WAREHOUSE BASICS:Why Order Fulfillment is Important
Supply chain companies are working to reduce the time it takes to get an order to a customer’s home or to stores when planning their fulfillment strategy. Most thirdparty fulfillment warehouses try to offer next-day, and even same-day delivery following in Amazon’s footsteps proving the importance of fulfillment.
25% of shoppers will abandon their order due to unexpected shipping costs being added to the order just prior to checkout. 74% of online shoppers say that free shipping is one of the most important factors at checkout. 94% have taken some sort of action to qualify for free shipping. These statistics show the importance of successful order fulfillment in order to keep shipping costs down or completely free.
Having a successful ecommerce order fulfillment strategy is imperative in gaining a competitive advantage. 63% of online shoppers cite excessive shipping fees as a reason they canceled their order. This is why ecommerce fulfillment warehouses need to keep fulfillment costs down as much as possible. For online retailers in the supply chain, the average cost to fulfill an order using fulfillment centers is 70% of the average order value. Successful order fulfillment only occurs when ecommerce order fulfillment warehouses and distribution centers are able to streamline order fulfillment and keep inventory levels and costs down.
A successful order fulfillment process is as follows: Products are ordered and purchased in bulk from a wholesale or manufacturing company and are then shipped and delivered to a 3PL ecommerce fulfillment warehouse. The product is received by the ecommerce fulfillment warehouse and checked into the thirdparty logistics warehouse stock using the warehouse management software. The thirdparty fulfillment must physically have the inventory in order to start fulfilling orders. The online store relays the order to the third party logistics fulfillment provider (3PL). The 3PL Fulfillment partner then picks, packs and ships the order to the customer. Once all items in an order have been picked and packed, warehouse workers pack boxes at packing stations and prepare for product shipping. A delivery company picks up the orders from the fulfillment centers and transports the packages to their destinations. The order arrives in the customers hands and the fulfillment process is complete.
It is imperative that supply chain fulfillment companies follow best fulfillment practices in their fulfillment operations in order to be successful and compete with Amazon.