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With the prevalence of ecommerce stores increasing, both for "Business to Consumer" (B2C) and "Business to Business" (B2B) industries, the speed at which customers expect to receive their products has also increased.
Order fulfillment is a strategy that you can add to your B2B ecommerce supply chain to improve your bottom line and grow your business without expanding in-house resources exponentially. In fact, 91 percent of consumers will leave your site if you don’t offer fast and free shipping. If you are just starting an ecommerce business, this post will help you understand order fulfillment and its relationship to customer experience.
Order fulfillment refers to the process of storing inventory, packing products and shipping ecommerce orders to customers. Order fulfillment can help businesses to easily and quickly get products to customers. For both B2B and B2C companies, the fulfillment process begins after a customer has completed their ecommerce order.
Myth: Fulfillment should be close to your business.
Reality: Fulfillment (whether a fulfillment company or not) should be close to your customers, not necessarily to your business.
Myth: Having fulfillment locations in rural areas will save money.
Reality: This is not necessarily the case if it is not close to your customer.
Ecommerce order fulfillment is just as important for B2B businesses as for B2C. For B2B, bulk quantities of products are shipped to retailers (whether they be big-box like Walmart or smaller stores). Fulfillment is not only a component of inventory management strategy, but also of customer experience strategy with the ultimate goal of customer loyalty.
First, have your ecommerce and supply chain strategy in place. Use software like Inxeption, that helps you to get organized, sell, ship, and manage orders easily. Once these things are in place, determine based on your understanding of your customers and their locations, and determine where you want your fulfillment to be.
You want to use software or services that integrate with ecommerce platforms or online marketplaces that you currently use, so you can manage your full supply chain in one place. This makes it easier to track information and where products are en route to customer. It also helps the merchant to understand supply levels and properly plan.
Utilize an ecommerce software that enables you to transact in the way that you need. For example, if you are shipping products in bulk that require signatures for purchase orders or other contracts, it would make sense to use a platform that allows for CPQ, quoting and signing functionality in cart.
Location matters when it comes to fulfillment. You want your product to be as close to your customers as possible. Even if you don’t have a brick and mortar location and only sell via online channels, you know where the majority of your customers are coming from based on your marketing strategy and analytics (if you don’t, think about an ecommerce software with integrated marketing data). You want to put your fulfillment in a place that will serve the majority of where your customers are coming from and provide the following benefits:
Use software that allows for the best possible shipping and logistics services for your customers. Customers expect fast shipping that is also affordable, and you can do this partially by utilizing fulfillment, but also with a software that accommodates for affordable and integrated logistics when it comes to your ecommerce. Offering fast or free shipping to customers decreases cart abandonment rates substantially.
Also known as self fulfillment, this is where the merchant fulfills orders internally without the help of a 3PL or dropshipper. It is common for smaller or newer businesses to fulfill in house, or bigger B2B businesses that have their own warehouses or operations that enable them to do the fulfillment themselves.
Ask yourself, “What do I need as a large or growing business to fulfill orders internally?” You’ll quickly identify warehouse space, staff to manage the warehouse facility, necessary equipment to handle boxing, packaging, moving products, warehouse management software/services and more. You will need liability insurance and workers compensation for warehouse staffers, amongst other considerations.
Third party (3PL) fulfillment
Why would you use a 3PL? You’ve run out of space, time and resources to pick, pack and ship your products to customers efficiently.
What does a 3PL do? A 3PL handles fulfillment on your behalf. They get inventory from the manufacturer, pack and ship products to customers when an order is processed, managing returns (in some regard, depending on your policy).
When certain challenges are arising in your business, you might want to consider fulfillment for your products. These might include the following:
It’s no surprise that logistics and fulfillment are intrinsically linked. You fulfill orders so you can ship them. It’s important to make sure you are using a logistics provider that works for your specific needs, especially if you are a B2B ecommerce business.
Having a system that integrates each component of your supply chain can make business processes more seamless and can help you focus on the parts of your business that manage most. Want to see how having a one stop shop for commerce and logistics can help you? You can do it all with Inxeption.