What Is Ecommerce Order Fulfilment and How Does it Work?

Ecommerce fulfilment is the process of storing, sorting, selecting, and ultimately shipping your goods to your customer. As your business grows, order fulfilment becomes as much a chore as it is an expense… so sooner or later, you’ll want to think about outsourcing it.

If your business is scaling and has outgrown its current fulfilment solution (such as dropshipping), then rest assured you’re in the right place and order fulfilment is for you, and you’d benefit from partnering up with a top-rated UK order fulfilment provider.

However, there are so many fulfilment providers to choose from, and it can be difficult to determine which company is the right fit for your business’ budget, order volume, and ambitions. This is where our quick and free cost comparison tool comes in. Designed by our team of ecommerce experts, this free, easy-to-use tool provides you with direct pricing quotes from some of the UK’s best fulfillment providers.

But if you want more information first, read on to learn more about what ecommerce fulfilment is, how it works, and what costs are involved.

What is ecommerce fulfilment?

Ecommerce fulfilment (also known as order fulfilment) is a key part of the supply chain for all online businesses. Essentially, it’s the process of getting the right stock to the customers that have ordered it.

Even before your customer makes an order, your inventory needs to be stored and sorted in a warehouse. And, after that customer hits ‘Buy Now’, those goods still need to be selected, packaged, and shipped off for delivery.

You can manage your ecommerce fulfilment in-house – though we don’t recommend this for businesses looking to scale – or by outsourcing the job to a 3PL (third-party logistics) provider to do it for you.

How does ecommerce fulfilment work?

When your customer first places an order, the ball of the ecommerce fulfilment process starts rolling. So, what is the order fulfilment process?

Step 1: Receiving

Powered by integration with your shopping cart software, details of the order are sent straight through to the 3PL provider. This information arrives at a fulfilment centre, which is basically a big warehouse where your goods are stored.

Step 2: Picking, packing, and shipping

With your product’s unique SKU (stock-keeping unit) in hand, the 3PL provider’s fulfilment centre staff go about locating it. This is known as ‘picking’, and ensures that your customer receives the right stock, from the right inventory (fulfilment centres can store goods from thousands of different sellers, with many offering the same products).

Once it’s picked, the stock is then ‘packed’ – wrapped, boxed, and sealed according to the specific instructions you’ve issued to your 3PL supplier.

It’s then shipped to the customer. Simple!

What is 3PL ecommerce fulfilment?

3PL means ‘third-party logistics’ and refers to a service that allows you to outsource each link in the supply chain. This service is provided by a company known as a 3PL provider.

From having your products delivered to a warehouse, storing them there, and then sorting, packing, and shipping them off, a 3PL provider can take care of the whole process for you.

To keep you in the loop, 3PL providers work closely alongside your existing systems. They offer integrations with ecommerce platforms such as Magento, Shopify, WooCommerce, and BigCommerce, allowing for real-time, two-way transmission of stock and order information.

You’ll also be provided with an online reporting dashboard, allowing you to utilise your business’ sales information to inform smarter decisions going forward. With a 3PL provider’s cloud-based software’s live insights, you’ll know exactly what’s working, what’s not selling, and where there’s room for your business to grow.

Is order fulfilment right for you?

Before you sign up with an ecommerce fulfilment provider, it is important to understand whether order fulfilment services are right for you and your ecommerce business.

To make it clear and easy to distinguish between a business that would benefit from setting up 3PL services and a business that wouldn’t, we’ve put together the table below which specifies the requirements to be eligible for the service.

If you’d answer ‘yes’ to all of the above ecommerce fulfilment criteria, then your next step is to read our review of the best order fulfilment services in the UK. Or save yourself time and get a quick answer to that question by using our quick and free cost comparison tool.

If order fulfilment services are not suitable for your business, we would recommend dropshipping as an excellent alternative for your ecommerce needs. Take a look at our dedicated review of the best ecommerce platforms for dropshipping for more information.

What are the best fulfilment services for small businesses in the UK?

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BEST OVERALL PROVIDER
Provider Huboo	Provider BOXStation	Provider Bezos.ai	Provider MyWarehouse	Provider Green Fulfilment	Provider Amazon FBA	Provider Core Fulfilment	Provider ShipBob	Provider Minatus	Provider Cloud Fulfilment	Provider Red Stag Fulfilment
Best for Low storage and packing prices	Best for Micro businesses requiring order fufilment services	Best for Small businesses that need fulfilment services to handle specialist goods	Best for Reliability with a 100% accuracy guarantee on its picking and packaging service	Best for Small businesses wanting to reduce carbon emissions by working with eco friendly providers	Best for Small businesses that need speedy shipping	Best for Businesses that need to integrate other software with its order fulfilment service	Best for Small businesses selling products to the US	Best for Companies that want friendly, personal customer service	Best for Small businesses wanting real-time insights and stock level movement reports	Best for Small businesses wanting to protect stock from being lost or damaged
Transparent pricing	Transparent pricing	Transparent pricing	Transparent pricing	Transparent pricing	Transparent pricing	Transparent pricing	Transparent pricing	Transparent pricing	Transparent pricing	Transparent pricing

Compare costs from these providers using our free, easy to use comparison tool. Compare Costs

To find out more about each of these providers, including costs and pros and cons, read our dedicated guide to the best order fulfilment services for startups in the UK.

How much does ecommerce fulfilment cost?

Outsourcing your order fulfilment comes with a number of different expenses, these include:

Fulfilment services costs

Some providers will charge an onboarding fee when you get started. They will also charge ongoing fees that cover your licence of the order fulfilment software, along with customer support and integration with your shopping cart.

Fulfilment centre costs

This is what you’ll pay to receive your goods at the order fulfilment centre, and includes storage fees. Storage fees are typically charged by pallet space (around 1m3), or per individual letter or parcel.

Below is an example of what some of the top fulfilment providers charge:

• Amazon FBA’s storage fees range between 46p and £1.10 per item
• Core Fulfilment’s storage fees are £10.88 per pallet per month
• Minatus charges £2.48 per cubic metre, per week for storage
• Huboo offers two months of free storage, and free stock replenishment

Order fulfilment costs

These costs cover the picking and packaging of stock and include returns handling. Some example costs are below:

• myWarehouse’s picking and packaging costs £2.61 per order
• Huboo charges between 30p and £2.95 for packing and packaging
• Minatus picking prices for 100+ orders per month start from £1.48, with 0.08p per additional pick

Many providers, such as Huboo, offer subscription rates for a more cost-effective approach – particularly for businesses with large sales volumes.

For a single, fixed monthly fee, you’ll get an agreed amount of orders (units) fulfilled. Huboo’s rates, for example, start at £25 per month for businesses that dispatch a maximum of 300 units per month, going up to £150 for 5,000 units, with customisable rates negotiable beyond that.

How to choose the right 3PL provider

Selecting the right ecommerce fulfilment supplier might be the most important decision your business makes this year. Read on to find out which questions you need to be asking any potential provider before you sign a deal.

Is it quick?

Anyone who’s ever ordered anything online will tell you that time is of the essence. Consumers value speed and convenience, and the faster you get them their purchase, the more likely they’ll be to buy from you again.

With that in mind, seek some assurances from your 3PL provider. How quickly can they turn around orders? Is same-day (or at least next-day) delivery available? Ask any prospective provider about their returns handling process, too. How quickly can they turn around a returned item, and have it back on the shelf ready for resale?

Is it cost-effective?

Fees for picking, packing, delivery, and storage all tend to differ wildly across 3PL providers.

Amazon FBA, for instance, offers value for businesses trading in small-sized, low-value goods, sold at high volume. It’s one of the reasons the ecommerce behemoth has all but cornered the market, but it’s not for everyone.

Among the admirable alternatives is Huboo, which caters to businesses of all sizes. Unlike Amazon FBA, Huboo offers big savings on storage fees – your first two months are on the house, and discounted rates are available beyond that.

You’ll also want to know your supplier’s shrinkage rate. ‘Shrinkage’ is a euphemism for ‘breakage’, and also includes lost or stolen items. Most 3PL providers have a shrinkage rate written into their contracts; this is usually between 2% and 5%, but can be as high as 10%.

For your ecommerce fulfilment deal to be cost-effective, you’ll want this figure to be as low as possible. Luckily, it’s negotiable, so… negotiate!

Next steps: comparing order fulfilment service providers

Now you know more about what ecommerce fulfilment actually is, how it works, and who it is suitable for, you can determine whether the service is right for your business, and move forward with speaking to providers.

To recap, order fulfilment is suitable for businesses that:

• Have a website that is set up for online selling
• Have been selling products for longer than six months
• Are shipping more than 10 items per day
• Are an established business with a budget to invest in proper fulfilment

If your business fits the above criteria, all that is left to do is get more information and quotes from the UK’s top 3PL providers.

This is where our cost comparison tool comes in handy. Simply answer some questions and you’ll then receive bespoke, personalised order fulfilment services quotes from leading suppliers, who’ll help your ecommerce business come up with a plan that works for you.

If, however, you decide that order fulfilment isn’t right for your business, why not look into dropshipping?

It’s an excellent alternative to ecommerce fulfilment and is more suitable for some businesses.

For more information, check out our best ecommerce platforms for dropshipping review.