It's no secret that with the rise of eCommerce, retail orders businesses are turning to online sales to stay afloat. But retail isn't dead; it's just changing.
Operating an eCommerce business is a lot different from running a brick-and-mortar store. With an online store, you have to consider things like retail fulfillment — getting your products to your customers in a timely and efficient manner.
If you're just getting started with your eCommerce business, you may even be wondering what retail fulfillment is and how to go about creating a process for it. Keep reading to learn more and how to create a fulfillment process for your eCommerce business, and the benefits you’ll get.
What is Fulfillment in Retail?
Retail fulfillment is the process of receiving, processing, and shipping product in response to orders received from retail customers. This can be done through a third-party fulfillment service or in-house using your staff and resources.
The fulfillment process typically involves various steps that need to be taken to get products from your warehouse to your customer's doorsteps, including:
- Receiving Order From Customers
This can be done online, over the phone, or in person.
- Processing Orders
Processing involves picking and packing the orders.
- Shipping Orders
Orders are typically shipped via UPS, FedEx, or another shipping carrier.
- Tracking Orders
Once orders are shipped, you'll need to track and trace them to ensure they are delivered on time and in good condition.
- Returns & Refunds
You'll also need to handle returns and refunds for orders that are not satisfactorily fulfilled, so be prepared to resolve customer issues.
Creating a Retail Fulfillment Process
Now that you know what retail fulfillment is, it's time to create a process for it. Here's how to do that:
1. Define Your Goals
The first step in creating a fulfillment process is to define your goals. What do you want to achieve with your process? Do you want to minimize costs? Improve customer satisfaction? Increase efficiency?
Other goals you might consider could have to do with delivery times and high-quality customer service. If you wish to partner with a retail fulfillment provider, having the right goals in mind can help.
Once you've defined your goals, you can start to put together a plan to achieve them. Several considerations can help you develop the ultimate retail order fulfillment strategy, including:
- Managing inventory
- Managing customer orders
- How you’ll ship products to customers.
- How you’ll handle customer service inquiries.
2. Choose a Fulfillment Method
The next step is to choose a fulfillment method. There are two main options for fulfillment. They are “in-house” and “third-party”.
- In-House Fulfillment
Consists of handling the receiving, processing, and shipping of orders yourself. This will give you more control over inventory and can be done with your staff and resources.
- Third-Party Fulfillment
Using a fulfillment company to handle the receiving, processing, and shipping of orders for you. This can be a good option if you don't have the time, resources, or staff to handle fulfillment in-house. You’ll also enjoy improved efficiency and cost savings.
3. Select Your Fulfillment Partners
If you've chosen to use a third-party fulfillment company, the next step is to select your fulfillment partners. There are a few factors to consider when choosing a fulfillment company, such as cost, shipping times, order accuracy, and customer service.
You want to compare the costs of different fulfillment companies so you can find a company that offers competitive rates. Shipping times are also important to consider because you'll want to ensure your orders are delivered promptly.
You’ll also want to ensure your orders are filled accurately so that the right products are shipped to the right customers. Doing so will enhance your reputation while reducing costs associated with returns and canceled orders.
As for customer service, you'll want to make sure that the fulfillment partner you choose has a good reputation. This way, you can be confident that your customers will be taken care of if any problems arise with their orders.
The right fulfillment partner will also help you with the logistics of order management and inventory monitoring.
It's important to take your time when selecting a fulfillment company and to choose one that you feel confident will meet your needs.
4. Set up Your Systems & Processes
Once you've chosen your fulfillment method and partners, it's time to set up your systems and processes. This includes creating packing slips, setting up shipping labels, and choosing a returns process.
You'll also need to train your staff on how to use your new retail fulfillment process. Make sure they know what's expected of them, and that they understand your goals for the process.
5. Test & Revise Your Process
After you've set up your retail fulfillment process, it's important to test it out and make sure it's working the way you want it to. Try processing a few orders yourself, or have your staff process some orders.
Once you've tested your process, you can revise it as needed. Make sure to document any changes, so everyone is on the same page.
6. Monitor Your Process
Once you've implemented your retail chain fulfillment process, it's important to monitor it and ensure it's running smoothly. There are a few things you can do to monitor your processes, such as tracking shipping times and order accuracy.
You should also track satisfaction levels and resolve any issues that arise.
By following these steps, you can create a retail fulfillment process that will help you meet your goals. With a well-designed process, you can improve your efficiency, reduce costs, and improve customer satisfaction.
Remember, monitoring should be an ongoing process, so it can keep order fulfillment in supply chain management as efficient and effective as possible. That way, you ensure orders are processed and fulfilled in a timely fashion, and inventory levels are optimal.
What is Fulfillment Activity?
Fulfillment activity is the process of receiving, processing, and shipping orders. A fulfillment company usually handles fulfillment activity, but you can also do it in-house. Typical fulfillment activities include creating packing slips, setting up shipping labels, and choosing a returns process.
Creating Packing Slips
When an order is placed, the first thing that needs to be done is to generate a packing slip. A packing slip is a document that lists the items being shipped, as well as the addresses of the sender and recipient.
Packing slips can be generated manually or through an order management system.
Creating Shipping Labels
After the packing slip has been generated, the next step is to create a shipping label. Shipping labels include the addresses of the sender and recipient, as well as a barcode used to track the package.
Shipping labels can be created by an order management system or manually.
Choosing a Returns Process
It's important to choose a simple and efficient returns process. There are a few factors to consider when choosing a returns process, such as the cost of return shipping and the time it takes for a refund to be processed.
You should also consider how returns will be handled if you are using a fulfillment company. For instance, partnering with ShipNetwork will save you time as the company takes care of everything from order fulfillment to shipping and returns.
How Does the Retail Fulfillment Process Work?
The fulfillment process typically takes place in one or more distribution centers. It involves inventory monitoring, supply chain fulfillment management, order processing, and elements such as quality control. Customer support is also necessary for clients who might need to make product returns or exchanges, or report problems.
When using a fulfillment partner, such as ShipNetwork, the fulfillment process starts when you upload stock-keeping units (SKUs) to SmartFill. An advanced shipping notice (ASN) with details about your delivery is then created and sent to you. Afterward, inventory is sent to the designated fulfillment centers where the following steps occur:
1. Receiving Inventory
Inventory arrives at the distribution center from suppliers. It is then checked for accuracy and inspected for quality. The inventory must also be counted to ensure the correct amount was received. Then, it's stored in the fulfillment center until it is needed.
Bar codes or SKUs are used in both the receiving and storage processes, as well as to later retrieve the goods from storage.
2. Storing Inventory
Inventory received in the fulfillment center or warehouse is either disbursed immediately or sent to storage. Inventory is ideally stored in a way that optimizes space and makes it easy to retrieve when needed. For example, fast-moving items might be stored in an easily accessible location, while slow-moving items might be stored in a less accessible location.
Additionally, it's ideal to store inventory long enough to organize its distribution for existing sales, rather than holding it for future sales. SKUs are handy in inventory storage since they help identify and manage inventory.
3. Processing Orders
Once clients place an order in your shopping cart system, it's received in the nearest fulfillment center, where it must be processed. Order processing includes the selection of the item, packing, and preparing it for shipping.
Fulfillment centers can use either a picking team or automated robots to select items according to the packing slip's instructions. Packing slips usually contain specific information, which could be a list of item SKUs, product sizes, colors, locations, and several units.
A packing team or automated fulfillment robots must then pack newly received customer orders. The goal is usually to achieve the lowest practical dimensional weight, calculated by multiplying package length by width by height.
Optimizing dimensional weight is important because space is at a premium in delivery trucks.
Additionally, return shipping materials and labels are typically included when packing. They make it convenient for customers who may wish to later exchange or return an item, or ask for a refund.
Once packed, the order is sent to a shipping node or transportation channel for onward forwarding to the customer. If the right pick and pack solutions have been employed, fulfillment will be easier, and freight costs cheaper.
Shipping solutions such as SmartFreight can help an eCommerce business navigate complex government regulations, get the best rates, and negotiate with carriers.
Examples of major carriers with which ShipNetwork has established relationships include the United States Postal Services (USPS), DHL, UPS, and First Mile.
It's important to meet the packaging requirements outlined by the carrier. Failure to do so could lead to delayed shipments if carriers refuse to accept the order.
The retail fulfillment process ends when customers finally receive their orders. Order tracking can be used to monitor the progress of an order and provide customers with updates.
Giving customers a tracking order can reduce calls made to your customer service desk from those wondering about their order's status.
7. Processing Returns
According to a National Retail Federation study, 20.8% of online purchases of shoppers have returned an item they bought online.
This suggests that retail businesses must have a return process in place to accommodate customers who have changed their minds about a purchase or received damaged goods.
The returns process usually starts when customers request a return authorization from the retail business.
Once authorized, customers typically have to return the item within a certain number of days, and in some cases, pay a return shipping fee.
Returns are then received at the nearest fulfillment center, where they must be processed and the inventory restocked.
Why is Retail Fulfillment Important?
Fulfillment in retail is important because it helps you meet your goals. By having a well-designed retail order fulfillment process, you can improve your efficiency, reduce costs, and improve customer satisfaction.
A retail fulfillment process can help you:
- Improve Your Efficiency
Can help streamline your operations and improve your efficiency.
- Reduce Costs
Save money on shipping and other costs associated with fulfilling orders.
- Improve Customer Satisfaction
Improve satisfaction by ensuring orders are accurate and shipped promptly.
Why Outsource Retail Fulfillment & What Can You Expect
The modern-day consumer is used to receiving their orders quickly and correctly. To meet these expectations, eCommerce businesses need a retail fulfillment process that is accurate, efficient, and cost-effective.
Remember, projections suggest that by 2040, the majority (95%) of consumer purchases will happen in the eCommerce environment. This is an astronomical rise, given that overall online sales were just 18% in 2018.
Outsourcing retail fulfillment is a great option for businesses that want to focus on their core competencies and leave the fulfillment process to experts. When you outsource retail fulfillment, you can expect:
- Improved Accuracy
Your fulfillment provider will have a dedicated team of experts overseeing your account, with fulfillment accuracy improving as a result.
- Reduced Costs
When you outsource retail fulfillment, you can expect reduced costs as your fulfillment provider will have economies of scale that allow them to pass on savings to you.
- Improved Efficiency
When you outsource retail fulfillment, you can expect improved efficiency as your fulfillment provider will have the latest technology and tools to streamline your operations.
An example of the technological tools from which you can benefit include the order-delivery platform SmartSuite by ShipNetwork (formerly Rakuten Super Logistics).
SmartSuite incorporates SmartFill 2.0, which is a cloud-based fulfillment management system. It also has the SmartFreight component, which handles domestic and international freight needs from pick up to drop off.
Lastly, SmartSuite offers Xparcel Ground service, which is a shipping option designed to shop from multiple carriers and select the lowest but most efficient in real-time. This improves shop fulfillment by reducing clients' shipping costs.
Benefits of Retail Fulfillment Services
When you partner with a retail fulfillment partner such as ShipNetwork, your business stands to gain several benefits, including:
- Saving time
Reach 98% of U.S. locations in one to two business days. You also get to enjoy guaranteed order processing in one business day or less.
- Seamless Integration
You can maximize your shipping power by having your shopping cart platforms and online marketplaces integrated with SmartFill. Also, mitigate costly carrier rates thanks to ShipNetwork’s strategic eCommerce shipping partners.
- Improved Customer Service
Offer improved customer service by providing faster shipping times and tracking information. Your customers will receive the right items faster.
- Enhanced Brand Reputation
Retail fulfillment enhances your reputation by providing clients with assurances that there’s a dedicated support team should any issues arise.
- Reduced Costs
Retail fulfillment can help businesses reduce their shipping and inventory costs.
If your retail business is looking to stay ahead of the curve, retail fulfillment is a great opportunity to consider. By offering retail fulfillment, you can increase sales, improve customer service, and reduce costs.
Your eCommerce business will greatly benefit from lower shipping costs and faster delivery times when it ships from multiple fulfillment centers.
Request a quote from ShipNetwork today to get a shipping analysis, as well as smarter and faster retail fulfillment solutions.
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