Order fulfillment, pick and pack and drop shipping advice ~
Pick of the Pack

An e-tailer’s focus is often fixed towards generating sales. Little time and effort is devoted to the order fulfillment component of e-tailing to ensure that the customer’s order is delivered on time.

It was not until customers began complaining of long delivery delays at Christmas time a few short years ago that consideration was given to developing better order fulfillment systems. Drop shipping and pick-n-pack systems then became well known concepts amongst some e-tailers, though they are still poorly utilised by others, even today.

The goal of online order fulfillment should be to deliver an online order to the customer in the quickest time possible whilst utilising efficient, quality controlled systems.

The order fulfillment process encapsulates many steps, including the receipt of the electronic order, customer communication, processing the order, relaying the needs of the order between the sales, production and warehousing departments, picking and packaging the goods and dispatching the goods.

Let’s focus on the pick and pack component of order fulfillment and the options available to businesses.

Pick-n-pack involves identifying the goods to be dispatched, physically picking them from stock or warehouse shelves, printing invoices, wrapping and packaging the goods and producing shipping manifests.

The most common situation amongst e-tailers is simply stretching existing resources. Businesses often rely on their existing staff to handle order fulfillment without creating dedicated or partly dedicated order fulfillment and pick and pack teams. Few establish and follow documented procedures.

Although this may suffice in the short term, the long term implications can become increasingly significant.

For example, some businesses have their sales staff or customer service staff pick-n-pack orders. Depending on the business, this process may consume an hour or three each day. Although those staff resources may be readily available within the business, such staff, particularly sales staff, are an expensive resource whose time is better directed towards generating new revenue.

Does this describe your business? What is the job description of the staff currently doing your pick-n-packing?

Do you have documented procedures that your staff follow to ensure that every step is performed efficiently?

If you don’t you need to develop and follow a documented procedure or at least implement a basic checklist to ensure that some efficiency can be gained.

When contemplating employing dedicated order fulfillment staff you also need to consider the downside. Without an ongoing steady flow of orders, internal resources devoted solely to order fulfillment may experience idle time. If the scheduling of pick-n-packing teams occurs where the staff work only a few hours each day or week, it places limits on when orders can be dispatched and adds the burden of staff scheduling.

Another option adopted by businesses of all sizes is the outsourcing of your order fulfillment. It is now possible to outsource the entire process from warehousing, to pick-n-pack and dispatch.

Australia Post offers order fulfillment services including warehousing and pick-n-pack services from their Brisbane warehouses, with construction to commence shortly on their Brisbane Airport complex.

Fully automated services will be offered from the Australia Post airport complex that may enable e-tailers to gain increased efficiencies, reduced costs and reduce human error in the order fulfillment process.

Otherwise companies looking to outsource their order fulfillment can look to other e-tailers that have established pick-n-pack facilities that are willing to share their facilities (and costs). Naturally you will need to explore your networks to identify suitable opportunities.

By outsourcing you will leverage from the experience of other businesses and significant benefits and cost savings may accrue. Companies offering outsourcing services will have efficient systems, procedures and trained staff already in place. They will also have existing relationships with delivery and courier companies possibly offering cheaper delivery rates.

Finally, an option availed by some manufacturers and suppliers is drop shipping.

Drop shipping allows your orders to be communicated directly to your suppliers who then package and dispatch the goods from their warehouses. Drop shipping by suppliers in international countries directly to your international customers can be particularly appealing – in terms of delivery and warehousing cost savings and reduced delivery timeframes. You should check with your suppliers to determine whether they offer drop shipping services.

Take this opportunity to scrutinise your order fulfillment procedures. Conduct a quick audit of your order fulfillment systems today. Consider whether you need to update or develop specific systems and dedicated staff teams, or whether outsourcing or drop shipping will achieve the end goal of efficient order delivery.

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Sharon Wild
Strategy & Marketing Director of e-JAZ, Sharon has been involved in the e-commerce community for several years. She successfully manages Australia's largest online jewellery store, Gillett's Jewellers.

Sharon can be contacted via email on sharon@e-jaz.com.au