Different models of order fulfilment for online sales
Make the right choice on how to deliver your online orders to customers
by Anindya Ray on 15/12/2017
Body Order fulfilment is the complete process of fulfilling orders received online. This involves several steps and depending upon its efficiency, customers perceive your business. A customer who orders online expects seamless delivery of products in good shape and within the time span promised. The customer is not bothered about how you do it, for the her/him, only the end result matters.
Whether you do it yourself or outsource the activity, the process of fulfilment involves warehouse management, order management, packaging, shipping and customer communication. You have options of how to go through this process depending upon your business model.
Let us explore the different ways you can do order fulfilment:
In drop shipping, you don’t purchase or own the product you are selling. You are the middleman who may not even see the physical product. You concentrate on selling the product and when an order is received, it is conveyed to the drop shipper or manufacturer who packs and ships the product to the buyer. Your profit is made from the difference of the selling price and the price that you pay to the drop shipper. The benefit of drop shipping is that you don’t block money is stocks that are not moving. Though, in this process you are removed from the process of fulfillment, you still remain accountable for the sold product.
Another option for order fulfilment is third-party fulfilment where you own the products you are selling. As a seller, you either purchase the product or manufacture it, store the product with a third party logistics provider (3PL) and then sell the product. When an order is received, the third party packs and ships it. Your profit would be the difference between the retail price and the price you pay for the product plus the fees you pay to the 3PL. If you have a unique product but lack storage space and you want to focus on marketing rather than fulfilling, third-party fulfilment is probably the best option for you.
In this model of fulfilment, you own the inventory and fulfil orders yourself without involving any third party. The manufacturing and inventory control is under one roof, and you may lease warehouse space which acts as your distribution hub where pickers and packers ship your products to the customer. Your profit is the difference between the retail price and the costs that you incur in manufacturing/buying the product, storage and fulfilling orders. The main advantage of self fulfilment is that you are always in control. Though it is a bit time consuming, you know how your products are being picked and packed and when they are being shipped to the customer.
Fulfillment by Amazon
Alternatively, if you want to use a super-efficient fulfilment service, try Amazon. It has one of the most advanced fulfilment network in the world that your business can benefit from. With Fulfilment by Amazon (FBA), you can store your products at FBA centres and they will pick, pack, ship and provide customer service for your products. If you wish to sell on Amazon, please register as ‘Seller on Amazon’.
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