Tag: order fulfillment process

Best Order Fulfillment Strategies for E-Commerce Businesses

Order fulfillment Process

Order fulfillment is an important phase in a successful e-commerce business, first you fulfill then it is the time you meet your customers and finish the transaction, and if you are new to the business then you might have not enough idea about how an order placed online reaches your doorstep. In the phase of order fulfillment, you create a lifelong relationship with the customer.

Order fulfillment services are third-party vendors such as online sellers which fulfill an order for other companies. Third-party vendor’s involvement reduces infrastructure and cost as well improve the efficiency, Your order fulfillment strategy determines how quickly and easily you can scale your business. As technology is evolving customer is expecting better and faster deliveries, the idea of waiting for a package for days is gone to the oblivion now.

Before knowing the popular order fulfillment strategies let’s look at the stages involved in order fulfillment.

1. Receiving- To fulfill the orders you must need an inventory and if you are filling orders-in hose, you’ll be manufacturing the products yourself.

2. Inventory Storage – Proper inventory storage is the key, employees must be able to find the products, pick and pack them, and get products ready for shipping as quickly as possible.

3. Processing- Order processing involves order being submitted and then process of picking and packing as quickly and efficiently as possible.

4. Picking and Packing- Once the order is submitted the order is packed and ready to be shipped.

5. Shipping- Order is packed and ready to send, it shipped to the customer.

6. Returns- If the customer pulls up a return request all the steps will be done in reverse order, from picking and packing to storing it into inventory.

Popular order fulfillment strategies.

Thanks to the ever-evolving technology, there are multiple options to choose from, all you have to do is just choose the right strategy, which depends upon your order volume, products and if you can do all that or want someone else to do it for you.

Direct Fulfillment

Direct/Self or In-house order fulfillment also known as self-fulfillment, this strategy is the starting point in small businesses, thought large corporations also use it.
This type of fulfillment occurs when the trader has complete control over the order fulfillment process, trader completes each step of the fulfillment process by going door to door himself, this demands effort and lots of attention.

Advantages for Direct Fulfilment

1. Offers total control over order fulfillment processes.
2. While starting small when you don’t have a budget for third party vendors you can rely on this because you are only paying for shipping.
3. You don’t need much knowledge to complete this order fulfillment process.
Np negotiations as large corporations shipping through third-party vendors can become a competitive advantage.

Disadvantages of Direct Fulfillment

1. It takes lots of time and energy and requires constant attention.
2. Limited options for shipping to customers.
3. Packaging of all the products will take the time that you can direct toward other things.

Dropshipping

When a customer places an order you pay for fulfillment as the order comes, merchant purchases a specific item their customers order from manufactures who send it to the customer, after shipping you are charged for the product.
You don’t need to have a warehouse for this type of strategy, this works if you are planning to sell products from numerous brands.

Advantages of Dropshipping

1. Easy to scale.
2. No need for a warehouse.
3. Easily affordable.
4. More products and faster.

Disadvantages of Dropshipping

1. No option for customization.
2. No control over warehouse-like direct fulfillment.
3. You can only buy from companies with drop-ship capability.

Third part Outsourced fulfillment/3PL

Third-party Logistics involves the third-party providers, involving handling the detail over to third parties. Third parties provide solutions regarding warehouses, packing, and distribution.
When the customer places an order it goes to third-party provides which then handles the order form their location to shipping to customer. The third-party involves steps mentioned above such as receiving, picking, packing, return and quality control.

Advantages of 3PL

1. No investment required for warehouse space.
2. It provides data to track the shipment.
3. Includes manpower as more men are committed.

Disadvantages of 3PL

1. Reduced control over products is packed and shipped.
2. Additional costs for fulfilments, storage, etc.
3. You are not the only client, so your order can be shared with others at the warehouse.

Tenaxx Logistics provides you all warehousing and transportation management services. Contact us today for more information and updates.

ADVANTAGES AND DISADVANTAGES OF DROP SHIPPING

Drop-Shipping

The dropshipping process is different from the traditional fulfillment process in that the merchants don’t have to keep the inventory. Instead, the vendor represents the inventory from your side. You only make a purchase from them when any customer place the order for some items and you sell them through the dropshipping process.
Dropshipping allows you to sell items without actually involving in the handling of inventory and shipping the items to the customer by yourself. This becomes a very flexible and time-saving order fulfillment process for merchants.
To know more about drop shipping visit

The Advantages of Drop Shipping

There are numerous advantages to drop-shipping your products, which include:

1. Not keeping an inventory on-hand:

One of the main advantages of using drop shipping is that you don’t need to keep the inventory on-hand. You only buy the inventory from your vendor when you sell something to the customer, hence you do not need to worry about managing the inventory.

2. No storage space required:

With the dropshipping process, you don’t need storage space as you don’t keep the inventory on-hand. Hence, your business will have little to no overhead costs of managing and renting the storage space.

3. Grow more business:

When you store and sell your own inventory, there can be many limitations, such as limited stock of goods and limited shipping location. But, with drop shipping, you can sell a wide variety of goods which represents by various vendors as well as you can ship the items to many locations. Thus, in this way you can grow more business.

4. Unlimited Products:

Dropshipping gives you the flexibility to sell those items which are not present in-store or kept in local inventory. It appears to your customers that they have unlimited product options. This is very useful for great customer experience.

All of these benefits are great. But, before you get ahead of yourself and start to drop shipping, you need to know about the other side of this fulfillment process.

The Disadvantages of Drop Shipping

Dropshipping has some considerable issues that you need to take into account before choosing a dropshipping option.

1. Low product margins:

As the product directly ships by the vendor to the customer without the involvement of the merchant selling the products, the markup on the price keeps on increasing. It’s how vendors make their profit in this business strategy. Although, in a competitive market, you have to continually lower your price to compete. This might can results in loss sometimes as you have to sell at very low margins.

2. Finding the right vendor:

Finding and creating good business relationships with the right vendors with wide product variety and right prices can be difficult. As dropshipping becomes more feasible for more vendors, you’re going to have to scan through a lot of posing wholesalers offering “wholesale” prices.

3. Relying on vendors:

The best and worst part of dropshipping is that you rely on your vendors to always have products in stock and to make correct shipments. But, what if they don’t have an item in stock that you just sold to your customer? Or, their shipment doesn’t reach the customer on time? Who will be responsible for answering the customers? As the vendors are completely invisible to your customers, hence it is your responsibility to handle these situations and cover the costs when you need to.

4. Using multiple vendors:

Merchants will often make deals with multiple vendors to get a wide range of products, ensure the products are in stock and select the best prices for different products, and ship from the nearest location to customers. It is not as easy as it looks, managing multiple vendors can be very complex. If you don’t do it right, it can cost you your business.

5. Shipping costs:

Keep a check on shipping costs when you’re using multiple vendors to ship different parts of one order, or product. If not handled carefully, dropshipping isn’t cost-effective for you anymore.
Dropshipping if done correctly can make a big difference in your business and its bottom line. But, if not handled well, it can cost you your business.

The Bottom Line

The benefits of drop shipping make it an attractive and flexible order fulfillment solution. But, there’s also a bad side of drop shipping that you must take into account. Ultimately, the decision on whether or not dropshipping is the best choice for you depends overall on your business type and requirement.

Contact Tenaxx Logistics

Want to find out more about our order fulfillment services? Contact Tenaxx Logistics today by filling out our online form or call us at 519-260-2738 and let us know what your business requirement. We’ll talk to you about possible shipping requirements and give you an accurate estimate for the services you need.

Check out these articles for further reading:
What is Drop Shipping?
Common Order Fulfillment Issues and How To Fix Them

What is Drop Shipping?

What is Drop Shipping?

In the dropshipping process, the online seller doesn’t keep the products it sells in stock. Instead, when a customer buys some items from a store, the store purchases the item from a third party and has it shipped directly to the end customer. As a result, the merchant never handles the products it sells.

The major difference between dropshipping and the standard retail method is that the selling merchant doesn’t keep the products in inventory. The merchant purchases inventory when required from a third party – usually a wholesaler or manufacturer – to fulfill customers’ orders.

In this setup, the seller doesn’t need to invest in purchasing inventory for its e-commerce business. In this case, the manufacturer will charge the seller a higher wholesale price for each product, in exchange for handling the warehouse and shipping individual orders rather than shipping to the seller in bulk. Although the e-commerce seller does not any product in stock, on the seller’s website it looks as if they are selling their own products. The seller handles everything from the marketing of the products and to the customer handling, while the manufacturer provides warehouse and shipping services.

RELATED:BENEFITS OF OUTSOURCING LOGISTICS SERVICES TO THIRD-PARTY COMPANIES

The process for dropshipping is as follows:

1. Show items offered by one or more drop shipping companies in your online store.
2. A customer chooses the product and places an order in your store.
3. You forward the order to the manufacturer for handling the shipment of the order to the customer.
4. The manufacturer processes the order and ships it directly to your customer.

With this kind of retail fulfillment method, the seller doesn’t need to purchase the inventory and keeps it in the stock. This is a key feature of using the dropshipping process for e-commerce businesses.
Drop Shipping is a great option for sellers who do not have enough capital to buy their own inventory, or who don’t want to handle warehouse and logistics related work. You can also place a wider selection of products using drop shipping for your business. It can also be a low-risk way to test new products before you bring them into inventory.

Choose Drop Shipping or Third-Party Fulfillment for Your Ecommerce Business?

Dropshipping and third-party fulfillment are different e-commerce, business models. Both involve an outsourced order fulfillment process, but the services provided by drop shippers and fulfillment centers are quite different.
Dropshipping and third-party fulfillment fulfill different needs for e-commerce sellers. Your business may choose to outsource order fulfillment to both of these types of providers at different times, depending on your business needs.

Call Tenaxx Logistics for Your Order Fulfillment Services

Want to find out more about our order fulfillment services? Contact Tenaxx Logistics today by filling out our online form or call us at 519-260-2738 and let us know what your business requirement. We’ll talk to you about possible shipping requirements and give you an accurate estimate for the services you need.