Order Fulfillment Services to Streamline Delivery

Why you need the right order fulfillment services

For ecommerce businesses, any frequent or notable mistake — such as delayed deliveries or packages arriving in poor conditions — can lead to lost revenue and dissatisfied customers. In fact, according to a Körber Supply Chain report, over 67% of consumers have experienced delivery delays in the past six months, with 84% stating they wouldn’t shop in the same store again after one poor experience​.

With customer experience playing such a pivotal role in long-term brand loyalty, selecting the right order fulfillment services is key to your ecommerce success. But with so many options, how do you ensure you’re taking the right approach? Let’s discover how.

The 4 most common ecommerce order fulfillment services

From sorting items to handling returns, retailers frequently use four ecommerce fulfillment methods to balance cost and delivery precision. Some adopt a hybrid approach, combining in-house fulfillment with outsourcing. Others experiment with dropshipping to test new markets with minimal risk. The one thing these methods have in common is the need to implement up-to-date technology for greater efficiency.

Let’s look at each fulfillment approach’s main characteristics:

    1. Third-party fulfillment

Third-party fulfillment happens when companies outsource the processing of orders after they’ve been placed by customers and logged into an order management system (OMS). Once the OMS processes the details, it sends the information (such as items, quantities, and shipping specifics) to the third-party logistics provider (3PL). The 3PL then manages the next steps, including:

• Picking the items from their warehouse
• Packing the order to meet retailer and customer specifications
• Shipping it to the customer using the chosen carrier and delivery method

Hiring a 3PL for B2C and B2B order fulfillment services benefits mid-sized businesses that have established product lines but lack the infrastructure to manage warehouses and shipping nationwide.

Let’s take a look at this strategy’s main benefits:

• Operational scalability: Outsourced providers take over nearly every step of the supply chain, including warehousing, picking, and shipping. This approach enables high-volume shippers to scale without significant overhead.
• Geographic reach across various regions: Third-party suppliers often have a network of strategically located warehouses, enabling businesses to position inventory closer to customers. This business model reduces shipping distances, accelerates delivery times, and allows 3PLs to secure better shipping rates due to bulk carrier partnerships.

Potential challenges with third-party fulfillment include limited control over customer experience and unexpected fees, such as accessorial charges, which can erode your profit margins​​. To mitigate these logistical issues, businesses should carefully evaluate carrier contracts, maintain open communication, and collaborate closely with providers to align expectations and costs.

    2. Self-managed fulfillment

If you choose to self-manage your ecommerce fulfillment, you are responsible for the complete process, from inventory to shipping and return requests. This type of strategy is ideal for large and established businesses, as it enables complete control over the customer experience. However, it is resource-demanding — requiring significant investments in staff, technology, and warehouse space.

    3. Hybrid fulfillment

Using a hybrid approach to combine self-fulfillment and third-party services optimizes your online store operation for cost and fleet flexibility. For example, during peak seasons, businesses can leverage 3PL services to handle surges in orders without overburdening their in-house teams.

Similarly, hybrid fulfillment enables strategic allocation for retailers offering varied product categories. You can manage specialized items in-house while outsourcing other inventory to optimize delivery efficiency.

A hybrid ecommerce order fulfillment process works well for mid-sized businesses but requires advanced coordination to avoid problems such as misaligned stock levels or delayed shipments. Comprehensive end-to-end solutions like the Shipium Platform mitigate these inefficiencies: our Fulfillment Engine uses inventory data across your operations, ensuring that orders are fulfilled from the right locations at the right time, eliminating delays and helping you make accurate delivery estimates.

    4. Dropshipping

Dropshipping is a fulfillment method in which businesses send products directly from suppliers to customers, bypassing inventory storage. This model works well for small to mid-sized retailers who want to expand product offerings with the least possible risk or upfront capital. It’s an ideal choice for startups or companies testing demand in niche markets.

Although cost-effective, when using this type of online order fulfillment service, ecommerce businesses sacrifice control over shipping quality and delivery promises, as they rely entirely on suppliers to manage these critical aspects.

How to optimize each step of the ecommerce order fulfillment process

Optimizing order fulfillment is a great way to ensure a seamless customer experience. A delay at any stage — be it inventory mismanagement, slow picking and packing, or carrier issues — can result in negative brand reviews and lost deals.

Follow these five steps to get started:

    1. Use technology to improve order management

Without the shipping technology to track, process, and fulfill orders in real time, inefficiencies can quickly snowball into costly delays. To build a comprehensive modern order management process:

• Deploy modern technology: Implement software to automate tracking, status updates, and routing decisions. Use AI, machine learning, and predictive analytics to anticipate demand and reduce order processing times.
• Integrate systems: Connect your order management system with customer relationship management (CRM) tools for seamless internal communication.

    2. Plan smart inventory placement

Misplaced or poorly planned inventory leads to stockouts. That’s why it’s important to optimize warehouse locations — placing products as close to customers as possible — and their internal layout to reduce travel time and overall errors. Consider these tips:

• Review analytics: Take advantage of data-driven insights to position inventory closer to high-demand regions, resulting in faster order fulfillment services. Monitor sales trends, customer behavior, and regional demands.
• Ensure flexibility: Adopt dynamic inventory allocation to respond to changing customer behavior. Build flexible relationships with carriers to respond quickly to item location adjustments, ensuring rapid stock replenishment.
• Optimize warehouse layouts: Group frequently picked items together, reduce travel distances with strategic shelving, and streamline operations using warehouse management systems (WMS). Companies using 3PL can collaborate by sharing demand data and setting service level agreements (SLAs) to ensure efficiency.

    3. Streamline your picking and packing processes

A disorganized picking and packing process requires workers to spend more time searching for items, often traveling unnecessary distances within the warehouse. These inefficiencies delay ecommerce order fulfillment and increase labor costs. To streamline operations, use these targeted strategies:

• Standardize the picking and packing process: Create clear guidelines and provide systematic training to ensure accuracy and consistency — reducing mistakes and accelerating fulfillment times.
• Use eco-friendly materials and optimized box sizes: Reduce environmental impact, appeal to eco-conscious consumers, and cut unnecessary material costs.
• Implement warehouse automated systems: Employ conveyor belts, automated box sealers, and robotic arms for item sorting to handle repetitive tasks with speed and precision.

See how our Package Planner API can help you optimize your cartonization strategy.

    4. Apply modern practices to your product shipping workflow

An efficient shipping process workflow reduces transit times, minimizes costs through strategic partnerships, and ensures reliable delivery. For businesses seeking the best ecommerce fulfillment services, optimizing this process involves:

• Using real time data to optimize carrier selection: Make partnership decisions based on delivery speed, cost, and reliability.
• Determining the most efficient shipping routes: Use intelligent software, such as the Shipium platform, to coordinate logistics while cutting down costs.
• Offering customers multiple shipping options: Provide alternatives such as express and economy, to meet diverse needs. According to The Future Shopper Report 2024, 51% of consumers want their shipping faster, while 41% want it cheaper.
• Partnering with regional carriers for last-mile delivery: Use local carriers, as they often have better network coverage within specific geographic areas, offering reduced time in transit.

Discover 10 strategies to decrease shipping costs and improve your bottom line.

    5. Simplify returns management

Returns are a fact of ecommerce: according to the National Retail Federation, the annual return rate in 2024 is nearly 17% — or $890 billion of merchandise purchased online. However, a well-optimized system can transform returns from a pain point into a strategic opportunity. Follow these best practices:

• Provide transparent return policies: Create transparent policies and ensure users can easily find them on your website to enhance customer support.
• Simplify labeling: Include return labels directly in the original shipment or provide customers with an easy option to print them online to streamline the process.
• Automate the entire process: Integrate returns into your OMS to track each returned package in real time. Analyze return data to identify trends and reduce future returns.

How to select the best ecommerce fulfillment services for your business

Whether you are choosing a new software solution or outsourced warehousing, finding the right partner fit for your business requires considering its specific size, needs, and growth goals.

Here are our insider tips on how to identify the best order fulfillment service for ecommerce companies:

• Understand your business needs: Assess factors like order volume, customer demographics, and future expansion projections. For example, businesses experiencing seasonal spikes may require flexible solutions that accommodate fluctuating demands without overcommitting to warehouse space.
• Prioritize integration and technology: Ensure synchronization between your sales channels and fulfillment processes by integrating your systems. Connecting ecommerce platforms, marketplaces, and even physical stores can maintain inventory accuracy, reduce overselling risks, and deliver a consistent customer experience across all touchpoints.
• Analyze costs and long-term fit: Evaluate long-term scalability and compatibility with your brand strategy. Focus on providers who can adapt to your evolving needs, ensuring that your operations remain efficient as your business expands.

Streamline your ecommerce fulfillment with Shipium

Shipium’s end-to-end platform simplifies logistics and helps businesses move orders from shelves to customer doorsteps faster and more cost-effectively. We integrate into all your existing systems, such as OMS and WMS, to streamline fulfillment decisions upstream and downstream, helping you confidently make delivery promises you can keep.

With our shipping solution, you get:

• Enhanced carrier selection: Dynamically choose the best carriers in real time, ensuring precise estimated delivery dates (EDD) and reducing fulfillment costs.
• Intelligent order routing: Optimize delivery routes, intelligently select the best fulfillment center for each order, and create a seamless order-to-delivery workflow.
• Predictive analytics: Shipium’s Simulation tool uses data-driven insights to forecast demand and identify potential bottlenecks to avoid disruptions in your shipping process.

Book a demo to see how Shipium helps you manage your order fulfillment services and boost customer satisfaction.