Fulfillment and inventory management

Your complete guide to choosing fulfilment services


Written by Starshipit

If you are growing your eCommerce business, you might start hearing phrases like “fulfilment service” and “order fulfilment efficiency”.

That’s because are the key to scaling your online store without working 80 hour weeks.

Order fulfilment is basically anything you do to get products out to customers. It covers steps like inventory management, to shipping to processing returns.

Once you start shipping hundreds of orders in a week, it’s time to upgrade and automate your fulfilment process to keep customers satisfied. Ready to learn how? Keep reading!

What are fulfillment services?

Order fulfilment services are the tools and systems you use to get an order to a customer.

eCommerce shipping fulfilment includes everything from order processing, to packaging, to actual delivery, to processing returns. It also includes your system for things like product quality control and storing stock in a way that makes it easy to pack orders.

Third party fulfilment services let you outsource some or all of these steps so that you can focus on building your business.

This looks different depending on what stage of business you are in. There are a few common models to choose from to get your products out the door.

What are the ways to handle eCommerce order fulfillment?

Choosing a fulfilment service starts with knowing where you are at in your business. Are you just starting out with only a couple of orders a week? Do you ship hundreds of orders to multiple countries? Let’s go through some of the different fulfilment models to choose from.

1. In-House or Self-Fulfilment

In-house fulfilment is when you do everything from packing to shipping yourself. Unless you are dropshipping directly from a manufacturer, this is where most eCommerce businesses start out.

In-house fulfilment usually means

  • Running your business from home
  • Having a relatively low volume or parcels
  • Needing to save money by doing everything yourself

Self-fulfilment is a great way to start, as long as you have good systems in place for processing orders quickly. is key!

eCommerce fulfilment: Strategies to fulfill online orders

2. Third-party / outsourcing

Third Party Logistics (3PL) takes care of order fulfilment on your behalf. Instead of receiving all the inventory at your house, everything gets shipped and stored with a warehouse or fulfilment center.

3PL providers make sure orders get out the door quickly. Often they will use some kind of barcode or SKU system for inventory, shipping integrations for streamlined delivery, and organise returns for you.

This is a good model if you are growing rapidly and need to get hundreds of orders out the door every week. There will come a point in your weekly sales where it is more cost effective to pay someone else to fulfill your orders, and 3PL is the answer.

3. Dropshipping

Dropshipping is similar to third party logistics, except that items are shipped directly from the manufacturer. If you want to completely outsource your fulfilment management system, dropshipping might be the option for you.

Instead of you ordering all the products, customers purchase through your website, and everything is handled by a fulfilment center.

This model has a low barrier to entry and doesn’t require you to purchase large quantities of stock that might not sell. It works well if you have a low budget for fulfilment services as everything is handled external to you and your business.

Top 3 benefits of fulfillment services

eCommerce fulfilment services mean that you can get more orders out with less errors. Whether you are doing it yourself or outsourcing steps, there are many benefits to automating your fulfilment process.

eCommerce shipping solutions
  • Offers faster, affordable shipping

Fulfilment services often mean that you can negotiate better shipping for your customers. Combining shipping integrations and warehouse solutions meant that Australian fitness brand Lorna Jane could offer great shipping rates to a global audience.

International shipping is always hard to get right but using an automated global shipping system simplified the process drastically. With Starshipit in place, the Lorna Jane team can easily manage shipments from all their distribution centers, regardless of country.

Being able to ship using a variety of shipping carriers is also key. It all comes back to customer choice. Starshipit allows them to offer options when it comes to shipping carrier, service level and delivery timeframe.

This ability to easily adjust couriers also proved useful for Lorna Jane during the COVID-19 pandemic, as the company could choose different couriers based on performance and pass these choices along to customers.

  • Improves order accuracy

Some common challenges with eCommerce order fulfilment are human error. Things like customers inputting addresses wrong, mistyping data from Shopify to your order courier, and misplacing order sheets all slow you down and cost money.

Popular fashion brand ShowPo improved their order accuracy basically overnight when their fulfilment warehouse started using Starshipit.

“One big issue we faced was that of unmanifested orders from our last mile partners. This often resulted in hefty penalties by our carrier. Starshipit allows us to validate addresses on our front. This means that we never encounter unmanifested parcels and this has become a big cost saving for the business."
  • Saves time on logistics

Order fulfilment should be the easy, automated part of your business. Using some kind of fulfilment service allows you to simplify this process and focus on other parts of growing your business.

For example, Aussie surf brand Eat Your Water used to be “all over the place” before they implemented fulfilment services.

“We were managing our fulfilment straight through Shopify, using a very slow label printing system,” he says. “It was very ‘all over the place’ and we needed to run a lot of tabs at the same time to get a package out the door.

Since integrating Starshipit with their Shopify store, they have:

  • Cut domestic order fulfilment by 20-25%
  • Cut international order fulfilment by 60-75%
  • Decreased shipping times from around 10 days to 1-5 days

What do fulfillment services cost?

The cost of order fulfilment services will depend on what you outsource. Like most business expenses, they will grow as your number of orders do.

If you are using 3PL or a dropshipping warehouse, you will usually pay per hour or per unit per pallet.

Service providers are charging for everything from storage to quality assurance to paying staff to pick and package products on your behalf. You will usually pay some combination of recurring fee, and one time fees.

For your own fulfilment services, you might be paying monthly fees for shipping software, paying your couriers for each parcel, and paying staff by the hour to help ship orders. If you are doing it this way, it is important to have an automated system to make it as easy and efficient as possible for staff.

Features to look for when choosing a fulfilment service

Ready to choose a fulfilment service? Here are a few things to look for in your fufilment system checklist.

  • Pricing

Before signing up to fulfilment services, you will want to compare a few options. Look for potential hidden costs, and read every word of your contract!

If you are thinking about outsourcing fulfilment, spend a couple of months tracking how long it takes you to fulfill an order and how much that time is worth to you. Also consider how many orders come in per month and whether their monthly charge covers costs.

  • Location of the fulfillment service provider

The location of your service provider matters. It could drastically change the price of your shipping! For example, if you have a lot of domestic orders, it wouldn’t make sense to outsource to another country. If you want to expand to other countries, it might make sense to have a warehouse set up closer to them to save on shipping costs for customers.

  • Provided services

Most 3PL providers will offer basic storage, packing and shipping. You need to make sure that you choose a provider that will take as much care with your products as you would. Look for extra services such as batching and processing returns on your behalf.

  • Customer support

61% of customers will switch to competitors after just one poor customer experience. You can’t afford to invest in fulfilment services that won’t fix problems! Look for providers with positive eCommerce business reviews and guaranteed support for you and your customers.

  • Automation/Use of technology

You are paying for efficiency. If your chosen service provider doesn’t use technology or shipping integrations, they probably aren’t worth your time. If you are curious you can always ask what systems they use to automate your orders.

  • Consider scalability

You need to plan your business assuming that it will scale over the next few years. Fulfilment systems matter even if you are just starting out. If you want to outsource your fulfilment, choose a provider that can scale with you.

Outsource your fulfilment service with Starshipit

Starshipit is the easy way to elevate your fulfilment services. Whether you are doing every order yourself, in a team, or ready to outsource to a third party, Starshipit makes sure customers get orders fast and at a great shipping price. Take fulfilment services off your to-do list and get started with Starshipit for free!

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