Evolution of Ecommerce Fulfillment Services
E-commerce has grown substantially in recent years. The explosion of services has led to the establishment of fulfillment services that provide order fulfillment in an instant. Gone are the days when the consumer's order was packed and shipped. Now reliable, express, and seamless shipping is the need of the day. The fulfillment companies operating their fulfillment centers primarily take care of this.
The evolution of fulfillment centers
In the nascent stage of ecommerce businesses, they have used third-party logistics companies to fulfill their orders. This led to many delays and the supply chain was greatly disrupted. Traditional warehousing methods were insufficient to meet customer expectations. Delayed pickup and delivery time necessitated the need for fulfillment service providers to fulfill orders. The packing and shipping were also lacking to meet the growing customer sales. Multi-sales channels led to the necessity of having inventory storage for the order fulfillment process.
Dedicated Fulfillment Centers
As ecommerce businesses grew and the growth of online store, the need to establish ecommerce fulfillment centers also grew. This led to the growth of multiple fulfillment center locations with a dedicated account manager. Major ecommerce platforms have their supply chain where the order processing is done. The picking packing and shipping is done from this network of fulfillment centers. The best example is fulfillment by Amazon FBA. Ecommerce stores are also using third-party logistics to fulfill customer orders. The ecommerce business is set to grow, giving rise to order fulfillment services companies.
Challenges in Ecommerce Fulfillment Services
Ecommerce companies don't work without their fair share of challenges. With the growing customer orders and the demands of the entire fulfillment process, the ecommerce fulfillment company has to constantly innovate for their order fulfillment services. So the need for a sound fulfillment strategy is the need of the hour.
Peak Season Demands:
One of the biggest challenges facing ecommerce businesses is the peak season demands. The surge in customer orders during promotional events or festival demands needs a balanced fulfillment strategy. Order fulfillment by an ecommerce fulfillment provider can also be done by outsourced fulfillment. This reduces the burden on the ecommerce fulfillment process ensuring the orders are fulfilled leading to customer satisfaction.
Last -Mile Delivery:
When the customer places the order, the fulfillment companies process the same at their fulfillment center. They may use a third-party logistics company or self-fulfillment to deliver the order. However, the main challenge for the fulfillment service is the last-mile delivery. Unforeseen situations may affect ecommerce order fulfillment. Adverse weather and urban conditions are some examples. Fulfillment services company may employ drones, or autonomous vehicles or have a local network of fulfillment centers.
Returns Management:
Another challenge faced by ecommerce businesses is the returns. Ecommerce businesses employ a dedicated account manager to oversee the returns by the customer. They offer round-the-clock customer support to resolve the issues faced by them. When the customer returns the product, the ecommerce business has to pay shipping costs to third-party logistics 3PL or when they send through a self-fulfillment process, they have to make sure the product reaches them. Inventory management at the fulfillment warehouse is also a vital part of the supply chain. Ecommerce platforms use reverse logistics strategy and leveraging technology to minimize returns and impact operational efficiency.
Environmental Sustainability in Ecommerce Fulfillment Centers
Ecommerce fulfillment companies aim to implement a sustainable ecommerce fulfillment strategy that aims to reduce the impact on the environment. They have introduced a lot of measures to provide solutions like a network of fulfillment centers, subscription boxes, efficient inventory management, accessible fulfillment center locations, fulfillment warehouses, and hiring of warehouses by paying storage fees. The fulfillment method is also tweaked to reduce the environmental impact. The use of recyclable materials for picking packing and shipping also helps reduce the environmental impact. Fulfillment by Amazon FBA is an example of the best ecommerce fulfillment provider.
Key Components of Ecommerce Fulfillment Services
The entire fulfillment process is based on certain key components which makes sure that the shipping process goes on smoothly. Right from customer support to shipping services is taken care of by the fulfillment service provider. The fulfillment company works together with the ecommerce business to formulate a fulfillment strategy that will lead to customer satisfaction.
Warehouse Space:
Most ecommerce businesses have their own warehouse space for quick order fulfillment. Some online store may even rent warehouse space to fulfill orders. Automated storage and retrieval systems have made order fulfillment easy and reduced human errors and delays. Storage fees are also kept at an optimum for outsourcing fulfillment. The fulfillment warehouse is equipped to meet the demands of ecommerce stores.
Order Processing:
When an order is received, the fulfillment process starts. The order fulfillment company processes the customer orders received through multiple sales channels. They may use a self-fulfillment process or a third-party logistics provider for order fulfillment services. The fulfillment service company manages the supply chain and uses shipping carriers for fulfillment and shipping processes. In this way, the customer orders are fulfilled by the fulfillment company. Real-time tracking and data analytics are used to further optimize the fulfillment process.
Shipping and Tracking:
Once the order is received and packed, the next stage will be shipping. The fulfillment company can either use self-fulfillment or third-party logistics. Ecommerce businesses collaborate with shipping services to calculate the shipping costs. There are also subscription boxes when the customer puts in a recurring order. Discounted shipping rates are also offered during the peak season which increases orders. Ecommerce companies have multiple fulfillment centers for order processing to meet customer expectations.
Future Trends in Ecommerce Businesses
With the impact of AI (artificial intelligence) on the rise, ecommerce fulfillment providers are looking for ways to improve the order fulfillment process. Personalized recommendations and delivery, using data analytics to improve the shipping process, efficient inventory management, and reduced fulfillment cost are some of the areas where ecommerce fulfillment providers are working. Customized fulfillment software also can help in a great way in streamlining the order fulfillment process.
With increasing consumer demand, ecommerce fulfillment companies are looking for solutions to minimize impact and increase efficiency. Leveraging the power of data analytics, AI, and blockchain technology, ecommerce platforms are aiming to increase customer satisfaction and customer support. Reduced environmental impact, minimized returns and low storage fees are some of the areas of concern for the fulfillment partner. Working on an efficient fulfillment method with multiple fulfillment partners can also bring about a change in customer expectations.
