Understanding the Flow of Ecommerce Fulfillment

Ecommerce fulfillment is the backbone to any successful business. Without them, many businesses risk losing customers and revenue, which results in reduced business longevity as well. Ecommerce fulfillment services have experienced an all time high in demand since the appearance of Covid-19, and remains that way to this day. In spite of that, many fulfillment centers struggle to cater to these demands equally, as most of them are experiencing a shortage in manpower or storage.

Consequently, this has led centers to prioritize jobs based on importance. This shows just how paramount fulfillment services are for any operating businesses, and how important it is for business owners to understand the process that is involved in getting their items from farm to table, warehouse to stores, suppliers to wholesalers and then distributors, or just about any transaction under the sun that involves delivering a product in a seller-to-consumer fashion.

Who provides Ecommerce fulfillment services?

In order to understand how the flow of Ecommerce works, we first need to recognize the people who are hard at work behind the scenes. Generally, fulfillments can be carried out in-house or through a third-party logistics (TPL) service provider. Although there are other types of logistics service providers out there, TPLs are by far, the most common and frequently used ones. TPLs provide comprehensive logistics services that are designed to facilitate the transportation of your goods or products in a safe and reliable manner.

B2B vs. B2C fulfillment

Generally, fulfillments are categorized into two types, Business-to-Business (B2B) and Business-to-Consumers (B2C). The difference between the two modes of fulfillment can be understood through the table below.

Caters to business establishments, big and small
Meant for consumers
Involves large quantity of raw materials, products or goods that are being transported
Items delivered are smaller in quantities
Fulfillments are conducted monthly and are recurring
Most deliveries are one-time off, or infrequent
Requires long-term storage services
Storage if any, is short-term as products under B2C are promptly delivered
Provides first-mile or last-mile delivery depending on the transaction
Stand the benefit of having last-mile delivery
Frees up a business’ need to focus on storage, allowing them to prioritize other aspects of a business
Provides a temporary place to safekeep and protect consumer’s products from harm and theft until the scheduled delivery
Delivery fees involved
In some cases, delivery is free

As we can see, both B2B and B2C both possess their distinctions. B2B logistics typically form the bulk of a fulfillment center’s work, although there are many fulfillment centers that focus on B2C too.

The flow

Now that you know who are the people providing fulfillment services and the type of logistics involved, we can start talking about the flow in Ecommerce fulfillment. As described in the table above, fulfillment concerns the delivery of goods, but that is only one of the many aspects involved. The full cycle of fulfillment can be chronologicalized in the following order.

  1. Storage and warehouse
  2. Inventory management
  3. Order management
  4. Picking and packaging
  5. Shipping and logistics
  6. Returns management


Storage and warehouse

Every fulfillment service starts with storage and a warehouse. Although both words, storage and warehouse are used interchangeably and commonly lumped together, the two have very different meanings. Storage refers to the act of stocking something, where they are intended for future use. On the other hand, a warehouse is a type of building with large ceilings and a giant room that offers storage services. Warehouses are considered as a form of specialized storage, while the word storage is an umbrella term to include all forms of stockpiling including those in a warehouse.

Warehouses are by far the most common form of storage method seen in logistics. When a fulfillment order is made, a staff working in the warehouse will be tasked with retrieving the goods and preparing them for packaging and shipping purposes.


Inventory management

Inventory management is the art of tracking the goods that come and go from the warehouse. Tasks such as labeling, stocking and storing, record keeping either digitally or physically and proper stock forecasting are all examples of inventory management. When stocks are close to running out, a fulfillment center has to carefully assess the demand to supply for the stocks and order just the right amount to avoid instances of deadstock or understock.


As goods leave and enter warehouses, the staff is expected to rearrange and reorganize stocks to ensure any existing space is properly utilized. Concurrently, there will be staff who are tasked with labeling and standardizing barcodes to maintain accuracy of information in goods that are logged within the system.


Order management

While inventory management is concerned with the goods in the warehouse, order management concerns the orders pertaining to the goods. Put simply, a fulfillment center needs to ensure the orders that they receive tally with the amount of goods that depart or enter the warehouse. Besides that, all orders that come through must act in tandem with the warehouse management system and inventory management system to ensure constant accuracy in reporting. This guarantees no information is lost in the process, and that order and stock records are in-sync across all softwares, all systems.


Picking and packaging

When an order for a good is safely processed, they will be sent to the final point of the warehouse for processing. This final point is known as picking and packaging. As we discussed above, picking is the process of retrieving the item from their designated racks for packaging. Right here, items are packaged and insured with protection to guarantee their condition during transportation. Everything that we’ve discussed above will also be in play i.e.: labeling, the updating of stock counts etc. Fulfillment centers are also required to fill up paperworks to ensure the item can properly make it through the customs and ensure the customer ultimately receives it.


Shipping and logistics

Once an item is ready for delivery, a delivery executive will pick it up and transport it to the intended destination, although strictly speaking, the process is much more elaborate and thorough than that. For most B2C fulfillments, this is usually the case. On the other hand, if it is a B2B, or specific B2C fulfillments, the delivery executive will hand over the goods to courier hubs for first and last mile delivery instead. Making sure that goods are delivered on time is incredibly important, as they contribute to the overall positive experience for a customer.


Returns management

In some cases, a customer may request to return products for specific reasons. Returns are often undesirable and frowned upon and many businesses attempt to avoid them, but if the customer’s cause for return aligns with the company’s return policies, they will have to accept it nonetheless and tank the loss. To that, a fulfillment center’s role in returns management is to ensure reverse logistics is carried out as smoothly as possible.


The pitfalls of using fulfillment services

Fulfillment services are a boon for any business who require support in delivering their goods to consumers and other businesses establishments, but they do come with some caveats. Here’s a small table that briefly sums up the pros and cons of fulfillment services.

Storage servicesLess control in stock quality
Ready to scale with the business
Lack of product customization
Reliable and speedy delivery at affordable costs
Susceptible to theft, although extremely rare


Bridging the gap in the pros and cons 

Fulfillment centers are rarely a one-off thing. If your business find itself needing to outsource its delivery, it may be worthwhile asking yourself these questions

  • Do I require storage services?
  • Is expansion a priority?
  • Do my customers want speedier delivery service?
  • Can I afford to pay for fulfillment services without financially straining my business?

    Wrapping Up

    There is never a hard and fast rule or an absolute answer to outsourcing your delivery to fulfillment centers, but what we can say with certainty is to take your time and carefully select centers that adequately address your needs. As businesses learn to change and adapt to the market, there will be moments where it will have to make changes to its business operations, which involves switching fulfillment centers or expanding their list of outsourced centers. If anything, determining which center to best go with is a long-lasting process that requires finesse.

    At Hisuperpanda, we provide a seamless end-to-end Ecommerce fulfillment process that can deliver satisfaction to your customers. To lear more about how we can help you to boost your Ecommerce business and improve your customer experience, contact us today!