What are order fulfillment on Shopify and its effective strategies for sellers?

Overview

Order fulfillment in Shopify is a great way to show how people get the product they paid for. It’s one of the final and most important stages of the selling process, and an unsatisfactorily planned fulfillment strategy could lead to losing customers. Before, an eCommerce brand offering free shipping was enough to have a benefit on fulfillment strategy. But expectations from customers are much large than before, and that’s no longer enough. A powerful order fulfillment process makes it easier to meet those expectations. 

What is Shopify order fulfillment?

The order fulfillment process in Shopify includes all activities between placing and shipping an order. You might hear about them: inventory, packing, and labeling the package in preparation for shipment.

Why is Shopify fulfillment so important?

• Lower costs: Corporate with an external fulfillment service provider to handle all processes can often reduce your shipping and operational costs.
• Improved customer service: your customers’ orders are fulfilled exactly, with the products ordered and within a consistent time frame. Failing on that will lead to a bad customer experience and negatively impact your business. 
• The ability to scale: Having a transparent process will save time while allowing you to focus more on other business development and extension, especially if you hire or automatically order fulfillment. 

• Optimized inventory flow: Shopify order fulfillment provides impressive visibility into important inventory flow phases like SKU storage and Shipment method. 
• Increasing revenue streams: By taking advantage of Shopify order fulfillment for your own store, you can make sure product availability and on-time deliveries meet customer expectations (and keep your revenue more consistent).
• Greater customer satisfaction: With the previous points, one of the most extraordinary advantages of Shopify order fulfillment is that it promotes customer satisfaction with every sale.

How does Shopify fulfillment work?

Order fulfillment processes are not exactly the same together, it depends on the type of strategy you chose. But in general, it’ll include 6 steps as below: 

1. You receive goods from your suppliers and store it in a warehouse, stockroom, or storage facility.
2. A customer proceeds with an online order via your eCommerce store.
3. The fulfillment order team receives the order details.
4. They will pick and pack the order, and attach the shipping label and returns form. 
5. The package is shipped to the customer’s address.
6. If a return is established, the customer uses the returns label to post the package back to the warehouse. At this step, there is a team that inspects the product and processes a return (if it qualifies for one).

Shopify order fulfillment options

Merchant fulfillment

Recommendations for Small businesses with low revenue volumes.

This fulfillment happens when you complete the order process by yourself. Also known as in-house fulfillment, it’s one of the most popular options: around 90% of all retail orders had at least some store take part in their implementation.

Pros:

• No fulfillment fees: only have shipping costs.
• Total control: over the unboxing experience, since your team will have packed the order. (Some third-party companies discourage custom packaging.)

Cons:

• This task takes a long time: needs to be completed by skilled workers. 
• Shipping can be more expensive because you can’t take discounted rates given to third-party suppliers. 
• Human error is common. Sometimes you’ve to accept it and adjust. Maybe you don’t have warehousing technology to pick up and pack all your orders. 

Dropshipping

Recommendations for Start-up business on a budget.

Pros:

• You can start your own business without a budget. You don’t need to pay for advertising and pay storage fees for it to sit in a warehouse. 
• Backlog management is getting from your plate, all items are purchased only when customers pay for them.
• You’ll have time to work on other areas of your business, such as marketing.

Cons:

No control over the unboxing experience.

• Shipping delays are common because providers are often completing thousands of orders per day. Unlucky, your order is being delayed, that’s common. 

Third-party fulfillment 

Recommendations for Growing eCommerce businesses with increasing revenue volume. 

Third-party fulfillment also known as a third-party logistics service takes the entire order process off your plate. They handle printing bank slips to shipping to your customer no need for your mediation.

Pros:

• Help you save time and focus on other tasks.
• Hiring seasonal logistics staff during busy periods is unnecessary. 

• Increasing the fulfillment speeds when many order fulfillment companies use automation and warehousing technology at the same time to pick, pack, and ship.

• Limit your backlog by stocking goods in the closest warehouse to your customer addresses.

Cons:

• The calculated cost: Normally pick-and-pack fee for a single item is $3.13, even more than half of the businesses’ fulfillment costs have changed in the past year. 

• Many third-party companies discourage custom packaging, it maybe causes of making harder to customize the unboxing experience.

Tips to Improve Order Fulfillment

Companies managing should plan ahead for a smooth order fulfillment process that’s automatic where possible. Applying for fully-featured ERP support you track orders, backlog, and shipments from end-to-end for enhanced visibility, amazing customer and employee experience, and ideally maximized total incomes.

1. Choose the best order fulfillment ERP system:

Start by choosing a system that offers end-to-end tracking for orders, inventory, and all other aspects of your business. An ERP features helpful modules that help you and your team control the entire business, including the order process, finances, and human resources. Through one secure, cloud-based system that’s always accessible. 

2. Combine with suppliers and vendors:

Modern ERP systems allow you to combine directly with suppliers and vendors. For instance, your entire restocking and accounts outstanding process can combine together and proceed without human interposition. Arrange your rules, connect with your vendors and suppliers, and your systems can control everything from there. 

3. Set up customer expectations clearly:

Set up clear expectations when receiving an order, then try to meet those expectations. If anything can be delayed, inform your customer about the issue as soon as possible, to avoid being disappointed.

4. Optimize inventory management:

If you hold too small stock, you risk running out of stock and coming up with lack of a customer orders. A quality inventory management module in your ERP is extremely helpful for this task.

5. Select the correct order-picking strategy:

When an order establishes, maybe you don’t have a group of automated warehouse robots to pick up and package orders. Common order-picking strategies include single-order picking, where orders are picked at the same time, and zone and bunch order picking. Multiple orders are collected at once, and other strategies are intended to limit moving time and expand picking speed.

6. Treat your shipper as an important partner:

Many organizations play a key role: Don’t consider your shipper like any other vendor. Spend time and effort to accommodate the best deal and shipment schedule for your order needs, and work with your shipper to avoid delays.

7. Arrange for customer service and returns:

Mistakes, defects, and delays happen you can’t avoid, whether the issue was your fault, your customer’s, or a vendor’s, you should prepare to make it right.

Conclusion

Fulfillment orders have an important role increasingly now a day. It does not only support you optimize the budget but also increases the satisfaction of customers. Besides, it has many options right for your own store. However, if you only search on the internet then you intend to proceed with a limited budget, that too dangerous. Why don’t you share your idea with us – ONEXT DIGITAL? I’m sure you will receive helpful solutions. How would be great! Please don’t hesitate to contact us!