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Ecommerce fulfillment refers to the process of receiving, processing, and delivering customer orders for products in the online retail environment. It encompasses various logistics and supply chain operations that are essential for getting products from the seller's inventory to the end consumer. Ecommerce fulfillment includes activities such as order picking and packing, inventory management, shipping, and delivery, and often includes managing returns and customer service related to the fulfillment process.
In this growing business, ensuring convenient customer access and swift product delivery is of utmost importance. In recent years, there has been a significant shift in consumer behavior, with more and more individuals opting for online shopping over traditional brick-and-mortar stores. This shift was notably accelerated by the onset of the COVID-19 pandemic and is projected to continue its rapid growth over the next half-decade.
However, for any ecommerce enterprise, whether it's a fledgling startup or a seasoned industry giant looking to capitalize on the digital wave, having robust ecommerce fulfillment services in place is imperative. For centuries, goods were exchanged in physical marketplaces where buyers and sellers converged. Yet, thanks to the capabilities offered by the Internet, businesses no longer require physical stores to peddle their wares, and customers no longer need to venture out to purchase what they desire. Now, with a simple click of a mouse, consumers can acquire virtually anything they desire from the comfort of their homes.
This article will focus on the complete ecommerce fulfillment process from the seller's perspective. Any individual can initiate their business by either producing or procuring products, which are then listed on online marketplaces such as Amazon or Flipkart, or they can establish their ecommerce website. Subsequently, they begin receiving orders from customers.
The ecommerce fulfillment process encompasses the following key activities:
Ecommerce Store and Fulfillment Center Integration: When a business transitions to online selling, it transforms into an ecommerce seller with the primary objective of creating a seamless workflow that ensures the timely and efficient fulfillment of all orders. The initial step towards achieving this is to integrate the online store with the fulfillment center. The moment an order is received, it should be swiftly relayed to the fulfillment center for further processing. Integration facilitated by warehouse management software ensures that orders flow directly to the warehouse (fulfillment center), where items are picked, packed, and shipped, thereby optimizing the fulfillment process.
Inventory Management: Maintaining an effective inventory system is essential. Upon receiving the merchandise at the fulfillment center, it undergoes a thorough inspection to identify any discrepancies and is then logged into the system as inventory. An ecommerce fulfillment center offering real-time inventory management ensures that stock is placed in inventory within a day or two of arrival. Such centers also provide sellers with demand forecasts and strategies to prevent stockouts of their most profitable products, reducing lost sales and increasing overall revenue.
Order Fulfillment: The eCommerce order fulfillment center plays a pivotal role in locating the correct products, picking, packing, and accurately labeling them when fulfilling customer orders. Maintaining a high level of accuracy is vital, as errors in picking, packing, or delivering the wrong orders can lead to customer losses. In today's world, customers expect quick delivery with minimal delays, making swift turnaround times for orders crucial.
Returns Processing (Reverse Logistics): Returns from customers are an inevitable part of ecommerce. Simplifying this process and making it convenient for customers can help build trust and drive higher sales. Efficient ecommerce fulfillment centers process returns promptly, ensuring customers receive refunds swiftly. Speedy return processing also allows returned products to be re-stocked and resold sooner. A well-established system is necessary for handling damaged returns, and excellent customer service plays a crucial role in the returns process, influencing repeat purchases and customer satisfaction.
Ecommerce fulfillment has the potential to reduce costs and increase overall sales revenue, making it a high-priority component of any business's ecommerce strategy, regardless of its size.
There are two primary approaches to executing an ecommerce fulfillment strategy:
Dashboard Insights: 3PL companies provide ecommerce sellers with customized dashboards that offer valuable insights into their sales, helping them strategize for specific regions to boost business.
Inventory Management: 3PL providers handle inventory management, allowing sellers to concentrate on marketing and branding activities, which are vital for expanding their customer base and generating higher sales.
End-to-End Fulfilment: 3PLs manage the complete ecommerce fulfillment process, handle compliance issues with vendors, process returns efficiently, and ensure orders are fulfilled successfully.
Cost Reduction: 3PLs can negotiate shipping discounts for small businesses, optimize warehouse locations based on customer demand, and significantly reduce shipping costs.
Effective Warehousing Management: A well-integrated warehousing management system streamlines ecommerce fulfillment process, ensuring timely arrivals and organized inventory placement, which leads to satisfied customers.
For both small and large businesses, leveraging the expansive network of warehouses, transportation, and shipping partners that 3PL providers offer can lead to business expansion and improved overall performance. Even larger enterprises can enhance their core activities by outsourcing ecommerce fulfillment processes, as 3PLs excel in handling these tasks efficiently, ultimately benefiting the top and bottom lines.
The foundation of the e-commerce industry lies in the expectation that businesses will offer customers a pleasurable shopping experience and smooth delivery process via online sales. These online sales can originate from various sources, including popular marketplaces such as Amazon, Flipkart, Shopify, and social media platforms like Facebook and Instagram.
The listing of products on platforms is half the work done, however, the ecommerce fulfillment and timely delivery of these products is another major aspect of a successful business.
While speedy delivery holds significant importance, there are other equally crucial factors that influence the delivery and e-commerce fulfillment process. When a customer receives their orders, it marks their initial physical interaction with the product, and this moment can leave a lasting impression about the brand. This is where packaging becomes a pivotal factor. Inferior packaging has the potential to diminish the overall experience, even when the product is of the highest quality and delivered promptly. On the other hand, appropriate packaging can pleasantly surprise the customer and likely motivate them to make repeat purchases.
Importance of Packaging:
Utilizing appropriate packaging is essential to safeguard the product from damage during transit, as this would be the most undesirable outcome. This situation is even more exasperating because it not only leads to customer dissatisfaction but also forces them to navigate the complexities of the entire return process.
Packaging serves several vital functions. The primary role is to safeguard the product within, ensuring it reaches the customer intact. It's essential to select the appropriate packaging to match the product type; shipping books in cosmetic packaging or using shoe boxes for clothing is not a suitable choice. Proper packaging minimizes return costs, enhances your bottom line, and fosters customer confidence and loyalty by delivering an improved customer experience.
The second function involves conveying the quality of your brand to customers. When a product is shipped in the right box, complete with appropriate fillers, receipts, catalogs, and other essentials, it signals the seller's dedication to offering top-quality products along with exceptional customer service.
Lastly, packaging presents an opportunity for brand promotion. Customers often repurpose boxes, keeping your brand in their thoughts. Moreover, satisfied customers tend to share their shopping experiences with friends and post reviews online. A positive experience can lead to favorable word-of-mouth and increased sales for your product.
Types of Packaging:
Companies of all sizes, SMEs, MSMEs, and Enterprises shall focus on packaging to increase their overall business by providing a top-class customer experience. Once we've emphasized the significance of packaging, it becomes equally crucial to deliberate on the most suitable packaging for each specific product.
Here are the some variety of packaging a business can consider:
Corrugated Boxes: These cardboard boxes are widely regarded as the preferred choice for most buyers and sellers in the realm of e-commerce, facilitating the transportation of goods from fulfillment centers to customers. Various types of corrugated boxes are available, and their selection influences the durability and strength of the packaging. The three primary options to consider include:
Single Wall: Featuring a single layer of protection that enhances thickness, these boxes offer sufficient protection while remaining lightweight. They are suitable for the majority of e-commerce shipping needs.
Double Wall: When dealing with heavier items, the need for extra protection arises, achieved by incorporating an additional layer of cardboard flute. However, it should be noted that this will lead to increased material and shipping costs.
Triple wall: These boxes have a high strength comparable to wood crates and are usually designed for big-ticket purchases like televisions, glass tables, and other home appliances, falling in the category of fast-moving consumer durables (FMCDs).
Paperboard Boxes: These folding cartons are both lightweight and sturdy, offering the flexibility to be customized and folded into various shapes and structures. When not in use, they can be stored flat. This versatility allows for a personalized touch in packaging. Various types of paperboard boxes, such as solid bleached and coated unbleached kraft boxes, serve as packaging solutions for a wide range of products, including frozen and wet foods, meat, bakery items, cosmetics, soft drinks, beer, and detergents.
Rigid Boxes: Rigid boxes, a variation of paperboard boxes, are exceptionally thick, with their paperboards compressed to increase thickness by three to four times. This results in a durable, rigid coating that provides enhanced protection. These boxes are generally not recommended for small e-commerce businesses due to their higher cost in both procurement and shipping. However, as a company expands, they can aspire to incorporate these sturdier boxes into their packaging options.
Poly Bags: Poly bags are thin, lightweight, and highly flexible. They are commonly used for packaging food products, magazines, and flowers. One of their advantages is their cost-effectiveness in terms of procurement and shipping. Additionally, poly bags are well-suited for products that come in multiple sizes, such as clothing items, as they can accommodate various dimensions.
Infills: In many cases, the size of the product and the size of the box used for packaging do not match precisely, potentially leading to product damage during transit. To address this issue, infill materials are utilized to provide an extra layer of protection.
The e-commerce business model is experiencing remarkable growth in India, and there is a widespread desire to participate in this flourishing narrative. But the picture is not as rosy as it looks from the outside. It is very important to learn the basics and economics of ecommerce fulfillment services else the sellers may incur heavy losses and the opportunity may fail soon.
When customers place an online product order, they receive an anticipated delivery date, which establishes expectations that are fundamental to delivering satisfactory customer service.
All e-commerce vendors strive to meet these expectations, but occasional delays in order fulfillment can occur, resulting in customers opting to cancel or return their orders.
The other reasons for returns can be:
One of the most significant challenges is the occurrence of delivery delays. In today's fast-paced consumer landscape, customers have high expectations for rapid order fulfillment. Even when they accept longer estimated delivery times, they anticipate their orders to arrive within the specified timeframe. Extensive industry research indicates a direct correlation between the duration of delivery and the likelihood of returns (RTO). Frequent delays not only result in the loss of a single sale but can also diminish overall sales due to negative reviews. Customers tend to share negative experiences more readily, especially in the era of social media, amplifying the impact.
Now, let's explore various methods for reducing RTO:
Expedited Shipping: Faster shipping leads to fewer delays, resulting in increased customer satisfaction. When customers receive the right product within the promised delivery window, they are more likely to place future orders.
Post-Order Support: It is beneficial for businesses to proactively engage with customers after they place an order. Timely notifications at various shipment stages, such as in-transit, packaging, and out for delivery, can be sent. Additionally, messages or emails should be dispatched in the event of any delays or delivery exceptions. Both of these practices contribute to a seamless and trouble-free shipping process, fostering trust between the seller and the customer and, in turn, delivering an exceptional online shopping experience.
Pin Code Verification: Delivery services heavily rely on accurate pin codes for the successful delivery of online orders. However, in a diverse country like India, the outdated pin code system can be a significant challenge for shipping carriers to ensure accurate and timely deliveries. To minimize the occurrence of wrong deliveries, where a package intended for Delhi ends up in Uttar Pradesh without customer notification, effective communication is crucial.
Reducing COD Orders: According to research by PixelMattic, Cash on Delivery (COD) is the primary mode of payment for online orders in India. Roughly 73% of all orders are COD and 40% of all these orders are returned to origin (RTO).
Some customers give incorrect phone numbers and addresses. Others change their minds after they have placed an order. These factors lead to high returns.
To mitigate these issues, the following solutions can be implemented:
Ecommerce fulfillment is the key to customer satisfaction and success for online retailers. Godamwale, with its expertise and extensive network, simplifies this process. They help businesses find warehousing and logistics solutions and streamline operations, ensuring efficient product delivery. Partnering with Godamwale makes navigating the world of online retail smoother and more customer-focused, ultimately enhancing your Ecommerce success.
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