The Importance of Order Fulfilment Centres for eCommerce - Intact

The speed and efficiency at which online orders are processed can make or break your eCommerce operation. Customers expect fast and timely order turnarounds, complemented by transparent communication and accurate tracking capabilities.

Getting order processing and shipping right begins and ends with a robust fulfilment cycle. From goods-in to a customer’s front door, order fulfilment is the single most important aspect of selling online, and is key to ensuring your business delivers for the needs of its customers in an increasingly competitive eCommerce arena.

Happily, there are ways of streamlining your order fulfilment processes, foremost of which could entail having a designated fulfilment centre. This is a centralised space for managing orders, inventory, and shipments, and can help to ensure that your logistics are running efficiently under one roof.

Sometimes, eCommerce businesses outsource fulfilment activity to a third-party specialist. They’re responsible for picking, packing, and delivering orders on your behalf, which can bring significant benefits and reduce the resources required to manage fulfilment in house.

To demonstrate the importance and benefit of having a designated order fulfilment centre, this article will focus on the key considerations and advantages which such a resource can bring to your eCommerce operations. Use the links below to navigate or read on for the complete guide.

Quick Links 

• 7 Key Benefits an Order Fulfilment Centre Can Bring to Your eCommerce Operation
• How Does an Order Fulfilment Centre Work?
• What’s the Difference Between Warehousing and Order Fulfilment Centres?
• The Role of ERP Software in the Order Fulfilment Cycle

7 Key Benefits an Order Fulfilment Centre Can Bring to Your eCommerce Operation

Efficient eCommerce relies on rapid and efficient fulfilment, something that can be difficult to achieve when managed internally. For businesses new to selling online, it can be all too easy to underestimate the challenges involved in fulfilling web orders in a timely and consistent way, which is why many SMEs (and larger brands, for that matter) outsource order fulfilment to external specialists.

If you’re considering how best to manage your eCommerce activity going forward, here are seven advantages of using a designated order fulfilment centre to manage this side of your operations.

1. Fast and efficient order processing – fulfilment specialists are experienced in processing orders at scale, and are almost guaranteed to process, pick, and deliver goods faster than you could internally. They do this by leveraging the latest inventory management automation tools, which link up with your eCommerce software to optimise fulfilment times.
2. No physical infrastructure requirements – consider the costs involved in developing and managing your own warehousing and distribution infrastructure – such a setup is beyond the reach of many online retailers. With a third-party provider, you can tap into the capabilities of an advanced order fulfilment centre, leaning on them for storing, processing, packing, and delivering customer orders.
3. Scalable fulfilment capabilities – with minimal internal infrastructure, you can easily scale up your fulfilment requirements to suit a larger volume of orders as your eCommerce operations grow. Third-party fulfilment specialists are capable of processing hundreds, if not thousands, of orders each day, so there’s never an upper ceiling on how many orders you can channel through your fulfilment partner.
4. Reduced staffing costs – warehousing and logistics means extra staff to manage your fulfilment operations, and this can present significant overheads for eCommerce retailers. Working with an external order fulfilment centre eliminates these staffing requirements, so you can more easily control costs and reduce HR requirements.
5. Greater product variety – since order fulfilment centres can store, pick, pack, and deliver hundreds of items with ease, this gives you the freedom to expand your product range and introduce greater variety to your inventory. Without compromising on efficiency and speed, you can scale your eCommerce offering, which means increased revenue and a broader customer base.
6. Streamlined automation and control – order fulfilment centres link up with your existing eCommerce/business management software, introducing advanced automation which ensures rapid and consistent fulfilment times. This is ideal for businesses investing heavily in eCommerce activity, giving you a controllable and trackable way of maintaining efficient order processing.
7. Frees you from the admin of order fulfilment – packing and handling orders in house can be a time and resource-intensive undertaking, so outsourcing can certainly help to lighten the load. And with the time you’ll win back by handing fulfilment tasks to a third party, you and your team can focus more on business strategy and planning for future growth.

How Does an Order Fulfilment Centre Work?

Think of order fulfilment centres as a warehousing and logistics partner. They handle the legwork of fulfilling your online orders, including activities such as storing, packing, picking, and shipping, while you control the day-to-day running of eCommerce operations (e.g., taking payments, communicating with customers, and handling queries and complaints).

So, how does an order fulfilment centre work in relation to your eCommerce site?

To begin with, you’ll need to place inventory within the order fulfilment centre, before connecting said items with your eCommerce system. Therefore, when a customer places an order on your site, this triggers an automated fulfilment request which is fed to the fulfilment centre, which then sets about preparing the goods ready for shipment.

When selecting an order fulfilment centre, it’s important to establish how fulfilment alerts will be triggered. Automation is, in our view, a prerequisite, since it’s unfeasible to manually alert your fulfilment partner each time an order comes through on your website. You also need to consider things like pricing and location, as well as other factors such as how well an order fulfilment centre aligns with your business (i.e., from an environmental or ethical standpoint).

Before partnering with an order fulfilment centre, you also need to understand the things they can’t do on your behalf. For example, it’s still your responsibility to investigate and resolve incorrect orders, while making sure your inventory is correctly logged and tracked on the fulfilment centre’s systems. You’ll also need to ensure that you’re accurately tracking inventory volumes, since it’s your responsibility to keep on top of stock within the fulfilment centre, so that you avoid sell outs and overstocks.

What’s the Difference Between Warehousing and Order Fulfilment Centres?

Warehouses and order fulfilment centres may sound comparable, but there is a key difference in how they work and what they offer.

Warehousing typically means simply storing inventory for a later date. For example, this is where your inventory may be stored until it’s moved to an order fulfilment centre for processing and shipping.

While an order fulfilment centre can store your inventory, it’s usually only for short periods, with the premise that goods will soon be processed, packed, and shipped to customers. Storing inventory in an order fulfilment centre for long periods is wasteful, which is why accurate sales forecasting is essential for ensuring that the right items are at the fulfilment centre at the right times.

The Role of ERP Software in the Order Fulfilment Cycle

ERP software is an indispensable tool for supporting effective and efficient order fulfilment. Whether you handle fulfilment in house or outsource to a third-party specialist, the capabilities of an ERP system mean a more unified approach to fulfilment, wherein both your eCommerce, warehousing, and logistics operations are intrinsically linked by automated processes and enhanced, real-time data.

We hope this guide has shone a light on the advantages and capabilities of order fulfilment centres. If you need support optimising your eCommerce operations, Intact can help thanks to our range of innovative, efficiency-focused business management tools. To learn more about how we can help elevate your online sales, visit the homepage or contact the team today.