Storage to Delivery: The 5 Stages Of Order Fulfilment

If you run an online store (or are thinking of running an online store), you’ll need to understand how order fulfilment works. This is the process of getting your product to the customer. Order fulfilment can be broken down into several stages. By optimizing each stage, you can save costs, speed up delivery and prevent loss/damage of items. Below, we’ll take a walk through these five stages and how to manage each one.

Stage #1: Storage

Everything begins with how and where your products live. If you’re running a small store, you might be able to store everything at home in your garage or in a self-storage unit.  If you’ve got a large inventory or are receiving lots of orders, you may need to consider looking into a warehouse for lease. Make sure products are stored at the right temperature and clearly labelled and grouped for easy picking. Use software to help alert you when stock is low or when items are about to expire.

Stage #2: Picking

Once an order is placed, the picking process starts. This could be done by you, your staff or even by robots. Efficient picking requires clear shelf labelling and a smart layout that reduces travel (consider storing popular items near the front of your warehouse and store together items that are commonly ordered together). Many companies use batch picking to pick multiple orders at once. Consider creating a warehouse map and electronically confirm picking by using RFID tags, allowing you to scan each item.

Stage #3: Packing

Each order needs to be carefully packed to protect it from damage during transit. When choosing packaging, you also need to weigh up factors like presentation, cost and sustainability - ideally you want packaging to be robust, visually attractive, cheap and recyclable. On top of outer packaging, consider inner packaging (such as dividers, bubble wrap, packing peanuts, shredded paper or polystyrene).

Stage #4: Shipping

After items are packaged, they can be shipped to customers. You’ll need to choose a courier that can ship items within the agreed deadline at a reasonable cost. When shipping items long-distance, this will require using a mix of freight shipping companies and last mile delivery companies. Drop-shipping (storing items in different warehouses around the world) can help minimize shipping times and costs, but is only suitable for companies getting lots of international orders. Do your research to find a reputable courier.

Stage #5: Delivery

When your item reaches the customer, it’s important that you confirm delivery. Use software to track orders and consider requiring photo evidence or a signature. You can ship directly to a customer’s address or use pickup points to provide extra flexibility. Think carefully about which addresses you are willing to deliver to - as a startup, you may want to keep things local at first.

Bonus sixth stage: Returns

Sometimes the journey doesn’t end at delivery. If a product is damaged or the wrong size or an unwanted gift, it could be crucial to have a returns policy in place. Think about how to carry out these returns in a cost-effective and efficient way - will you pick up items from customers or will customers be required to post returns themselves? Also make sure that your return window is reasonable both for you and the customer. With personalised products, it’s okay to not accept returns.

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