5 Strategies for Order Fulfillment
By: June Campbell | Posted: 23rd February 2005
Fulfillment is simple at a brick and mortar store. The customer
pays for the merchandise and carries it away. However,
fulfillment is more complicated for a mail order business or a
business that is selling via the Internet.
Fulfillment includes taking the order, packing, shipping and
processing the financial transaction. It could also include
customer service, technical support, inventory management, and
processing refunds, returns and warranty claims.
Fulfillment is a vital but costly aspect of operating a
business. Your situation determines which approach works best
for you.
1. Drop Shipping Drop shipping is an arrangement in which a
wholesaler or manufacturer agrees to fulfil orders from items in
their warehouse. You make the sale, conduct the financial
transaction, and send relevant data to the company to process.
Since the company ships the merchandise, you do not have to
arrange warehousing or inventory management.
Many businesses will not agree to drop shipping, as they find it
more profitable to process large orders instead of individual
orders. However, there are exceptions. Find a company that
produces merchandise that you would like to sell then contact
them and see if they will negotiate.
Alternatively, look for a company that promotes drop shipping.
Run a Net search or a Yahoo search for "drop shipping." Before
signing a drop shipping agreement, ask for references from
satisfied merchants.
2. Set Up Your Own Mail Room Micro businesses might set up a
"mailroom" in the basement. It's cost effective, but labor
intensive.
You will need a means of processing payment (i.e. credit card
capabilities) and a means of keeping track of inventory, orders,
refunds, etc. Yahoo's Small Business category lists numerous
companies selling software for small business management.
Larger small businesses might opt to set up a mailroom in the
workplace and assign employees to handle order fulfillment. This
allows the most control over fulfillment as everything is done
on site. You can ensure that knowledgeable people handle
customer service, that packaging is appropriate, and that
refunds, warranties and are processed in a timely manner.
3. Integrated Fulfillment for the Web
Businesses that are adding online sales to their regular
operations require software that integrates with the existing
system, manages inventory, facilitates customer service and
generally handles all aspects of fulfillment.
If you're too large for the basement mailroom and too small to
outsource, you might consider using one of the companies that
are catering to small business. Check out Yantra, Manugistics
and EXE Technologies.
4. Fulfilling Digital Products
Businesses selling only digital products (computer documents,
software, music, video, etc.) have the easiest time with
fulfillment. You will need a web site, shopping cart software to
take the order, and a means of processing payment. The most
automated businesses use technology that serves automatic
download information to the customer upon processing a
transaction.
Online businesses might opt to purchase web storage, shopping
carts, encryption for secure ordering, and a credit card
processing service individually. Alternatively, they might look
for a "one stop shop" that handles the entire thing for a fee.
The former is likely to be lower cost but labor intensive; the
latter could be more costly but simpler to set up and manage.
To find ecommerce providers, run a Net search for "ecommerce
billing fulfillment service".
5. Out-Source to a Fulfillment Firm
If your sales justify it, you could outsource the entire process
to a fulfillment company. This may or may not be more expensive
than doing your own fulfillment. Calculate the cost of on-site
fulfillment and compare the price.
Out-sourcing reduces your control over fulfillment, as well as
the amount of contact you have with your customers. If customer
contact is very important to your operations, or if you need to
explain your product to customers before making a sale,
outsourcing might not be your best choice.
Before signing a contract, consider these issues: 1.Will the
company package your merchandise appropriately? Can they handle
your perishable products quickly? You want to avoid returns of
damaged goods.
2. Does the firm process orders quickly enough to accommodate
your turn-around time?
3. Is the company strategically located? Shipping costs and
transit times will be reduced if your fulfillment company is
located close to the majority of shipping addresses. For
example, 74% of the U.S. population lives close to or in UPS
zone five. A company situated in that region might be a good
choice for businesses that sell primarily to the US public.
4. Are sales reps assigned to your orders and are you permitted
to train them?
5. Can the firm provide references from customers running
similar operations to yours?
As the comedian said, "Delivery is everything."
About the Author
About the author : June Campbell How to Write Business Plans, Business Proposals, JV Contracts,Human Resource Package, More! No-cost ebook "
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Tags: relevant data, business category, small business management, brick and mortar store, brick and mortar, yahoo search, selling software, drop shipping, order fulfillment, mail order business, micro businesses, financial transaction, inventory management