What is fulfillment, its process and benefits for e-commerce

What is fulfillment: its process and benefits for e-commerce

Fulfillment is an increasingly popular service in e-commerce. Imagine that orders are storming into the e-shop from every side, while warehouses and logistics are not catching up. Also, a company can outgrow the market in which it operates, and is gradually starting to expand at new territories.

The seller will find himself in front of a difficult decision. He will either expand its warehouses and staff, improve information systems, or transfer this responsibility to a third party.

And here the fulfillment services come in, whose goal is to ensure the complete logistics of the e-shop, from the storage of the goods to the delivery of the package to the consumer. The seller can devote himself fully to his business and the area in which he excels, many times at a lower cost.

On the other hand, he must transfer his trust to another company. But fulfillment is a far more complex service. Therefore, when choosing the right partner, the e-commerce seller can put these worries behind.

What possibilities does the service offer for the e-shop? How can it help, and what its process includes, you can find in more detail in the article.

Development step by step

The beginnings of fulfillment date back to the 19th century, when the first delivery companies and various packaging warehouses were established. With the gradual development of the market, the first companies appeared in a few decades, which allowed traders to outsource their logistics.

However, the biggest shift came with the Internet, which fully opened the door to globalization and enabled the formation of an e-commerce environment. Expanding companies, however, often failed independently to ensure the operation of logistics in other territories, as they needed new employees, premises, technology, and more.

This took a lot of time and effort, so they were forced to leave the responsibility for logistics to third parties. The development of the market and the formation of technology have thus brought the official name “order fulfillment,” which currently includes all logistics processes.

There comes benefits with the service

Fulfillment can be used by different types of customers. E-shops, retailers through various marketplaces, such as Amazon, trading or manufacturing companies, and many others, can find benefits in it.

However, the main reasons for outsourcing logistics may not be only a lack of capacity, high fees for warehouse workers or premises. It can also significantly simplify the expansion into new markets in various countries of the world or, in short, the normal operation of the e-shop.

The advantages of fulfillment are fewer worries about logistics, which means more time for business or financially more advantageous delivery. In addition, the service helps optimize e-commerce logistics processes, covers busier parts of the season, delivers shipments quickly and many other activities.

On the other hand, there are also disadvantages, for example, depending on the size of the company or a steady and common process. This is because companies may find it uncomfortable to adapt to the new system or be afraid of their goods when outsourcing to a third party.

The fulfillment process from A to Z

The fulfillment we know today involves not only storing, packaging, and delivery, but also several other activities:

  1. The whole service for the client begins with the registration of the receipt of the goods. The client usually sends the products directly to the warehouse from the manufacturers or distributors.
  2. The goods pass through the receipt and proceed to storage, during which it is registered in the system and it is verified that the numbers stated on the receipt fit. The product is assigned a position in the warehouse, is stored, and is immediately ready for dispatch.
  3. If the customer orders the product, the fulfillment company receives the order information via the API to the information system. It serves to the management of storage, orders, and shipments.
  4. After registering the order in the system, the goods are picked up and sorted. The information system of the fulfillment partner is important here, on the basis of which the picker can get to the goods quickly, sort them, or eliminate errors.
  5. The sorted goods pass through the packaging. This can be due to the equipment and capabilities of the company, either manual or automatic-machine packaging.
    Some fulfillment companies also offer the option to choose the method of packaging. The seller can determine the packaging material used, or agree on individual boxes that contain, for example, the e-shop logo.
    In the case of seasonal peaks, it is very important whether the 3PL company can ensure, for example by automation, higher order volumes and thus avoid delays.
  6. After packaging, the parcel goes to the finalization department, where it is dispatched to a specific transport line or delivery company based on the country of delivery.
    During transport, it is important whether the fulfillment partner has set up regular lines and whether it can deliver the package to several countries around the world within 24 hours. The return of customers to the e-shop is, in most cases, conditioned by fast and trouble-free delivery.
    After assigning a transport line, the buyer receives information about his shipment via email or SMS. Delivery of the package takes place by various means, whether by courier, post, or personal collection via parcel shops or parcel machines.
  7. During delivery, a certain percentage of packages are either not delivered or returned. The advantage for the e-shop is that the fulfillment services also ensure the takeover and management of these types of returns.
    The e-commerce client is informed about them. He can also check the condition of the product via the information system and can decide whether the goods will be returned for shipment.
  8. The last step in the process is the management of cash on delivery and invoicing. A good partner will handle complete cash on delivery in all European countries on behalf of the client. After processing the payments, the final amount is sent to the client’s account.
    The resulting invoice for the services is then sent by the fulfillment company to the client, usually on a monthly basis.

Complex services from Fulfillment by FHB Group

As a company, we have been operating in the fulfillment market since 2008, during which we have been growing at a rate of approximately twice as fast every year. We can process tens of thousands of orders across 220 countries around the world every day.

We are constantly expanding our capacities, while we currently work in A-class warehouses. These are located in different countries, thanks to which we are the largest fulfillment company in Central Europe.

The basis of our services is complexity and flexibility, with an emphasis on client needs. These services are accompanied by our information system, called Kika, which covers warehousing, shipping, transportation, cash on delivery, return management, and other parts of the process.

By constantly improving the information system, we can ensure the error rate of the package to zero. A clear and thorough system can save customers thousands of euros a year.

In addition, we regularly invest in automation through our technology and warehouse expansion. Clients can thus benefit from fast and ecological packaging through a high-speed machine packaging line and more.

Therefore, we are also able to always accept new clients. We are ready for larger volumes of goods or orders, which is helped, for example, by our regular transport lines across Europe. Many years of experience, market leadership, and large volumes of managed shipments give us a strong position in setting prices with all courier companies. As a result, clients save money and time, which they can use in their main business.

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