Order logistics is essential to eCommerce fulfillment. After all, the process of delivering orders to customers is the heart of every online product business.
A thorough understanding of order logistics is crucial for every eCommerce entrepreneur. Here’s a review of the components of this essential eCommerce operation.
Order logistics definition
Logistics is the organization of transport, processing, and delivery to complete operations that have many moving parts. Order logistics is the coordination of all the elements necessary for order fulfillment.
How is order logistics different from order fulfillment or order processing?
Order fulfillment is the most common term for the logistics of processing eCommerce orders. Order logistics is also referred to as order processing. While the terms refer, generally, to the same operations, order logistics may focus more on the management and coordination of order fulfillment than other aspects such as packaging or kitting.
What are the essential elements of order logistics?
Order logistics consists of numerous interconnected operations. Coordinating order logistics requires managing each element so it doesn’t hold up order processing.
Raw material and inventory sourcing
Order logistics begins before you even get your first order. Everything in your supply chain influences your order logistics, starting with sourcing raw materials and manufacturing products. This includes managing transportation from factory to warehouse.
Inbound shipment receiving
Inbound inventory is the next logistics step to prepare for order fulfillment. You have placed an order and scheduled delivery to your fulfillment center]. Now the warehouse must move your inventory from the receiving dock and process it into stock, ready to fill online orders.
Inbound receiving can be a pain point in your supply chain. If your products sit on the receiving dock for several days or longer, that interrupts the flow of your goods from manufacturing to order delivery. At Red Stag Fulfillment, we guarantee that we will move inbound shipments from the receiving dock into stock in two business days or less, so your merchandise doesn’t sit in limbo.
Warehousing and storage
Until your products sell, they remain in the fulfillment warehouse. While that sounds like a simple and passive part of the order logistics process, it is not.
First, warehousing must safeguard the security of your products. That means protecting them from the elements, including moisture and excessive heat or cold. Safe warehousing also protects your items from theft and damage. At Red Stag Fulfillment, we have cameras covering every inch of our fulfillment warehouses. If there is an issue with one of your products, we will review the footage to find out what went wrong and correct the problem. We also provide 24/7 security at all our facilities.
Next, your fulfillment warehouse decides the best placement of your products. Placement is important for pick and pack operations. Implementing the most efficient pick and pack methods for your order fulfillment is vital to fast, accurate order logistics.
Inventory management
Inventory management is crucial to running your eCommerce business profitably. Plus, inventory forecasting and demand planning ensure that you have the right amount of stock for order fulfillment at the right time, so you avoid stockouts and backorders. Using lean inventory management principles will keep your stock costs low and your turnover high.
Red Stag Fulfillments helps our 3PL clients with inventory planning. That service is part of our commitment to helping your business grow and succeed. And our zero shrinkage policy means that your products are safe with us.
Order fulfillment
When a customer places an order in your online shopping cart, order logistics kicks into high gear. First, your fulfillment warehouse gets notified of the customer’s order. The warehouse management software generates a pick list. The picklist directs a picker where to find the products for the order in the warehouse.
After the picker gathers the products for an order, the next step in order fulfillment is the packing station. The packer selects the best box in which to ship the order. The box needs to be of a grade of cardboard that will protect the contents; heavier products require heavier cardboard boxes.
Size is also important. The box should be no bigger than needed to hold the products, with enough infill to protect them during shipping. Otherwise, the order might be subject to dimensional weight pricing, which can significantly increase shipping costs.
During order fulfillment, accuracy and speed matter. Your orders should be processed quickly — the same day the customer places them, when possible. And you need each order to contain the right products, packed with care so they arrive in perfect condition at the right address.
Red Stag Fulfillment offers fulfillment guarantees. If we mis-pick or mis-pack an order, we fix the problem and we pay you $50. The quality of our order fulfillment services has been recognized with multiple industry awards.
Shipping
The next phase of order logistics is shipping. Typically, FedEx, UPS, and USPS will make daily stops at fulfillment warehouses to pick up packages for delivery. Bulk and oversized shipments may ship as palletized or LTL freight.
At Red Stag Fulfillment, we look for the best shipping options for each client and each order. Our flexible carrier selection can save you and your customers on shipping costs and reduce delivery times.
Order delivery
The final step in the order logistics process is handled by the carrier. The delivery service has the responsibility of ensuring that the parcel arrives on time and in good condition to your customer.
For freight shipments, order logistics is a bit more complex. The trucking company may need to schedule a delivery time. In addition, it’s important to send the right type of truck, particularly for residential freight deliveries. Red Stag Fulfillment helps our clients manage freight logistics to make it simple for you to ship oversized orders.
Why is order fulfillment important for eCommerce businesses?
When you started your eCommerce business, you probably focused most of your energy on product development, marketing, and customer acquisition. However, the connection between the items you sell and your satisfied customers is order fulfillment. Here are just a few of the ways that well-run order logistics will help boost your sales and increase your profit margin.
Accurate order processing
Mistakes in order processing can increase your return rate and lead to negative customer reviews. If your customers know they can rely on you for accurate, reliable order delivery, they will return to buy from you again and again.
Meeting expectations on delivery times
Some factors are out of your control in order logistics. During the COVID-19 pandemic, spikes in demand and supply chain issues have slowed down order processing and delivery times.
However, professional 3PL services can help mitigate these problems. For example, Red Stag Fulfillment guarantees same-day fulfillment. That means your orders get to the carrier quickly, so order processing doesn’t add to order lead times. And, during the 2020 holiday rush, when many 3PLs weren’t able to ship orders on time due to carrier capacity limitations, we worked overtime to find alternate delivery options. As a result, we had very few late orders, even during a difficult time.
Cost control
ECommerce product markups need to include more than just the cost of goods sold. Affordable fulfillment can help you set competitive prices and still have a healthy profit margin.
Customer satisfaction increases with improved order logistics
The cost to keep a return customer is less than the expense of acquiring a new customer. Excellent order logistics will help you meet consumer expectations and earn loyal repeat customers. Your fulfillment should be an asset to your business, not a liability that your customer service and marketing departments have to work to overcome.
How much does order logistics cost?
Order logistics costs will depend on whether you operate your own warehouse or use a 3PL and what types of products you store and ship. Here are some of the fees that will determine how much your fulfillment costs:
Inbound receiving
A 3PL may charge per pallet for receiving inbound stock.
Storage fees
You will pay a monthly fee for the amount of warehouse space you use. When you rent your own space, warehousing is a fixed cost no matter how much or how little inventory you have. With a 3PL, you pay just for the shelf space you use each month. Red Stag Fulfillment’s commitment to accurate fulfillment extends to storage fees. With our cubic foot storage model, we bill you for the amount of space your products use each day.
Pick and pack fees
Expect a per-package fee and a per-item charge for order picking. Unless your products ship in factory packaging, boxes are also an expense to factor in.
Shipping costs
Shipping costs will depend on the number of shipping zones the package must cross to reach your customer, whether you need expedited shipping, and the weight of the package, including DIM weight charges. As a bulk shipper, Red Stag Fulfillment has negotiated lower rates with the major carriers, which we are able to pass on to our clients. Plus, our warehouse locations offer national fulfillment services that reduce your shipping zones, which lowers your delivery times and shipping costs.
Extra services
If your products need extra storage or handling services, incorporate those fees into your fulfillment budget. Extra services can include cold storage for perishable products, special handling for items classified as hazmat, or kitting services to increase your product offerings.
Red Stag Fulfillment has a variable cost fulfillment model, so you pay only for the services and storage space that you use each month.
What role do third-party logistics companies play in your supply chain?
Your third-party logistics provider is an essential part of your supply chain. When you outsource your order fulfillment to a 3PL, you add the expertise of a full staff of logistics professionals to your operations. Your 3PL can do more than pick, pack, and ship orders. You can lean on the experienced staff to help manage factory-to-warehouse transportation, improve your delivery times, and bring flexibility to your logistics.
When you work with a top-notch 3PL, you gain a powerful partner to support your business growth.
How will your business benefit from improved order logistics?
Improved order logistics can save you money on order fulfillment, reduce your delivery times, and increase order accuracy. That helps your internal operations by reducing costs, improving supply chain visibility, and increasing the efficiency of your operations. Excellent fulfillment also enhances the public face of your company, as you get more five-star reviews from customers who are delighted by their experience receiving their orders.
At Red Stag Fulfillment, we’re dedicated to exceptional fulfillment. We continuously look for new ways to improve the level of service we provide for our clients. Plus, our focus is on solving your fulfillment problems, large and small, so you can direct your attention to adding customers and increasing your market share.
Are you ready for outstanding fulfillment? Then you’re ready for Red Stag Fulfillment.
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