Since the inception of Amazon Prime, the standard for online shopping has risen exponentially, Customers have begun to expect their orders to be delivered without delay — and often at a lower cost than many businesses advertise.
In fact, there is evidence to suggest that over the last few years people have become more willing to abandon their cart if shipping fees and taxes are higher than expected. Moreover, online shoppers have repeatedly stated that delivery speed is one of the most important factors they consider when making a purchase.
It has even been estimated that up to 40% of online shoppers will never shop with a retailer again if they had a poor experience with shipping or delivery.
All of which means that getting your Order Fulfillment Strategy sorted is pretty damn important if you intend on running a successful online business.
What is Order Fulfillment?
But first — what are we talking about when we discuss order fulfillment?
The term Order fulfillment refers to the entire process associated with receiving, packing, and shipping off an order to a customer. Most small business owners opt to undertake this entire process themselves, where they receive an order online, pack it at home, and then ship it off as soon as they possibly can.
While this is one of the more common approaches to order fulfillment, it may not be the best.
See, there are a number of ways you can get your orders fulfilled by a third party. This allows online small business owners to completely outsource the order fulfillment process, allowing them to focus on things like marketing and, you know, actually running a business.
With this in mind, there are a number of different approaches you can take to order fulfilment, each with their own unique pros and cons.
Which is what we want to highlight here today.
1. Standard In-House Fulfillment
I’ll keep this one short and sharp, as I have already alluded to it above.
As a small business, in-house fulfillment describes the process of receiving, packaging, and shipping orders yourself.
This is a cost effective option that works well for small businesses that are just starting out and don’t have the need to outsource their fulfillment process. However, as a business grows, this becomes less effective.
It may reach a point where you receive such a large number of orders that fulfilling them starts taking away from other important tasks. In this setting, you may also need to consider renting out an extra space for storage, or even hiring a set of extra hands to help.
All of which would suggest that a different strategy is needed.
2. Third-Party Fulfillment
As you may have guessed, third party fulfillment companies pretty much complete the order fulfillment process for you.
This is a fantastic option if you find yourself spending too much time packing boxes and shipping orders yourself, if you have run out of storage room, or feel as if your time could be spent more efficiently working on other projects.
While it may sound like an unnecessary cost to have someone else ship your orders for you, it does come with some other distinct advantages.
These companies are designed to do this. They have the expertise required to ship things quickly and efficiently. Moreover, because they ship so many packages on a daily basis, they often get lower shipping rates with the bigger shipping companies.
This means that while it will come with a slightly greater cost, it will not be as large as you think — and it may even improve the speed at which your customers receive their orders.
3. Canadian Fulfillment
Canadian fulfillment is similar to other third-party shipping options, although there is a slightly different purpose — to lower the import costs associated with the purchasing of foreign products.
American businesses who get their products from overseas have recently seen a rapid increase in shipping costs due to the introduction of Trump’s import tariffs. This has markedly increased the cost of business, forcing many to close.
But Canadian fulfillment allows you to redirect your shipments through Canada. In doing so, they allow your products to gain a classification as a “Section 321” shipment, which means they can cross the US border completely tariff free.
This is the perfect option for those of you who get your products from places like China and are therefore hit with a hefty import cost.
Section 321 Explained
Section 321 is a little-known solution that allows you to import Chinese made goods to the USA without having to pay the tariffs imposed by Trump. But in order to qualify for Section 321 clearance, the order has to have a value of less than 800$. So, with Canadian fulfillment, you can order as per usual, but have a third-party break it down into smaller orders for individual customers.
When it comes to selecting a partner for Canadian fulfillment, you do need to be selective. While reducing import costs are great, you also want to ensure that your customers receive their products without delay.
Some companies, such as Stalco, are doing Canadian fulfillment right, with a distribution center extremely close to the American border, they only use well known shipping companies for order distribution, and they even offer same day fulfillment — all of which means that your customers will get their orders as quickly as possible.
The approach you take with order fulfillment can make or break your business — which is why you must get it right.
While the approach you take will be dictated by your current state of growth and your individual business needs, it is important to remember that there are a variety of options available.
So, take your time and choose wisely.
- Accepting Credit Cards Online: 10 Red Flags For e-Fraud
- How to Calculate Shipping Costs in eCommerce
- What Works on the Web? 12 Lessons From Successful Home-based Online Entrepreneurs
- How to Save Money On International Shipping
- Outsourcing Your Ecommerce Order Fulfillment
a WordPress rating system
a WordPress rating system