Table of Contents
The first challenge when starting an eCommerce business is developing a product, value proposition and associated messaging. Once you’re online and have all the technology and marketing in place to generate orders, order processing can create many stumbling blocks. This is the art of efficiently managing the supply chain, which constitutes dealing with suppliers, goods intake, storage, picking, packing and distribution of your customers’ orders.
As businesses become more popular and discoverable, order volumes will naturally increase, placing pressure on supply chain infrastructure. This is why a popular strategic imperative for ambitious online brands is to outsource order processing with a fulfilment centre.
How To Find the Order Fulfillment Centre?
What is Order Fulfilment?
Also known as third-party logistics, or ‘3PL’, eCommerce order fulfilment is the act of entrusting a separate business entity that specialises in efficiently managing supply chain and inventory control on your behalf, as you.
It’s a very popular initiative as it means retail entrepreneurs can refocus their attention on developing their brand, along with sales, marketing and new product development. Demand for fulfilment centres is rampant globally, and the market is predicted to nearly triple in size over the next six years.
As a result, while fertile ground for new 3PL entrants, competition is fierce, with established players vying for their slice of the market. 3PLs are diversifying their service pillars to stand out from the crowd, and offering a broader range of supply chain support, including everything from manufacturing and procurement, to strategic consultancy and more commonly, outsourced customer service, returns processing, customs clearance and custom packaging.
Zendbox, a leading UK-based fulfilment provider, has innovated by offering eco-friendly initiatives, inventory analysis software, and a best-in-class 10pm order cut-off time. For new customers they will plant trees to minimise their carbon footprint.
Their inventory analytics platform, ‘Zendportal’, uses AI-powered technology that analyses goods-in, sales order volume and seasonal demand fluctuations, to predict when and when not to replenish stock, helping retailers avoid understocking, which means missed sales opportunities, and overstocking, which means capital unnecessarily tied up in inventory, a major bugbear and threat to profitability for retailers selling perishable or seasonable items.
After learning that more than a third of online orders are placed between 4pm and 9pm, Zendbox recently introduced a 10pm order cut-off time, helping merchants offer next-day delivery to more consumers. As a result, their multichannel eCommerce business clients have experienced an average conversion rate uplift of 15%, from both domestic customers and in new overseas markets.
Complete Strength is a Shopify-powered sport nutrition direct-to-consumer (D2C) store. Its founder, Rob Whitfield, has acquired new customers thanks to Zendbox’s 10pm order cut-off time, adding: “The majority of our orders will come in of an evening. When we had an earlier cut-off time, we missed out on sales. Now we’ve got a later cut-off time with Zendbox, we get less abandoned carts. We have also noticed customers are shopping with us simply because of the later cut-off time.”
How 3PL Works?
After a contract is signed, the first stage is to integrate the retailer’s eCommerce platform, marketplaces and/or order management system (OMS) with the 3PL’s warehouse management system (WMS), and as part of the onboarding process, connecting your suppliers with the fulfilment warehouse goods intake team, along with establishing lines of communication between both parties, such as customer service, IT and procurement.
Products will then arrive at the fulfilment centre ready to be allocated specific picking locations. Then when orders begin to flow in, picking and packing notes are generated and the picking team will collect items for each order, ready for packaging at the packing bench, along with application of the shipping label.
Once the shipping label is printed (and applied), the customer will receive a tracking notification. At each point of the picking, packing and shipping process (such as collection by the courier), barcode scanning technology is utilised and this data is fed back to both WMS and OMS to ensure SKU (stock keeping unit) levels are accurate.
Once packaged and ready to ship, packets, parcels and lightweight mail items will be grouped by carrier on pallets, in containers or bags, ready for collection by the 3PL’s individual courier partners, or if partnering with a multi-carrier consolidator, a single collection regardless of carrier choice.
Once orders are collected, they enter the carrier network, such as DHL, DPD, Evri or UPS, and depending on carrier and service selection, consumers will typically be given a range of in-flight delivery options, such as live courier van tracking, the option to choose timed deliver windows, the ability to establish a ‘safe place’ for shipments to be left, and in the case of some carriers, photos of the parcel as it passes along conveyor belts throughout the courier network.
Carriers can also offer the ability for overseas customers to pay delivery duty via their app, or alternatively, this can sometimes be done at point of checkout via the retailer’s eCommerce platform.
Finding the Best UK Fulfilment Centre
Looking for and signing up with a fulfilment centre is a highly-involved, high-trust process. Other than the obvious advice such as checking their third-party reviews, employee reviews and customer success stories, it’s important to consider that 3PLs demand minimum order volumes of between 10 and 300 shipments per day on average.
Some 3PLs specialise in specific industry segments, or high volume lightweight fast-moving consumer goods (FMCG), whereas other B2B fulfilment specialists will be better suited to bulky shipments. Pricing is a minefield but in summary, variables include contract length, onboarding and integration fees, picking, packing, storage, shipping and returns charges, along with other costs such as customer support, and help with paperwork such as customs clearance.
Prudent retailers will establish both KPIs and OKRs to ensure both parties’ expectations are aligned, and these metrics could be things like order processing speed, on-time delivery performance and customer satisfaction scores, i.e. CSAT and Net Promoter Score (NPS).