Four Key Factors to Design a Successful Ecommerce Order Fulfillment Strategy

Designing a successful eCommerce order fulfillment strategy can be tricky because this task requires consideration of various factors in the process. You need to understand all aspects of the supply chain and provide your customers with an excellent experience after careful planning and optimization.

Here are some tips to help you design an eCommerce order fulfillment strategy to help you deliver products on time while improving customer satisfaction.

How to Design a Successful Ecommerce Order Fulfillment Strategy?

Track inventory regularly

When a customer finds that the ordered product is out of stock and not delivered in time, they may never shop in your store again, or vent their anger on social media. These consequences may not only lead to an increase in customer churn but also have a terrible impact on your brand.

Therefore, to avoid these incidents to the greatest extent, your best strategy is to simplify your order fulfillment process and deliver products to customers as quickly as possible. You need to focus on inventory and build an inventory management system. This system can help you get real-time fulfillment cycles, so you always know when products are out of stock or unavailable.

Ecommerce-Order-Fulfillment-Strategy丨A-Better-Lemonade-Stand丨ChinaDivision
Ecommerce-Order-Fulfillment-Strategy丨A-Better-Lemonade-Stand丨ChinaDivision

Product Kitting

Product Kitting helps reduce the processing time and cost of order fulfillment. Product Kitting refers to the process of grouping, packaging, and supplying different but related items as a unit.

Product Kitting can increase productivity and reduce labor costs by storing products in separate kits. Besides, you can reduce inventory and improve cash flow.

Automated warehouse

Adopting an intelligent warehouse system can help you manage inventory, warehouse organization, and logistics using data-driven technology.

You can automate the warehouse by choosing to use technologies including RFID identification, the Internet of Things, and easy tracking of the inside of the IoT.

Using a warehouse management system can reduce human errors in order processing.

Transparent supply chain

Supply chain visibility is the focus of your strategy. Supply chain visibility can give you a deeper understanding of each process and improve the underperforming parts.

For example, if you track picking activities in a warehouse and find that manual picking increases time costs, you can move it to an automated process.

Therefore, you must keep track of your supply chain and collect data.

How to Conduct Dropshipping Competitor Research?

To make your dropshipping business stand out in the market and get more quotes, one of the important things you need to do is to investigate your competitors. Your competitor company may inspire you to optimize your dropshipping business and help you develop a stronger marketing plan for your own shipping business.

Please select five competitors in your market for analysis, including one or two major players (such as Amazon or Walmart).

Dropshipping丨Admitad Academy丨ChinaDivision

Some methods of conducting dropshipping competitor research are:

Google search. Google search results will list your top five competitors. Starting with the keywords in a simple search, the top ten in search results will show who your top competitors are and how they promote their products. If you have a specific country or region to focus on, you can use third-party tools such as Ahrefs or SEMRush to find keyword data.

Use competitor spying tools, such as SameWeb and Alexa. Such online tools are great for finding (and tracking) the online activities of competitors. Tools can obtain a competitor’s website information such as social media profiles, popular traffic sources, number of visitors, etc.

Browse social media. Search for Facebook ads in your niche and see the top brands on the market. See how the company communicates with customers, the way its feeds are designed, how much engagement they get—you can even follow their feeds and never miss any opportunities. Use this information to find ways to differentiate your business and improve your social media marketing strategy.

Subscribe to email lists of competitors. Want updates from competitors to be sent directly to your inbox? Sign up for their email list and learn about their marketing strategy. You can also learn more about promotions and transactions to attract customers to buy.

Organize your research materials in spreadsheets and keep them updated so that you can easily refer to them when making decisions for your store. For example, if you want to use email marketing to promote your business, you can check the form material to see what strategies your competitors are using.

Simple Guidance For You In Order Fulfillment Cost

Different 3PL order fulfillment costs are different. When you decide to use 3PL services, you may encounter some expenses and knowledge you need to know before signing the agreement.

3PL-Order-Fulfillment-Costs丨Tenaxx-Logistics丨ChinaDivision
3PL-Order-Fulfillment-Costs丨Tenaxx-Logistics丨ChinaDivision

Startup costs

When you decide to start with 3PL, you may encounter startup costs. This fee is used to run e-commerce services and is a worthy investment project because it helps reduce confusion when using various services.

Inventory receiving costs

A 3PL will first receive your inventory, and then begin processing and fulfilling your online store orders. Inventory receipt means that the specific conditions of inbound and outbound logistics will be taken over by 3PL. Different 3PL own different charging methods, such as per-unit, per-pallet, flat rates, or per hour.

Inventory storage costs

When your goods need to use the 3PL order fulfillment center to store inventory, you will need to pay for storage space. Storage fees range from per SKU or per unit storage to a fixed fee (for each box, shelf, or pallet used).

Order pick and pack costs

Some 3PL models include Order pick and pack costs. After the customer places an order, the fulfillment process starts picking or use the picklist to collect each ordered item from its designated storage location. Many fulfillment providers offer to charge on a per-pick basis, which means you pay for each item included in the order.

Packaging costs

Your product packaging represents your brand image. Some 3PLs will charge for packaging materials as a separate order item, while other 3PLs include them in their fulfillment services.

Kitting costs

Some 3PLs provide kits and assembly services. Kitting refers to any unique way of assembling, arranging, or packaging items before shipping. Common applications for kitting include assembling multiple SKUs during packaging or preparing inventory in a specific way. Because this service is designed for each customer, the supporting fees may vary.

Shipping costs

The last section is e-commerce shipping costs: the amount charged by 3PL to transport orders from its fulfillment center to the customer’s doorstep. Many 3PLs will work with major transportation companies to enable them to provide volume discounts to customers. Transportation costs take into account many factors, including transportation efficiency, transportation area, and product size and weight.

Challenges in Dropshipping Business

Dropshipping business is undoubtedly one of the most outstanding things brought about by the Internet and our new lifestyle. This new business model allows start-ups to run e-commerce with little resources. Here, we will discuss the seven most common challenges related to dropshipping business and how to overcome them:

Find a reliable supplier

The first major challenge most companies face in dropshipping is to find reliable suppliers. There are many manufacturers and sourcing agencies that can be your suppliers, but you need to maintain a detailed relationship with them on the same page.

You can easily find suppliers in almost any niche market of your choice. There are many resources to help you search. Make sure that the supplier you choose can meet your needs. Consider factors such as supplier fees, minimum orders, professional industry knowledge, and scalability.

Dropshipping-problems丨ChinaBrands丨ChinaDivision
Dropshipping-problems丨ChinaBrands丨ChinaDivision

out of stock

When you start your dropshipping business, you will discover that the warehouse may be out of stock. It is one of the most common problems, and it is more common in certain product hot seasons. If you work with a very large manufacturer and order fulfilment company, you may not experience a shortage. If a product is out of stock, you must notify the customer as soon as possible, even if you find another supplier. It is recommended to cooperate with multiple suppliers.

Delay in order processing

When customers buy items from your website, they expect their order to be processed as quickly as possible. Most customers don’t understand that, in most cases, the process of processing orders is not completely under your control.

In some cases, orders that have already been placed with manufacturers will be delayed. When customers wait for the tracking code, this delay may create some tension with them. Don’t let it linger. If you haven’t received any news from the supplier within 24 hours after placing the order, please contact them to solve the problem. When these situations occur, you will at least know why the order has not been processed and how long you have to wait. Pass information to customers to appease them.

Ship to the wrong address

As embarrassing as it sounds, some orders have been shipped to the wrong or non-existent address. This is another major challenge you may face as an e-commerce entrepreneur. The best way to solve this problem is to carefully check each order address sent to the supplier.

Product return

This is something you can’t escape in e-commerce. In most cases, this is never your fault, because third parties are always involved in direct shipping. You cannot make all the rules here. Suppliers handle returns in different ways, so you must find a way to communicate clearly with customers. Your return policy is clearly stated on your website. Make all necessary efforts to make your order fulfilment proceed smoothly.

How to Find Wholesale Suppliers?

Are you struggling to find a suitable wholesale supplier?

Did you know that there are more than 330 thousand wholesale suppliers in the world? And the top 50 suppliers generate only 25% of industry revenue.

The difficulty of finding a suitable wholesale supplier can be imagined!

DONT WORRY! This article will provide some ways to inspire you. These tips can not only help you find the right wholesale supplier but also help you clear your mind.

How-to-Find-Wholesale-Suppliers丨ChinaDivision
How-to-Find-Wholesale-Suppliers丨ChinaDivision

Contact the manufacturer

This is the most straightforward and easy way for us to find wholesale suppliers. If you have a product you want to ship, you can call the manufacturer and ask it to provide a list of wholesale distributors. Then you can contact these wholesalers to inquire about the availability of dropshipping services and information about opening an account.

Since most wholesalers ship products from various manufacturers, this strategy will enable you to quickly source select products in the niche markets you are exploring. After several contacts with leading manufacturers, you will be able to quickly find excellent wholesalers in this market.

Use Oberlo

Oberlo can help you easily import supplier products directly into Shopify and ship them directly to your customers.

  • Import products from suppliers
  • Fulfill orders automatically
  • Inventory and price auto-updates
  • Product customization
  • Pricing automation

Use Google search

Google search can find more high-quality suppliers, but there are some rules to keep in mind:

  • You’d better search extensively. The performance of wholesalers in marketing and promotion is not optimistic, and they will definitely not be among the best in the search results for “Wholesale Supplier for Product X”. This means that you may need to look at many search results (perhaps hundreds) to find the wholesaler’s website.
  • Don’t draw conclusions through their website. Some wholesalers are now notorious for using the 90s style website design. Therefore, although a good website may indicate a good supplier in some cases, many legitimate wholesalers have a recommended homepage. Don’t let bad design scare you away.
  • Use a lot of keyword modifiers. Wholesalers do not perform extensive SEO to ensure that you find their website, so you may need to try various search queries. Don’t just stop at “[product] wholesalers”. Try to use modifiers such as “distributor”, “dealer”, “bulk”, “warehouse” and “supplier”.

Attend trade fairs

Trade fairs allow you to establish contacts with all major manufacturers and wholesalers. This is a good idea to establish contacts and investigate your products and suppliers. But this method is only effective when you have selected market segments and/or products, and it is not feasible for everyone. However, if you have the time and money to attend, it is a good way to get to know the manufacturers and suppliers in the market.

What Are the Types of Warehouses? (Part Ⅱ)

In the first part of our guide to all types of warehouses, we focused on each type of warehouse. In the second part, we will explore more types of warehouses, especially those that have emerged due to the recent demand for more complex warehousing services.

Types-of-Warehouses丨Totaljobs丨ChinaDivision
Types-of-Warehouses丨Totaljobs丨ChinaDivision

What Are The Different Types of Warehouses?

Distribution center

The convenience of entry and exit of the distribution center is very strong. This kind of center is essentially a place where goods are purchased from different suppliers in the distribution system and quickly transferred to each customer.

Distribution centers usually have a relatively large space, almost twice the size of traditional warehouses, and can accommodate multiple supply chain businesses. Retailers’ large inventory can be released through distribution centers to save holding costs.

Government warehouse

Government warehouses, as the name suggests, these warehouses are directly owned and controlled by the government. These warehouses can not only meet the government’s own needs but also can be leased to enterprises for use. But if the company cannot pay the rent on time, the government will have the right to dispose of the goods to offset the rent.

Consolidated warehouse

The consolidated warehouse receives the goods from different suppliers and packs them into larger goods and then transports them to buyers.

Generally speaking, a consolidated warehouse is a very economical way of order fulfillment, especially suitable for small e-commerce companies or start-ups. Most of these warehouses are located in superior geographical locations to meet the needs of urban areas with strict logistics.

Climate-controlled warehouse

To meet the storage needs of different products, the climate-controlled warehouse ensures the integrity of the goods by keeping the temperature within a certain range.

Items that require special handling conditions (such as vaccines, medicines, dairy products, artwork, electronic products, etc.) should be stored in a climate-controlled warehouse. This type of warehouse will follow strict quality control procedures to ensure excellent environmental quality.

Fulfillment Center vs Distribution Center: What’s the Difference?

Order fulfillment is the core part of e-commerce. Before choosing a fulfillment center and a distribution center as part of your e-commerce supply chain, you should be aware of the difference between the two.

As e-commerce becomes more prosperous, more and more consumers choose to purchase large items online, resulting in an increasing demand for warehouse space. According to data from the CBRE Group, the availability of industrial real estate in the United States is only 7%. Warehouse space in high-demand areas close to the city center is particularly narrow.

At the same time, CBRE data also shows that 1.25 million square feet of warehouse space are required for every $1 billion in e-commerce sales.

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Explanation of the fulfillment center

The fulfillment center is a warehouse for e-commerce fulfillment services. Your company’s products are shipped to the distribution center in the form of containers or pallets. The warehouse will store your products until they are sold. The fulfillment center is the final destination of your products before they shipped to consumers or wholesale customers.

When your sales platform receives an order, the product is directly transmitted from your sales channel to your fulfillment center. Most order fulfillment service providers will have an online dashboard, which can track the progress of the product in the entire warehouse.

The fulfillment center will remove the order items from the shelves and package them for delivery and transmission. The shipping station will label it and notify the carrier to prepare to pick up the package. Carriers such as FedEx, UPS, and USPS will regularly pick up the goods at the distribution center every day.

Many fulfillment centers also provide other services, including inventory management, multi-channel, and matching and customization.

There are other names for fulfillment centers, such as:

  • Fulfillment warehouse
  • Order fulfillment center
  • 3rd-party logistics warehouse(3PL)

Third-party logistics can refer to fulfillment centers or more complex logistics operations. In addition to 3PL, there are other levels of logistics services, such as 4PL, 5PL, and so on.

Explanation of distribution center

The distribution center is also a kind of warehouse, but its position in the supply chain is different. The distribution center redistributes the products in the warehouse, but the distribution center can also store products.

The direct docking object of the distribution center is not the consumer, but the transfer point that converts the product from one mode of transportation to another. Product advantages will be transmitted from the distribution center to the fulfillment center for order fulfillment. Besides, distribution centers can also serve as commodity centers for large retailers.

Fulfillment Center vs Distribution Center: What Kind of Business Do You Need?

If the center of your business is e-commerce fulfillment, your choice may be a fulfillment center rather than a distribution center. The next step in your decision is to find the most appropriate provider of fulfillment services for your business, which also involves the level of service your business needs, the size of your business, and the type of products you sell. Make sure that the service provided by the fulfillment company is what your company needs.

Why it is Important to Pay a Visit to Your Order Fulfillment Warehouse?

E-commerce sellers who have learned about outsourcing warehouses maybe want to check the actual delivery status to confirm the professionalism of the 3rd party logistics. Thus, it is a good choice to conduct a field visit around and inside the warehouse. So what are the important issues that can be judged by fieldwork?

First of all, you can check the surrounding environment of the warehouse. In order to ensure the timeliness of delivery, the courier can enter the courier distribution center as soon as possible. The e-commerce seller needs to confirm whether the order fulfillment warehouse is around or even inside the courier distribution center to ensure the delivery. At the same time,

also need to confirm the traffic conditions around the warehouse, because e-commerce sellers need to send goods to warehousing companies through logistics or other methods, so the transportation convenience during delivery and storage needs to be guaranteed.

At the same time, you can also see the professionalism of the warehouse staff, which is a very important aspect. For example, some Amazon sellers may have fragile products or some items that require more professional storage methods(red wine, cosmetics, food, etc. ), so you can visit  the warehouse to check the level of personnel operation and find whether there is violent operation or any factors that can damage your inventory. In Fact, whether or not your goods are protected in the third-party warehouse is also a problem that e-commerce sellers are more concerned about. No one wants to receive the news that their goods is damaged.

In addition, e-commerce sellers also need to confirm whether warehousing company is equipped with a professional warehouse management system and related equipment to ensure the accuracy of delivery.

Finally, China Division welcomes your visit at any time! Please be sure to contact us if you have any questions about the order fulfillment and Chinese warehousing.

Suggestions on Controlling Fulfillment Warehouse Loss Rate

What is the utilization rate of the warehouse to prove the strength of an e-commerce order fulfillment center? In a sense, it covers the control of loss rate, the lower the loss rate is, the better the utilization rate will be. Nevertheless, the turnover rate of goods in the e-commerce warehouse is quite high, and there will be losses in the process of turnover and movement. What’s worse, it is difficult to predict where these losses will occur, how many losses will occur, whether they will be registered timely, what causes it, and the most important question is how to effectively control the rate of loss of inventory.

The following aspects will tell you how ChinaDivision carry out this work:

  • List Loss Points

All warehouse staff will participate in the discussion, starting with the process of e-commerce warehouse management, studying which operations are easy to cause the loss of goods, and recording these possible problems timely. Second, we need to count historical data, classify according to the cause of loss, and see how much loss is caused by each loss point. To determine the percentage of each loss that accounts for the overall loss of the e-commerce warehousing.

  • Set the Standard for Los

According to the data, ChinaDivision will calculate the loss value and percentage of the loss point to determine the loss standard and determine how much the loss standard should be kept. Zero loss is always just an idealized number. In reality, there is no such zero loss situation. 3pl fulfilment It is better to work out a more reasonable control target at a time and gradually improve it. Besides, the loss prevention standards mainly  referred to  two aspects, one is the target value, and the other is the loss prevention operation standard, which is used to regulate the staff in the e-commerce cloud storage in order to control within the target loss value operational requirements.

  • Record Data Timely

It is not for the operator to clarify the target value of the loss to be controlled, to receive training to understand how to prevent loss, and the loss will naturally fall below the target. It is necessary to record and account for the loss of the operation. In some places where management is not standardized, there are certain hidden rules, such as underreporting of losses, concealment, or staring at target values. These actions will affect the timely search for the cause of the loss, and then take effective measures to reduce subsequent occurrences. We have formulated the rules for accurate accounting. The loss is classified according to the reason for loss and scrap in the finance. When the reason is more general, the specific loss point is written in the remarks, which is convenient for the next round of combing and reducing the entire warehouse management. There must be a mechanism for inspection, supervision, and assessment, and actions that are not properly accounted for should be dealt with and punished in a timely manner.

Only by sorting out these loss issues, determining specific loss standards, and confirming the data in time, can the loss be controlled within the target range, so both the drop shippers and their customers can benefit a lot.

What factors need to be considered in the choice of warehousing outsourcing?

Nowadays, many e-commerce sellers prefer order fulfillment center, but what factors need to be considered when choosing your new warehousing partner? Here we have listed some major factors for your reference.

  • Charging Standard

The charge standard of fulfillment center can be divided into two categories:

The first category is to carry out the charging standard according to the actual operation volume (warehouse receiving, delivery, storage, return, etc.). And the other type is based on the cost of resource consumption and development contract (the total area of the application warehouse, the total number of staff, equipment depreciation, consumables, etc.)

  • Process Control and Management Data

It is necessary to carefully investigate the process optimization documents of your potential warehousing partner to evaluate its standardization and work ability. For example, you can obtain a general idea of them through website visiting. You can also pretend to be a new customer to test them. Generally speaking, the will show you some files about their enterprise profile and fulfillment performance, which cover their process control and management methods.

  • Execution Capabilities

In addition to the marketing plan, the execution ability is also a very critical part. It is necessary to fully grasp the work flow of third-party warehouse and outsourcing enterprises, especially the steps at the level of purchase, marketing, accounting supervision, etc. A qualified warehouse should work out the practical plan.

  • Humanized Marketing Plan

Customized business planning of a Chinese order fulfillment center is an indelible aid. You can evaluate its professional skills and value according to their marketing plan. Furthermore, a fulfillment center with strong market sensitivity will create a more valuable plan, which means they can provide more benefits for you.

In a nutshell, China fulfillment services is appreciated by more and more e-commerce companies, especially the Amazon and Shopify seller. Therefore, detailed investigation is a wise choice for everybody who wants to find an ideal expert of drop shipping, packing, china sourcing, third party logistics, etc.