Operating an eCommerce business can be very rewarding, but building it can be pretty challenging. Product development, advertising, servicing customer needs; there’s a lot that needs to be attended to. While all of these elements are important, there’s one that may trump them all: order fulfillment; after all, if you need to deliver the products your customers ordered in a timely manner – and make sure the right products are being delivered – otherwise all of the development and marketing you’ve invested in will be for naught, and you certainly won’t be able to meet the needs of your shoppers.
The bottom line is this: effective order fulfilment can make or break your eCommerce business. The delivery of the goods you offer is leaves a lasting impression on your customers; after all, they want to get the right products, and they want them to be delivered in a timely manner. If you get it right, you can amass great success, but if you get it wrong, you may end up having to shutter your online storefront. That’s why it’s so important to choose the right order fulfillment strategy; but, what’s best for some eCommerce businesses may not work for others. So, how do you know which strategy you should choose? Start by gaining an understanding of the different types of product fulfillment strategies; once you know what your options are, you can choose a strategy that will align with your unique needs.
Self-Fulfillment
Self-fulfillment, or in-house order fulfillment, occurs when you, the merchant, handles all of the aspects of order fulfillment yourself. You store the products you offer, a customer purchases a product, and you locate the item that was ordered, pack it, and ship it out.
This fulfillment strategy is pretty simple and straightforward. Many business owners like it because it gives them complete control of the shipping process; however, as your operation grows, it may not be the most effective option. The cost of in-house order fulfillment can become exorbitant, especially when you have a large inventory that needs to be stored and shipped; and, quality control can falter. For these reasons, self-fulfillment is usually the best option for eCommerce stores that are just starting out, who don’t store a large inventory, and who aren’t shipping out a tremendous amount of product.
Third-Party Order Fulfillment
Another option is to outsource shipping to a professional, third-party order fulfillment service. For business owners that have a large inventory of goods that need to be stored and are selling a high-volume of products, outsourcing the task is usually a better option. It helps to speed up the shipping process, ensures quality control, and cuts back on costs.
With third-party fulfillment, the company you’ve hired will handle all aspects of shipping, including receiving, picking, packing, labeling, and sending out orders. They’ll also process any returns that need to be made, communicate with customers, and make sure your stock is replenished and safely stored.
Dropshipping
Lastly, there’s dropshipping. With this strategy, the merchant (you) does not possess the products that you sell; rather, goods are made, stored, and sent out directly by the manufacturer. When shoppers place an order at your eCommerce store, it’s sent to the manufacturer, and the manufacturer than picks, packs, and ships the product.
Of all three options, dropshipping requires the least amount of merchant involvement; you just need to focus on making sales. Additionally, minimal development is required, and you can have access to a larger amount of products at a faster rate of speed. Dropshipping is also an affordable option and gives you the chance to focus on other aspects of your business. The downside, however, is that there’s virtually no quality control, you can’t customize shipping, and developing your brand with this shipping process is a lot harder.