Order fulfillment can be a very complex undertaking that encompasses every activity that is involved in shipping goods to customers. It starts with receiving shipments and entails sorting stock, shelving inventory for picking, picking orders, checking orders for accuracy, labeling packages for shipment before sending them out, and tracking the packages to their final destination.
There are four main ways for small businesses to approach order fulfillment: fulfilling orders in-house, outsourcing the process, using drop shipping, or coming up with a hybrid order fulfillment solution. Here is a more detailed look at these approaches.
Many e-commerce businesses start with in-house fulfillment operations. Even if they end up expanding and needing outside help in the future, it’s a great way to come to terms with this important aspect of selling online. Fledgling operations might use their garage, a retail stockroom, or a local storage unit for this purpose. However, it’s important to keep in mind that growth may come quickly, and more space and staff will be needed.
Use drop shipping
When you use drop shipping, you have suppliers taking care of all the order fulfillment details for you right from their warehouse. You won’t have to pay for stock until the sale is made. This is a great way to extend your sales capacity without adding much in the way of cost. It’s especially useful for small businesses that fulfill large orders, sell oversized items, sell goods in case quantities, or wish to extend their product collection without taking on additional inventory costs. This economical option lets you save by not only having to purchase the stock until it’s been ordered by customers but also because you’ll avoid having to pay for inventory storage or inbound shipping
Use a third-party logistics fulfillment partner
If you don’t have the time or desire to deal with inventory management and processing and shipping orders, you can turn to a third-party logistics fulfillment partner. This will require an additional expense for your business, but you’ll be able to save time that you can focus on other tasks, enjoy discounted volume shipping rates, take advantage of nationwide warehouse networks to secure faster delivery times, and accommodate business spikes or slowdowns in a cost-efficient manner.
Finally, you can use a combination of approaches in hybrid operations. You could use in-house fulfillment for custom orders, for example, outsource those high-volume goods, and turn to drop ship for orders that are extra-large.
This blog post was based off of an article from Fit Small Business. Read the full article here.