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Order Fulfillment Process: 4 Steps [+Flow Chart]

Any time you order something online, it's getting shipped from somewhere. Whether it's coming from Amazon, Walmart, or your favorite shoe store.

Now think about the times an order hasn't shown up. Or it was late. Or it was damaged.

Odds are, you aren't going to order something from there again!

So, how do you make sure that doesn't happen with your ecommerce brand? The answer is perfecting your order fulfillment process.

What is the Order Fulfillment Process?

The definition of the order fulfillment process is a set of activities a company performs to receive and deliver orders to customers.

There are generally four steps in the order fulfillment process: receiving, picking, packing, and shipping.

Fulfillment Process Steps

Step 1: Receiving

Before you ever get an order, your inventory must arrive safely. Receiving involves the unloading and storage of inventory to a fulfillment center.

You will have to submit documentation on what you're sending in and the 3PL will verify that the quantity you entered was the quantity that was received. Accurate inventory counts are important so you don't oversell or undersell based on your stock.

Once your fulfillment partner has your inventory, it is stored in bins, shelves, and pallet locations.

Step 2: Picking

You'll integrate your store (ex. Shopify) to the 3PL's software. Once a customer places an order, your 3PL will be able to process and pick the order.

The warehouse will delegate which member of the picking team will pick your order. The picker will grab the packing slip with the SKUs, items, and locations and obtain the products from the order from their various locations around the warehouse.

Step 3: Packing

Once the picker has all the items they need, they pass them on to the packer.

Your 3PL will determine which packaging is necessary for your order, such as boxes, bubble mailers, or poly mailers.

They'll also use any other necessary dunnage, such as bubble wrap, kraft paper, or air pillows for void fill to protect your product while in transit.

Step 4: Shipping

Now that your order is packed, you're ready to ship.

Your 3PL will purchase labels for you and apply them to the order. Their software should calculate the best rate for your order depending on the weight, dimensions, and destination of your package.

One big advantage of a 3PL is shipping rates, since they can negotiate big discounts to save you on postage fees.

Once the order has been shipped, the tracking information is updated automatically back to your store and shared with your customer.

Fulfillment Process Flow Chart

How to Improve Your Order Fulfillment Process: Tips & Tricks

The Receiving Process is Crucial

When inventory comes in, you'll want to make sure your counts are correct. Incorrect counts can lead to shrinkage, overselling, or underselling. You'll also want to do this quickly so you can start selling as quickly as possible.

Make Sure to Forecast Demand

No one knows exactly how much they are going to sell, but you should have a good idea of what sales are going to be. It can take months for inventory to arrive when you place a purchase order and the last thing you want is to go out of stock.

Pick Orders Carefully

Exchanges and incorrect products shipped not only cost you a lot of money to fix, but they damage your reputation with your customers. Your 3PL should utilize barcode scanners to make sure the correct items are picked every time, but if you're doing it yourself, just make sure to double-check!

3PL Guide for Fulfillment Services

Is a 3PL Right For My Business?

Depending on your business needs, a 3PL may not be the best option for you. Here are a few things to consider:

  • Capacity - Is fulfillment overwhelming you or taking time away from growing your business?

  • Volume - Can you handle shipping in-house? At some point, you will have to decide between leasing your own warehouse space and using a 3PL. If you are a small business, we have a great guide to help you run fulfillment in-house like a pro.

  • Location - Are you near most of your customers?

  • Order Weight and Dimensions - Are your products large and/or heavy? A 3PL can get you great rates, especially on bulky products.

  • Complexity - How custom is your process? If you are hand-writing notes, using custom packing tape, and your own tissue paper, it could be really expensive to use a 3PL.

  • International Shipping - Do you plan on shipping internationally? A 3PL gives you easy access to the international market with cheap rates.

  • Running a Warehouse - Do you really want to manage staff, commit to a long-term lease, and manage your own warehouse? Or do you want to focus on growing your business?

For a full analysis and free quiz to help you determine if you need a 3PL, click here.

What to Look For in a 3PL

  • Capabilities - Do their services match your needs?

  • Capacity - Can they handle your volume as you grow?

  • Service - Do they have adequate SLAs?

  • Support - Will getting help feel like pulling teeth

  • Pricing - Are their rates competitive?

For a step-by-step guide on how to choose a 3PL, click here.

3PL Fulfillment Pricing Breakdown

3PLs can have a variety of different pricing models. When you get quotes, you'll be presented with a variety of different fee structures. Luckily, the fee structure doesn't matter (say what?).

The only thing that matters is your total cost per order for fulfillment. This means totaling up all your monthly fees and dividing it by your number of orders to determine your true cost per order.

We have a killer 3PL comparison template that allows you to plug in your quotes from multiple fulfillment providers and it will automatically output your total cost per order and rank them based on the factors most important to you.

Leave Order Fulfillment to the Pros

Struggling with order fulfillment? OTW Shipping is an order fulfillment company that will integrate with your selling platforms, store your inventory, and pack and ship your orders for you!

Fantastic company to work with. Helped me countless times with confusion I had, amazing support/guidance and great service. 100% recommend to go with them over Shipbob, Deliverr, or any other bigger service you're thinking of going to. - Karan Jaggi, Founder of Isla Eyewear

Reach out to see if we're a good fit for your growing brand and get back to what you do best: your business!

Frequently Asked Questions

What is product fulfillment?

Product fulfillment is the process of taking and completing orders for customers.

What is the definition of order fulfillment?


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