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Fulfillment in e-commerce logistics services covers the processes that occur from the receipt and preparation of the customer's order to the delivery of the order to the customer. Since dealing with all these tasks is a heavy workload for the seller, there is a need for companies to handle these operations.
The company that undertakes the service instead of the seller deals with planning all preparations in the process. Thus, the workload in the sales process is reduced for the sellers. So, how does this service work and which sellers might prefer this service? Let's take a look at this too.
What is Fulfillment?
The fulfillment service, which is a great opportunity for those who have an e-commerce store, is basically order fulfillment. Since online shopping has become widespread nowadays, everyone engaged in online trade has the question of what fulfillment means in their mind. This process includes the steps followed by the seller while delivering an order to the buyer.
In this way, many steps are followed in the online logistics part so that the placed order can reach the buyer smoothly. If an e-commerce company wishes, it can undertake the task of stocking the orders in its own company and all operations such as receiving stock, inspecting inventory, labeling, and managing the inventory system until the order reaches the buyer.
However, for every company to deal with this entire process can generate a huge workload and cost. For this reason, e-commerce companies prefer to partner with a fulfillment firm. Thus, the firm offers a comprehensive service to the e-commerce company.
This logistics service model includes many elements in the process of delivering the order to the buyer and covers all aspects of online sales. The process can be said to cover four main headings: e-commerce platform integration, storage and delivery, picking and packing orders, returns and complaints.
What Are the Advantages of Fulfillment?
E-commerce companies can make even better progress with a fulfillment center. The main activity of this business is not only order fulfillment and product distribution. Thanks to the partnership with external logistics services, the e-commerce company gains more time for its core business activities such as sales and innovations.
In this way, various advantages help the growth of the e-commerce company. We can list some of the fulfillment advantages as follows:
• It allows the seller to dedicate more time to core business activities such as business development, marketing, and customer support.
• By Gaining knowledge, the process is made more systematic.
• Thanks to better process optimization, existing resources are used in the best way to reach results and resolve issues.
• It offers more advantageous delivery and the opportunity to expand into foreign markets.
• It ensures faster delivery of shipments.
• Warehousing and transportation are done in the best possible way.
• You get better shipping rates for international deliveries.
• The seller does not need to deal with issues like warehouse employee leaves or sickness.
• A single payment was sufficient for all services such as warehousing, packaging, and shipping.
• You have many more shipping options like customer-oriented courier delivery and personal pickup.
Looking at the advantages listed above, it can clearly be said that delegating orders to an external partner for fulfillment service has numerous benefits for the e-commerce company.
Handling this very important part of the business by delivering it to professionals also affects the e-commerce side of the business positively. To do this, all you need to do is decide on the external logistics partner that you think will be best for your business.
What Are Fulfillment Fees?
Pricing of fulfillment services is formed in line with the services offered by the operations center. It includes charges such as system integration, product receiving, warehousing, product picking, packaging, and value-added services. We have detailed these for you:
Setup Fees / System Integration
Setup service and system integration is the integration of your marketplace store, website infrastructure, and other sales platforms with the software of the operations center. This setup & integration fee may vary depending on the scope of the integration.
Product Receiving Fees
Product receiving fees, also known as the inbound logistics process, vary according to the type of product to be accepted, the quantity of products, product packaging, and the content of the controls to be performed during acceptance. In a standard product receiving process, product quantity and damage control are among the core operations.
Warehousing Fees
Warehousing fees are also priced based on variables such as how long the product will be stored, how much space it will occupy, how it will be stored, and so on.
Picking and Packaging Fees
From the moment the products reach the warehouse, how they will be picked and packed is defined in line with the seller's demands. A pricing emerges based on these requests, and the seller covers the fees for the service.
Shipping Fees
During the shipment stage of the product, delivery from the warehouse to the customer is usually undertaken by 3rd party logistics and courier companies. These fees can also be included in the fulfillment services and proceed depending on the initiative of the seller or the service provider. You can meet your fulfillment and intermediate warehouse service needs with ParkPalet, and safely ship your products with Navlungo.
How Is the Pricing of Fulfillment Services Conducted?
Fulfillment fees, of course, can vary across the companies providing the service. It depends on the structure of the company providing this service and how it meets the fulfillment service.
Some fulfillment operations centers ship ready products to customers, while other centers provide value-added services such as packaging, product bundling, gift wrapping, and so on, to deliver the products to the end user.
Most fulfillment service providers determine a fee per transaction, thus generating per-order costs for sellers. As the order volume of E-Commerce sellers grows, their costs decrease due to economies of scale.
How Is Fulfillment Done in E-Commerce?
In e-commerce, fulfillment services take place basically under four main headings including warehouse management, order management, logistics management, and customer relations, which also covers returns and complaints.
In warehouse management, the core products of the seller company are stocked in a single location. This stage is the part where everything related to your company's warehousing activities, such as warehouse space, stock availability, and shipping equipment, comes to the fore.
The order management step includes tasks such as inventory control, pricing, order picking, fulfillment, tracking, shipment tracking, record keeping, and notification of demands and purchases.
The logistics part includes tasks such as packaging and delivering orders. When the e-commerce firm receives fulfillment services, it does not have to deal with these processes. Thus, it does not spend time receiving and delivering orders either.
One of the best aspects of fulfillment, the customer relations part, involves taking care of customers in the best possible way. If any issue occurs during the order process, it deals with supporting the customer, tracking the stage of the product being delivered, and establishing the necessary communication with customers in case of returns, exchanges, and complaints.
The relationship established with customers at this stage can be provided through various communication channels such as email, call center, or SMS. Since the external logistics partner handles this entire process, a trust bond between the customer and the company is established faster and easier. With reports generated based on kept records, the quality of the service is constantly improved.
In the video below, ParkPalet co-founder Alp Çiçekdağı explains the fulfillment service in detail. You can watch this video if you wish.
https://www.youtube.com/watch?v=KQ4xKSsRDG4
What Are the Fulfillment Implementation Steps?
The e-commerce logistics service, which is basically gathered under four main headings, proceeds as follows when the fulfillment process is divided into smaller implementation steps:
• Receiving the order (from the e-store, social media boutiques, or by phone)
• Recording the order request in the inventory system
• Sending confirmation to the customer after the order is confirmed
• Directing the order request to the warehouse
• A warehouse employee finding and picking the ordered product
• Packaging the order and preparing it for shipping
• Dispatch of the order
• Informing the customer by sending a notification that their order is on its way
• Delivery of the order to the customer
• When necessary, executing exchange or order returns and processing refunds
• Updating the inventory
The first step of fulfillment implementation is warehouse management. In order to make sales from stock, it is necessary to build product stock in the warehouse. In this process, operations regarding warehouse space management and product stocks are carried out. The second step is order management.
This stage covers the organization of tasks related to the order, such as the e-commerce company's products being ordered by customers, checking the stocks of products, record-keeping, and preparing the order.
The third stage is logistics management. It covers the packaging and delivery of the order after it is received and prepared. Running the shipping process by the external logistics partner also reduces the workload and cost of the e-commerce firm.
The fourth and final stage is customer relations. Here, the customer is informed about the status of the order, and customer satisfaction is ensured by dealing with demands such as product exchange or return.
Who Can Choose Fulfillment Services?
If you have a growing e-commerce business, managing all orders, creating warehouses, and stocks causes you to spend considerable time and money. Therefore, you can consider partnering with a fulfillment service as a fast and modern solution to meet constantly growing customer demand.
Automated fulfillment software can provide convenience up to a point. However, it is wiser to use a service that offers greater flexibility in adaptation. If you are a medium or large e-commerce owner, you too can opt for this service.
What Should You Pay Attention to When Choosing a Fulfillment Service Provider?
Being fast in order fulfillment is one of the key points you should pay attention to in the logistics firm you want to partner with. Because in the increasingly competitive online market environment, your orders should be fulfilled as quickly as your e-commerce firm operates.
When choosing a fulfillment service provider, you should make sure that they have a reliable shipping service capable of guaranteeing delivery in three days or less. You can also place importance on your fulfillment service provider strategically utilizing multiple warehouses located across different regions.
The use of multiple warehouses located in different regions both reduces delivery times and decreases costs as less distance will be covered during the shipping process. It is also important that the company you partner with has flexibility.
Last-minute adjustments and modifications should be possible, and other various order fulfillment experiences should be adaptable to your customers, allowing necessary adjustments to be made.
If you also want to grow your e-store without thinking about the process of storing products and preparing orders, you can create your e-commerce logistics request at ParkPalet right away to get fulfillment services!
Ways to Reduce Costs in Fulfillment Services
Fulfillment includes the service costs we have mentioned, and reducing these costs is one of the most critical elements for all sellers. There are multiple ways to reduce costs.
Working with the right shipping company, staying in touch with the company you work with regularly, ensuring your marketplace integration and order management system run efficiently, and doing product and order management collectively will basically reduce these costs.
Frequently Asked Questions About Fulfillment
Below you can find the most frequently asked questions and answers about fulfillment from users.
Does It Make Sense to Use Fulfillment Services?
Using fulfillment services is the most logical solution for businesses that want to focus solely on sales and marketing. There are many stages and operations from the packaging of the product to its delivery to the customer. Automating these processes and focusing only on sales and marketing creates an important resource of time to grow the business.
Who Should Prefer Fulfillment Services?
Online businesses that have weak operational resources or do not have enough time can use fulfillment services. Planning and running a massive operation can be quite challenging, which can cause you not to dedicate enough time to your products. It can be said that fulfillment is the best option for those who want to manage huge organizations with few people.
