Fulfillment in e-Commerce
In today’s changing e-commerce world, efficient fulfillment is vital to ensuring the success of companies selling online. With the growing popularity of online shopping, customers have increasingly higher expectations regarding the speed and quality of delivery. To meet these requirements, e-commerce companies must invest in reliable logistics solutions to ensure effective order processing and high customer satisfaction.
The key role of fulfillment in the e-commerce industry
Fulfillment is a comprehensive process that includes several activities, from order acceptance through product completion and packaging to shipment to the customer. Each of these stages significantly impacts the overall efficiency of the online store. That is why it is crucial for e-commerce companies to pay due attention to selecting the best logistics service operator. This will allow them not only to reduce costs but, above all, to ensure the highest quality of customer service and build a competitive advantage in the market.
Fulfillment in Poland in numbers:
As research shows, the e-commerce fulfillment market in Poland is expected to grow by an impressive 12.4% annually in 2023-2028, reaching a value of PLN 11.8 billion by 2028 [1].
In 2023, as many as 72% of online stores in Poland used fulfillment services [2], and 63% of Polish consumers declared they were more willing to buy in online stores offering short delivery times than in stationary stores [2].
Online stores that decide to cooperate with logistics operators record, on average, 15% higher sales [3] and can reduce logistics costs by up to 40% [3].
At the same time, the e-commerce industry must face challenges related to fulfillment, such as managing product returns (a problem affecting 52% of online stores in Poland [2]) or integrating store systems with the logistics operator’s system, which may cause difficulties for smaller entities.
Data sources:
[1] https://fulfillment-polska.pl/porownanie-uslug-fulfillmentowych-2024
[2] https://eizba.pl/wp-content/uploads/2023/02/Raport_e-Izby_Dekada_polskiego-e-commerce_2023.pdf
[3] https://abelle.info.pl/usluga-fulfilment-dla-sklepow-internetowych-czy-to-sie-oplaca/
Types of fulfillment in e-commerce logistics
Internal (in-house): In this model, e-commerce deals with the fulfillment process independently, having complete control over all stages, from storing goods to shipping to the customer. This solution requires significant investments in logistics infrastructure and is more often used by large enterprises. In Poland, 38% of online stores use the in-house model.
External (outsourcing): More and more e-commerce companies are outsourcing fulfillment services to specialized logistics operators. This allows them to reduce operating costs, increase process efficiency, and focus on key business aspects, such as customer acquisition or the development of the e-commerce platform. In Poland, 62% of online stores choose the fulfillment outsourcing model.
Data source: https://eizba.pl/wp-content/uploads/2023/02/Raport_e-Izby_Dekada_polskiego-e-commerce_2023.pdf ).
The most popular fulfillment services in e-commerce
- Storage of goods: Fulfillment in e-commerce includes storing products in conditions adapted to their specificity, which allows for the optimization of warehouse space and reduces the risk of damage to the assortment. Warehousing services are used by 98% of online stores that have decided to outsource fulfillment.
- Order picking: After the customer orders, warehouse employees pick the products, pack them, and prepare them for shipment. Automating this process can significantly increase efficiency and shorten turnaround time. 95% of stores using fulfillment choose packaging services.
- Delivery and returns handling: E-commerce fulfillment also means managing customer shipments and efficiently handling returns and complaints. Working with trusted courier companies and offering various delivery options helps meet customer expectations. 93% of stores using fulfillment choose shipping services.
Data source: https://eizba.pl/wp-content/uploads/2023/02/Raport_e-Izby_Dekada_polskiego-e-commerce_2023.pdf).
How to implement effective fulfillment in an online store?
Implementing effective fulfillment in an e-commerce store requires adapting solutions to the specific needs of a given enterprise. Key factors to consider are:
- The company’s size.
- The industry in which it operates.
- The geographic scope of sales.
- Individual customer expectations.
The fulfillment implementation process includes several essential steps, such as selecting the appropriate order fulfillment model (in-house or outsourcing), integrating logistics processes with the e-commerce platform, and optimizing warehouse and shipping processes.
Fulfilio, as an experienced logistics operator, offers its clients comprehensive fulfillment services that facilitate business scaling. Flexible solutions, such as the ability to quickly increase storage space, allow for effective adaptation to the changing needs of the online store. The fulfillment service at Fulfilio includes inventory management, order, and returns management. Thanks to this, e-commerce stores can optimize logistics processes and recover the value disturbed by previous, ineffective activities. Cooperation with a logistics operator such as Fulfilio allows e-shop owners to focus on developing their business. At the same time, an experienced team of specialists handles all issues related to order processing.
The impact of optimization of fulfillment costs on e-commerce profitability
Optimizing fulfillment costs has a direct impact on an e-commerce store’s profitability. Although warehousing, packaging, and shipping costs may be a free part of the supply, basic methods must be used, e.g., through market automation, agreeing rates with logistics service providers, or optimizing delivery routes.
It is important to remember that meeting this condition is not only a matter of logistics but also an element of having a customer experience. Investments in service quality, shortening lead times, and ensuring convenient deliveries can translate into customer shipments in the event of an extension of sales and follow-up.
Fulfillment in e-commerce – Analysis and optimization of the fulfillment process
Fulfillment is not only logistics but a comprehensive process that significantly impacts customer satisfaction and sales results of an online store.
As the number of online orders increases, e-commerce companies must face new challenges. Your role in process optimization is crucial. It allows you to reduce operating costs, shorten order fulfillment time, and increase control over the supply chain, thereby empowering you to provide the highest quality service and fast delivery to customers.
Definition of process mapping in e-commerce logistics
Process mapping is a management technique that is particularly important in the e-commerce industry. It involves a precise description of all the steps and activities that make up the fulfillment process, from when the customer orders until the product is delivered. Thanks to process mapping, e-commerce companies gain a complete picture of the flow of goods and information, which allows them to identify areas requiring optimization.
Benefits from optimizing the order-picking process
Mapping fulfillment processes brings many benefits for companies operating in the e-commerce market.
First, it allows you to increase efficiency by identifying and eliminating ineffective steps in the supply chain. Thanks to this, companies can shorten order fulfillment time and deliver products to customers faster, which is crucial for building a competitive advantage in their business.
Moreover, process optimization reduces operating costs. Significant savings are achieved by removing unnecessary activities and improving key fulfillment stages, directly boosting e-commerce activities’ profitability.
Process mapping significantly enhances the quality of customer service. Optimized processes enable faster and more reliable fulfillment of online orders, leading to higher buyer satisfaction and loyalty. In the e-commerce world, excellent customer service is a key success factor.
Finally, process mapping increases transparency and control over supply chain processes. Accurate documentation of all fulfillment stages allows employees to better understand the company’s functioning and facilitates process management and supervision.
Thanks to this, e-commerce companies can respond faster to emerging problems and introduce the necessary improvements to maintain high quality of services and customer satisfaction.
Fulfillment in e-commerce – Stages of optimization of fulfillment processes in e-commerce
As an experienced logistics operator specializing in comprehensive e-commerce services, we understand the importance of process mapping for optimizing fulfillment. Therefore, at Fulfilio, we develop and implement solutions tailored to individual customer needs, covering key processes such as:
➨ Identification of critical elements of the order fulfillment process
The first step in mapping fulfillment processes is to identify the key elements of the order fulfillment process. This stage is thorough and allows you to understand and systematize all activities that make up efficient customer service, from the moment the customer places an order until the product is delivered to the indicated address. Below we present the most important elements of the order fulfillment process that should be analyzed in detail in order to optimize the entire supply chain.
- Order Taking: The process of collecting and processing orders from customers.
- Inventory management: We ensure the monitoring and control of stock levels, giving you peace of mind about your inventory.
- Order picking: Selection of products and preparation for shipment.
- Packaging: Securing products in appropriate packaging.
- Shipping: Organization and fulfillment of orders to customers.
- Returns Handling: The process of accepting and managing customer returns.
➨ Detailed analysis of individual stages of customer service
To ensure the highest quality of customer service and increase sales in your e-commerce, you should carefully analyze all identified processes.
For this purpose, various techniques, such as flowcharts, can be used. Flowcharts allow for a graphical presentation of the process’s sequence of activities, making it easier to identify potential bottlenecks and areas requiring optimization.
Another helpful tool is value stream mapping, which enables the identification of activities that add value to the customer in e-commerce and the elimination of waste. This allows for increased process efficiency and better control over individual stages.
Finally, SWOT analysis allows you to assess the strengths, weaknesses, opportunities, and threats for each stage of the fulfillment process. This enables you to identify areas requiring improvement and develop an optimization strategy that will contribute to the success of your e-commerce.
➨ Identification of areas requiring optimization
Identifying areas requiring optimization is the key to success and increasing sales. Particular attention should be paid to critical points that have the most significant impact on the efficiency and costs of the fulfillment process.
Bottlenecks limit the throughput of the entire process, so eliminating them will increase efficiency and shorten order fulfillment time. The places generating the most costs should be analyzed to develop strategies to reduce them, e.g., through automation. However, areas that require the most time should be optimized to speed up the process and provide better control over order fulfillment.
Accurate identification of areas for optimization is not just a step, it’s a leap towards success. It paves the way for developing effective solutions that can ramp up efficiency, cut costs, and enhance customer service quality. And in the e-commerce world, these are the pillars of success.
➨ Implementation of strategies to improve processes
After conducting a detailed analysis and identifying areas requiring optimization, the next step is implementing strategies to enhance fulfillment processes. Based on the collected data and analysis conclusions, the following improvements can be made:
- Automation: Using advanced technologies to automate repetitive tasks to increase efficiency, reduce errors, and save time.
- Lean management: Implementing lean management principles to eliminate waste, improve process efficiency, and optimize the use of resources.
- Employee training: Regularly enhancing qualifications and developing employee competencies through dedicated training is crucial. It not only improves the quality of work but also significantly enhances customer service, thereby contributing to the overall efficiency of the fulfillment process.
Implementing these process improvement strategies will allow you to achieve tangible benefits, such as shortening order fulfillment times, reducing operating costs, and improving the overall efficiency of the fulfillment process.
➨ Monitoring effectiveness and continuous improvement
Fulfillment optimization in e-commerce is a comprehensive process that requires regular monitoring of results and analysis of the effectiveness of introduced changes. Key performance indicators (KPIs) and feedback from employees and customers provide valuable information on which further improvements can be made.
At Fulfilio, we understand the importance of constantly improving the fulfillment process to maintain high customer service quality and increase e-commerce efficiency. Therefore, we regularly analyze data, implement innovative solutions, and adapt our processes to the changing needs of the e-commerce market, providing our customers with the best possible service.
Thanks to our continuous improvement efforts, we are able to provide our clients with the highest quality of services, shorten order fulfillment time, and minimize operational costs. This benefits our clients and provides our business partners with a competitive advantage, as we focus on meeting the growing demands of the e-commerce market.
