How to fulfill your own orders: Ecommerce self-fulfillment guide

Self-fulfillment is a common entry point for ecommerce businesses. Before seeking a third-party solution, many store owners opt to fulfill customer orders in-house, retaining full control and oversight of their operations.

However, ecommerce self-fulfillment is full of challenges. An inefficient process results in poor customer satisfaction rates and higher fulfillment costs, and it can be a time-consuming endeavor that distracts you from core business activities.

I’ve managed inventory and shipping for a handful of established brands, and I’ve successfully launched my own ecommerce store, Bucket Hat Lab, using the self-fulfillment method.

Thus, I’ve overcome the challenges on both sides of the coin and developed strategies you can use to avoid them. This guide will teach you the fundamentals of ecommerce self-fulfillment, its pros and cons, and how to self-fulfill orders with maximum efficiency and accuracy.

What you’ll learn

What is ecommerce self-fulfillment?

Self-fulfillment in ecommerce, also known as in-house fulfillment, is where an online business manages all or some of its own inventory and order management activities.

It differs from outsourced fulfillment, where inventory is stored off-site and a third party—for example, Fulfillment by Amazon (FBA) or a third-party logistics (3PL) provider—handles the order fulfillment process on the seller’s behalf.

In-house fulfillment comprises a handful of order management processes:

Ecommerce self-fulfillment is a common strategy among new businesses, often beginning in a seller’s living room or garage (or bedroom, in my case).

Storage constraints and sales growth often force sellers to invest in larger infrastructure—such as a warehouse or storage unit. But the challenge of balancing growth with investment in fulfillment resources can make self-fulfillment efficiency hard to achieve.

Read more: Small business order fulfillment guide

Pros and cons of fulfilling your own orders

There’s no one-size-fits-all order fulfillment strategy when it comes to ecommerce. The right solution for your business will depend on which best aligns with your core objectives, resource availability, and experience.

To make the right decision, you must first understand and weigh the pros and cons of in-house fulfillment compared to outsourcing.

Here’s a quick breakdown of how the advantages and disadvantages of self-fulfillment affect specific priorities and goals.

Control and knowledge

Self-fulfillment gives you more control over your fulfillment process. You decide when to ship, which carriers to use, and how inventory is managed. This also means you can easily adjust your strategy on the fly and reprioritize orders based on new information.

Fulfilling your own orders also helps you learn every step of the order fulfillment process. This is useful if you later decide to outsource, as it teaches you the value of the third party’s services and helps you better understand what’s happening behind the scenes.

Time and expertise

Time spent fulfilling your own orders could be spent on other core business activities, such as marketing, sales, and procurement. Plus, if you handle fulfillment yourself, you most likely won’t have access to the expertise and efficiency of a specialized logistics provider like Red Stag Fulfillment.

Outsourcing to professionals enables you to leverage decades of logistics experience and state-of-the-art fulfillment technologies without committing a significant upfront investment. Of course, you can always hire your own experts, but this adds extra staffing, equipment, and training costs that dig into your bottom line.

Cost

Self-fulfillment helps you avoid additional costs such as 3PL fulfillment and storage fees, but it requires extra investments. Outsourcing is typically cheaper in the short term, making it easier to scale early on. But in the long run, investing in your own facilities can be the more affordable strategy provided sales and profits keep growing.

In-house fulfillment costs include:

These added costs shrink your profit margins, limiting your cash flow and therefore slowing your capacity for growth.

How to fulfill your own orders: Step-by-step guide

The self-fulfillment process comprises several important steps, none of which are hard to learn.

I’m living proof of this. I got my first warehouse job straight out of high school, knowing very little about supply chain management. Yet it only took a few weeks to learn how to pick, pack, and ship orders quickly and accurately. When I launched Bucket Hat Lab 10 years later, I was confident I’d be able to handle the task of self-fulfilling orders.

Follow these steps to fulfill ecommerce orders in-house:

Whether you’ve leased a small warehouse or you’re fulfilling orders from your own home, you’ll need to prepare some essentials before shipping your first order.

For starters, you’ll need packaging materials for shipping orders such as:

The required materials will depend on the nature of your products. Fragile items will necessitate protective packing materials, and heavier goods need strong, sturdy packaging to prevent damage to your package and others during transit.

I sell a selection of cowboy hats that require foam inserts, bubble wrap, and packing paper to ensure they keep their shape during transit. But if you’re selling car engines or gym equipment, you’ll likely need specialized packing materials and shipping vessels.

Read more: How to reduce shipping costs on heavy items

You’ll also want some basic hardware, e.g., a shipping label printer, blank labels, a packing tape dispenser, and a utility knife or scissors. Also consider what you’ll need to keep your goods organized in storage, such as any shelving, storage bins, or racking systems.

Efficient inventory management is crucial for keeping costs low and customer satisfaction high. When stock runs out before it’s replenished, you won’t be able to fulfill orders until new stock arrives—which may result in canceled orders and fewer repeat sales. Your products need to be categorized and organized to ensure you can find them easily and reorder at the right time.

Separate your inventory into dedicated storage areas using shelving, bins, and dividers. These areas should be logically organized to save you time picking orders.

You also need a system for managing inventory and orders. Many sellers start out simple with an ecommerce platform such as Shopify or Amazon for order management and a few spreadsheets for tracking inventory volumes and order statuses.

However, spreadsheets are time-consuming to update and quickly become messy. Consider investing in automated systems—such as inventory management software or order management software—to increase the accuracy, visibility, and speed of your logistics processes when your order volume becomes difficult to manage or you want to streamline efficiency.

Assign unique alphanumeric codes—commonly called stock-keeping units (SKUs)—to each product in your inventory. These help you track inventory as it moves in and out of the business. Plus, they’ll come in handy when you need to analyze sales performance and make critical decisions about your strategy.

In the world of self-fulfillment, consistency pays dividends.

If you’re frequently bouncing between responding to emails, packing orders, and receiving stock, you’ll waste a lot of valuable time just switching from one task to the next.

Instead, I recommend establishing a standard operating procedure for managing orders and inventory to ensure tasks are carried out efficiently.

To set up your order management process, follow these steps:

Email notifications immediately inform you when new orders come in, allowing you to fulfill them as soon as possible. Syncing your store with your business software tools provides data consistency across the business, preventing overspending and double work. Pre-arranged carrier collection times provide daily deadlines for your order fulfillment responsibilities.

Once you’re all set up, decide which tasks need to be done first. Prioritize time-sensitive tasks, such as responding to customer emails and fulfilling orders before the courier arrives, and leave other activities for later in the day or when you have some downtime.

Once you have everything in place, you’re ready to start fulfilling orders.

To minimize your shipping costs, use the smallest feasible package. Cut down boxes to reduce the dimensional weight of the package, stack heavier items on the bottom, and protect fragile goods with extra packing materials to prevent damage during transit.

The picking and packing process is straightforward:

Your packaging is the first physical touchpoint a customer has with your brand. This makes it an excellent opportunity to provide a memorable customer experience. Consequently, good packaging increases the likelihood of repeat sales and reduces the risk of returns.

Most major carriers allow you to book a shipment using an online system or app.

Simply enter the details of your package—weight, length, width, height, and destination—into the carrier’s booking platform, select your desired shipping method, and schedule a time for collection or drop-off.

Once you’ve confirmed the details, the carrier’s shipping platform will provide a shipping label for you to print and affix to the top of your package. Ensure the label is clear and visible and all the details are correct. Then update the tracking information in your order management system or ecommerce store to notify the customer.

An efficient returns process keeps customers happy.

Decide your method for inspecting, validating, and resolving returns, and make your returns policy easily accessible. (Note that the seller is usually expected to provide return labels or organize the collection of unwanted goods.)

Consider the returns policy requirements of your ecommerce platform when constructing your policy. Amazon Fulfilment by Merchant (FBM) for example, requires sellers to match or exceed Amazon’s return policy. While Shopify and Google Shopping have policy requirements of their own.

With all customer interactions, including returns and general inquiries, speed is key.

So set aside time every day to manage returns. Quick responses, refunds, and replacements go a long way in avoiding customer dissatisfaction. Update your inventory records whenever returned goods go back on the shelves or replacements are issued.

Tips for improving your self-fulfillment process

Foster a system of continuous improvement to capitalize on the benefits of self-fulfillment.

By frequently identifying bottlenecks in the order fulfillment process and tweaking your workflows, you can improve fulfillment speed and accuracy while reducing your fulfillment costs.

Here are my top tips for optimizing the self-fulfillment process.

A structured approach keeps your self-fulfillment workflows smooth and efficient.

For example, I allocate windows each workday for specific tasks to keep my store running smoothly. My morning is spent responding to customer inquiries, picking and packing orders, and organizing carrier pick-ups.

This enables me to ship as many orders as possible while reserving time in the afternoon for less urgent tasks. It also means I waste fewer minutes switching between activities.

Fulfilling orders in batches is a time-saving strategy that’s easy to implement.

Rather than picking orders individually, group orders by like items and retrieve the inventory in a single journey. This reduces the time spent walking back and forth between your inventory storage and packing areas.

You can also batch orders based on other factors, such as time sensitivity, shipping location, or designated carrier—whatever is best suited to your business needs.

Accurate, reliable inventory management prevents many of the problems sellers face when self-fulfilling orders. By ensuring inventory levels are always accurate, you can avoid running out of stock at crucial times or overstocking inventory that takes up too much space in your storage area.

Use real-time inventory management software, barcode scanners, and regular physical stocktakes to boost inventory accuracy and streamline the order-picking process.

Read more: What technology can be used to fulfill orders?

When is the right time to outsource fulfillment?

Outsourcing fulfillment means hiring a third party to manage some or all of your customer orders. A quality 3PL manages inventory storage, fulfillment, and shipping on your behalf—often also handling returns and fulfillment-related customer service tasks.

Consider outsourcing if you’re experiencing one or more of these challenges:

A practical approach, often called hybrid order fulfillment, is to manage some orders in-house and outsource the rest. This is how I manage orders for Bucket Hat Lab. For top-sellers and products that reach a certain sales threshold after launch (for example, 10 sales in one month), I send the inventory to a 3PL warehouse for storage and fulfillment.

In this way, you can avoid ceding total control to a third party and free up time to focus on value-adding activities, such as marketing and procurement.

Read more: 3PL vs. in-house logistics: Which is best?

Optimize ecommerce fulfillment with Red Stag Fulfillment

Are you struggling to keep up with sales growth? Do you wish you could spend less time fulfilling orders and more time on other areas of the business? We can help.

Red Stag Fulfillment was founded by ecommerce operators that understand the real needs of online sellers. Our best-in-class facilities and dedicated team of logistics experts ensure every order is fulfilled accurately and efficiently, helping you scale faster and delight your customers.

We’ve got the capacity and experience to help you grow—and the experience and flexibility to find a solution tailored to your unique needs. Reach out today for a free consultation.