What is Ecommerce and Order Fulfilment?
Your business is growing, so it’s time your processes did the same. Read on to learn more about ecommerce fulfilment, and why you should outsource yours
Strong foundations are the key to building a successful business.
Sure, you can splash out on stylish social media marketing campaigns, or throw a big launch party. You can invest heavily in a polished, professional online shop, or in hiring a team of up-and-coming young hotshots to set sales soaring.
But none of it matters, unless you get the basics right.
We’re talking about ecommerce fulfilment, of course. 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.
Having a third-party logistics provider (3PL) handle your ecommerce business’ order fulfilment will not only free up space and time, but will save you the costs and administrative hassle of maintaining your own storage space.
If you have 30 seconds to spare, you can compare quotes directly from leading order fulfilment providers. How?
Simply provide us with a few details about your business, and what you’re looking for in an ecommerce fulfilment provider. We’ll do the rest, putting you in touch with leading 3PL providers, who’ll be able to help grow your business.
Or, read on to find out how, and to learn a bit more about ecommerce fulfilment along the way. What is a 3PL provider, for instance, and how do you choose one? How does the process work? And more importantly, how much will it cost you?
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.
Here’s how it works.
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 fulfillment 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?
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 into.
So which 3PL providers are doing it best?
What are the best fulfilment services for small businesses in the UK?
We found Huboo, Abstrakt, Core Fulfilment, Green Fulfilment, James and James, Amazon FBA, Sprint Logistics, and ShipBob to be among the best 3PL providers for startups.
To find out more about each supplier, including expert reviews, costs, and pricing plans, head to our page on the best fulfilment services for startups in the UK. We’ll explain exactly why we recommend them, and help you decide which one your business should choose.
Alternatively, you can skip straight to the good stuff, and receive tailored quotes from the best fulfilment services for UK businesses. Simply provide us with some details about the kind of ecommerce fulfilment solution you’re looking to implement, and we’ll match you with the right suppliers for your needs.
Fulfilment services costs
These are 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.
Order fulfilment costs
These costs cover the picking and packaging of stock, and include returns handling.
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 £10 per month for 30 units, going up to £150 for 5,000 units, with customisable rates negotiable beyond that.
Do you already outsource your ecommerce fulfilment?
Is it quick?
As anyone who’s ever ordered anything online will tell you, 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!
Is it quarantine-friendly?
Sadly, this is something we all have to bear in mind since businesses were closed in March 2020. Most 3PL providers are still offering normal service across their networks of shipping carriers and fulfilment centres.
But, as we all know, COVID-19 has caused serious disruption around the world – so it’s best to check on the status of your 3PL provider’s service, before signing a contract.
Outsourcing your ecommerce fulfilment to a third-party provider is a smart way of proofing your business against the ravages of COVID-19
Is it for you?
Finding the 3PL provider to outsource your ecommerce fulfilment needs to can be tricky. You have to balance a range of costs, while choosing a provider that’s well-suited to your business’ size and sales volume – not to mention the type of stock you’ll be selling.
Tricky, indeed. So let us help.
Furnish us with a few basic details about your ecommerce business and your order fulfilment needs. We’ll ask about your current sales volume, and which sales channels you’re currently using. We’ll also require your postcode, to match you only with the 3PL providers catering to your area.
When you’re done, we’ll do just that. You’ll receive tailored quotes from leading ecommerce fulfilment providers, all primed to help your business scale with faster, more efficient processes.
The whole thing takes about 40 seconds, and it’s completely free. You just need to be based in the UK to be eligible.
What is fulfilment in ecommerce?
‘Fulfilment’ is, essentially, what it says on the tin. It’s the act of ‘fulfilling’ an order, ensuring goods are selected and packaged with care, before being delivered to the correct address.
In ecommerce, fulfilment is the whole process that takes place after a customer places an order, and before they receive their purchase.
Businesses around the world outsource their fulfilment duties to save time, free up storage space, deliver better customer service, and relieve themselves of the duties of managing (and paying) a team of staff.
What does an ecommerce fulfilment centre do?
A fulfilment centre is the physical location where a 3PL provider stores your inventory. Fulfilment centres are also where the picking and packing of goods occurs, prior to their shipment to the customer.
Is ecommerce fulfilment the same as drop shipping?
Drop shipping businesses sell products online that, when purchased, are delivered directly from the supplier to the customer. These businesses never actually own their own stock.
Drop shipping is a more hands-off approach, but has implications for your business’ reputation and quality standards. You’ll have no control, for example, over how the goods are packaged and shipped. This means orders could come late, and arrive in shoddy condition.
The profit margins are also slim, and you’ll have little – if any – control over the process.
With ecommerce fulfilment, though, you will own the stock you sell. Only you won’t have to store it – if you outsource to a 3PL provider, anyway – and you won’t be responsible for getting it packed and shipped off to your customer.