your inventory management process

Install inventory tracking systems to maintain real-time stock levels. This will enable better decision-making and ensure you’ll never overstock or run out of products. You’ll be able to meet customer demand more efficiently and even forecast future demand to make data-driven purchasing decisions.

• Track your success

Set KPIs and regularly monitor your order fulfilment process, ensuring that potential pitfalls are caught and addressed to keep things running at their best at all times. Setting goals and implementing decisions to work towards them can ensure you’re on the right track and constantly striving for improvement.

• Partner with Whistl

At Whistl, our team handles the entire order fulfilment process from start to finish, so you don’t have to worry about anything. By freeing up your resources, you can direct your employees to focus on other essential aspects of your business, ensuring your core activities are always thriving.