In this post you will find information about fulfillment; that is, its meaning and its importance within the supply chain of an online store. Stay until the end!
What is Fulfillment?
fulfillment is an English term that is used to describe the process of fulfilling or satisfying orders in ecommerce.
An order goes through different stages from when the purchase is made until the final product reaches the hands of the buyer. If we think about the operation of an online store, we are going to find different procedures that must be carried out from the moment an order is received, such as:
- Verification of available stock > in the first instance, it must be verified that all purchased products are in stock (except for pre-sale cases). That is, that our inventory has stocks of the product.
- Confirmation of payment> will depend on the means of payment chosen by the client and the crediting times of the same. Payments through cards usually have immediate confirmation or a maximum of 72 business hours. If it was by transfer or deposit, you must wait for the accreditation in the account. Once the payment is confirmed, you can proceed with the shipment (except in cases of cash payment).
- Picking or collection of the products> it is the assembly of the package that will be dispatched with all the ordered products. The physical characteristics of each product that is marketed and the organization and/or distribution in the storage location, be it a store or a warehouse, will have a direct impact on assembly times.
- Preparation of the package for home delivery or pick-up > once the package is assembled, it will be dispatched through a logistics operator, or it will be left ready for pick-up in a store or showroom.
- Delivery of the order > is the moment when the order finally reaches the customer.
Order management is a key process and is largely responsible for ensuring a great shopping experience.
It is necessary to coordinate all these tasks so that the client receives his order satisfactorily.
The fulfillment is, then, the set of procedures involved in order management and is directly related to storage and distribution logistics. In this sense, it is essential to be able to build customer loyalty.
4 good practices in the Fulfillment process
- Selection of suitable personnel.
- Development of processes for order management.
- Execution of the planned tasks.
- Troubleshooting.
According to the online sales model that you have chosen for your business (own production, wholesale purchase or ), the fulfillment It will have variants, but broadly speaking it comprises four good practices that are key in any online sales strategy:
1. Selection of suitable personnel
The selection of personnel who will be in charge of planning, verifying, preparing and coordinating orders will be essential. These tasks can be carried out with your own team or delegated to third parties, as we will tell you later.
2. Process development for order management
They are directly related to the strategy of, storage and distribution of products.
There will be differences according to the stage of the business or the item since, for example, the processes involved in putting together an order for clothing will not be the same as construction materials or lighting. However, there should always be procedures that:
- Guarantee the established preparation and delivery times.
- Allow to resolve incidents or errors.
- Facilitate reverse logistics in cases of returns.
Learn more about what you have to keep in mind when it comes to .
3. Execution of planned tasks
As we mentioned, order management comprises several steps and the coordination of different tasks from the moment the order is received. Therefore, it is important to continuously monitor these tasks and monitor some indicators to measure their efficiency (we will see them later).
Although there are different ways to carry out this type of task, many businesses today understand that management tools are essential to carry out the operation in an orderly manner. Especially in cases where an online store is integrated with a physical store and inventory management is multi-deposit.
Some of the most used solutions that can be easily integrated with Tiendanube are:
4. Troubleshooting
There will always be situations where something does not go as planned and it will be necessary to take action to resolve them. Although it is expected that they arise, it is crucial to be able to anticipate them in order to know how to act before them.
Typical cases may be to define in advance how changes or returns will be made or how to proceed with an order that arrives damaged or cannot be delivered due to errors in the delivery address.
What indicators to take into account to measure the efficiency of the logistics process?
If the shopping experience is rewarding for the customer, they will surely buy again through the online store and, of course, they will also recommend it. That is why it is important to monitor some indicators that ensure a successful shopping experience and that are directly related to the logistics process.
According to the last one carried out by the Mexican Association of Online Sales (AMVO), in 2021 the digital consumer recognizes home delivery as one of the main benefits of buying online, since it avoids transfers to physical stores. However, it also acknowledges that shoppers are becoming more sophisticated and demanding faster shipping.
The agility of the entire purchase and return process, as well as faster deliveries, are stronger motivators for Mexican consumers to buy online.
On the other hand, the more efficient the process, the more profitable the operation. Some of the indicators that you should take into account are:
- Time from when the order is entered until it is delivered: it is the time of the complete process, from the customer placing the order in the store until he receives his order. This general measure is used to know in broad strokes how logistics management is working. It will have its variants according to the delivery areas, to differentiate from local delivery or for the interior of the country.
- Order preparation time: it is the time that is consumed since an order is entered, it is prepared, packaged and it is available for picking or collection.
- Time in transit: this is the time that the package is in transit from when it leaves the warehouse (own or third party) until it arrives at the customer’s address. It will depend on the logistics operator you work with and the dynamics of shipments.
- Percentage of error in the preparation of the order: here you must analyze the orders that had an error in the preparation process. For example, if it is an online store that sells footwear and the customer receives a different number than the one requested, that is an incident. It will then be necessary to define a maximum tolerance percentage for this indicator, which is usually always close to 1%.
- Percentage of error in the delivery of the order: as we already told you, the errors in this case can be varied ―the wrong delivery address, loss or breakage of a package or other circumstances―. Therefore, we recommend that you establish a tolerable percentage of incidents for your online business. For example, if out of 100 orders delivered in 1 month, 2 had errors, your percentage of incidents will be 2%.
- Reverse logistics of returns: this is a metric that will allow you to know the percentage of orders that were returned ―for different reasons―. This metric may vary depending on the type of product ―it will not be the same for the textile or footwear industry as for companies in the decoration sector―.
logistics partners
The tasks included in the Fulfillment can be carried out with our own team or through logistics partners () that are incorporated in the different stages of the process.
There are companies that provide comprehensive solutions. The complete service is called e-fulfillment and includes sales, logistics order management and home delivery.
Other companies offer services that are integrated only into some of the logistics processes (storage in their own warehouses, order preparation, picking, distribution and delivery, for example).
Some companies that provide these services in Mexico and that can be integrated with are:
- : It is an online platform that allows you to manage shipments and connect with all logistics operators in the country, without the need to integrate your Tiendanube with each of them.
- : is a Mexican courier and parcel company for express shipments or also known as .
- : the DHL shipping company through integration with Tiendanube where you can offer automated shipments, automatic tracking and multi-channel sales service.
- : another same-day delivery option, with 99 minutes you will get a collection and shipping service.
Learn more…
Article
Choosing one type of solution or another will depend on the characteristics of your business, the products you market and, fundamentally, the need to delegate the physical storage space to third parties.
conclusion
It is important to bear in mind that, in order to organize the operation of an e-commerce successfully and guide it towards the business objectives, each company will choose a different management model, which is why the Fulfillment process will also have its variants. However, in all scenarios the main focus will remain on and continuous improvement.
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