It’s not an exaggeration to say that the order fulfillment industry is the real driving force behind the incredible rise of retail and ecommerce. After all, it’s order fulfillment companies that literally deliver on the promises that online stores make. Third-party fulfillment provides crucial support for ecommerce platforms with more reliable logistics than those platforms could provide for themselves.

Let’s look at how ecommerce fulfillment performed by third-party logistics services improves the business performance of online retailers and increases the satisfaction of their customers.

What is order fulfillment?

The order fulfillment process includes all the steps necessary to deliver items ordered online. This starts with the warehouses where the goods are stored, through the pick&pack process of selecting ordered items and preparing them for shipment and then on to turning packages over to a shipping agent for final delivery to the customer.

Order fulfillment also covers areas like inventory management, storing inventory, business management, transportation logistics and platform integrations. It is a complex process that involves close cooperation with clients for whom logistics companies fulfill orders.

What is included in the order fulfillment process?

The order fulfillment process includes all steps in the order journey, from preparing a package for delivery to delivering ordered items to the end customer.

It can often even start before that, with warehousing services that store goods in safe areas in environments appropriate for the conditions required for the goods. This can involve temperature and humidity control, custom security measures, specially designed storage facilities and more.

The first step taken by logistics companies after an item is ordered is picking it from the shelf space where it is stored. Then it’s on to packing it properly to keep it in ideal condition during the rest of the delivery journey before it’s handed over to a parcel service to get to the final customers.

The order fulfillment process can also involve help with specific areas required to meet guidelines for selling on particular marketplaces, like Amazon Vendor Order or Fulfillment By Amazon. This kind of help from a fulfillment partner can be crucial to maintaining profitable relationships.

So, from handling inbound deliveries and storing items to preparing them for shipment to turning them over to shipping agents for delivery, logistics partners take care of the complete order fulfillment process so you can focus on your business.

Order fulfillment strategies

Fulfillment centers are full of strategies, processes, equipment and more that help to make everything as efficient and accurate as possible.

Warehouse management is a key part of this, ensuring that space is used as efficiently as possible. This benefits both the warehouse operators and the client as well, since they don’t have to pay for more space than is needed to store their goods.

Accuracy is an important metric in warehouse order picking and among the most common fulfillment challenges. All distribution centers are faced with the challenge of getting the right items in the right packages but this is especially difficult in ecommerce fulfillment due to the volume of shipments. The best order management systems use cutting edge technology, like Warehouse Management Systems, to use barcodes to ensure that orders are filled as accurately as possible. The industry standard is around 97% accuracy for all orders filled.

And then there’s the matter of keeping costs down. Shipping costs are the area where fulfillment providers have the most leverage and they are able to negotiate rates with shipping agents that would be well beyond the reach of individual customers. These savings are passed along to clients, making fulfillment solutions through third parties a cost-effective move.

How does order fulfillment improve your online shop logistics?

After an online store grows beyond a certain point, handling logistics becomes much more complex and demands much greater resources. When it comes to everything involved in the order fulfillment process, building, maintaining and staffing your own logistics operation on top of your sales and marketing teams creates difficult financial and practical challenges.

This is when it makes sense to outsource your logistics needs to specialists and for the same reasons you outsource anything else — when it is no longer cost effective for you to do certain tasks yourself and you can both save money and benefit from specialist experience and expertise by working with a third-party service provider.

That’s why the great majority of small businesses that start out by fulfilling their own orders reach the point where they realize they’re much better off by using the services of merchant fulfillment.

By turning your fulfillment strategy over to logistics specialists like Paragon Logistics, you’re freeing up resources that can be better invested in the core of your business, like sales & marketing, website performance, customer support, product offering and more. This helps to create the circumstances where the business can continue to grow instead of diverting resources to necessary but unproductive areas like fulfillment.

How to choose the best order fulfillment provider for your e-commerce platform

Here are some of the main areas to examine when selecting a logistics partner:

Accuracy of shipments. This shows how accurately logistics services for ecommerce fulfill their primary purpose – deliver the right product to the right customer. In massive warehouses with thousands of items, mistakes will be made even with the best technology but any logistics provider good enough for you should have an accuracy rate of at least 98%.
Integrating with CRMs and other tech tools. Digital integration allows you to access all relevant information about your shipments, returns and more. In many cases, it also means being able to get answers quickly yourself rather than relying on someone to respond to your call or email. Integration is an essential tool that lets you stay informed about things like deliveries, shipments in progress and other issues that your customers may inquire about. Simple integrations with the tools you already use make it possible to change orders, check order statuses and more.
Secure facilities. You’re turning over your inventory to someone for safekeeping — are their facilities up to your standards? You have the right to ask about how the warehouses of your logistics partner are secured and protected. Always chek which security are measures used at sites where your goods are stored. Modern ecommerce logistics warehousing should meet the highest standards.

Customer support. This is important for any service, and logistics is no exception. Ask about available resources to help you when you have a problem, question or anything else that requires support from the company.
Flexible pricing plans. Per-piece charging is a standard in the industry – you pay separately for each piece you ship. However, different ecommerce logistics providers may offer other plans that may be more appropriate for the volume of your business. It doesn’t hurt to ask and you may find that a fulfillment center is willing to be more flexible than you realized.

Order fulfillment is an essential part of ecommerce and the overall supply chain.

And it’s not just about keeping online customers happy — third-party fulfillment services are essential to growing ecommerce businesses and makes their expansion easier by taking care of important but non-core tasks. They also provide new opportunities for growth by making it easier to access foreign markets with streamlined processes for cross-border shipping.

On top of that, fulfillment operations supply a scalable model that allows you to expand your warehousing space as needed as well as the volume of packages you need to send.