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The customer experience (CX) has become the top priority of online businesses in 2021. 81% of companies view customer experience as a competitive differentiator. Customers today expect a great brand experience regardless of the sales channel—be it an online store or a marketplace.
The ecommerce order fulfilment process is one of the most crucial parts of the ecommerce journey which significantly impacts the customer experience. According to research, 94% of customers blame the retailer for poor delivery, while 47% of online shoppers decided to not shop from a brand again due to poor delivery experiences.
As an ecommerce seller, if you ensure an efficient and speedy order fulfilment process, you can significantly improve customer satisfaction, brand loyalty, sales, and ultimately, business revenue.
In this blog, you will learn what is ecommerce order fulfilment, what are the order fulfilment steps, what are your order fulfilment options, how to determine your order fulfilment strategy, when to switch from self-fulfilment to dropshipping or outsourcing fulfilment, how to choose the right fulfilment service for your ecommerce business, and the smart way to fulfil orders in 2021 with a tech-enabled 3PL, Eshopbox.
Order fulfilment is the complete process of receiving an online order, packing it, and delivering it to customers. It includes storing inventory, picking and packing products, and shipping orders to customers doorsteps. And sometimes, it also includes handling order returns.
Once a customer places an order on your website or a marketplace, several steps go into the order processing to prepare the order for delivery.
Now let's see what the ecommerce fulfilment process entails.
Receiving: In order to fulfil orders, you need inventory in-hand. Receiving refers to accepting and storing incoming inventory at the fulfilment centre. It includes documentation and physically storing inventory in dedicated storage locations, such as shelves.
Storing: Storing your inventory in a secure storage facility is critical to a smooth fulfilment process. Moreover, you need to maintain a storage facility for efficient and timely order fulfilment.
Picking: When an order is received, it is assigned to the picking team—whether by human or robot. The picker gets a picking slip including the items, quantities, and storage locations to collect the products from their respective locations.
Kitting: Bundling two or more products together into a product kit is known as product kitting. However, it is a value-added service of order fulfilment but you can take advantage of this creative merchandising technique to increase your sales and average order value (AOV).
Packing: To protect your products in-transit, they are packed with secure packing materials. These materials include dunnage such as, include boxes, bubble mailers or poly bags, packing tape, bubble wrap, and air fill. Moreover, you can also use custom packaging to extend your brand experience in order to create an exceptional unboxing experience for your customers.
Performing quality checks: To ensure your customers receive high-quality products, you need to perform quality checks at the time of receiving your inventory in the fulfilment centre and order processing. This helps you to maintain your brand's credibility and minimise returns.
Shipping: To meet all the Service Levels Agreements (SLAs) of every sales channel, orders are marked 'ready-to-ship' on time. The courier service then pick ups the orders from the fulfilment centre to the customer’s location via one or more transportation methods.
Updating: Notifying customers about their order status in real-time to ensure that they have complete visibility of their orders.
Self-fulfilment is when an ecommerce business keeps order fulfilment in-house. It is suitable for small businesses who are just starting out as in the initial stage the daily order volume is very low. Eventually, when the order volume increases, it's inevitable to make huge investments to keep up with the spike in the orders. At first glance, self-fulfilment may appear to be the best option to cut costs. However, it is usually a bad idea— there are hidden order fulfilment costs that can significantly increase your total business operations cost. So it's better to switch from this model at the right time.
Dropshipping is a method of order fulfilment in which ecommerce sellers don’t have to store or ship the products they sell. Instead, they purchase the products from a manufacturer or a third party and get them shipped directly to the customer via a dropshipping provider. It is a much more hands-off approach in which you must consider all the pros and cons of dropshipping. Dropshipping generally means that you have no control over the supply chain, quality of the products delivered, or the shipping speed. If your drop shipper fails, you also fail with them. This makes it very difficult to create positive customer experiences and build a creditable brand image.
3. Outsourcing fulfilment
Outsourcing order fulfilment to a 3PL (third-party logistics) provider can help ecommerce businesses maintain a seamless order fulfilment process. 3PL providers provide the most-efficient and cost-effective way of order fulfilment as they bring considerable expertise and knowledge to the table. There are multiple benefits of outsourcing order fulfilment to a 3PL provider. You can stay at par with the continuously changing ecommerce ecosystem and ensure exceptional customer experiences by just focusing on your core business and the rest is taken care for you by the 3PL.
When it comes to order fulfilment, there’s no such thing as one-size-fits-all. You should align your strategy with your unique business needs and preferences. Here are some essential factors to keep in mind while choosing an order fulfilment strategy for your ecommerce business:
1. Order volume
The number of products you sell, i.e. your order volume, over a period of time plays a significant role in finding an appropriate fulfilment solution for you.
If your order volume is low, it would be more cost-effective to keep fulfilment in-house, rather than outsourcing it. For example, you sell a limited variety of products and are shipping just a few orders each week. In that case, you don’t need a scalable storage facility or a powerful infrastructure to keep track of your inventory and fulfilment operations.
If your order volume is increasing quickly, you’re likely to outgrow your fulfilment strategy. It’s essential to make sure your ecommerce fulfilment strategy can scale with you. In such scenarios, it's best to outsource your order fulfilment to a 3PL provider.
2. Sales channels and technology
Your fulfilment strategy should consider the number of sales channels you're selling, especially from a technology standpoint. If you're selling your products on only one sales channel, say your online store powered by Shopify, it would be comparatively easy to manage the entire order fulfilment process. This can be done through self-fulfilment. However, if you're observing a constant growth in orders, it would be better to outsource your Shopify fulfilment.
In contrast, if you're selling on multiple sales channels, such as your online store, Amazon, Flipkart, Myntra, and more, your technology should streamline the order fulfilment process, not complicate it. You should always have complete visibility of your inventory across fulfilment locations in real-time. Moreover, if an order is placed, there should be an instant and automatic update in inventory on all channels to prevent overselling. For this, you need robust technology which can be acquired by partnering up with a tech-enabled 3PL provider like Eshopbox.
3. Customer location
The most important aspects of your fulfilment strategy are where you ship your orders 'from' and 'to'. 73% of online shoppers want affordable, fast deliveries, and 24% of customers cancel their orders due to slow shipping speed.
To ensure fast and affordable order deliveries, you need to analyse your customer base, i.e. are your customers located centrally in one region, or are they spread across the country.
If your customers are located in one or two locations, it is better to fulfil your orders from one warehouse. However, if your customers are spread across the country, it makes sense to fulfil your orders from multiple locations. You can split your inventory in multiple fulfilment centres across India covering all the zones, i.e. North, East, South and West. This will help you leverage ground shipping, which is significantly less costly than expedited shipping and faster than ground shipping from one side of the country to the other. Thus, you can reduce shipping costs and transit time.
4. Customisation needs
If you sell custom-made products, extremely fragile products or highly specialised products that require custom storage, packaging and shipping conditions, you may want to choose a more hands-on approach. As most fulfilment companies usually provide standard solutions for standard products. Even if some fulfilment company agrees to offer on-demand fulfilment services, it might be more costly. Most importantly, it can mean giving up control over every custom detail.
Your fulfilment process can either drive you forward or hold you back. For that, it is essential to shift from in-house fulfilment or dropshipping to an outsourced fulfilment (3PL) provider at the right time. Here are a few questions you should ask yourself to ascertain that you require a fulfilment partner for your ecommerce business:
High shipping fees and slow shipping speed are the biggest reasons for shopping cart abandonment. However, you can either provide speedy delivery by incurring more costs or offer free delivery by compromising the delivery speed. A 3PL provider can help you achieve both by reducing the cost of shipping and reach your customers fast.
If your order accuracy is declining—customers are being delivered incorrect or damaged products, you can prevent that by outsourcing your fulfilment. 3PL providers ensure excellent order accuracy and a delightful fulfilment experience for your customers.
If you are experiencing order volume fluctuations throughout the year due to seasonality or flash sales, it means that your inventory levels, storage requirement, and manpower requirement also changes frequently. 3PL providers have a large pool of resources to allocate according to your current order volume to manage fluctuations in sales effectively.
If you are fulfiling your orders, but not in the most efficient and cost-effective way, you should outsource your fulfilment. 3PL providers help unify your fulfilment to achieve greater cost savings, increased efficiency, and consistency across multiple sales channels by incorporating advanced technology and powerful workflows.
If your daily volume is constantly increasing with time, your ability to handle them in-house is diminished– resulting in missed deadlines, poor standards, and overworked staff. A 3PL provider can ensure fast order deliveries, increase your manpower and storage capacity to handle overall order increase, peaks, and troughs.
If you want to expand your online business, you must ensure that your fulfilment process is ready to grow too. As you will be focusing on bringing sales to the store, fulfiling more orders can deviate you from making more sales. A 3PL provider can help you dedicate more time to your business expansion plans. While fulfilment tasks are crucial, they're not the reason you started your business. A 3PL provider can enable you to focus on high priority tasks and take care of the order fulfilment and supplementary activities allowing you to scale flexibly.
Although there are multiple benefits of outsourcing ecommerce fulfilment, unfortunately, there are many misconceptions that hold brands from outsourcing order fulfilment. You can dispell some of the common myths about partnering up with a 3PL provider and achieve long-term success for your ecommerce business by choosing the right order fulfilment partner.
It is crucial to assess the order fulfilment partner by posing the right questions:
Eshopbox is a tech-enabled 3PL provider offering an all-in-one ecommerce logistics platform using modern software to provide fast and affordable fulfilment. Brands of all sizes — use Eshopbox full-service solution to store inventory at warehouses near their customers and ship orders with the Eshopbox carrier network to improve transit times and shipping costs. With Eshopbox, you can put your ecommerce operations on autopilot by ensuring SLA-driven order processing, incredible order accuracy, custom branded experience, and lightning-fast delivery across India. Eshopbox's deep integration with sales channels enables you to earn prime-like badges to accelerate your sales.
Thus, Eshopbox's distributed network of fulfilment centres across India, fulfilment infrastructure, powerful automation technology, extensive industry experience enables you to scale confidently and unlock your ecommerce potential.
An order fulfilment process can either make or break your online business. Having a sound strategy in place can help you succeed in the ever-growing and competitive ecommerce landscape. By considering the unique requirements of your business, you can choose a competent fulfilment partner that could be a substantial piece in your overall business puzzle to drive significant growth.