If you’re considering working with a third-party logistics (3PL) provider or are new to outsourcing shipping, what goes on in a fulfillment center may seem like a black box. But the fulfillment process doesn’t have to — and shouldn’t — be a mystery!
So what exactly happens at a 3PL’s ecommerce warehouse once a customer clicks “Submit order” on your online store? We hope this post sheds some light on the fulfillment center operations that take place between checkout and when the order arrives on your customer’s doorstep.
The ecommerce fulfillment process
Here are the top operational activities that occur in a fulfillment center, involving both inbound and outbound logistics processes.
Your 3PL can’t ship orders if they don’t have your inventory! The receiving of inventory is one of the top warehousing operations that has to take place before your 3PL can start fulfilling orders for your online store. Receiving refers to the acceptance of incoming inventory followed by its storage.
Each 3PL has its own processes for receiving and storing inventory. For example, at ShipBob, we require clients to fill out a Warehouse Receiving Order (WRO) so that we know which products we will be receiving and how many units.
This helps us stay organized and timely with receiving, meaning we can start fulfilling your orders more quickly and efficiently.
Once we receive your inventory, we store your items in our fulfillment centers. Each SKU has a separate dedicated storage location, either on a shelf, in a bin, or on a pallet.
When your customer places an order, it’s time for the fulfillment process to begin! Some 3PLs require you to manually upload orders to their system; however, there are 3PLs (like ShipBob!) that can integrate with your online store and automatically push orders to your fulfillment provider.
As soon as an order is sent to your 3PL, it is assigned to a picking team. The picking team receives a picking list of the items, quantities, and storage locations at the facility to collect the ordered products from their respective locations.
When all items in an order have been picked, it’s time to get them securely packed up. Some 3PLs will charge for packing materials as a separate line item, while others include them as part of their fulfillment services.
At ShipBob, for example, plain, standard packing materials — brown boxes, yellow bubble mailers, white poly bags, packing tape, and dunnage — are included. We strive to choose the best packing materials to both protect your products and achieve the lowest practical dimensional weight. We also allow our clients to use custom packing materials to put their brand front and center at an additional cost.
The next step is shipping your order. Most 3PLs will purchase and print shipping labels on your behalf. Some 3PLs have preferred carriers with whom they partner, while others compare shipping costs from a variety of carriers.
ShipBob does the latter to make sure that our clients receive the most affordable pricing possible for the delivery speed their customers choose.
Carriers such as DHL, USPS, and UPS pick up orders from fulfillment centers to ship. Once the order ships, you should automatically receive tracking info from your 3PL. With ShipBob, as soon as the order ships, tracking info is pushed back to our clients’ stores.
Technology, fulfillment, and ShipBob
We hope this post demystifies the basics of the fulfillment process. Of course, there may be variations in this process from 3PL to 3PL. Unlike an on-demand warehousing company, 3PLs are the experts in fulfillment, not just excess storage needs.
At ShipBob, every action we take while fulfilling your order has an automatic, corresponding digital counterpart in our dashboard, which keeps our ecommerce fulfillment processes efficient and consistent. Each step is directed by information that is automatically populated in the dashboard when an order is submitted.
For example, in the picking step, the ShipBob dashboard shows our fulfillment associates exactly which SKUs will go in the order, including any custom packaging, and where in the fulfillment center to find those SKUs. This takes the guesswork out of fulfillment and helps us fulfill orders for hundreds of clients each day.
3PL Fulfillment Process FAQs
Below are some of the most frequently asked questions about 3PLs and the fulfillment process:
What is 3PL fulfillment?
3PL (third-party logistics) fulfillment refers to outsourcing the retail order fulfillment process to a team of experts. This includes receiving orders, picking and packing, inventory management, shipping, and warehousing. By outsourcing fulfillment to a 3PL, you’re able spend less time fulfilling orders and more time on developing your business.
What does a 3PL do?
3PLs go beyond just fulfilling orders, but not all 3PLs are the same. Depending on the 3PL, fulfillment logistics services may include: storing and managing ecommerce inventory, 2-day shipping, distributed inventory, fulfillment analytics and reporting, returns management, and more.
What is outsourced fulfillment?
Outsourced fulfillment refers to hiring a 3PL to take care of all order fulfillment-related tasks from receiving inventory to shipping orders. Outsourcing fulfillment comes with several benefits including cost and time savings, optimized supply chain, and the ability to ship orders to customers, across the country or globally, faster.
What is a 3PL vs. a 4PL?
A 4PL adds an additional degree of separation between ecommerce merchants and their 3PL partner. A 4PL manages and arranges 3PL services for the merchant; this is sometimes referred to as “double brokering.” A 4PL offers an end-to-end supply chain management solution which includes 3LP services, manufacturing, and more.
Learn more about how partnering with a 3PL can help your business scale, and get tips for choosing a fulfillment partner. Download “How to Choose a 3PL for Your Ecommerce Business.”