Ecommerce Fulfillment: Choosing the Best Solution for Your Company

For both a B2B or a D2C ecommerce company, a sale is not complete until the purchased items are received by the customer, making the order fulfilment process the heart of your business and key to building trust and affinity with your customer. Whether you manage order fulfilment in-house, with a third-party logistics provider (3PL) or by means of drop shipping, all solutions have one thing in common –they need to be predictable, accurate and efficient.

Jump to a section:

• What is Ecommerce Fulfilment
• Methods of Ecommerce Order Fulfilment
  • In-house Fulfilment –advantages and challenges
  • Third Party Logistics (3PL) –advantages and challenges
  • Drop Shipping –advantages and challenges
• Finding the Right Solution
• How SEKO Can Help

What is Ecommerce Fulfilment?

In the simplest terms, ecommerce fulfilment is the process of completing online orders.

For a web-based business, fulfilment encompasses everything from processing inventory, warehousing, packaging, shipping and delivery to managing returns and exchanges to completing value-add services such as gift-wrapping and engraving.

A seamless ecommerce fulfilment function is more critical than ever as consumers have become more and more accustomed to two-day, and even same-day, delivery options. Delayed or lost orders, poor tracking capabilities or a negative customer service experience can be detrimental to customer loyalty and overall brand reputation.

Methods of Ecommerce Fulfilment

The most popular methods of order fulfilment include in-house fulfilment, third-party fulfilment and drop shipping. The following section outlines the high-level characteristics of each solution: 

In-house fulfilment involves a business fulfilling orders within their own facilities. This includes using its own labor, technology, warehousing and more without the help of an outside partner. In-house fulfilment is best suited for smaller businesses with lower inventory volumes, or those who seek complete control over the entire operation. It’s a great starting point for home-based businesses as it’s a relatively low-cost option. However, in-house fulfilment can become challenging for businesses needing to scale due to limitations on available warehousing space, labor and competitive shipping rates.

Third-party logistics (3PL) is a fulfilment method in which an outside 3PL, such as SEKO Logistics, is hired by a company to manage its entire supply chain from end-to-end. The transition to this model often occurs when companies outgrow their in-house fulfilment operation. 3PLs are also extremely beneficial for companies looking to scale their ecommerce businesses, both nationally and globally, while simultaneously improving service levels and the overall customer experience. While 3PLs are an outside provider, they act as an extension of a business, taking on the entire fulfilment process enabling the internal team to focus time and resources on other critical business functions.

Drop Shipping is a fulfilment method that involves forwarding online orders directly to the manufacturers or product suppliers to fulfill. The retailer doesn’t come into contact with inventory and instead, the supplier manages the entire process from point-of-sale to delivery. Drop shipping can be an attractive option due to its low start-up cost. Conversely, this fulfilment option gives complete control over the shipping and handling process to the supplier which can be detrimental to a company’s reputation if there are excessive delays, lost or broken items, or negative customer service experiences.

Finding the Right Solution

Transitioning fulfilment models to match a company’s growth trajectory is not uncommon, it’s expected. Whether just starting out or looking to chase after aggressive growth goals, it’s important for businesses to evaluate a variety of factors when determining the best ecommerce fulfilment solution. Some of the most notable considerations include:

• Capacity to manage part or all of the fulfilment process in-house (and scale efficiently)
• Availability of warehousing space–whether locally or globally 
• Access to internal and customer-facing tracking technology