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What Is eCommerce Fulfillment_Featured

What is eCommerce Fulfillment?

Whether you are a new online retailer, or you manage a long-standing company or small business looking to sell goods online, trying to under...
Julia Hecht
October 21, 2019
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Whether you are a new online retailer, or you manage a long-standing company or small business looking to sell goods online, trying to understand "what is eCommerce fulfillment?"can be a bit daunting. However, in today’s age, selling online is the best way to take your business to the next level. Your customers will appreciate the ability to buy products or services online and have them delivered to their door, and that will reflect in an increase in sales. 

What is eCommerce fulfillment? It refers to the system in which online purchases are processed and delivered to customers. While this appears simple to the customer, it actually involves a complex, multi-step process that includes: 

  • Inventory Management
  • Payment Verification
  • Distribution
  • Transportation and delivery
  • Returns Processing

Before you commit to an eCommerce store, you should understand the basics of online purchasing and the order fulfillment process. Here is what you need to know in order to get started!

Warehousing and Distribution

After an item is constructed, collected, built, or otherwise finished, it goes straight into a specialized warehouse called a distribution center to be stored. A distribution center is not only a warehouse but a full fulfillment center that can handle the process of packaging and shipping so you don’t have to. For most online retailers, owning a personal distribution center is not feasible, so the process is usually handled by an outsourced fulfillment company, to fulfill orders on behalf of your eCommerce business.

When a distribution center receives a shipment, workers unload the pallets from the truck. If there are different types of items in the same shipment, they will organize them by likeness and assign barcodes to each group, if they do not already have them. The items are then moved to shelves, and their location is marked in their computer database through the Warehouse Management System (WMS), so they can find the product again quickly once an order is placed. It allows companies to ship orders within minutes of receiving the order, which can dramatically increase the number of orders that can be fulfilled in a single day.

The distribution center WMS is also helpful for inventory management and monitoring the stock of a particular item. You would be able to see exactly how much of your product is in the warehouse, so you know when to restock their shelves to keep everything moving smoothly. It also keeps you updated on the status and location of your shipments, so your business can monitor the process in real-time.

How Online Shopping WorksHow Online Shopping Works

Assume that a customer finds your website late at night, and decides that he would like to make an order. Even though it is well after business hours, the online web server allows him to place an order anyway, without having to wait for normal operational hours like with physical retail. He selects three different items from your online store before he decides to check out. He clicks on his shopping cart, at which point he can review the order and see the cumulative cost of the products, tax, and shipping. 

Your customer checks the order for correctness, then clicks on the page that will allow him to pay for the products. Depending on your business, he may be prompted to make an account on the website to subscribe for email updates, or for the site to remember his payment info. This particular customer is no stranger to buying online, but this is his first time purchasing anything from your store, so he inputs his information into the site to make future purchases easier.

He moves on now to select his payment option, which will allow him to pick from any number of sources you allow, like credit or debit cards, gift cards, PayPal, direct from a bank account, or some other option. He decides to use his credit card, and a page or popup comes up for him to put in his card information. He fills it out, and completes the order by pressing the confirmation button that will withdraw the money from his account. He closes down his computer for the night, having taken only five minutes or so to fill everything out to shop online.
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The Verification ProcessThe Verification Process

After your customer’s order has been completed successfully, it must be verified. Payment verification is one of the most important steps in selling goods anywhere, including online. The first thing that will be checked is that the payment was made. The verification program cross-references the provided name, shipping address, and credit card number, to make sure that it is consistent and correct. This is to verify that he is the genuine owner of the card, and that it is not stolen or being used illicitly. 

When the payment information has been verified, usually within a few seconds of purchase, then the customer is shown a “thank you” popup and sent an order confirmation email. This is to make sure that he is the one that placed the order, and to ensure he still wants to go through with the purchase. He can still cancel the order at this time if he chooses. Then the order information is automatically sent to the distribution center for fulfillment.

Pick, Pack, and Ship

At this point, the customer’s order is sent to the distribution center through the WMS, which connects your online store’s orders to the distribution center database. The distribution center workers can then view the order and see what items need to be shipped to the customer. This process allows for a great degree of accuracy, and decreases the likelihood of shipping the wrong items. The warehouse workers consult the online database and find the pallets or crates with the different items. They pick one of each from the three different places, check them for imperfections or damages, then pack all three in the same box. 

This process is called Pick and Pack fulfillment service, and it can be helpful with reducing the shipping costs for deliveries. The distribution center workers then take the information and print out all the appropriate labels for the products, along with an invoice or receipt. The box is sealed, labeled, and handed off for delivery.
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What is eCommerce Fulfillment and Delivery?

As soon as the items are shipped out, the WMS automatically notifies you. You will receive regular updates on the status of the shipment and can track the route through the help of tracking information and GPS systems. This way, you can offer good customer service by keeping your customers updated on the status of their deliveries.

From the distribution center, the package moves around quite a bit before finally making it to the customer:

  1. First, the package gets loaded onto a freight truck, air carrier, railcar, or some other long-distance carrier.
  2. The carrier delivers the package all the way to a transportation terminal or post office that is closer to where the customer lives.
  3. There, the package is unloaded, and the driver updates the WMS to inform both you and the customer that the package arrived at the terminal.
  4. The package is then loaded onto a postal service delivery truck along with several other packages going to people in the same area.
  5. The delivery truck delivers the package to the customer, often directly into their hands. The WMS is updated again, and you are immediately notified of the successful delivery.

Understand How Online Shopping Works?

Still unsure of what eCommerce fulfillment is? R+L Global Logistics can answer any questions you may still have about the process. We can also outsource all of your 3PL warehouse for you. We cover a wide range of options in terms of value-added services and levels of automation for eCommerce fulfillment to find the perfect system that works for your business model.
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