e-Commerce fulfilment is the process of storing, reworking, managing inventory, picking, packing and distributing fast-moving consumer goods, printed matter, promotional or business to business (B2B) items for sale and resale. Fulfilment services can be facilitated in-house by the retailer or brand, but are often outsourced with a fulfilment specialist, due to their space and skills.
An increasingly popular operational strategic imperative, the global eCommerce fulfilment services market size was valued at $70 billion in 2019 and is expected to expand at a compound annual growth rate (CAGR) of 6.5% from 2020 to 2027. Since Grand View Research’s report, online retail has matured by as much as five years in a matter of months which means right now demand outstrips supply for retail warehouse space.
While order fulfilment outsourcing is in demand, it’s a major commitment. Before you decide to take the plunge, in this article we detail the 10 key stages of eCommerce fulfilment.
Whether you are already working with an outsourced fulfilment specialist or managing fulfilment services in-house, you will then have a strong enough understanding of the intricate processes, to make an educated decision.
If you choose to outsource your fulfilment processes, onboarding is a crucial first step. Your business and selected outsourced fulfilment specialist should be aligned in terms of your offering, their expertise and the technical infrastructure of both parties.
Finding a fulfilment house that integrates seamlessly with your eCommerce platform, marketplaces and order management system will ensure all order and product data is orchestrated with the greatest accuracy.
The onboarding stage should include a review with your account manager and integration specialist to map out your current product range, order volumes and SKUs to determine how much warehouse space you will need throughout the year, including potential peaks and troughs in demand.
At Whistl we will also assess whether we can offer added value to your business and challenges, such as contact centre support and the selection of the appropriate parcel carriers. These additional services can help businesses exceed their customers’ expectations.
The first time your products arrive at the warehousing and fulfilment facility will be the first ‘receipt of goods’ from your suppliers. Once your products arrive, the goods-in team will sign a confirmation note so that you have documented proof that the team has received your goods, along with the time and inspection details. The goods-in team should also check receipt of goods against the inventory, to ensure volumes and products match what you have ordered.
To maximise revenue opportunities, inventory management should be set to allow triggers that generate orders with suppliers when stock levels fall below-set volumes and if the rate of sales exceeds predicted levels, products do not become out of stock or understocked. Well-optimised order fulfilment and inventory management will ensure maximised sales from managed stock levels.
Cross-docking might be required for part-sold or fully sold inventories. The process of cross-dock can minimise or remove some of the steps below if the goods are fully sold. For fully sold inventories cross-dock fulfilment allows for products to be received into the fulfilment centre and despatched accordingly to the relevant customers or given final destinations.
Following the receipt of your goods, the fulfilment house can perform a series of pre-agreed audits and inspections, including:
- Box numbers and pallets match your packing list
- Product volumes match the consignment orders
Inventory management processing can include thorough inspections; for example,
- Checking the correct amount of apparel items are in each box
- Item quality and checks for imperfections or damages
- Checks for variable elements including sizes and colours have been supplied as per the order.
Inventory checks should always be coordinated based on the retailer’s unique needs. Many fashion retailers offer personal shopping subscription services, where they take the customer’s clothing and style preferences along with demographics and tailor their clothing in a monthly or quarterly box. This might require need for each order to be completely bespoke, requiring fulfilment teams to ‘rework’ the products into custom arrangements, to suit each customer’s specific requirements.
Some retailers may require boxes to be broken down and items moved into different packaging; in this instance, the reworking can be carried out between the ‘receiving’ and ‘inventory storage’ stages, but with bespoke fashion retailers, typically the picking and packing team will need to work with the reworking specialists to collect and return items from their stored locations to prepare a customised order.
4. Inventory management
After the auditing of your products, received inventory stock is updated into the fulfilment provider’s warehouse management system. Software solutions should easily integrate with the retailer’s order management platform, ensuring complete transparency of the supply chain journey. This would be from the order picking, packing to the final destination via delivery despatch. Delivery to your final location and customers are typically sent via the UK and international parcel carriers and mailing partners (dependent on the customers' location and any pre-determined delivery i.e. speed of transit).
Integration with the retailer’s order management platform, allows the fulfilment house to analyse the product range and sales data to store the product appropriately, to ensure the fast-selling ‘in-demand’ products are the easiest for the pick and pack team to access.
Constituting a large proportion of a fulfilment centre's operating costs, warehouse picking is the labour-intensive process where stored products are collected from their locations in order to fulfil customer orders. There is a wide variety of picking methods deployed by fulfilment centres and retailers worldwide. Here are the four most common methods:
- Zone picking is the most commonly used method for complex orders that contain multiple items. Products will typically be pre-stored in locations called ‘zones’ to maximise the efficiency of this process and to ensure that picking staff don’t need to travel far unnecessarily. Typically a picking employee will be assigned to their own zone.
- Batch picking is a method employed by picking staff that need to travel long distances throughout the warehouse. If they’re already making that journey, they might as well collect other items in that area while they are there. As such, pickers will typically group orders at the same time, eliminating the need for multiple trips.
- Discrete picking is the most popular method for smaller warehouses and retailers with a limited number of SKUs (stock-keeping units).
While more distance travelled is required on average to fulfil an order, picking accuracy is typically higher because each picking staff can focus on one order at one time. However, as the business scales, the discrete picking method is not as efficient. This emphasises the importance of working with an order fulfilment provider that is experienced in maintaining accuracy and efficiency as the retailer’s sales grow
- Wave picking is similar to discrete picking in that one order is picked at one time, however, this method introduces scheduling windows as a means of optimising the picking team’s time depending on the time of day. Wave picking is also useful for when picking staff are also responsible for packing, reworking and other areas of the order fulfilment process.
Most modern fulfilment houses will utilise a combination of the above, or as the retailer grows in order volumes, their fulfilment provider may evolve from discrete and wave picking methods to zone and batch picking to suit the business’s current demands.
While your products will arrive at the fulfilment warehouse in a container and/or pallets, the products themselves will be in boxes, often called ‘outers’ and ‘inners’. However, these boxes aren’t necessarily the packaging that will be used to deliver to your customers. Often the packaging will arrive from a separate supplier or the fulfilment house will offer to package of their own.
Your products may be pre-packed before being selected from inventory, or packed to the specific criteria by the packing team. It is important to decide whether you want to use generic packaging in the early stages of your business’s growth.
As your business scales, it is likely you will look to implement bespoke packaging to enhance your customer experience and reinforce your brand.
Packing isn’t just about putting an item in a box. You may also include surprise gifts to delight your customers, discount vouchers to encourage impulse purchases and returns information to ensure your customers have plenty of options available to them at every stage of their buying journey.
Once the item is packed, the next stage is to print a shipping label from your carrier management system to apply to the parcel.
If your product is being delivered domestically to somewhere in the UK, this is usually all you will need. However, if you are shipping internationally you will need to ensure you are meeting the guidelines for that country. For example, if you are shipping into the European Union, you usually will have to include commercial invoices with the shipping label, along with stating your product HS code, your own EORI number and depending on the item’s insured and actual value, product type and country of manufacture, your customer may be required to pay customs duty to release the item.
Once your items are labelled and include all the correct documentation, at this stage the fulfilment house will group parcels by carrier and destination.
Each parcel will travel along a conveyor belt and along this machine will be delivery fulfilment specialists who will scan and sort each parcel to ensure it is ready for when each carrier partner arrives at the fulfilment house to collect the parcels.
9. Returns processing
Some studies have found that as many as 30% of products ordered online are returned, compared to less than 9% for brick-and-mortar stores. It is therefore of great importance that you work with a fulfilment centre that can help minimise the incidence of returns happening in the first place, and manage your returns when they happen.
It is important to ensure the returns process offered by the fulfilment centre assists the process of improving revenue and supports the opportunity for resale of products. This might mean working to pre-stated product and quality guidelines. For example; for your business, this could mean prioritising impeccable condition products for immediate resale or refurbishing slightly damaged items before re-introducing them to their respective warehouse locations (stock replenishment).
For fashion retailers cleaning processes such as garment steaming or shoe cleaning and re-lacing might be required. These specialist services will support the insight to the business, with quality checks including inventory logging of returns codes, stock volumes and any issues of faulty products sent back to the manufacturer on the retailer's behalf.
Whistl's Fulfilment Returns Process:
10. Ongoing customer support
The customer journey doesn’t end with receipt of their goods; our research found that 46% of consumers said they stopped using a company/organisation based on a poor call centre experience. While many fulfilment companies purely handle the storage and distribution of products, at Whistl we also offer e-commerce customer service to complement our fulfilment offering, so that you can deliver a consistent omnichannel customer experience.
Deciding whether to outsource fulfilment services
In this article, we’ve delved into every aspect of the order fulfilment journey. Getting fulfilment right requires fastidious attention to detail and so whether you are managing it in-house or with a specialist, it pays dividends to have an expert taking care of each of these processes.
Above all else what’s important is that you can process orders as quickly as possible, utilise the correct delivery services and respond to peaks and troughs in demand by minimising overstocking and understocking. Get one of the ten elements wrong and this can be the difference between a repeat customer and a one-star review.
Whistl offers Bespoke Fulfilment Services
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