Order Fulfillment 101: 5 Steps to Success

[Updated post from April 26th, 2024]

Picture this: one of your products is flying off the shelves. Customers are checking out, orders are rolling in, and everything looks like a win. You’ve got the inventory to meet demand, so the hard part’s over, right? Not quite. The real work is just beginning.

When a customer clicks that “purchase” button, their journey isn’t over; it’s entering one of the most critical (and often overlooked) phases: order fulfillment. This behind-the-scenes process has become a make-or-break moment for ecommerce brands, where speed, accuracy, and transparency matter just as much as the product itself.

According to EMARKETER, 93% of consumers say the post-purchase experience is important, yet 83% think it still needs improvement. That gap reveals a major opportunity (and challenge!). Not everyone fully understands the intricacies of the order fulfillment process: how it works, what happens, or how products get from port to porch. 

In this guide, we’ll break down the order fulfillment process from the ground up: how it works in omnichannel selling, why it matters more than ever, and what you can do to deliver an experience that keeps customers coming back.

The Order Fulfillment Process

Order fulfillment is, by definition, receiving, processing, and delivering an order to a customer. Efficient order fulfillment is key to a brand’s reputation, a company’s profits, and its ability to retain clients and boost loyalty.

The process involves all aspects of the supply chain: warehousing, inventory management, packaging, and shipping. The key to successfully navigating all the competencies of order fulfillment is through a carefully planned and documented strategy.

Remember, without sales, there is no business. But without efficient, swift, and accurate order fulfillment, there will likely be no repeat sales. 

Defining and Developing an Order Fulfillment Strategy

Each business has unique needs that will help define its fulfillment strategy. In general, a focus on three key areas is critical to planning and executing efficient order fulfillment.

Size and Volume

The size and scale of a brand’s ecommerce business play a vital role in planning fulfillment solutions. Retailers putting together a fulfillment strategy should look at:

• How many products do I sell? 
• What is the volume of my monthly shipments? 
• Will this number increase due to seasonal swings or overall business growth?

It’s important to consider size and volume as they directly influence the complexity, speed, and cost of fulfillment. A small brand with 75 orders per month is going to have very different needs than a growing business with 8,000 orders per month. As ecommerce brands grow, they may require additional warehouse locations, increased automation, or stronger inventory management, especially as they expand channels. 

The business size and volume will also impact packaging costs, shipping rates, staffing, and technology needs. The goal is to create an order fulfillment strategy based on a brand’s size and growth trajectory to mitigate overspending or bottlenecking operations. Size and volume may also dictate whether a retailer works with a partner, such as a 3PL provider.

Technology

The need for technology in a fulfillment strategy is no longer optional; it’s table stakes. Complete visibility throughout the fulfillment process allows businesses to track all touchpoints and understand potential disruptions or delays in real-time.

Luckily, there are an incredible number of options when it comes to fulfillment technology. The most cutting-edge software streamlines processes, reduces human error, and highlights improvement areas throughout your supply chain operations. It can also facilitate automation and leverage data to help drive decision-making. 

Working with a 3PL or logistics partner that uses modern technology tools can provide retailers with integrated solutions to increase transparency and efficiency. The results? A more accurate and efficient order fulfillment workflow.  

Location

With customer expectations for fast and cost-effective delivery at an all-time high, strategic fulfillment locations are a critical component of any order fulfillment strategy. To cut costs and increase delivery speed, retailers must focus on warehousing in areas central to the most popular delivery locations and minimize the number of shipment zones along the way.

5 Steps for Streamlined Order Fulfillment

Building a strong order fulfillment strategy means assessing how each of the essential components functions and taking steps to improve them. Brands must look at and optimize: 

1. Receiving Inventory

Ecommerce companies have the option of receiving and storing their products before orders are placed (either in-house or through a third-party partner) or receiving goods only once a customer places an order. 

Regardless of which option is used, the inventory needs to be inspected and adequately sorted to ensure that goods aren’t damaged, and the correct amounts have been received. Technology, like bar code scanners, plays a significant role in reducing sorting time and increasing inventory accuracy.

Tip: Streamline the receiving process with clear labeling, scheduled deliveries, and real-time inventory updates.

2 . Storing Inventory

Though storing inventory may seem like a basic concept, it’s vital to the fulfillment process. With proper sorting and storing, the turnaround time during order processing is significantly reduced, creating shorter delivery times. The products need to be stored appropriately, and inventory levels should be constantly managed for accurate data.

Tip: Use tactics such as clear bin labeling and SKU-based zones to speed up picking and minimize misplacements.

3. Order Processing

Companies that choose to process their own orders use this step in fulfillment to pick the products from their inventory, inspect items for any damage, and send them to the packing station for shipment. 

For companies that outsource their order processing, the logistics partner manages this entire process. When using a logistics provider, it’s essential to choose the right fulfillment partner. For example, selecting a 3PL with the services and expertise to handle specific industries and needs, like apparel, beauty, or food and beverage.

Tip: Automate order processing with integrated systems, which can help speed up the process and reduce manual errors.

4. Shipping

The question all brands ask: What is the best shipping method for the least amount of money? There are many shipping options available, and with customers looking for fast and free delivery, retailers need to balance their costs with efficiency and speed. Giving consumers options during the online sales process will help determine the best course for shipping.

Once the products have been shipped, businesses must send customers tracking information and keep a close eye on any shipping delays before the goods are delivered. Customer satisfaction is top of mind when it comes to order fulfillment, and fast shipping (one or two-day deliveries) is a crucial step in keeping customers happy.

Tip: Use rate shopping tools along with a logistics provider’s expertise and carrier partnerships to find the fastest, most cost-effective shipping for each order.

5. Returns

Returns happen, and are often a significant part of post-purchase operations. Companies need to have a clear and concise return policy for damaged goods, purchases made by mistake, etc. 

In addition, more customers expect free return shipping, giving businesses another cost to absorb. Once the products are returned to the warehouse, they need to be evaluated for defects or damage. If they are in good working order, they should be sorted and put back into inventory. Like picking and sorting, this process can be tedious, but with the right technology and a streamlined returns management strategy, it can be done quickly and efficiently.

Tip: Simplify the process with prepaid labels and clear instructions to speed up restocking.

Order fulfillment can make or break growth 

Creating great products and strong marketing is only one piece of a large puzzle when building a successful ecommerce brand. The other pieces? Strong order fulfillment that delivers on every promise, right down to how fast and reliably products arrive.

As a brand scales, the behind-the-scenes logistics can get increasingly complex. That’s where a third-party logistics (3PL) provider comes in. By outsourcing fulfillment, omnichannel brands can save time, reduce costs, and refocus their team on what drives growth.

Ready to simplify operations and deliver a better customer experience? Talk to a WSI fulfillment expert today and start building a strategy that scales with you.