Product fulfillment is much more than the process of readying your product for delivery to the customer. With social media and customer reviews on the rise, smooth fulfillment is crucial to gaining customer loyalty and maintaining your business’s reputation. And whether fulfillment services are handled in-house or outsourced to a third party, having a reliable process that reduces order error can make or break a business.
Order fulfillment is the process of taking requests from customers, assembling the merchandise, and packaging and delivering the product to the designated shipping address. The following are the two primary types of fulfillment:
- Product fulfillment: This is the process of product manufacturing, warehousing, assembly, quality control, and delivery directly to customers. Customers can place orders via the Web, e-mail, telephone, or fax. This method of fulfillment is also called “drop shipping.” Fulfillment companies typically charge a small percentage of each sale and bill the client at the end of the month.
- Service fulfillment: Sometimes referred to as “membership fulfillment,” this is the process of making particular services available to the subscribed members. Service fulfillment involves setup of customer profiles in computer systems, coordination with various service providers, quality control, and delivery of services to the customers. Typical services include e-mailing customers usernames/passwords for access to membership sites or mailing membership cards to customers.
A typical fulfillment center handles each order received in a few well-designed stages, according to the particular product you’re selling:
- Warehousing: Fulfillment centers that handle warehousing store inventory for companies offsite. They order new products from the business when they run low and sometimes allow business owners to monitor the inventory online.
- Order processing: When a business receives an order from a customer, it passes it on to the fulfillment center, which processes the order via an electronic invoice. The fulfillment center pulls the item from the inventory and makes sure it gets to the right address. Many smaller fulfillment centers pick and pack orders manually, while larger centers usually have automated systems.
- Returns and exchanges: Many fulfillment centers can take care of customer returns and exchange requests for you, as long as they adhere to your company’s return policies. Fulfillment center staff examine returned items to determine whether they can be resold. Sometimes the service provider charges a small fee for restocking products.
The recent wave of e-commerce companies is tailor-made for fulfillment services. Typically there is an individual who works from home and doesn’t want the hassle of buying a physical location or hiring a staff. Outsourced fulfillment allows the owner to concentrate financial and human resources on marketing and product development.
Fulfillment centers are also ideal when a company becomes too large to handle the process themselves, such as when sales are booming or the product is difficult or time-consuming to assemble. Valuable resources can be saved without compromising the speed and correctness of order delivery.