Order fulfillment lies at the heart of ecommerce. No matter what kinds of products you’re selling in the market, it all comes down to how to fulfill your orders. There are many reasons why the order fulfillment process is important in ecommerce. First and foremost, it helps you prepare for the customer satisfaction that your business serves. However, there are various ecommerce fulfillment models in the market for you. It all comes down to your priorities ultimately. The choice of an ecommerce model can surely make a difference to your business. And that’s why you must know what you’re doing and whether it can yield the right results. However, don’t worry, we’ve got you covered! Here you can find the A to Z of ecommerce fulfillment models for your online business!
E-Commerce fulfillment is when the customer orders a product online, and it gets delivered to him. This supply chain requires receiving, storing the inventory, processing orders, picking up items, packing boxes, and transporting the product to the customer destination.
A fulfillment company can perform eCommerce fulfillment services. E-commerce fulfillment models are, therefore, the sum of workflows and many individual services
In-House Order Fulfillment
It is also known as a self-fulfillment order. This process occurs whenever the seller fulfills the process by himself without any involvement of a third-party or a drop shipper. This model is generally applicable to the ones who have small businesses and those who have low order quantity.
Advantages
Low cost
Full administration
Doable by everyone
Disadvantages
Time-consuming
Increasingly complex
Space allocation for inventory
Requires Order Fulfillment Software
Third-Party Fulfillment
Sellers migrate to a third-party fulfillment model when the process becomes too complex to handle on their own. From the packaging of bulk orders to shipping them one by one, it is impossible to manage the process single-handedly, sans compromising the expected time of delivery, and tarnishing the high hopes of your end-customers. Outsourcing a major chunk of the fulfillment process to a 3PL service provider enables you to manage and dedicate time for core business operations seamlessly. A 3PL provider manages everything, mainly, the inventory and eliminates your woes for the same.
Advantages
Streamlined process
Multiple Courier Partners
Discounted Shipping Rates
Dedicated Fulfillment Centre for Bulk Inventory
Disadvantages
External dependency
Poor service of 3PL provider can make or break your business reputation
Drop shipping
In this model, sellers neither manufacture nor store the products they sell on their store. The products are, instead, directly shipped by the manufacturer. When an individual places an order online, the order is either automatically or manually forwarded by the seller to the manufacturer. The manufacturer then ships the order directly to the respective end-customer.
Advantages
An easy-to-start online business
Global accessibility
A singular focus on product sales
Diverse product catalog
Less overhead costs
Fast business growth
Disadvantages
Zero Product customization
Low-quality control
Limited Scope of Branding
Singular parameter (price) for gaining competitive advantage
Complex coordination among multiple drop shippers.
Each of the three fulfillment models has its advantages and limitations. The best way to determine which fulfillment model is ideal for your business is to distinguish your business goals and understand its requirements.
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