ABC of Fulfillment for Ecommerce
The success of an eCommerce depends on several factors, and fulfillment is one of them. We tell you why and everything you need to know about the subject.
Why is it so important for an eCommerce to know what fulfillment is and what it is for? Simple: understanding this concept is the first step to working on logistics that guarantees the arrival of orders in the hands of customers.
As online sales grow, brands must offer experiences that convince people to continue purchasing their products, since a single mistake can be enough to make them choose the competition.
If you have an online store and are interested in delving deeper into the topic, read the following paragraphs, as we will delve into the characteristics of fulfillment and we will also share actions that you can implement now in your business so that no shipment is delayed.
What is fulfillment?
Fulfillment, or compliance, refers to the entire process that is carried out for an eCommerce to deliver to customers the products they purchased, and in which, both the speed and the quality of the services, are highly valued attributes in the market, becoming a differentiator.
It was introduced by the giant Amazon in its search for innovative logistics solutions, and today, it enjoys greater popularity in Latin America and the world as a successful strategy to bring products closer to the end consumer and speed up the fulfillment of online orders.
In fact, there is also the possibility for a digital seller to delegate all tasks related to logistics to specialized companies, whose infrastructure makes it possible for fulfillment to be successful from start to finish.
Why is fulfillment important in eCommerce?
Imagine that you buy a product online and, in addition to it not arriving on the indicated day, you don't know where it is, or when it will arrive. Surely it has happened to all of us at some point. What feeling did it generate in you? The same thing can happen to your eCommerce customers if you don't keep your delivery promise.
More than 50% of online users consider shipping speed as one of the decisive factors in their purchasing decision, while almost 40% will not purchase again from a store with which they had a bad delivery experience.
Loyalty is one of the priorities for any business, and in the e-commerce sector, the experience with the order contributes to generating a positive perception in the consumer and increasing the repurchase rate.
What processes does fulfillment include?
When an online business does not have what is necessary for its fulfillment to be efficient, the best decision you can make is to trust a logistics partner to help ensure that each stage is completed without complications. What are those phases? Below, we explain them to you:
- Order generation
Once the customer finishes paying for the product and the order is generated, the fulfillment expert company comes in, as the time you defined in your delivery promise begins to run. Your job is to keep track of the inventory, know how many pieces you have and in which warehouse in real time so that the shipment is made in a timely manner.
- Order processing
After the order is received, the product is taken out of the warehouse and prepared to leave the route. This link in the chain plays a determining role; However, whether it goes well depends on no dispensing errors being recorded and the speed with which it can begin to be transported to the customer's destination.
- Shipment
When the order has been processed and dispatched with the courier / parcel service, the last mile phase begins, whose objective is for the user to receive their purchase, and at all times, the fulfillment companies provide full traceability to the end customer and the seller about the status of the order.
- Customer Service
At the end of the sale, it is mandatory to offer an excellent after-sales service, in which people's doubts and needs are addressed, a highly valued factor that customers take into account in future purchases.
- Returns
Dissatisfied customers or certain conditions mean that returns can occur in any of the sales, but the important thing is to find the best way to deal with them from fulfillment, generating the minimum possible impact on the business.
The following graph shows each of the steps included in the addressed process:
In summary and as we already mentioned, one of the advantages of outsourcing fulfillment is that it avoids the wear and tear, loss of time and investment required by the tasks and processes related to the shipping of products, so that brands can focus fully on brand positioning and generating sales.
Fulfillment models for eCommerce
Each eCommerce is different, both in its sales volume and in its growth projection and internal administration; The type of fulfillment that best suits your needs and your logistics process depends largely on these aspects. It can be implemented in three ways:
Internal fulfillment (In-House)
The eCommerce assumes all the functions of inventory storage, preparation and packaging of the order on its own, that is, without hiring fulfillment services. The last mile, depending on the case, can be internal or external with parcels/courier services.
It is a good alternative for those who do not yet have a high volume of orders, have the storage space for their stock, as well as the personnel to efficiently manage distribution. However, it requires an investment of time that could be implemented in making important decisions for the store.
Outsourced Fulfillment (Outsourcing)
It applies to those businesses that have grown and do not have the time or infrastructure to meet their high sales demand. Considering outsourcing to a specialist is the ideal option if your warehouse is no longer sufficient, if your store operations are getting out of control, or even if the systems you have no longer offer the expected performance.
In these cases, delegating storage, stock management in your inventory, and distribution of shipments can improve customer perception in the last stage of the purchasing process and make your business continue to evolve.
Hybrid Fulfillment
It is a formula that allows eCommerce to maintain, for example, the direct management of products that have high turnover or require special treatment, and delegate the distribution of other items or more complex geographical areas to the supplier.
During high-volume campaigns or peak seasons such as Hot Sale or Buen Fin, hybrid fulfillment is an opportunity to absorb demand without the need to oversize one's own infrastructure; In addition, it facilitates expansion into new markets.
To learn more about it, we invite you to read the post we made on the subject:Fulfillment models: Which is best for your e-commerce?
Differences between fulfillment and traditional logistics
- Operational approach
Lifelong logistics is designed to supply physical points of sale by moving high volumes of products to warehouses or branches. It works well when looking for efficiency per batch or route.
Fulfillment, on the other hand, focuses on individual orders, requiring more operational flexibility and real-time coordination: each request is treated as a unique event: it is picked, packed, labeled and shipped based on the customer's address, not a standard route.
- Type of orders
In traditional logistics, orders are normally scheduled, with fixed destinations; On the other hand, fulfillment handles an enormous diversity of products, which requires an infrastructure capable of processing hundreds or thousands of different orders per day, each with its own destination, content and delivery times.
- Final goal
Traditional logistics seeks to maintain stock available at the point of sale. The purpose of fulfillment is to fulfill the promise made to the customer at the time of purchase in an agile and precise manner.
- Technology and integration
While in traditional logistics technology is only an internal control tool, in fulfillment it is essential, since it is used for activities such as synchronizing inventories, scheduling routes or unit tracking, automating order assignment and more, in order to provide complete visibility to the customer and the logistics operator in each phase.
- Customer experience
In traditional logistics, the customer does not interact with the operation; You only perceive the final result if you go to the point of sale. In fulfillment, any smallest detail of the operation has an impact on the user experience: from delivery times to the presentation of the package.
Advantages of outsourcing fulfillment in your online store
Fast shipments without losing sight of your stock
A specialized fulfillment provider operates systems that allow inventory and orders to be monitored instantly, which shortens delivery times, minimizes preparation errors and improves the promise of fulfillment.
Ability to scale in peak demand
Peak seasons, launches and promotional campaigns can put internal operations in a predicament; However, with a strategic ally, it is possible to save your team from collapsing or overcrowding warehouses, since they will take on the additional volume.
Less invisible expenses
At first glance, outsourcing seems more expensive, but when you look at the total operation (physical space, staff, software, packaging equipment, returns, insurance, losses), the numbers change. Fulfillment transforms fixed costs into variable costs and allows you to predict the expense per unit delivered with greater accuracy.
Logistics as a competitive advantage
Currently, the market is saturated and both delivery times and the after-sales experience can tip the balance; Therefore, if you decide to look for a professional fulfillment service, you will be able to differentiate yourself from your competitors by guaranteeing faster deliveries, presentable packaging and simple return processes.
Focus on business growth
Your staff will be able to redirect energy towards tasks such as product development, marketing, channel expansion or customer service, since the expert logistics team will ensure that fulfillment strategies work perfectly.
Where is fulfillment going?
The global trend is outsourcing, its positive results in terms of efficiency, quality of service and reduction in operating costs, make it one of the #1 practices to conquer broader markets.
In Mexico, for example, the adoption of such services by eCommerce has gradually grown and it has been recorded that more than 40% of Mexican online stores outsource the storage service for their merchandise.
Read also:What are smart logistics solutions for e-commerce?
Focus on growing
Don't let your efforts in your sales channels be overshadowed by a bad fulfillment process. Start by taking the time to evaluate these aspects:
- Size of your eCommerce
- Number of monthly orders
- Operational capacity
- Growth projection
- Location of your clients
- Preparation times
- Shipment Pickup
- Order delivery and product returns management
- Percentage of errors during the process
The above will allow you to have a clear overview of the opportunity areas of your company, highlight opportunities for improvement and determine if it is time to delegate your logistics operation. Remember: the more efficient you are in responding to orders, the more profitable the operation will be and the more satisfied your customers will be.
How can Cubbo help you with your fulfillment processes?
At Cubbo, we can be the ally in Mexico that you are looking forrethink your fulfillment strategy. We work with an integration platform with multiple sales channels, including TikTok Shop, without the need for intermediaries like Shopify, so that your fulfillment is fast.
We also have an infrastructure designed to handle high volumes of orders at peak demand and have adapted services according to the needs of different industries. For example, for the fintech sector, we provide fulfillment solutions that accelerate card activation, with deliveries in less than two days and a 97% success rate.
For brands seeking to expand in the Mexican market, Cubbo acts as Importer and Merchant of Record (IOR and MOR), handling legal and tax aspects. Likewise, we have a system that allows customers to request exchanges or returns from the eCommerce website; Afterwards, we take care of the returned products.
Know our numbers:
- Cubbo customers recorded average savings of 21% in operating costs.
- 97.1% of the products received in our warehouse were processed in the system and were ready to be sold within 24 hours.
- We had shipment compliance of 99.7%.
- We record an order fulfillment accuracy of 99.9875%, that is, 1 error per 8,000 shipments.
- 60% of our deliveries in CDMX were made on the same day.
- We deliver nationwide in an average of 1.3 days.
If your online store operates in different regions, rely on solutionsfulfillment in Mexico CityIt will allow you to maintain efficient control of your inventory, ensure fast deliveries and improve the customer experience in one of the areas with the highest concentration of orders in the country.
Now that you have a broader notion about fulfillment, you have to review the logistics of your online store and enhance it with a fulfillment that is up to par, but you shouldn't do it alone: Cubbo will accompany you.Don't hesitate to contact us!
