Fulfillment

What Is An Order Fulfillment Process?

Now that you understand what is fulfillment, what exactly does the process look like? Typically, this includes:

• eCommerce website and distribution center (omnichannel) integration to ensure a seamless order flow.
• Inventory management at the distribution warehouse to get insights into sales.
• Product distribution, which can be through your third-party logistics provider.
• Reverse logistics to process returns, which is pretty common in distribution services.

Fulfillment Statuses In eCommerce

As the name suggests, fulfillment statuses indicate the state of the order in question after a consumer initiates a purchase. There are five prevalent statuses, including:

• Scheduled statuses, which are common in subscription services.
• Partially fulfilled status if the customer hasn’t received the product in full.
• Fulfilled status when the distribution process is complete.
• Unfulfilled, a status that updates after the date for fulfilling a scheduled request reaches.
• On hold stage status for reserving inventory.

Order Fulfillment Vs Dropshipping

Although both of these methods intend to avail goods to the customer as seamlessly as possible, their processes are different. Order fulfillment means that manufacturers can involve the use of third-party logistics providers who keep their inventory in their warehouses and await customer requests.

On the other hand, dropshipping is that kind of delivery model where wholesalers or manufacturers supply orders directly to buyers. It can be considered a go-to strategy for retailers who buy products from manufacturers at a large discount. However, the manufacturer keeps the inventory and products until it’s time to distribute customer orders.

Best Fulfillment Strategy

The best distribution strategy entails partnering with third-party logistics providers, popularly abbreviated as 3PLs (Third-Party Logistics) in eCommerce. These are service providers that store your products in their warehouses and deliver them to the customer when they initiate the buying process.

An excellent example of an eCommerce player using this strategy is Amazon. The online retail giant uses 3PLs to cut costs, as well as enhance customer experience by shortening the delivery timeframe. This is because 3PL warehouses are often close to the customer, unlike your production plant, which might only be in one location.