10 Steps to Ecommerce Fulfilment
When choosing an outsourced fulfilment partner, a methodical approach is wise, Whistl explains
Ecommerce fulfilment is the process of storing, reworking, managing inventory, picking, packing and distributing fast-moving consumer goods, printed matter, promotional or business to business (B2B) items for sale and resale. Fulfilment services can be facilitated in-house by the retailer or brand, but are often outsourced withafulfilment specialist.
The global ecommerce fulfilment services market size was valued at $70bn in 2019 and is expected to expand at a compound annual growth rate (CAGR) of 6.5% from 2020 to 2027. Right now, demand outstrips supply for retail warehouse space.
Before you decide to take the plunge, consider the 10 key stages of ecommerce fulfilment.
If you choose to outsource your fulfilment processes, onboarding is a crucial first step. Your business and selected outsourced fulfilment specialist should be aligned in terms of your offering, their expertise and the technical infrastructure of both parties. Finding a fulfilment house that integrates seamlessly with your ecommerce platform, marketplaces and order management system will ensure all order and product data is orchestrated with the greatest accuracy.
The onboarding stage should include a review with your account manager and integration specialist to map out your current product range, order volumes and SKUs to determine how much warehouse space
you will need throughout the year, including potential peaks and troughs in demand. Whistl can offer added value, such as contact centre support and the selection of the appropriate parcel carriers.
The first time your products arrive at the warehousing and fulfilment facility will be the first ‘receipt of goods’ from your suppliers. Once your products arrive, the goods-in team will sign a confirmation note so that you have documented proof that the team has received your goods, along with the time and inspection details. The goods-in team should also check receipt of goods against the inventory, to ensure volumes and products match.
To maximise revenue opportunities, inventory management should be set to allow triggers that generate orders with suppliers when stock levels fall below set volumes. Well-optimised order fulfilment and inventory management will ensure maximised sales from managed stock levels. Cross-docking might be required for part sold or fully sold inventories. The process of cross-dock can minimise or remove some of the steps below if the goods are fully sold. For fully sold inventories cross-dock fulfilment allows for products to be received into the fulfilment centre and despatched accordingly.
Following the receipt of your goods, the fulfilment house can perform a series of pre-agreed audits and inspections, including:
● Box numbers and pallets match your packing list
● Product volumes match the consignment orders
● Inventory management processing can include thorough inspections
● Checking the correct amount of apparel items are in each box
● Item quality and checks for imperfections or damages
● Checks for variable elements including sizes and colours have been supplied as per the order.
Inventory checks should always be coordinated based on the retailer’s unique needs. Many fashion retailers offer personal shopping subscription services, where they take the customer’s clothing and style
preferences along with demographics and tailor their clothing in a monthly or quarterly box. This might require the need for each order to be completely bespoke, requiring fulfilment teams to ‘rework’ the products into custom arrangements, to suit each customer’s requirements.
Some retailers may require boxes to be broken down and items moved into different packaging; in this instance the reworking can be carried out between the ‘receiving’ and ‘inventory storage’ stages, but with bespoke fashion retailers, typically the picking and packing team will need to work with the reworking specialists to collect and return items from their stored locations to prepare a customised order.
4. INVENTORY MANAGEMENT
After the auditing of your products, received inventory stock is updated into the fulfilment provider’s warehouse management system. Software solutions should easily integrate with the retailer’s order management platform, ensuring complete transparency of the supply chain journey. This would be from the order picking, packing to the final destination via delivery despatch. Delivery to your final location and customers are typically sent via UK and international parcel carriers and mailing partners.
Integration with the retailer’s order management platform, allows the fulfilment house to analyse the product range and sales data to store the product appropriately to ensure the fast-selling ‘in-demand’
products are the easiest to access.
There are a wide variety of picking methods deployed by fulfilment centres and retailers, including:
● Zone picking is the most commonly used method for complex orders that contain multiple items. Products will typically be pre-stored in locations called ‘zones’ to maximise the efficiency of this process.
● Batch picking is a method employed by picking staff that need to travel long distances throughout the warehouse. If they’re already making that journey, they might as well collect other items in that area while they are there. Pickers will typically group orders at the same time,eliminating the need for multiple trips.
● Discrete picking is the most popular method for smaller warehouses and retailers with a limited number of SKUs While more distance needs to be travelled on average to fulfil an order, picking accuracy is typically higher because each picker can focus on one order at one time. As the business scales, the discrete picking method is not as efficient.
● Wave picking is similar to discrete picking in that one order is picked at one time. However, this method introduces scheduling windows as a means of optimising the picking team’s time depending on the time of day. Wave picking is also useful for when picking staff are also responsible for packing, reworking and other areas of the order fulfilment process.
While your products will arrive at the fulfilment warehouse in a container and/ or pallets, the products themselves will be in boxes. However, these boxes aren’t necessarily the packaging that will be used to deliver to your customers. Often the packaging will arrive from a separate supplier or the fulfilment house will offer packaging of their own.
Your products may be pre-packed before being selected from inventory, or packed to the specific criteria by the packing team. It is important to decide whether you want to use generic packaging in the early stages of your business’s growth. As your business scales, it is likely you will look to implement bespoke packaging to enhance your customer experience and reinforce your brand. Packing isn’t just about putting an item in a box. You may also include surprise gifts to delight your customers, discount vouchers to encourage impulse purchases, and returns information.
Once the item is packed, the next stage is to print a shipping label from your carrier management system to apply to the parcel. If your product is being delivered domestically in the UK, this is usually all you will need. However, if you are shipping internationally you will need to ensure you are meeting the guidelines for that country. For example, if you are shipping in to the European Union, you usually will have to include commercial invoices with the shipping label, along with stating your product HS code, and your own EORI number.
Depending on the item’s insured and actual value, product type and country of manufacture, your customer may be required to pay customs duty to release the item.
Once your items are labelled and include all the correct documentation, the fulfilment house will group parcels by carrier and destination. Each parcel will travel along a conveyor belt and delivery fulfilment specialists will scan and sort each parcel to ensure it is ready for when each carrier partner arrives at the fulfilment house.
9. RETURNS PROCESSING
As many as 30% of products ordered online are returned, compared to less than 9% for brick-and-mortar stores. Work with a fulfilment centre to help minimise the incidence of returns happening in the first place, and manage them when they happen. Ensure the returns process offered by the fulfilment centre assists the process of improving revenue and supports the opportunity for resale of products. This might mean working to pre-stated product and quality guidelines.
For example, this could mean prioritising impeccable condition products for immediate resale, or refurbishing slightly damaged items before re-introducing them to their respective warehouse locations. For fashion retailers cleaning processes such as garment steaming or shoe cleaning and re-lacing might be required. These specialist services will support the insight to business, with quality checks including inventory logging of returns codes, stock volumes and any issues of faulty products sent back to the manufacturer on the retailer’s behalf.
10. ONGOING CUSTOMER SUPPORT
Whistl research found that 46% of consumers stopped using a company/organisation based on a poor call centre experience. While many fulfilment companies purely handle the storage and distribution of products, at Whistl we also offer ecommerce customer service to complement fulfilment, so that you can deliver a consistent omnichannel customer experience.
DECIDING WHETHER TO OUTSOURCE FULFILMENT SERVICES
Getting fulfilment right requires fastidious attention to detail and so whether you are managing it in-house or with a specialist, it pays dividends to have an expert taking care of each of these processes. Above all else what’s important is that you can process orders as quickly as possible, utilise the correct delivery services and respond to peaks and troughs in demand by minimising overstocking and understocking. Get one of the ten elements wrong and this can be the difference between a repeat customer and a one-star review.