Maximize Success with Effective Order Fulfillment

The good news is you’ve reached the point in your small business where you’re ready to fulfill customer orders, and that’s something to be proud of!

And now that people want to get their hands on your products, how do you actually do that? A simple walk to the mailbox, a private company…carrier pigeon? Well, before you go ahead and decide, and start training that pigeon, let’s discuss a sound strategy that can help your business grow.

Choosing the right order fulfillment method

Deciding the right way to efficiently fulfill customer orders is crucial for your business because it’s quite literally the moment you’ve been dreaming of—customers holding your product.

Here are several fulfillment options, each with unique advantages:

• Utilizing third party logistics solutions (3PL): Partner with a specialized third party company to manage the entire fulfillment process, which can streamline your operations and offer expertise to plan the infrastructure to actually do it.
• Drop shipping: Orders are shipped directly from the manufacturer to the customer, eliminating storage needs.
• In-house fulfillment: Also known as self-fulfillment, so you manage all fulfillment from storage to shipping; everything is performed internally with no external partners.
• A hybrid approach: Combines elements of the above, each tailored to your specific business needs.  

For many startups, in-house fulfillment is a popular choice because you control everything and it’s cost-effective (and let’s face it, the bottom line is important). If you go down that route, it will involve:

1. Ordering products: Ensure you have sufficient inventory before listing your products for sale.
2. Storing products: Develop short-term and long-term storage solutions for availability and accessibility.
3. Processing customer orders: Efficiently gather, pack and label products for shipping.
4. Shipping orders: Choose cost-effective and reliable shipping with tracking capabilities. Consider cost, pickup/drop-off logistics and always provide a tracking number (we all know how often we check it when we order things).
5. Handling customer service: Two words that are incredibly important, customer service, can often make or break how people see your company. Establish clear protocols for returns, whether it’s with doorstep pickups, drop-off points, or requiring them to create their own label. Decide what to do with the returned products once they reach you and be timely in your response.

Scaling challenges

Self-fulfilling orders can be very cost-effective in the beginning stages of your startup, however, as your business matures, there can be some challenges that pop up, including:

• Difficulty scaling your business
• Cost of shipping may be higher when self-fulfilling orders compared to working with a third-party logistics partner
• Tracking orders becomes more complex as you get more orders
• Time spent on fulfilling orders could be better spent elsewhere

There will come an inflection point where you will need to determine if it makes more sense to expand your self-fulfillment operations by adding more warehouse space, employees, and system upgrades, or consider if it makes more sense to outsource order fulfillment by partnering with a 3PL. A good way of telling if it may be time for a change (in a good way because you’re growing) is that you can’t keep up with your order volume. When you find yourself approaching this situation, take some time and explore 3PL solutions, like Fulfillment by Amazon.

Like anything else in building your small business, take everything in stride, it’s a constant learning process. You’re nimble and smart, so if you see something working then keep doing it, but if you see that something is stalling, rethink your strategy.

Above all, this is an exciting time for your business, it’s something that entrepreneurs dream of, so make sure to also take a step back and enjoy it a little. You’ve done a lot and the above information is meant to help you do even more. Good luck!

Want to keep learning?

Check out our course, How to Find the Right Fulfillment Partner, available through the Amazon Small Business Academy.