Fulfillment operations primarily refer to the process of getting a product delivered to the right customer at the right time after a successful sale. Since the inception of eCommerce sales, it implies the procedure of proper order placement, picking from the inventory, packaging and shipping the order to the buyers. If you have a good website or selling on online portals, your ability to swiftly fulfill and ship the orders will highly affect your sales.
The process of fulfillment operations has become complicated to manage due to various reasons. Customers in Hong Kong tend to cancel/return an order or leave the shopping cart if they find –
- the final price for shipping and taxes are high
- delivery time is long
- have a poor delivery experience like product mismatch & substandard quality.
Owing to the fact that any one of the reasons mentioned above can be fatal for your future business, it should be avoided at any cost. And, if you continually face these problems, it is time to plan and structure your fulfillment operations at the very next instant. Here are some key points that you need to understand before you can simplify and streamline multichannel fulfillment operations in Hong Kong.
There are four major departments for fulfillment operations.
- Receiving- order placed from an online store and sent to pick from the warehouse
- Inventory storage- Warehousing/ Stock Keeping Unit
- Order processing- primarily deals in packaging
- Shipping- sent to the correct address
Now depending upon the order volume and products, there are three methods of fulfillment that are most commonly in use.
It can be done If you have the capability to handle and investment to cover large scale operations without the help of a third-party logistics provider or dropshipper. It is great for someone who just starts to manage inventory from home. It gives a 100 percent control on the inventory, staffing and money. Picking, packing and shipping do not involve a whole lot of extra cost.
So, if you are starting to sell online, start with securing a warehouse and installing a proper eCommerce warehouse management system (eWMS), so that you get ready for both B2B and B2C operations and for smooth functioning of the warehouse.
Third Party Logistics or 3PL comes into the picture when your eCommerce business is flourishing and you need to fulfill tons of orders every day. It becomes frantic to handle picking and shipping orders and it is even tough to handle the inventory with a strategic plan. 3PL provides management to the distribution infrastructure from receiving the catalog from the manufacturer to restocking the returned product.
After outsourcing your fulfillment process to a trusted professional 3PL’s staffs, you do not have to invest a whole lot of money in buying a warehouse or hiring experts. Moreover, 3PLs have the logistical expertise in handling fulfillment projects in bulk hence can negotiate a considerable amount of discount from the shipments which improves your profit margins.
Make sure you do not miss the chance to check the customer satisfaction levels. Talk to them in case you have negative feedback and immediately change your 3PL provider if there is a mistake in perpetuity. Recruiting compliant staff stays optional until you require it the most.
As an eCommerce merchant, you don’t have to hold the products under your control. It’s your manufacturer who provides the facility of storage, packaging and shipping. With the help of proper order management software (OMS), it is easy to manage and forward the order to the manufacturer automatically. The manufacturer then supplies or dropships the product to the buyer’s delivery address. The complete procedure works in sync so that there is no confusion while picking the inventory. To have a relationship with a dropshipper is excellent for your business. You get to list more products in your eCommerce marketplaces and sell more without lining up on any part of the logistics operation and minimize chances of inventory closure. Even though dropshipping is not suitable when a business scales up and you have to coordinate with multiple suppliers, you can take help of an expert eWMS. Dropshipping saves a lot of overhead costs like warehousing and shipping.
Understanding the procedure of fulfillment operations is required before opting for any of the methods mentioned above. Also, keep in mind what kind of fulfillment operation suits your company and budget. A completely structured fulfillment operation makes or breaks a business because it affects a lifetime value of the customer relationship.