What Is Fulfillment?
Firstly, what are we referring to when we talk about fulfillment in ecommerce? Well, it relates to the logistics of the selection, packing and delivery of products to customers.
Smaller businesses often manage this process in-house - it saves money but takes more time.
Larger businesses make use of third-party logistics services or fulfillment companies to take away the burden of this process for the retailers. 3PL and fulfillment companies process the orders on behalf of multiple ecommerce stores, managing many locations where they hold brands’ inventory, strategically located near cities and transport hubs to reduce the time between an order being placed and a product being delivered.
What Are The Main Fulfillment Options?
Self-Fulfillment
Often, smaller businesses, or those with very bespoke shipping requirements handle their own fulfillment. This covers storing inventory, picking, packing, order shipping, and customer service.
This gives businesses full control over the entire process and can save money for lower order volume businesses - although managing fulfilment in-house does create additional burden in terms of time spent on the tasks, and can limit future scalability.
Third-Party Fulfillment
As ecommerce businesses grow and order volumes rise, managing storage, packing, and shipping in-house often becomes unsustainable. To keep up, many turn to third-party warehousing or fulfillment services. These partners collaborate with retailers to process orders efficiently and often secure discounted shipping rates from carriers.
Outsourcing fulfillment simplifies operations for online sellers. In many cases, orders are sent directly to the fulfillment provider, who takes care of packaging and delivery. The main responsibility for the retailer is to maintain sufficient inventory with their fulfillment partner to meet customer demand.
Dropshipping
Dropshipping is an option for merchants who don’t hold any stock - instead, you list products from another supplier in your store, and when a customer places an order, you forward it to the supplier who then ships it.
This removes entirely the burden of inventory management, picking, packing and shipping, and reduces overheads for items like warehousing and logistics.
Conversely, it means you have less control over the whole process. Any issues that occur may not be your fault, but as far as your customer is concerned, you’re the store they’ve bought from and therefore they’ll be wanting answers from you.
We have more details on this topic in our articles about the pros and cons of dropshipping, and, if you decide it’s for you, how to start dropshipping for free.
How To Choose The Best Fulfillment Solutions Provider
If you decide to use a third party provider, here are some tips when it comes to choosing the fulfillment service that’s best for your business:
1 - Choose a provider that specialises in ecommerce
Ecommerce has its own needs and quirks. It’s worth choosing a fulfillment provider that has experience working with ecommerce businesses. This can be useful as you scale - they will be knowledgeable about things like international shipping, product classification and tariffs, for example.
2 - Look for experience in your industry
This isn’t always a deal breaker, but it can be useful if your industry niche has specific needs and your potential fulfillment partner has dealt with them before.
3 - Check their centre locations
This is worth bearing in mind as proximity to your customer base can affect shipping times and costs. Choosing wisely could mean that you can offer competitor-beating services such as same or next day delivery.
4 - Do they manage returns?
A solid returns policy is important to ecommerce customers. If you use a fulfillment provider that manages returns on your behalf, it could save you a ton of time. Customers can send defective products back to the warehouse and the fulfillment provider may be able to issue a replacement or refund, meaning you don’t need to get involved at all.
10 Of The Best Fulfillment Services for Shopify Brands
Shopify Fulfillment Network
Shopify Fulfilment Network (SFN) is Shopify’s fulfillment service that US-based brands can use to store inventory and fulfil customer orders. SFN has a network of centres in the United States to fulfil domestic and international orders. Shopify works with USPS, DHL, UPS, Canada Post, and various regional mail couriers to deliver customer orders.
To use SFN your ecommerce business must sell to US customers, have an active Shopify Payments account, and meet Shopify’s eligibility requirements.
Starshipit
A unified platform that integrates with ecommerce platforms and supports multiple carriers. It simplifies and accelerates the shipping and fulfilment process, making it faster and more efficient. Some of Starshipit’s benefits:
30 day free trial
manage your orders and couriers from one dashboard
keep your customer in the loop with tracking and notifications, reducing queries
branded returns portal
free onboarding
Shiphero
Shiphero has a one-click integration with Shopify. Some things to bear in mind:
order tracking and shipment notifications
automation rules for things like warehouse routing and shipping method mapping
stock pickers use barcode scanners to reduce errors by 99.9%
real-time ship rate shopping to ensure the cheapest carrier
comprehensive reporting
ShipMonk
With warehouses in the US, Canada, Mexico, the UK and Europe, ShipMonk could be a good option for your ecommerce business if you ship internationally and have more than 500 orders a month.
can manage traditionally problematic niches like CBD products
2 day shipping, 7 days a week fulfillment
distribute your inventory across their network for quicker shipping and lower costs
merchant success manager
Fulfillment By Amazon
This could be a good option if you’re a business with a website on Shopify but also selling on Amazon (you don’t necessarily need to be selling on Amazon to use it).
dropshipping services available
heavily discounted
24 hour support
ShipBob
A global provider with more than 60 fulfillment centres across the UK, Europe, USA, Canada and Australia.
bundling, B2B, international fulfillment
on-site reps at each location
custom branded boxes, tracking and returns management
Swap
Swap’s global network manages logistics from shipping to returns and even cross-border to consolidate the back end of business on a single dashboard. Swap says that on average brands save 30% by switching to the platform.
includes a recycling solution
exchanges and credits built in
personalised customer service
connects all your operational workflows
multiple shipping options and clarity on taxes
ShipStation
This order management system and shipping platform helps businesses build a bespoke shipping workflow.
shipping management
omnichannel management
order management
inventory management
warehouse management
customer engagement and branding
returns
Fulfillrite
Fulfillrite works for ecommerce merchants on platforms including Shopify and WooCommerce. Some of its key features include:
dedicated account rep
real-time order tracking and inventory management
same-day shipping for orders received by 2pm
returns management
custom packaging
bundles
import assistance
FedEx Fulfillment
One of the biggest names in the delivery business, their ecommerce operation works well for small, lightweight goods, both domestically and internationally.
low minimum order thresholds
good prices
robust fulfillment network
Fulfillment FAQ
What is ecommerce fulfillment?
Ecommerce fulfillment is the end-to-end process of delivering products to customers after they place an order. It includes several key stages:
Order processing: Receiving, verifying, and confirming customer orders.
Inventory management: Monitoring and maintaining accurate stock levels.
Picking and packing: Selecting the ordered items and preparing them for shipment.
Shipping and logistics: Coordinating timely and cost-effective delivery to the customer.
Returns and exchanges: Handling product returns and exchanges for dissatisfied customers.
What factors affect fulfillment costs?
Several factors can influence the cost of ecommerce fulfillment:
Product type: Bulkier, heavier, or specialized items often result in higher shipping expenses.
Shipping destination: International deliveries usually involve additional fees, including customs and import duties.
Delivery speed: Expedited shipping options generally come at a higher cost.
Warehouse fees: Charges related to storing and managing inventory within fulfillment centers.
How can you improve your ecommerce fulfillment?
To improve your fulfillment process, try these approaches:
Select the ideal fulfillment partner: Choose a 3PL provider that matches your business requirements and offers the services you need.
Enhance inventory management: Keep stock levels accurate and ensure warehousing is efficient.
Adopt an effective order processing system: Simplify the flow from order receipt to shipment.
Leverage tracking and communication tools: Provide customers with timely updates on their orders.
Establish a straightforward returns policy: Make the return process simple and convenient for customers.
What are some of the common issues with ecommerce fulfillment?
Common fulfillment challenges include:
Delayed shipping: Poor handling and processing delays can frustrate customers.
Order inaccuracies: Mistakes in picking or packing can result in incorrect shipments.
Product damage in transit: Inadequate packaging or rough handling can cause items to arrive damaged.
Stock shortages: Running low on inventory can lead to missed sales and unhappy customers.
Elevated fulfillment costs: Excessive expenses can reduce overall profitability.
What are the main fulfillment options?
Ecommerce businesses have several fulfillment methods to choose from:
In-house fulfillment: Handling all aspects of order processing and shipping within your own facility.
Third-party fulfillment (3PL): Partnering with an external company that specialises in managing fulfillment services.
Dropshipping: Having products shipped directly from a supplier to the customer without holding inventory.
If you’d like any support when it comes to managing fulfillment for your Shopify store, feel free to drop us a line. As a certified Shopify Plus Partner, we know the platform like the back of our hand and can help with any element of your ecommerce operations.
