Understanding eCommerce fulfilment automation: Tips and tricks for beginners

2022-05-25

Written by David Renwick

What is eCommerce fulfillment?

eCommerce fulfilment automation is everything you do after a customer buys something from your store. You are “fulfilling” the order- and the customer’s expectations.

The eCommerce fulfilment process covers everything from

  • Receiving and storing inventory
  • Keeping eCommerce site up to date with inventory
  • The system for receiving orders
  • Accurate and timely shipping prices
  • Shipping logistics like labels, addresses and booking couriers
  • Using the right courier service for deliveries

You might be doing some or all of these steps yourself, depending on how big your store is.

Regardless of how many orders you send, eCommerce fulfilment automation is the best way to ensure you are sending orders effortlessly.

Types of Order Fulfillment

Order fulfilment will look different depending on the size of your eCommerce operation. At the beginning you might be doing all of the order fulfilment steps yourself (as well as marketing, customer service, market research, everything!).

And that can be a great low-cost way to get started! However as you grow, so will your logistics. There are few different ways you can outsource or automate your order fulfilment.

Merchant Fulfilment

Merchant fulfilment, AKA self-fulfilment, is usually the first step for a self-starting ecommerce business. This is where you, the “merchant”, fulfils orders yourself.

This would be your go to order fulfilment method is you

  • Run your business from home
  • Have a low volume or parcels
  • Want to save costs as you grow

If you are getting to the point where orders are becoming overwhelming and you are getting a lot more inquiries about parcels not shipping quickly enough, that is your indicator that it is time to outsource.

Third-Party Fulfilment

Third Party Logistics (3PL) takes care of order fulfilment on your behalf. Instead of receiving all the inventory at your house, everything gets shipped and stored with a warehouse or fulfilment center.

Using 3PL usually means that orders go out a lot faster because they have an automated system for picking, packing and shipping. This is perfect for eCommerce businesses where you have your own specific products but need help fulfilling orders efficiently.

Understanding the order fulfillment process

From ordering and receiving products to the customer actually holding the product is a complex process. There is probably more involved than most people think! Let’s go through the order fulfilment process step by step to understand where each part needs to be efficient.

Receiving inventory

Before you can sell products you need to order them. If you are using the dropshipping method, then this step won’t apply to your business at all. If you or a third party are in charge of receiving inventory, it is your responsibility to

  • Check the right number of products have arrived
  • Follow up and build relationships with manufacturers
  • Create stock keeping units (SKUs) so that your website stays up to date

Depending on your business model, this part of the process could be automated by a third party so that you don’t have to manually add everything into your system.

Inventory storage

Next you need somewhere to put everything that arrives! This might be a spare room or office if you are a one-person team. Using 3PL or dropshipping models mean that everything is stored offsite.

The benefits of using a fulfilment center mean that everything will be organized and shipped efficiently. However, it also means that you have no control over the process or quality control unless you regularly go down yourself (which defeats the purpose of outsourcing).

Order processing

Once a customer places an order, it needs to be processed. For self-fulfilment, this usually means getting an email notification, creating a new order in your system, finding and packing the items, and then putting the address into your courier service. A fulfilment center will do this efficiently, with ecommerce fulfilment automation systems to make it much faster than doing it yourself manually.

Shipping

Shipping incorporates both the process of choosing the right courier, creating shipping labels, and making sure your delivery system is reliable. This can quickly become laborious if you don’t have an automated system!

For example, if you are doing Shopify fulfilment in Australia could use a shipping integration like Starshipit to automate the courier and shipping process. This means more efficient shipping with less human errors.

Returns processing

Your complete order fulfilment should include some kind of returns process. Refund and returns policies should be written clearly on product descriptions, your website and on order confirmation emails. Remember, you are there to make sure your customers have a positive experience with you so they come back! 84% of online shoppers would never come back after a negative returns experience. This means having a clear system for it is crucial to positive feedback and building customer loyalty.

Challenges of order fulfilment (and tips to avoid them)

Ecommerce fulfilment automation definitely has a few challenges. Once you have an efficient system in place, most of these problems will sort themselves out. Don’t forget that you are not alone in these challenges!

Let’s go through some of the challenges in ecommerce fulfilment automation together.

Inventory management

If you are fulfilling orders yourself, you might run into supply issues. Warehouses and 3PL use SKUs to make sure that the number of items on the shelf match the number of items on your online store. Managing inventory is a significant challenge if you are starting to get a lot of orders.

One way to fix this is to outsource some of the inventory management. This means that you don’t have to personally update everything on your website. The less customers have to jump through hoops the better! Customer dissatisfaction is difficult to undo once the damage is done.

Logistics planning

Making sure the customer is satisfied with their purchase is pretty much your only goal besides making a profit. Logistics like shipping can cause a lot of problems because once it leaves your office or third party warehouse you are not necessarily in control of service quality.

It is important to have systems in place like

  • Automatic shipping updates for customers (using shipping fulfilment software)
  • Streamlined order processing once someone hits “buy”
  • Ask for feedback and reviews to make sure customers are happy
  • Keep track of courier efficiency in case you need to change services

Ecommerce fulfilment automation and carefully planning logistics can help avoid challenges. However, you still need to be available to address any customer concerns and react accordingly.

Supply chain execution

As you grow, you may start to use supply chains and software to automate the fulfilment process. This means outsourcing things like inventory management, warehouse management, transport and returns. Although this makes your job easier because you don’t have to fulfil orders personally, it can lead to challenges when customers are unhappy and you are not personally in control.

It is important to research fulfilment centers carefully and to build positive relationships with them in case of customer problems. Even if you outsource your supply chain, it still comes back to you!

Tips to improve order fulfilment processes for your ecommerce business

Whether you are fulfilling orders yourself or outsourcing logistics to a third party, there are a few things you can do to optimize your ecommerce fulfilment process.

Integration and automation

One of the easiest ways to automate your order fulfiment process is to use a Shopify shipping integration. This means that you don’t have to manually assign couriers and get orders out faster with less errors.

For example, online bulk-food store The Bulk Pantry drastically improved their customer experience by using shipping integration. They were growing rapidly in 2020 at a time when people wanted items shipped as quickly as possible.

With Starshipit ecommerce shipping integration, customers compare accurate shipping rates from different couriers. This helps The Bulk Pantry team choose the most reliable and cost-effective courier every time, saving them and their customers money AND time.

Quality control

Customers want to get what they pay for! Quality control is a crucial step in inventory management. When stock arrives, take a little bit of extra time to double check that each and every item is high quality and undamaged.

Doing this will save you time when you are fulfilling orders because you already know that each item is ready to be picked and packed.

If you are using a third party warehouse, they should be checking items for you when they add SKUs and store everything. Double check your contract to make sure that quality control is a service they offer! It will save you a lot of customer complaints down the line.

Return management/reverse logistics

Once you have shipping logistics and quality control sorted, you should have less returns to manage. However, automating any part of the returns process will keep customers and your schedule happy.

Even though refunds and returns are disappointing, you should process them with as much care and attention to detail as the original service. That way you have a much higher chance of retaining loyal customers.

Some steps to improve your returns process are things like:

  • Including complimentary return labels/courier for items like clothes or shoes
  • Offer to let customers keep the item while you send out a new one
  • Replace the item for free if it is damaged
  • Send out a new item as a priority

Include easy to follow returns policies that people can use if they need to  (without taking advantage of you)

Take home message

Ecommerce fulfilment automation is an investment in your customer experience- and therefore your overall revenue. By understanding the complete order fulfiment cycle and taking small steps to automate and improve your systems, you will have a first-class ecommerce store in no time!

Want a super simple solution for your shipping automation? Starshipit makes it easy to fulfil and ship orders no matter what ecommerce platform you are using. Stop wasting time and start shipping more orders with Starshipit!


David Renwick

David Renwick

David is Starshipit's Content Marketing Lead. When he's not whipping up a fresh new product update or chatting to customers for an exciting case study, you'll typically find him scoping out coffee spots and talking about what's on at the movies.

More from this Author