Order Fulfillment Meaning: Definition & Examples
Have you been wondering what order fulfillment is and how the process works?
Perhaps you’ve just started your business selling candles, stickers, etc., and you’ve just heard a new phrase, “order fulfillment.” So, what order fulfillment meanings do you need to know to run your home business successfully.
We’ll start with a basic overview, move on to the basic kinds of order fulfillment you can expect to do, and then onto common challenges you may face while shipping products to your customers.
Order Fulfillment Meaning: A Basic Overview
What does order fulfilled mean? Out of all the business concepts you could choose from, order fulfillment is pretty self-explanatory.
Order fulfillment is composed of all actions you take after receiving an order. That means ordering materials, keeping an inventory, packing the goods you need to ship, and shipping your packages with tracking.
You can also consider returns a less common step in the order fulfillment process.
Finally, you have to think about who in the process will be fulfilling your customer’s orders. Will you, the business owner fulfill your orders? Will you outsource to a fulfillment or a distribution company? Speaking of, what’s the difference between a fulfillment center and a distribution center?
We’ll get into those questions in the next section!
How Should You Organize Your Fulfillment Strategy?
Surprisingly enough, there are many ways that you can effectively organize your order fulfillment. While it may seem like you need to work like a one-person army, we would encourage you to outsource (if only for the sake of your sanity).
The different types of order fulfillment are:
DIY Order Fulfillment
This route usually means that you’re stocking, packing, and shipping everything yourself. While this method does save you money, you’ll be working very inefficiently unless you’ve hired employees specifically for the job.
Shipping With a Fulfillment Center
A fulfillment center does all the hard work for you. They store your merchandise, and they take care of sourcing, shipping, returns, and any other headache that might pop up.
If you decide to outsource, you can also explore what a distribution center has to offer. However, instead of manufacturing your products for you, distribution centers only store, ship, and handle returns.
Both of these options are pricier than the DIY approach, but both will give you invaluable peace of mind.
Why Order Fulfillment Should Be Your #1 Priority
Let’s face it; Amazon has trained consumers to have unrealistic expectations regarding shipping times and customer service. As a small business, you have to try to match the Bezos monolith.
Consider the following:
- 43% of people won’t shop with a shop until at least a month after a bad shipping experience.
- 38% of people won’t shop there again at all.
A.K.A. you need to get your order fulfillment process locked in.
Common Fulfillment Roadblocks
If you decide to go your own way, here are several things to watch out for.
The most common sticking points for any order fulfillment business are:
- Managing inventory
- Planning for times of high demand
- Sloppy logistics
- Bad supply chain management
So, if you’re starting a new business, be sure to watch out for these sensitive areas. Just remember, if you opt for a managed solution, most of these bottlenecks will no longer be your problem!
What Order Fulfillment Method Would You Choose?
Alright, that’s the basic rundown of the order fulfillment process! What did you think? Are you ready to DIY, or will you take a managed route?
If you get stuck, why not reach out to us? We’ll be able to walk you through the pros and cons of each option and through every Order Fulfillment Meaning.