Tell me if this sounds familiar. You set up your online store, and after working hard to grow the business and drive sales, something finally clicks. Maybe it was a great ad campaign, maybe it was getting discovered by the media, or maybe people just started to find you with no clear explanation. Either way, orders are rolling in much faster than before, and it’s getting hard to keep up!
This happens more than you’d think. Truth is, when people need order fulfillment for their online stores, they often need it in a hurry, because the burden of shipping out so many orders in-house is overwhelming.
If this sounds like you, then you’re in luck. In this article, we’ll talk about the seven steps you need to follow in order to get order fulfillment set up for your online store, be it Shopify, WooCommerce, Amazon, Etsy, eBay, or something else entirely!
1. Determine if you need order fulfillment in the first place.
Deciding to outsource order fulfillment is a big commitment. Don’t get us wrong – it’s a smart one when you do it at the right time!
But the key phrase here is at the right time.
When you have another company handle order fulfillment, you will benefit in a number of ways. You can save money, provide a better customer experience, and handle an overall higher amount of orders. Not to mention if handling your own orders is taking up all your space, time, or energy, outsourcing can fix those problems quickly too.
However, in order for third-party order fulfillment to work as a business, all clients need to have enough orders to ensure steady volume. That sweet spot is typically at least 100 orders per month, and many fulfillment companies will charge a fee for failing to meet this – or a similar – minimum monthly order volume. In addition to this, handing over order fulfillment to another company is scary – it means giving another company control over how your brand is perceived!
So when does it make sense to make the leap? As a rule of thumb, if you have at least 100 orders per month and shipping is expensive, stressful, or time-consuming, then it’s time to call for help.
(We elaborate on this more in the video below.)
2. Decide what kind of order fulfillment company you need.
Not all order fulfillment companies specialize in the same work. Most eCommerce companies ship small, lightweight, non-fragile, non-perishable items. That means most eCommerce-friendly fulfillment centers will handle those kinds of items with no issue. But still, there are a number of considerations that may require you to do some deeper research than just Googling “good eCommerce fulfillment company.”
The weight and size of your items. Small, lightweight items can be shipped by most warehouses. You will need a specialized warehouse if your items tend to be heavy (over 20 pounds) or bulky (more than you can easily carry in your arms).
Order volume. If you have under 100 orders per month, or are on the other extreme – tens of thousands of orders per month – then you will need to find a specialized warehouse. Otherwise, most eCommerce-friendly fulfillment centers will be just fine.
SKU count. If you have a high number of SKUs relative to your order volume, you may need a specialized warehouse. This happens a lot with apparel and other businesses where items come in a lot of different sizes and colors.
Fragility and refrigeration. Lastly, if your items are highly breakable or require refrigeration, you will likely need a specialized warehouse.
Aside from the above, there are a couple of other factors you will want to consider. Perhaps the most important is the location of the warehouse relative to your customers. If most of your customers are in the US, you will want to have a warehouse located somewhere that can cheaply reach most US residents within two days. Likewise, if your customers are in Germany, France, and Switzerland, you will want a warehouse in the EU near those countries.
The other important factor to consider would be value-added services. If you expect to need help with kitting or assembly projects in which a warehouse worker will essentially further process your inventory, make sure your warehouse of choice provides that service. Similarly, you may also want to work with a company that offers services such as refurbishment and freight management, if those are areas where you see yourself needing help.
3. Create a short list of fulfillment centers based on location of warehouses and available services.
When looking for an order fulfillment partner, it’s important to know that most companies will require you to request a quote. Order fulfillment pricing is complicated, so while some fulfillment companies post prices online, you won’t really know what your business situation will look like until you request a quote. This is because why pick and pack fees – the price of taking items out of storage and putting them in a box – are fairly standard, postage prices can vary widely from company to company.
With this in mind, you will want to make a list of 5-10 potential fulfillment partners. These are the companies you will request quotes from, and you will want to narrow them down later.
In making this list, choose fulfillment centers that are located so that they can ship to most of your customers within 2 days. Make sure to also choose fulfillment centers that provide the services you need, as discussed in the previous section. Once you do this, then you can request quotes and narrow down your options from there.
4. Narrow down your choices to the best options.
Because choosing an order fulfillment partner is so important to your customers’ experience, you want to make sure you choose a good one. In addition to cost, you will also want to consider the following factors.
Online reviews. Check out websites like Google, Trustpilot, the Shopify App store, and others to see what people say about the fulfillment center you are considering. Make sure to review negative comments as well, as they are often the most telling. Ignore drive-by one-star, no-detail trolls and focus on the ones that tell detailed, specific negative stories. If you see too many of those, it’s a sign to move on.
Quality of communication. Online reviews won’t tell you everything, so make sure you feel comfortable with your account representative or support team. You are going to be entering into a long-term business relationship, so you want to make sure that your answers are answered quickly and thoroughly. If you feel like something is not quite right, it’s better to pass on the fulfillment center and find a better partner.
Contracts, fees, and structure. Some fulfillment centers have complex fees and contracts. This is not necessarily a bad thing, especially if you need specialty services like the shipment of heavy or refrigerated items. However, if you feel that you’re being boxed in by a restrictive contract or you don’t understand how fees are levied, try to find a company where these are not issues.
Software quality. Much of your interaction with your fulfillment center of choice will be through their software. Make sure you are comfortable using it and that the software is easy-to-use and reliable. Most importantly – make sure it integrates directly with your shopping site so that you don’t have to do manual labor on a regular basis!
5. Integrate your fulfillment center of choice with your store.
Once you choose a fulfillment partner, then it is time to integrate their system with your store. Most fulfillment partners, us included, integrate with common systems like Shopify and WooCommerce. You will ask your fulfillment partner of choice for more instructions, and they can usually provide you with a detailed guide on how to integrate your systems.
After you set up the integration, run a few test orders through the system and make sure everything comes through as expected. Then, when shipping starts, spend the first two weeks monitoring your shopping site and your fulfillment partner’s software to make sure no items (or returns) are missed.
6. Send inventory to the warehouse.
Once you have chosen a fulfillment partner of choice, you will need to send them inventory. There are two parts of this process.
First, you will need to book freight. You can do this through a broker or a freight marketplace. Either way, you will need to arrange the shipment of your items from somewhere such as your home or a factory to the fulfillment center. That is usually your responsibility, although more fulfillment companies – Fulfillrite included – are starting to offer assistance with freight shipping.
After you do that, you will need to submit paperwork to your fulfillment partner. Some refer to this paperwork as an Advance Shipping Notice. Others call it a Warehouse Receiving Order. The name is different, but the concept is the same – tell them what you’re shipping, how much you’re shipping, how much it weighs, and when it is going to arrive.
Submitting detailed paperwork is very important here. Fulfillment companies receive items all day, everyday, so if you send your inventory without the proper documentation, it can cause delays. Fortunately, this is very easy to avoid!
7. Start fulfilling orders and processing returns.
After your inventory has been received, the vast majority of your work here is done! Orders will soon start going out, and returns will start being processed with minimal or no intervention on your part.
At this point, you have two primary responsibilities. One, make sure your customers are happy and keep an eye on fulfillment performance. Two, make sure you keep sending inventory in time so that you don’t accidentally run out of stock! (This can sneak up on you, especially early in the transition from self-fulfillment to third-party fulfillment.)
Once you decide you need order fulfillment for your online store, it’s not too hard to get it set up. After finding the right fulfillment partner, it’s as simple as integrating your store and sending inventory. The day-to-day struggle of retrieving items, packing boxes, and applying postage will become a thing of the past, letting you focus on growing your business!