{"id":1164,"date":"2024-11-01T15:55:06","date_gmt":"2024-11-01T15:55:06","guid":{"rendered":"https:\/\/www.shipbob.com\/uk\/blog\/order-fulfillment\/"},"modified":"2026-04-30T19:07:31","modified_gmt":"2026-04-30T19:07:31","slug":"order-fulfillment","status":"publish","type":"blog","link":"https:\/\/www.shipbob.com\/uk\/blog\/order-fulfillment\/","title":{"rendered":"What is Order Fulfilment? Define Your Process & Strategy in 2026"},"content":{"rendered":"\n

Table of Contents<\/p>

** Minutes<\/p><\/div><\/div>\n

Main takeaways (TLDR)<\/a><\/p>\n\n\n\n

What is order fulfilment?<\/a><\/p>\n\n\n\n

Why is order fulfilment important?<\/a><\/p>\n\n\n\n

How does the order fulfilment process work? (5 steps + infographic)<\/a><\/p>\n\n\n\n

Build your order fulfilment strategy around these 10 questions<\/a><\/p>\n\n\n\n

Order fulfilment options: what are they (+ 3 tips from the experts)<\/a><\/p>\n\n\n\n

Order fulfilment and 3PL pricing models<\/a><\/p>\n\n\n\n

Leave order fulfilment to the pros at ShipBob<\/a><\/p>\n\n\n\n

Order fulfilment FAQs<\/a><\/p>\n<\/div>\n\n\n\n

<\/span>

Key Takeaways<\/h2><\/span><\/div>
\n

1<\/p><\/div>

Order fulfilment involves receiving, picking, packing, and delivering ecommerce orders, starting from when a customer places an order and continuing until it reaches their hands.<\/p><\/div><\/div>\n\n\n\n

2<\/p><\/div>

The process consists of five main steps: receiving, picking, packing, shipping, and handling returns, each crucial for ensuring a smooth customer experience.<\/p><\/div><\/div>\n\n\n\n

3<\/p><\/div>

Outsourcing to a third-party logistics provider (3PL) can help businesses manage fulfilment efficiently (especially as they scale), since they offer expertise and cost-effective infrastructure.<\/p><\/div><\/div>\n\n\n\n

4<\/p><\/div>

Different fulfilment strategies \u2013 such as in-house, third-party, and dropshipping \u2013 cater to various business needs, with factors like business size, order volume, and sales channels influencing the best approach.<\/p><\/div><\/div>\n<\/div><\/div>\n\n\n\n

Think about the last time you ordered something from an online store and had a sub-par delivery experience. Maybe your package was lost, late, or damaged.<\/p>\n\n\n\n

Are you itching to buy from that seller again? Probably not. <\/p>\n\n\n\n

As an ecommerce seller, you would never want your customers to have an experience like that from your brand. Moreover, your brand\u2019s success depends on delivering not just an adequate delivery experience, but a stellar one. <\/p>\n\n\n\n

Achieving that outcome for your own ecommerce brand comes down to one thing: your order fulfilment strategy.<\/p>\n\n\n\n

In this article, we\u2019ll dive deep into order fulfilment: what it is, what it entails, and how you can optimise and transform it into a competitive advantage for your business.<\/p>\n\n\n\n

What is order fulfilment?<\/h2>\n\n\n\n

Order fulfilment is the process of receiving, preparing, and delivering ecommerce orders. It begins as soon as a customer places an order, and encompasses every activity involved in getting a finished order into the customer\u2019s hands, including order processing, confirmation, picking, packing, and shipping<\/a>. <\/p>\n\n\n\n

Why is order fulfilment important?<\/h2>\n\n\n\n

Order fulfilment is a necessary part of running your ecommerce business. Without it, there\u2019s no way to get your products into customers\u2019 hands.<\/p>\n\n\n\n

But more importantly, it is a critical stage of your supply chain that has huge implications for your brand\u2019s fans, finances, and future. There are 3 key reasons why you should care about your brand\u2019s order fulfilment:<\/p>\n\n\n\n

1. It impacts the customer experience.<\/h3>\n\n\n\n

Orders don\u2019t just magically show up on doorsteps; rather, every item in an order has to be procured, received at a warehouse or fulfilment centre, stored, picked, packed in a box, and delivered to the end customer.<\/p>\n\n\n\n

Even though the customer almost never sees these activities, how they are carried out will affect the customer\u2019s experience. <\/p>\n\n\n\n

For example, if a picker can\u2019t find one of the items in a customer\u2019s order (or realizes that item is out of stock), that order will be delayed. The customer is then forced to wait a longer time than they were promised to receive their finished order, which may upset them. <\/p>\n\n\n\n

Similarly, if an order is packed in the wrong size box without any protective material to cushion the items, those items may get damaged or broken in transit. The customer will then be disappointed when they open their package, and have to coordinate a refund with the brand.<\/p>\n\n\n\n

When you fail to meet your customers\u2019 expectations \u2013 that the exact items they ordered arrive quickly and in pristine condition \u2013 they probably won\u2019t purchase from your brand again. This can cost your brand money in the short term, and make it difficult for you to build up a loyal customer base. <\/p>\n\n\n\n

2. It\u2019s a major cost centre. <\/h3>\n\n\n\n

Fulfilment costs are part and parcel of running an ecommerce business \u2013 in fact, for many brands, order fulfilment is one of their biggest spending areas. Ecommerce brands should pay attention to their fulfilment partner\u2019s cost structure and billing to make sure they aren\u2019t accidentally overpaying for sub-par fulfilment \u2013 especially if they outsource fulfilment to a third party logistics provider, or 3PL.<\/p>\n\n\n\n

3. It\u2019s an integral part of scaling your business. <\/h3>\n\n\n\n

When you\u2019re first starting your ecommerce business, it\u2019s normal to fulfil all your orders yourself. But as your brand grows, so will your order volume \u2013 and eventually, you won\u2019t be physically able pick, pack, and ship them all on your own (or even with a team). <\/p>\n\n\n\n

To successfully expand your brand into new sales channels and geographies, you will need a way to manage more inventory, fulfil more orders, and ship out more packages without sacrificing quality or causing delays.   <\/p>\n\n\n\n

For example, when dog treat brand NutriPaw launched their brand, they fulfilled orders themselves. A year later, the brand had grown so much that self-fulfilment became completely unsustainable. <\/p>\n\n\n\n

At the scale they were operating at, keeping everything in-house would mean that we would be picking and packing orders<\/a> all day. By outsourcing fulfilment to ShipBob, NutriPaw was able to introduce new products and grow their brand without worrying about fulfilment. <\/p>\n\n\n\n

\n

\u201cWe wanted to free up our time to focus on growing our business, and knew it was time to outsource fulfilment to experts like ShipBob.\u201d<\/em><\/p>\n\n\n\n

Adelina Zotta & Connor Westby, Co-Founders of NutriPaw<\/a><\/p>\n<\/blockquote>\n\n\n\n

How does the order fulfilment process work? (5 steps + infographic)<\/h2>\n\n\n\n

The order fulfilment process might look different for different brands, but it\u2019s almost always composed of 5 key stages. <\/p>\n\n\n

\n
\"\"<\/figure>\n<\/div>\n\n\n

Step 1: Receiving<\/h3>\n\n\n\n

Receiving refers to the acceptance and storage of incoming inventory at a fulfilment centre.<\/p>\n\n\n\n

If your brand fulfils orders in-house, you are responsible for receiving and stowing inventory when it arrives from the supplier or manufacturer. <\/p>\n\n\n\n

When you outsource to a 3PL, the 3PL will take care of it for you. Each 3PL has its own processes for receiving and storing inventory, often involving documentation submitted by the merchant. This keeps things organised and timely, meaning your orders can start shipping sooner.<\/p>\n\n\n\n

Once inventory arrives at loading docks, it is counted and checked for quality. The items are then stored in dedicated warehousing<\/a> storage locations, such as shelves, bins, or pallets.<\/p>\n\n\n\n

Step 2: Picking<\/h3>\n\n\n\n

When an order is placed on your brand\u2019s ecommerce store, someone needs to go through inventory storage and pick each item in that order. <\/p>\n\n\n\n

When you work with a 3PL, each order is pushed to your 3PL\u2019s order fulfilment system, where it is assigned to the warehouse picking<\/a> team. A picker receives a packing slip<\/a> with the items, quantities, and storage locations at the facility to collect the ordered products from their respective locations.<\/p>\n\n\n\n

Step 3: Packing<\/h3>\n\n\n\n

Once all items in an order have been picked, it\u2019s time to get them securely packed up in a box or poly mailer, which gets sent to the customer.<\/p>\n\n\n\n

In packing, it\u2019s important to include insulating or protective materials so that the goods don\u2019t get jostled or broken in transit. These materials can include boxes, bubble mailers or poly bags<\/a>, packing tape, bubble wrap, air fill, and other dunnage<\/a>.<\/p>\n\n\n\n

3PL partners will handle packing for you. Some 3PLs will charge for packing materials, while others include them as part of their fulfilment services. Your 3PL will choose packing materials that will both protect your products and add up to the lowest practical dimensional weight<\/a>.<\/p>\n\n\n\n

If you\u2019d prefer to keep your brand front and centre, some partners allow you to stock your own custom boxes or otherwise use plain brown boxes.<\/p>\n\n\n\n

Step 4: Shipping<\/h3>\n\n\n\n

Once the order is packed, it\u2019s time to ship. Merchants must purchase shipping labels, affix the right label to each packaged order, and mail them to the customer using last-mile couriers such as the USPS, FedEx, UPS, DHL, and more.<\/p>\n\n\n\n

Most 3PL partners will purchase shipping labels<\/a> from shipping carrier(s) on the merchant\u2019s behalf. Some fulfilment providers have preferred couriers with whom they partner, while others compare shipping costs from a variety of couriers. The latter helps ensure the most affordable pricing possible for any given shipping option.<\/p>\n\n\n\n

One big benefit of outsourcing fulfilment is that major couriers pick up orders directly from the 3PL\u2019s fulfilment centres to ship, saving you a trip to the post office (or the hassle of arranging carrier pickups yourself).<\/p>\n\n\n\n

Once the order ships, you receive order tracking information<\/a>. Depending on your 3PL\u2019s technology, you can either automatically or manually share this information with customers.<\/p>\n\n\n\n

Step 5: Order returns processing<\/h3>\n\n\n\n

Although you hope it never happens, on occasion, customers will inevitably want to return some or all items from their orders. This means that ecommerce brands need a plan in place for how customers can ship the items back, and whether they will restock those items or dispose of them. <\/p>\n\n\n\n

Your brand will need to decide whether you will offer in-store returns, mail-in returns, both, or neither. You will also need to establish a return window (usually between 30 and 60 days), and whether you will cover the cost of return shipping. <\/p>\n\n\n\n

Some 3PLs will help you coordinate returns and restock eligible items in your inventory to be resold. <\/p>\n\n\n\n

Build your order fulfilment strategy around these 10 questions<\/h2>\n\n\n\n

There\u2019s no such thing as a one-size-fits-all order fulfilment strategy. Here are some important questions to answer to help you create a scalable fulfilment strategy for your online store.<\/p>\n\n\n\n

Business size and order volume<\/h3>\n\n\n\n
    \n
  1. How many SKUs<\/a> does your business sell?<\/li>\n\n\n\n
  2. How many orders are you currently shipping each month?<\/li>\n\n\n\n
  3. How many orders do you predict you\u2019ll be shipping next month? Next year?<\/li>\n<\/ol>\n\n\n\n

    The number of products you sell<\/a> and your monthly order volume play a big role in finding a fulfilment solution<\/a> that works for you. If you\u2019re new to the world of ecommerce, your fulfilment strategy is likely to look very different from, say, Walmart Marketplace<\/a> or Target.<\/p>\n\n\n\n

    Low order volume may make it more cost-effective for you to keep <\/strong>fulfilment in-house<\/strong><\/a>, as opposed to outsourcing.<\/strong> If you sell a limited variety of products<\/a> and are shipping just a few orders each week, you probably don\u2019t need a full inventory or warehouse management system<\/a> to keep track of your inventory<\/a> and operations.<\/p>\n\n\n\n

    If your business is growing quickly and your <\/strong>average order value<\/strong><\/a> is steadily increasing, keep in mind when you\u2019re likely to outgrow your fulfilment strategy.<\/strong> It\u2019s important to make sure your ecommerce fulfilment<\/a> strategy can scale with you.<\/p>\n\n\n\n

    Sales channels and technology<\/h3>\n\n\n\n
      \n
    1. Where are you selling online?<\/li>\n\n\n\n
    2. Are you selling on an ecommerce website, a marketplace, or both?<\/li>\n\n\n\n
    3. Which ecommerce platform are you using?<\/li>\n<\/ol>\n\n\n\n

      Your fulfilment strategy should complement and support your online sales channels, especially from a technology standpoint. Your technology should streamline the order fulfilment process, not complicate it.<\/strong> Order fulfilment software<\/a> that already integrates with your ecommerce platform and online marketplaces can help you manage the entire parcel fulfilment process more efficiently without having to do any developer work.<\/p>\n\n\n\n

      This is especially important if you\u2019re selling across more than one channel. <\/strong>As soon as an online order is placed on any of your sales channels, it should automatically be pushed to your fulfilment operations. Then it can be picked, packed, and shipped in a timely manner.<\/p>\n\n\n\n

      \n

      \u201cWe utilise ShipBob\u2019s EDI solution that is connected to our 3rd party EDI platform SPS Commerce for our Chewy orders, and when we don\u2019t ship directly to Amazon, we rely on ShipBob\u2019s direct integration with Amazon for FBA orders. We\u2019re even exploring additional channels that ShipBob supports, such as Walmart.com. <\/em><\/p>\n\n\n\n

      Being an omnichannel brand is critical for us, so we can reach more pet lovers from more places. We\u2019re glad that ShipBob helps us keep up with demand from all the places we reach our customers.\u201d<\/em><\/p>\n\n\n\n

      Stephanie Lee, COO at PetLab<\/a> <\/p>\n<\/blockquote>\n\n\n\n

      Choosing a fulfilment service with the right inventory management software<\/a> is also critical. You should always have full visibility into inventory movement<\/a> and quantities on hand across fulfilment locations, as well as a system in place to prevent stockouts<\/a>.<\/p>\n\n\n\n

      Overall, ecommerce businesses need to leverage technology that connects the upstream activities of purchasing and manufacturing to the downstream activities of sales and product demand<\/a> to make more accurate purchasing and production decisions.<\/p>\n\n\n\n

      Location, location, location<\/h3>\n\n\n\n
        \n
      1. Are your customers centrally located in one region, or are they spread across the country?<\/li>\n\n\n\n
      2. Do you have a large international customer base?<\/li>\n<\/ol>\n\n\n\n

        Where you ship to and from are two of the most important aspects that should inform your fulfilment strategy. Customers want ecommerce delivery to be quick and without a high price tag \u2013 so make sure you can deliver on customer expectations, try to minimise the number of <\/strong>shipping zones<\/strong><\/a> your average package travels.<\/strong> This can reduce shipping costs<\/a> and times, leading to happier customers.<\/p>\n\n\n\n

        Leveraging multiple fulfilment centres strategically placed near your customers can also drive down logistics costs<\/a> and shipping times. This helps you leverage ground shipping more often, which is significantly cheaper than expedited shipping<\/a>, while still getting orders to customers fast.  <\/p>\n\n\n\n

        If your brand ships outside of the US, it\u2019s even more important to master your fulfilment strategy. Shipping internationally can be extremely expensive and time-consuming \u2013 not to mention complicated, as there are additional duties, tariffs, and taxes that your brand must navigate. <\/p>\n\n\n\n

        Storing stock and fulfilling orders locally within the countries you sell in can help minimise cross-border complexities, cut costs, and improve shipping times.<\/p>\n\n\n\n

        If you decide to partner with a 3PL, they may have global locations that your brand can use to expand its reach without breaking the bank. ShipBob, for example, has fulfilment centres in Europe, Canada, and Australia in addition to its US locations. <\/p>\n\n\n\n

        Customisation needs<\/h3>\n\n\n\n
          \n
        1. Are your products made-to-order?<\/li>\n\n\n\n
        2. Is customisation a key selling point of your brand?<\/li>\n<\/ol>\n\n\n\n

          If you sell items that are custom-made, specially gift wrapped, or extremely fragile<\/a>, you may want to choose a more hands-on approach to your entire supply chain<\/a>.<\/p>\n\n\n\n

          Being able to pack items yourself gives you the freedom, flexibility, and reassurance that customisation will be exactly right each time. However, fulfilling orders yourself isn\u2019t always sustainable. While outsourcing fulfilment means giving up some control, the right fulfilment partner will enable you to control quality, deliver an unforgettable unboxing experience, <\/strong>and<\/em><\/strong> scale your brand. <\/strong> <\/p>\n\n\n\n

          \n

          \u201cFulfilment is one of the areas that we were super keen to outsource to a partner who\u2019s been doing it for a while and knows how it\u2019s done. We can trust ShipBob to support and handle fulfilment for us, so that we can focus on the strategic side of our business, helping us grow and develop much faster.\u201d<\/em><\/p>\n\n\n\n

          Adelina Zotta, Co-Founder of NutriPaw<\/a><\/p>\n<\/blockquote>\n\n\n\n

          Order fulfilment options: what are they (+ 3 tips from the experts)<\/h2>\n\n\n\n

          It\u2019s clear that different ecommerce businesses have different needs. The best order fulfilment strategy for your business might not be the same as that of your competitors.<\/strong> <\/p>\n\n\n\n

          The most common order fulfilment methods are outsourcing to a third-party fulfilment provider, merchant fulfilment, and dropshipping. <\/p>\n\n\n\n

          Third-party fulfilment<\/h3>\n\n\n\n

          Third-party fulfilment refers to outsourcing of fulfilment logistics<\/a> to an external partner. These processes can include inventory management, generating optimised picking lists<\/a>, packing boxes, and shipping orders, and managing returns.<\/p>\n\n\n\n

          Many ecommerce retailers partner with a third-party logistics (3PL)<\/a> partner to outsource supply chain<\/a>-related tasks that can often be too time-consuming, costly, or complex to manage in-house.<\/p>\n\n\n\n

          If you no longer have the bandwidth or space to fulfil orders yourself, working with a 3PL can help automate certain tasks. Freeing up the time previously taken up by product fulfilment allows you to focus instead on growing your business.<\/p>\n\n\n\n

          \n

          \u201cPersonally, when I hear about people trying to do their own fulfilment, I’m kind of skeptical. Having gone through that experience of packing orders, I would tell anyone that’s thinking about starting a business that it’s really, really well worth your time to consider partnering with a professional like ShipBob. A lot of people think, \u201cI don’t need that,\u201d or \u201cI don’t want to waste money on a fulfilment provider.\u201d But in reality, partnering with an expert like ShipBob will free up so much of your time, speed up shipping, and lead to a better customer experience.\u201d<\/em><\/p>\n\n\n\n

          Tyler McCann, Co-Founder of Taste Salud<\/a>  <\/p>\n<\/blockquote>\n\n\n\n

          3PLs have inbound and outbound logistics<\/a> expertise that your business can \u2014 and should \u2014 leverage. They also have the infrastructure needed to ship larger order volumes, making them invaluable as your business scales or needs to ramp up quickly and deliver orders accurately<\/a>.<\/p>\n\n\n\n

          Merchant fulfilment<\/h3>\n\n\n\n

          Also called in-house fulfilment or self-fulfilment<\/a>, merchant fulfilment refers to an ecommerce seller completing the entire order fulfilment process without the help of a third party.<\/p>\n\n\n\n

          Many online brands choose to fulfil orders in-house when first starting out. This often means storing inventory and packing orders from home.<\/p>\n\n\n\n

          Merchant fulfilment offers more control over your <\/strong>retail supply chain<\/strong><\/a> than outsourcing the same processes, but it can also be costly and hard to scale as your business grows.<\/p>\n\n\n\n

          When your order volume gets too high to keep fulfilling orders from home, you have two options: Expand your merchant fulfilment operations by investing in fulfilment infrastructure<\/a> (including warehouses, labour, equipment, and more) or outsource to a 3PL.<\/p>\n\n\n\n

          The former can be an expensive endeavor, which is why so many businesses choose the latter.<\/p>\n\n\n\n

          Dropshipping<\/h3>\n\n\n\n

          Dropshipping<\/a> is a much more hands-off approach to both manufacturing and order fulfilment where inventory is produced, stored, and shipped by the manufacturer.<\/p>\n\n\n\n

          When a customer places an order, the order details are forwarded to the manufacturer. The product ships directly from the manufacturer to the end consumer.<\/p>\n\n\n\n

          Low barriers to entry and minimal overhead make dropshipping an attractive option to many new ecommerce businesses. However, manufacturers are often located overseas, which means that shipping takes significantly longer and is potentially more expensive than fulfilling orders domestically.<\/p>\n\n\n\n

          Overall, dropshipping offers merchants very little control over the supply chain, especially when it comes to inventory management and order fulfilment.<\/p>\n\n\n\n

          ShipBob\u2019s top order fulfilment tips<\/h3>\n\n\n\n

          Take it from an expert supply chain partner \u2013 order fulfilment is hard. But there are a few ways your brand can make it a bit easier: <\/p>\n\n\n\n

          Your receiving processes are key<\/h4>\n\n\n\n

          If you own the receiving part of your order fulfilment processes, you want to make sure it\u2019s optimised so you can act fast. Any shipment should be processed as quickly as possible so that your customers can enjoy a fast delivery. <\/p>\n\n\n\n

          Have a backup strategy in place<\/h4>\n\n\n\n

          When it comes to shipping products, there are a lot of preventable shipping mistakes<\/a> to avoid, but also many external factors that you won\u2019t have control over. Goods can be damaged, couriers may decide to increase their fees, exceptional weather conditions might impact your delivery, etc. Having a good contingency plan for your order fulfilment can help you prevent late deliveries.<\/p>\n\n\n\n

          Use everything you can to anticipate demand<\/h4>\n\n\n\n

          Forecasting and staying in stock is essential to keeping up with the demand. If it\u2019s not your first year running your business, you could start by analising your data (orders, inventory, etc.) from the previous year to understand if there is any seasonality in your market.<\/p>\n\n\n\n

          Order fulfilment and 3PL pricing models<\/h2>\n\n\n\n

          Different 3PLs price their fulfilment services in different ways. Here\u2019s how ShipBob prices our ecommerce order fulfilment services.<\/p>\n\n\n\n

          Note:<\/strong> Order fulfilment pricing depends on your business\u2019s specific needs.<\/p>\n\n\n\n

          Fulfilment service<\/td>How it\u2019s priced<\/td><\/tr>
          Receiving<\/td>Flat rate for the first two hours, and a per-hour charge for each subsequent hour <\/td><\/tr>
          Inventory storage<\/a><\/td>Per bin, shelf, and pallet<\/td><\/tr>
          Pick and pack<\/a> fees<\/td>A certain number of picks included in total fulfilment cost, and a per-pick fee for each subsequent pick<\/td><\/tr>
          Standard packaging<\/td>Included in total fulfilment cost<\/td><\/tr>
          Shipping<\/td>Carrier pricing passed directly on to client<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

          Read more:<\/strong> Order Fulfilment Costs and 3PL Pricing Models: Everything You Need to Know<\/a><\/p>\n\n\n\n

          Just like there is no one-size-fits-all fulfilment solution, there is no one pricing model that fits all ecommerce businesses. Above is an example of ShipBob\u2019s fulfilment pricing. Reach out to our team<\/a> for a custom fulfilment quote that takes into account your business\u2019s size, needs, strategy and budget.<\/p>\n\n\n\n

          How to choose a 3PL<\/h3>\n\n\n\n

          If you\u2019ve decided that outsourcing order fulfilment to a third-party logistics service provider is the right choice for your ecommerce business, it\u2019s now time to select a partner. <\/p>\n\n\n\n

          However, choosing a 3PL can be a harrowing task. The options can seem endless, with confusing pricing and outdated processes.<\/p>\n\n\n\n

          It\u2019s important to find an order fulfilment provider that you trust to handle your inventory, provide a positive experience to your customers, and ultimately help you grow your business.<\/p>\n\n\n\n

          To determine if a third-party fulfilment company is the right partner for your business, be sure to ask them a comprehensive set of questions, including: <\/p>\n\n\n\n