5 Ways Beauty & Wellness Brands Can Combat Churn

Eco-friendly beauty and wellness subscription box with natural skincare products and sustainable packaging materials.

Beauty & wellness brands look to reinvent–and reinvigorate–the subscription model

From monthly sample boxes to discounted auto-renews, the subscription model packs a customer-pleasing punch for beauty and wellness brands. But with a significant churn rate–not to mention the reopening of physical stores, subscribers expecting an elevated experience, and supply chains still grappling with the effects of the pandemic–brands are feeling the crunch when trying to stay competitive. 

To combat churn and elevate the customer experience, brands need to focus on five key factors.

1.  Going Bicoastal

To get orders out to customers quickly–and efficiently–brands should be going bicoastal with their fulfillment provider. By having products on both coasts, you can reach customers across the entire country faster, and lean on additional stock if you’re running low in one location. And, with intelligent routing logic, orders can be fulfilled as much as possible from the nearest facility, then directed to fulfill from the facility with the remaining inventory. 

2.  Splitting Orders

A major issue for churn is product availability, but backorders are an ongoing issue–especially now with supply chain delays. The best way to manage? Split orders into multiple fulfillments. 

If a customer has three items in a recurring subscription and one is backordered, you can immediately ship the in-stock products so the customer receives as much of their order as possible. Plus, with the right technology, the backordered product will be flagged to ship immediately the moment it comes back in stock. 

3. Elevating the Unboxing Experience

From customized packaging and expertly wrapped products, to personalized thank you notes and samples, creating an unforgettable unboxing experience takes subscription orders to the next level. 

But the unboxing experience goes far beyond a few moments of box-opening bliss. First, it creates a sense of anticipation, where customers look forward to their purchases. Second, it helps spread brand awareness, as expert unboxing experiences are often shared on social media by satisfied customers. And third, it fights churn and builds retention–by offering a premium experience and unexpected gifts, brands can help bolster retention.

4. Setting Up the Right Return Process 

It might sound counterintuitive, but having the right return process in place can help stop churn. No matter how good a brand or their products, it’s inevitable that returns will happen–what matters next is how well it’s handled. By making returns quick and effortless, a user-friendly return experience can encourage a customer to keep purchasing, and to feel comfortable knowing they have the flexibility to change their minds and orders in the future.

5. Having a True Fulfillment Partner 

Having the right plans and processes in place is key–but without a true fulfillment partner, even the best laid plans can go array. The right partner should be a true extension of your team, and should:

  • Give you real-time visibility into every SKU and order, and to your full inventory position across all channels
  • Surpass customer expectations by offering 1-2 day shipping, maintaining your exact packaging and unboxing experience processes, bundling and kitting products to meet demand, and customizing orders for VIPs
  • Provide a full omnichannel experience by allowing you to rapidly scale across all channels (without adding risk or complexity to your operations)
  • Innovate faster with cutting-edge proprietary software, automation of crucial fulfillment process, and elimination of manual work

Client Spotlight: Ranavat

Michelle Ranavat, founder of ayurvedic beauty and skincare company Ranavat.
Ranavat founder Michelle Ranavat wearing a purple t-shirt, jeans, and gold heart necklace while sitting on a green velvet chair

Michelle Ranavat on what sets her beauty brand apart & why she chose MasonHub fulfillment.

You introduced Ranavat in 2017. What was the turning point for the brand? 

“For us, growth wasn’t linear. But people spending more on beauty and prioritizing self-care really allowed our business to shine. We found they were searching for skincare that was effective, made them feel good, and had a deeper meaning. So over the past year, we started constantly giving customers educational and enjoyable content, providing a connection around Ranavat and India and its traditions. When it came time for Holiday shopping, it felt like we were top of mind, like the years’ worth of work came to fruition at the right time.”

Why do you think beauty consumers are embracing Indian-inspired lines now? 

“It’s a confluence of many things. Ayurveda has been used regularly throughout history, as has yoga and meditation, and there is much more awareness of ingredients like ashwagandha and turmeric and what they can offer for skin, but there was never really a brand that could share a story and cultural connection. People are more open and connect the dots so much faster now.  It’s been a huge step toward celebrating our origins and enjoying not just the rituals but the culture behind the products.”

Ranavat beauty products laid out on a table including hair serum, cream cleanser, renewing bakuchi creme, brightening saffron serum, facial polish, hydrating jasmine mist, and resurfacing saffron masque.

Where are your customers located? 

“They’re pretty geographically diverse, and we have a big international contingent. The U.K. and U.A.E. are big areas for us, as are the U.S. coasts and Texas. We want to open new channels in India and other parts of Asia as well.” 

How would you describe your current distribution? 

“There are two sides of our business–ecommerce and wholesale. We just opened Sephora as a new channel, and being able to provide a really high-touch, custom experience to our DTC customers in addition to shipping big orders to Sephora is a really critical mix. What I appreciate about MasonHub is how they invested in our future by taking on a smaller brand and how they’ve helped us grow and scale. With supply chain craziness – we are seeing very long lead times on components – the last thing you want to do is over-complicate your job fulfilling orders. Finding the right 3PL is one of those things you should do before you need it, that’s why I chose MasonHub fulfillment.”

What’s your ultimate goal for Ranavat?  

“For the culture as a whole to reach more people through mainstream channels. That’s how I measure success. Are they connecting to us?  Can they see themselves in the brand? Are they able to see us in their daily lives?”

How Fulfillment Can Fuel Growth For Beauty & Wellness Brands

Abstract illustration of growth in beauty and wellness brands through fulfillment, with upward arrows and dollar signs.

MasonHub x Digiday micro report shows retailers how to sell more by optimizing their fulfillment with technology.

Consumers may not give much thought to how a package arrives at their doorstep, but fulfillment is a complex set of processes, with both plenty of margin for error and a huge opportunity for retailer gains. 

For omnichannel retailers–including beauty and wellness brands–the fulfillment process is a catalyst for growth, especially for smaller retailers. Explore the MasonHub x Digiday retailers’ guide to revenue for expert insights on fulfillment, inventory management, shipping, and more. 

READ MORE

Arka on How to Optimize Operations With Fulfillment

Custom designed packaging boxes with vibrant fashion illustrations and prints, showcasing creative branding for shipping.

MasonHub’s strategic packaging partner discusses how fulfillment partners can help brands shine.

This article was published on Arka.com on May 17, 2021.

As most beauty, wellness, and retail brands know, a good product package doesn’t fall from the sky–it’s a product of proper planning, right decisions, and joint effort between machinery and label. Explore top tips from Arka and MasonHub’s Founder & CEO, Donny Salazar, to take your e-commerce packaging operations to the next level.

READ MORE AT ARKA

Order Fulfillment for Modern Retailers: Process, Strategy & Services

Two warehouse team members engaged in a discussion over a tablet, strategizing on order fulfillment processes in a modern retail setting

Learn about order fulfillment solutions and technology to support your operation.

If you’ve ever made a purchase online, then you know how nice it is to receive a package at your door shortly after you order it. But most people don’t think about the process behind order fulfillment services that make fast shipping possible. A lot goes on behind the scenes. The ability to ship an order quickly, accurately and affordably is a well-designed, streamlined process with several steps, each just as important as the next. Just one misstep can result in an unhappy customer and loss of future sales. This entire process is known as order fulfillment. With the rise of omnichannel retail, inventory management has become more complex while customer’s expectations are higher.

“What’s at stake? Ecommerce sales are projected to surpass $735 billion by 2020”

— Statista

In this article, we’ll walk you through order fulfillment, beginning with what it is and how it works, and explain the different types of fulfillment models and strategies. We’ll also cover the issues that retail brands experience with order fulfillment as they grow, and when to know it’s time to outsource order fulfillment services (3PL). Today there are several technology solutions available in the market to support and scale fulfillment for growing retail brands, and it’s important to choose the provider that best suits your company’s needs. This article will walk you through:

What is Order Fulfillment?

Six Steps of the Order Fulfillment Process

Fulfillment Strategies, Pros & Cons

Issues Companies Experience With Fulfillment as They Grow

When to Switch from In-House Fulfillment to a Service Provider

How MasonHub’s Technology Supports and Scales

What is Order Fulfillment?

Order fulfillment is the process of receiving, packing, and shipping online orders to end consumers at home.

You could say that order fulfillment is the number one thing that impacts the customer experience, because if a customer doesn’t receive their order in a timely and accurate manner, they aren’t likely to buy from that company again.

It is a customer’s order that sets the retail supply chain in motion. We’ll detail the steps that need to happen in the next section, but in short, order fulfillment involves inventory going to a fulfillment center, which receives and stores it. Once the fulfillment center receives and processes an online order, it picks, packs, and ships the item to the end customer. Order processing refers to the workflow associated with picking, packing and delivery of the items to a shipping carrier and is a key element of order fulfillment. 

There are several types of ecommerce fulfillment models: in-house or self-fulfillment, drop shipping, and outsourcing fulfillment to a third-party logistics (3PL) company. An ecommerce company could use one or a combination of these. We’ll explore each model in-depth later on. 

The Six Steps of Order Fulfillment

An infographic depicting the six critical steps of order fulfillment: Receive, Process, Pick, Ship, Inventory, and Pack

1. Receiving

Receiving refers to accepting incoming inventory from the manufacturer, supplier, or ecommerce brand. Whether you outsource your order fulfillment or do it in-house, key tasks in the receiving process include: 

  • add each new SKU to an inventory or warehouse management software
  • count and inspect items to ensure accuracy
  • check for any possible damages
  • apply SKU or barcode labels
  • record the number of each SKUS in the inventory or warehouse management system
  • kit any items that go into bundled SKUS

2. Inventory Storage

Proper inventory storage makes for quick and easy picking. This is crucial for order fulfillment speed and accuracy. Moreover, it provides full visibility into what is available to ship and where to find it. Often, inventory organization involves putting SKUs in separate bins to enable fast and accurate picking and packing.

3. Picking

The first physical step for preparing an order for proper shipping is picking, where the item is located and retrieved from the shelf and bin. The person picking the order will also scan the barcode to verify the picked item matches the order.

4. Packing

Packing involves wrapping all the items to protect them in transit and using the right materials depending on the type(s) or items ordered. Materials can include boxes, bubble mailers, poly bags, bubble wrap, air fill and packing tape. During this step, workers add packing slips and any inserts before sealing the package and moving it to the shipping station. 

5. Shipping

It is the responsibility of the employee at the shipping station to weigh the package and determine the best method for the order. There are several ways to ship a package, but most customers are looking for the fastest and most affordable way. Different shipping carriers provide different options, ideally compared to find the best rates or service level, in a function known as rate shopping. Once an order ships, the tracking information goes to the customer to provide insight on its delivery status. 

6. Returns Processing

If an ecommerce company offers returns, these are also part of the order fulfillment process. Returns must also be processed quickly and efficiently to maintain a good customer

A neatly arranged curated gift box with skincare and cosmetic products, highlighting the personalized touch of tech-powered pick and pack fulfillment services

Fulfillment Strategies, Pros & Cons

There are four primary ways that businesses can handle order fulfillment.

1. In-house Fulfillment

In-house fulfillment, or self-fulfillment, refers to when businesses manage their own warehouse and shipping operations, typically with their own facility, equipment and staff. This method is best for established businesses or businesses that want total control over their end-to-end operations. 

Pros

  • Hands-on: Fulfilling orders yourself allows you to learn all the ins and outs of ecommerce operations.
  • Cost-effective: For new business, this is an extremely low-cost way of fulfilling orders. 
  • Complete control: You have the ability to personally oversee all aspects of your business. 

Cons

  • Potential to outgrow your space suddenly. 
  • Time-consuming: Time spent filling orders means less time for marketing, managing, sourcing and growing your business.
  • Difficult to downsize: Once you commit to warehouse space, it may be hard to downsize during less busy times or when sales slow down.
  • Large up-front costs

2. Outsourced Fulfillment

Companies can outsource order fulfillment by using fulfillment service providers or 3PL (third-party logistics) companies. Fulfillment service companies specialize in inventory management, order processing, order management, and shipping. This is a good option for businesses that want to save time by not handling these operations in-house.

Pros

  • Frees up time: When you’re not packing boxes and running to the post office, you have more time to focus on other aspects of your business.
  • Lower shipping costs: Because they have multiple clients, most fulfillment services have discounted volume shipping rates they pass along to their customers. 
  • Fast delivery: Many fulfillment companies have warehouses strategically located across the country to ensure fast delivery and lower shipping rates. 
  • Flexibility: Using a fulfillment partner makes it easier to handle sales spikes or slowdowns in a cost-effective manner. 

Cons

  • Less control: When you outsource fulfillment, you are not directly overseeing the process. 
  • More expensive: Using an order fulfillment company can cost more than self-fulfilling. 

3. Drop Shipping

Suppliers handle every step of the order fulfillment process, shiping orders directly to customers and billing the company for the products they sell. Drop shipping is a good option for startup ecommerce businesses or any online business that doesn’t want to purchase wholesale products upfront. 

Pros

  • No upfront inventory costs: When you drop ship products, you only pay for what customers purchase, so there are no bulk wholesale orders or leftover unsold products. 
  • No warehouse or storage fees: The drop ship supplier stores all products until they are sold, so you do not need a warehouse. 
  • Saves time: Similar to outsourced fulfillment, having someone else handle filling orders frees up time to focus on other parts of the business.   

Cons

  • Less control: You don’t see any part of the order before it reaches the customer.
  • Smaller profit margins: Drop shipping can be more expensive than sourcing wholesale products in bulk. 

4. Hybrid Order Fulfillment

This approach combines some, or all, of the above order fulfillment options. This is a popular solution for growing businesses because it offers a lot of flexibility. For example, you can use in-house fulfillment for custom products or items that need to be assembled. You can use outsourced fulfillment for non-custom items that are steady sellers or to help manage seasonal sales spikes without expanding your warehouse. Use drop shipping for large, expensive or infrequently purchased products that you do not want to stock in-house. 

Pros

  • Flexibility: Using different strategies for fulfillment allows you to add products or change directions easily. 
  • Strategic: A hybrid approach can often be cost-effective if you are strategic about which products are fulfilled with each solution. 

Cons

  • Lots of moving parts: Having inventory spread across multiple locations can be hard to manage.  
  • Time-consuming: Juggling orders across different solutions can also be time-consuming. 

Issues Companies Experience With Order Fulfillment as They Grow

It’s often hard to anticipate your needs, and as your business grows, order fulfillment becomes more complex.

Operational

Ecommerce sellers don’t always know what their marketing plans will be and therefore, they don’t select an order fulfillment partner that can support custom needs. Most ecommerce companies only focus on getting help with picking and packing when they start out — and may not be thinking about marketing inserts, custom packing lists, or product bundling. However, what they need is flexibility and a fulfillment partner who supports these changes. 

Strategic

You may assume your warehouse should be in the middle of the country, when in fact, it should be closest to your inventory and your customers. For example, is your product imported into California? Are most of your customers on the West Coast? If so, then it makes more sense to have a warehouse in California versus in the Midwest. Not only will you be able to receive inventory faster, you will be able to ship to customers faster and more affordably. 

Most important when it comes to deciding on your order fulfillment process and partners, is setting your business up to scale. It can be difficult and expensive to switch fulfillment partners once you’ve started working with a vendor, so picking the right one at the start is crucial. In short, you need to anticipate your needs before you know you need them. 

Beauty and skincare products arranged on a pink surface with a call-to-action prompting to outsource fulfillment, inviting a quote request

When to Switch From In-House Fulfillment to a Service Partner

Finally, how do you know when it’s time to partner with a fulfillment center? Here are the Top 5 Signs:

  1. Inventory costs are high while visibility remains low. 
  2. Deliveries aren’t consistent and often arrive late. 
  3. Customer complaints are on the rise. 
  4. It’s hard to pinpoint the status of orders. 
  5. Supply chain expenses are eating into margins.

How MasonHub’s Technology Supports and Scales Fulfillment

A modern fulfillment solution like MasonHub seamlessly combines order management technology and omnichannel fulfillment services. Moreover, by merging proprietary software with high-touch service, MasonHub checks all the boxes for retailers who prize efficiency, accuracy and innovation as much as the customer experience. 

  • Integrates quickly and easily with all your favorite ecommerce tools including Shopify, Netsuite, and Returnly.
  • Handles volume spikes and scale over the long-term. 
  • Shows all your data in one centralized dashboard: details on every customer order; shipment statuses, carrier activity and delivery estimates; inventory data down to the SKU level with cross-channel visibility; status of pending and completed returns. 
  • Supports a true omnichannel strategy with real-time data from direct-to-consumer, retail and wholesale channels. Counts and dynamically allocates inventory across all channels. 
  • Offers dynamic shipping rate discounts.
  • Allows customers to set customizable rules and guidelines.
  • Goes above and beyond the average fulfillment offering.
    – Branded packing slips
    – Special packaging
    – Gift messages
    – Rush receiving
    – Returns refurbishment

How to Set Up Your Shopify Store for Successful Fulfillment

A focused individual working on a laptop at a desk, engaged in setting up a Shopify store for successful fulfillment

Follow these steps when setting up Shopify and other sales channels to ensure successful fulfillment.

Transitioning from in-house fulfillment to a fulfillment partner is a big step for any retailer. So is switching fulfillment providers. Handing off order fulfillment services usually means a company is growing quickly in terms of sales and orders.  In order to have a successful and seamless transition, it’s important to set up several standards within your Shopify store and your other sales channels now. There’s certain information your fulfillment partner will need in order to onboard you. By following these steps, you’ll ensure that you don’t waste time and money when you’re ready to make the switch. This article will walk you through a checklist of important things to consider when you set up your Shopify store.

Before You Start

Setting Up Your Online Store

Connect a Payment Provider

Set Shipping Options and Strategy

Set Return Policy and RMA Process

Test your Store Before Going Live

Adding Sales Channels

What Other Third-Party Apps Will You Need?

Use Data to Gain Insights

Before You Start

What are your goals for your store? Do you want to sell online only, direct to consumers, or in person? What about Amazon? And what about social media channels like Facebook and Instagram? In addition to your e-commerce store, Shopify can enable selling through multiple channels. However, you’ll need to make sure you have systems in place for wholesale and retail. In all cases, make sure you understand the taxes and laws related to your business and the state and country you do business in.

When it comes to fulfillment, you’ll also need to decide whether to fulfill orders in-house to use a fulfillment partner.

A variety of makeup products arranged neatly, illustrating the type of items that might be sold in a new online store being set up

Setting Up Your Online Store

First, set up your web domain so customers can find your store by typing in your url. Decide on the name of your store, and create a login and password. Shopify will also ask for the legal business name and physical address of your store, as well as your billing address.  As the store owner, you can also create logins for any staff that are also accessing the store.

Next, you must decide on some basic standards for your product listings and customer transactions. It’s important to establish a consistent structure for your products and its size and color variations, which Shopify calls Variants. This will help you to stay organized and avoid shipping the wrong item to customers. A Variant includes attributes like size and color, a SKU (stock keeping unit) name, UPC (universal product code) barcode, HS (harmonized system) code and other attributes.

SKUs and UPCs

For the SKU name, we recommend combining the STYLE + COLOR + SIZE to get a unique SKU name like TSHIRT-BLACK-M. Most systems you will integrate with in the future will have character limits, so it’s recommended to keep this to a maximum of 20 characters if possible.

Next, you’ll need to label your items with UPC barcodes and add them to Shopify. Each SKU must have its own UPC barcode. They cannot be shared across SKUs, or your fulfillment partner will not be able to automatically scan and receive or ship your items. This is critical for accurate inventory management. If you do not have a UPC, your fulfillment partner may charge you a labeling fee each time you send them inventory.  Even if you are self-fulfilling now, these are important attributes to have in place before deciding to work with a 3PL. Additionally, every product (or style) must have a variant, and variants should have a size, color, country of origin and HS code. Shopify offers more details here

Organizing your store

Shopify allows you to choose and customize your theme, which will set the look and tone of your store. It’s important to organize your products in a way that makes it easy for your customers to find what they are looking for. This also makes it easier for you to add more items as you grow. Put them in collections and customize your menu and navigation to help customers find them. Start with something simple, such as Men, Women and Kids. Shopify will also ask you to set the necessary tax and shipping information for each product, so make sure you know the rules for your state/country. 

Connect a Payment Provider

You can enable several payment providers such as Shopify Payments or third-party providers like Ayden, DigiPay and Quickbook Payments, many of which work with easy-to-install apps for Shopify. Also consider whether you want to allow payment without credit cards using PayPal, Apple Pay or Amazon Pay. These options have accelerated checkout buttons that will save a customer’s information so they only need to enter it once. Also select which payment gateways to enable based on what countries you plan to sell to, as well as the fulfillment zones for each location you plan to ship to. Once you’ve decided on all that, choose your default currency. 

Set Shipping Options and Strategy

Shopify will prompt you to enter the default weight unit, shipping settings, as well as pickup and local delivery settings. But it’s up to you to choose the shipping options and strategy. It’s critical to get the delivery methods at checkout right. 

Best practices include setting up general shipping rates. Choose where you’re shipping from, then select which rates to apply. Learn more about Shopify’s shipping rates setup here. We recommend you start with basic options at checkout that are not carrier specific. This gives you flexibility to charge the customer a flat rate and you can choose which carrier to use that provides you the best rate. 

Standard: Use for ground services, which typically deliver in 2-5 days.

Expedited: Use for overnight or 2-day services.

More advanced users can set up price-based and weight-based rates, or even calculated rates from shipping carrier integrations. 

Set Return Policy and RMA Process

Having a clear return policy is critical, and it also influences a customer’s decision to buy. In order to process returns, you will need a return merchandise authorization (RMA) and a system in place for customers to request returns and receive an RMA. The RMA will be used to track the item and make sure it’s received, processed and entered in the ledger. In addition, you’ll have to decide whether to process returns manually or through an automated system. You can find a third-party app like Returnly or Happy Returns that integrates with Shopify. 

Test Your Store Before Going Live

Before you launch your store live, you should place test orders to make sure the following work: placing a credit card order, placing a PayPal or other payment service order, refunding an order, cancelling an order, fulfilling and partially fulfilling orders, and archiving orders. As your business grows, you will also have to address stock-outs, pre-sales and back-orders, as well as returns and inventory management, which can be hard to keep track of manually and in real time. This is when a fulfillment partner can really help you scale, because these functions can be automated and updated in real time. 

Adding Sales Channels

There are several other channels in which to sell your products in addition to your own online store. Are you interested in selling on Amazon (Fulfilled by Amazon or Amazon Marketplace)? If so, you’ll need separate systems in place. Shopify has native and third-party apps to get you connected to Amazon, but you’ll need a fulfillment partner to help you truly scale. 

Within your Shopify store, you have the option to add Buy Buttons. These are shortcuts to purchase an item in the store that can also be added to external websites and blog posts. You may also be able to sell with Facebook and Instagram, depending on your region, your product type and your Shopify plan. 

Additionally, you can really grow your wholesale business by connecting to other retail partners such as local stores or national chains such as Saks Fifth Avenue, Neiman Marcus, Target and Bed Bath & Beyond. However, you’ll need additional integrations with those partners and a fulfillment service in order to really grow and deliver. A partner like MasonHub that has experience working in all these channels is a good choice; whether or not you sell in them now, you can set yourself up for future growth.  

It can be challenging to manage inventory for multiple selling channels, which is where advanced fulfillment technology can be a very big help. 

What Other Third-Party Apps Will You Need?

Here are some other basic third-party apps and integrations you’ll need to consider when you set up your Shopify store:

  1. Shipping Carrier Integrations (FedEx, DHL, UPS) or an app like ShipStation or Easyship.
  2. Returns and Exchanges app (Returnly, Loop, Happy Returns).
  3. Recurring subscriptions management app (Subscriptions by ReCharge, Bold Subscriptions).
  4. Shipping Address Validator or another address validation app to ensure you have the correct address at checkout and avoid delivery delays.
  5. Customer Service management system like Zendesk, Kustomer, or Gorgias. 
  6. International Duty and Tax calculations from Zonos.
  7. Excelify to help you bulk export/import SKUs, Orders, etc. (This is a bit more advanced, but will help anyone who’s looking to clean up their catalog right before moving to a third-party fulfillment service.)

Use Data to Gain Insights

Make sure you pay attention to the data on your dashboard to understand metrics like the time of day when most customers place orders, what the most popular items are, which items are looked at the most, and what channel any referrals came from. This will help you understand your customers and cater to them. Once you begin gaining traction, this data will also help you manage your inventory. Using a fulfillment partner like MasonHub can take data insights to the next level by enabling pre-orders on popular items, as well as archiving customer profiles and giving you the ability to dictate certain actions based upon a customer’s preferences or actions. 

In Conclusion

In conclusion, Shopify’s platform is easy and convenient, but there are many other factors you need to consider when you set up your Shopify store. The more you pay attention to these beginning steps and settings within Shopify, the easier it will be to integrate with a fulfillment partner, or switch fulfillment partners,  down the road.

Understanding Pick and Pack Fulfillment for Retail Brands

A woman in the foreground packing items into a box with a male colleague in the background organizing inventory for retail brand fulfillment

A detailed overview of pick and pack fulfillment and how to determine if you should use a fulfillment partner.

What is Pick and Pack Fulfillment?

Why Use Pick and Pack Fulfillment?

Types of Pick and Pack Fulfillment

Benefits of Using Pick and Pack Fulfillment

Challenges of Pick and Pack Fulfillment

When Should You Use Pick and Pack Fulfillment?

Checklist for Selecting a Service

Should Your Warehouse Be Near Your Office?

Cost of Pick and Pack Services

How MasonHub’s Technology Provides the Right Solutions

What Is Pick and Pack Fulfillment?

Pick and pack is a method of order fulfillment often used by ecommerce sellers that receive small orders to be shipped around the globe. Rather than preparing and shipping entire cases and pallets of goods, ecommerce retailers rely on workers who pull (pick) individual items from master bins on fulfillment center shelves and then place (pack) them in boxes or envelopes addressed to specific customers for shipment. This process gives pick and pack workers easy access to items and, when organized correctly, saves handling time. Pick and pack also limits freight charges and other costs.

Why Use Pick and Pack Fulfillment

As U.S. e-commerce sales continue to grow at over 15% annually, suppliers feel the pressure to satisfy e-commerce customers by delivering a variety of goods in smaller sizes at a faster pace, Westernacher Consulting explains. Using a pick and pack fulfillment services allows you to:

  • Ship items faster
  • Free up time that can be spent on other tasks
  • Avoid costly mistakes when shipping orders
  • Provide a better customer experience 
  • Handle more orders as your business grows. 

Types of Pick and Pack Fulfillment

Types of Pick and Pack

There are four common strategies that fulfillment centers use for pick and pack:

Piece

Many companies start with piece picking because it is a straightforward picking method. Workers pick orders one at a time as they receive them. Workers take an order into the warehouse and fill it by picking items off shelves until the order is complete. It’s important to note that this picking process is inefficient in most warehouses; it is best suited to the smallest warehouses.

Batch

Warehouses with more traffic utilize batch picking because it is more efficient and cost-effective. Similar to piece picking, batch picking involves picking items for individual orders; however, similar orders are grouped together, and workers who batch pick fulfill more than one order at a time.

Zone

Zone picking involves dividing the warehouse into areas called zones. Order pickers pick items from their assigned zones only, and workers pass boxes from one zone to the next for orders that require items from multiple zones. The boxes may be passed manually or with conveyor belts. Zone picking is more efficient than piece picking and batch picking.

Wave

Wave picking combines zone picking and batch picking. Workers using this strategy are assigned to zones and pick orders in batches and pick them only within their assigned zones.

Benefits of Using Pick and Pack Fulfillment

Order fulfillment services offering pick and pack make it easy for organizations to offer various products from online stores to customers. Customers appreciate having a wide variety of items  to choose from, and companies often sell more when they offer more. As the fulfillment center receives orders, pick and pack workers gather requested items from the master cartons and package and label them for shipment.

When done well, pick and pack fulfillment increases customer satisfaction. Skilled pickers and packers fill orders accurately with items that are in good condition and ensure orders are shipped on time. Companies that hire talented pick and pack laborers also improve customer satisfaction by making sure items are handled carefully, are packaged well, and are clearly labeled. These skilled staffers handle fluctuations in order numbers and manage busy periods well, too.

Assorted cosmetics arranged for pick and pack fulfillment with a note highlighting a 20% savings on shipping costs

Organizations also utilize pick and pack fulfillment because it is cost-effective. By nature, the pick and pack process is designed for orders of various sizes, so minimum order charges typically do not apply. Pick and pack also often eliminates collecting items from different storage facilities and sending them elsewhere for packaging and labeling. The streamlined nature of pick and pack makes it more efficient overall, which keeps costs low.

Pick and pack workers are key to fulfilling ecommerce orders and meeting customer expectations, and organizations need to continually work to streamline operations to make sure their pick and pack work is done as efficiently, accurately, and cost-effectively as possible.

Challenges of Pick and Pack Fulfillment

Pick and pack fulfillment runs smoothly only when there is a high level of coordination, organization, and attention to detail. Streamlining order picker movement through warehouses to fill the greatest number of orders in the shortest amount of time is one of the largest challenges pick and pack fulfillment centers face. 

Another challenge associated with pick and pack is customer expectation. Customers are accustomed to shopping online and expect items to be in stock, to be shipped in 24-48 hours, to arrive on time, and to be exactly as described online. They also look for a wide selection, the ability to order using a mobile device, fast and free delivery, and free returns. Customers expect a positive experience, and fulfillment centers need to streamline pick and pack operations to meet and even exceed customer expectations. Retailers accustomed to operating in the direct-to-consumer market are used to these customer demands; however, many fulfillment centers and their logistics and distribution executives are new to the game and face challenges in adapting their knowledge, experience, and resources to meet the demands of customers they serve via pick and pack fulfillment.

When is Using a Fulfillment Partner Right for Your Business?

A streamlined picking and packing process isn’t an easy feat. Inventory must be on-hand, organized and tracked, so know you have enough inventory to ship and can track what your customer received. Products must be properly packaged to be delivered safely to your customer. This means knowing the required box size and packing materials. Shipping labels have to be generated and placed on the right packages. An order management system must be in place to validate that customers received the correct order. To achieve this, you also need the physical space and personnel to perform the process. This might be manageable if you only fulfill a few orders a day, but what about when you have 50-100+ orders a day? It becomes a daunting task that could make you prone to mistakes. And these types of mistakes could cost you customers. 

It’s important to anticipate the future needs of your company before it’s too late. At this point, many ecommerce sellers choose to use a pick and pack fulfillment service. Outsourced fulfillment services can take care of this entire process for you. All you have to do is provide them with your inventory. Then, when you make a sale, they pick, pack and ship the item for you. 

Checklist for Selecting a Pick and Pack Service

To save some time, use this checklist when selecting a pick and pack fulfillment service.

What services are provided? 

At minimum a fulfillment partner should provide basic pick, pack and shipping capabilities. Depending on your business needs, however, you might need more. If you ship internationally, you will need to make sure they can handle international orders. Will they process returns? Do they offer temperature-controlled storage for beauty or food items? 

Do they support value added services? 

Value added services (VAS) include the ability to ship different items together in a certain way, also known as kitting. Special materials such as marketing inserts, branded packing slips, gift messages, gift wrap, and product labeling are also important for the customer experience. Can your partner also support rush receiving or returns refurbishment? 

Can they integrate with your existing systems? 

If you have a multichannel business, your fulfillment service might just be one piece of your business. You might also have accounting software, and several marketplaces, in addition to your ecommerce platform. To streamline all of your business processes, you’ll probably need to integrate your fulfillment data with the rest of your sales data. This ensures inventory levels are correct and shipping information is synced across all of your business systems. Do they have integrated technology that provides real-time order and inventory tracking? Remember, keep your business’s big picture in mind. Are you going to have to integrate at some point? If you do, you need to choose a pick and pack service that can integrate with the rest of your systems.

What is their shipping guarantee? 

When researching different pick and packs services, ask what their guarantee is for shipping. Some promise to always ship the same day the order comes in. What shipping services do they provide? It is important to offer customers 1-day, 2-day, rush, expedited, etc. You want a partner that you can rely on to ship your packages in a timely manner. You can also look to customer feedback to see if the provider ships on time.

Do they provide shipping confirmation? 

When working with an external service, you need to feel confident in how they communicate with you. Look for partners that provide timely shipping confirmation and tracking numbers for both yourself, and your customer. This type of communication helps you manage your business. It’s also a vital part of the buying experience for the customer. You should have the confidence that your item got to the customer on time. If your customer does experience a problem, you also need the right information to solve it.

Single and Multichannel Fulfillment

Consider what channels your orders will be coming from. Do you just need to fulfill orders from your own site? Or, do you have several channels such as a physical store or wholesale that you need to process orders for? Ask how the pick and pack service will handle all different types of orders. Look for a pick and pack service that can support true omnichannel retail. 

Customer Testimonials 

Always check out the fulfillment provider’s customer reviews. Current and past customers can provide valuable insight into how well a service did or did not work for them and can add a boost of confidence that you’re picking the right vendor to work with. They also can point out problems that weren’t apparent on the surface.

Customer Support 

Lastly, ask each service what kind of customer support they offer. When you outsource fulfillment, you can lose direct oversight on your orders so it’s important to know who to call, email or chat with at any given time. In the case that there is a problem with an order, who can you call to fix it? Make sure that support is a priority of the pick and pack service you choose, not a luxury.

Should Your Warehouse Be Near Your Office

During evaluation, check out where the pick, pack, and ship service actually occurs. Where are the fulfillment centers located? If most of your customers are on the West Coast of the U.S., you probably don’t want to use a service that only has warehouses on the East Coast, and vice versa. This could affect timeliness of shipping and costs.

How Much Should You Pay for Pick and Pack Services?

Pricing terms are important and will take a little research on your part because each provider could have their own pricing model. Most pick and pack services have fee structures based on inventory storage, package size/weight, order handling, and shipping location. Think about the products you sell. Do you sell small items like books and cosmetics? Or, do you sell furniture or perishable food items? Bulky items are going to have different types of costs associated with handling and shipping. Understand how your product types affect incurred costs. Be sure to check out storage fees. Products with long shelf lives or storing items during the holidays can be more expensive in a fulfillment center because they are not designed to store inventory long-term. 

A palette of cosmetic eyeshadows with a call-to-action for optimizing fulfillment with tech-powered pick and pack services

How MasonHub’s Technology Provides the Right Solutions

MasonHub’s technology was built to streamline and scale pick and pack operations for growing ecommerce companies. We check all the boxes for retailers who prize efficiency, accuracy and innovation as much as the customer experience. 

Quick and easy integrations

Our software installs seamlessly/in one click with all your favorite ecommerce tools including Shopify, Netsuite and Returnly.

See all your data in one place

The centralized dashboard displays details on every customer order; shipment statuses, carrier activity and delivery estimates; inventory data down to the SKU level with cross-channel visibility, and status of pending and completed returns – all at one glance. 

Handle volume spikes and scale effortlessly 

If you have a sudden influx or a seasonal dip in orders, our OMS can scale up or down, ultimately helping companies grow over the long-term. 

Support a true omnichannel strategy 

MasonHub gives you access to real-time data as your  inventory is counted and dynamically allocated across all channels – direct-to-consumer, retail and wholesale.

Get the best shipping rates

Our dynamic shipping rate calculator finds the best rates across multiple carriers, saving you money on shipping costs. 

Set customized rules and guidelines

Whether you want to ensure that big orders receive specific packaging or specific orders include customized samples, our self-service system allows you to set your own parameters. 

Unlock value added services 

Our technology unlocks additional features so you can go above and beyond in growing your brand. 

  • Branded packing slips
  • Special packaging
  • Gift messages
  • Gift wrap
  • Kitting
  • Marketing inserts
  • Product labeling
  • Rush Receiving
  • Returns refurbishment 

Finding an Order Management System That Works For You

Schematic diagrams. One on the right showing the interconnected structure of a traditional retailer management system including order, transportation, and warehouse management. The other one the left an omnichannel brand management system, highlighting a centralized order management system.

Everything you need to know to evaluate order management systems and find the right solution.

To help you identify what’s right for your business, this article walks through:

What is an Order Management System?

Why Do I Need an Order Management System?

Understanding the Order Management Process

Common Order Management Features

Top 6 Benefits of a Modern OMS

When to Invest in an OMS

How to Choose an OMS

Improve and Automate Order Management With MasonHub

What is an Order Management Company?

Order management systems (OMS) refer to software that tracks sales, orders, inventory, and fulfillment, while powering the actual process of completing an order. 

A modern OMS is the technology that powers the connections for one seamless solution. In turn, this reduces the complexity of having to set up and maintain disparate systems, which prevents many companies from being able to scale. The old way of thinking about an OMS only involved order fulfillment services. However, modern order management systems treat the complete supply chain as an interconnected ecosystem, allowing merchants to automate their internal processes from order through to fulfillment and returns. At MasonHub, we manage the process through this entire lifecycle, with robust features and functionality that give clients more powerful tools to optimize and flex their business.

An OMS should be able to:

  • Route orders from warehouses based on proximity to destination and inventory availability
  • Update inventory levels across systems and sales channels in real time
  • Provide order details to warehouses for fulfillment
  • Track orders and returns from door to door for both customers and customer service teams
  • Surface and forecast stock levels in order to avoid stock-outs
  • Handle pre-sell, back orders, kitting, and returns

Why Do I Need an Order Management System?

To complete an order, many things must happen from the moment someone clicks “buy” to when they receive the product. Inventory and orders must align across multiple channels. Every step of the order fulfillment process must be tracked. Data must be reported, analyzed, and evaluated. As a result, an order management requires a multi-dimensional system that touches nearly every facet of how your business operates, including: 

  • Customer profiles
  • Multiple sales channels
  • Product information management
  • Inventory levels and multiple location management
  • Order processing
  • Backorder management
  • Order printing
  • Picking and packing
  • Shipping 
  • Negotiating carrier shipping rates and discounts
  • Wholesale order management
  • Retail store replenishment
  • Returns and refunds
  • Customer Service 
  • Marketing and promotional programs

Why is this important? With the rise of direct-to-consumer and multichannel distribution, retailers must be able to handle allocation across all channels. They need systems able to integrate with ERP and ecommerce platforms. That means a need for new types of solutions. 

Three bottles of nail polish in blue, orange, and teal, next to a call-to-action for a modern order management system with a 'Get Pricing' button

Understanding the Order Management Process

Order management is more than just fulfilling and shipping items from your warehouse to your customer. It involves a series of synchronous steps, fluid processes, and constant communication that create a seamless customer experience. The smoother and faster the flow, the more orders the company is able to process, and therefore, the quicker the business is able to grow. Here’s a breakdown of how end-to-end order management works:

Infographic depicting the five steps of order fulfillment: Order placed, Order checked, Order logged, Order fulfilled, and Order shipped

Order Placed: The process begins when a customer places an order online, in-store, or over the phone with a customer service representative. The customer’s order details get logged in the ecommerce platform alongside payment terms, shipping address, and past orders they’ve placed.

  1. Order Checked: The order must check against your inventory ledger, either through a connected system or by a warehouse manager, to confirm whether it can be fulfilled. If inventory is low, or runs out completely due to a large order, additional inventory may be purchased from your vendor using an ERP or similar purchase order platform.
  2. Order Logged: Next, the order gets logged into your accounting ledger, either through a connected system or by a finance manager, which records it as cash or accounts receivable, depending on the type of order and payment terms. An invoice is generated and sent to the customer. 
  3. Order Fulfilled: If inventory is available, the order is transmitted to your fulfillment partner either through a connected system or a fulfillment manager. For ecommerce orders, your fulfillment partner will purchase a shipping label through a carrier, who’ll pick it up and deliver it to your customer. For wholesale orders, you will coordinate pickup with a shipping provider who’ll schedule a pickup and deliver it to your customer. 
  4. Order Shipped: Finally, your fulfillment partner will notify you the order has shipped, ideally through a connected system. Your customer will pay you for the goods according to your payment terms, and your ledger will be updated with payment either through a connected system or manually by your finance manager.

Common Order Management Features, Functions, and Capabilities

The more touchpoints and people involved in the order management process, the more potential roadblocks there are to its success. For instance, key challenges for businesses include human error and process backlogs, lack of inventory visibility, transportation errors, and poor communication, which can all erode customer satisfaction and ultimately negatively impact loyalty. Consider these stats: the average U.S. retail operation has an inventory accuracy of only 63 percent. Over one-third of businesses have shipped an order late because they sold a product that wasn’t in stock.

The new wave of order management systems can help modern companies avoid these pitfalls. Modern solutions utilize an integrated and responsive OMS that works directly with a business’s ERP system and works alongside the human workforce in order to power the most productive, accurate and profitable order management cycle possible. Here’s how it should optimize the following features, functions and capabilities: 

  • Fulfillment: In the process of receiving, packaging and shipping ecommerce orders to customers, effective order management systems should optimize and streamline every step of fulfilling a customer order.  
  • Allocation of inventory: Inventory should be automatically allocated across multiple channels and the data updated in real time so customers know exactly how much inventory they have, so they can maximize sales. 
  • Pick and pack: Technology to support fast and accurate pick and pack ensures that these vital parts of the fulfillment process don’t get held up. Barcodes and scanners that capture data in real time, as well as automated packing requirements based on order attributes are some examples. 
  • Order/Shipping/Fulfilment Visibility: Customers should be able to view all their order and shipping data in real time to ensure that they’re meeting their fulfillment SLAs and their customers’ expectations.
  • Integrations with ecommerce and shipping suppliers: Modern fulfillment solutions offer easy compatibility with popular ecommerce platforms and shipping providers that reduces the need for manual intervention. They streamline multiple systems into one, and real-time error-free integrations are key to achieving that. 
  • Integrations with other technology: Today’s order management systems should be capable of easily connecting to other key parts of your technology stack like your ERP, business intelligence platform, or CRM through application plug-ins or a well-documented RESTFul API. It should be easy for your engineering team to seamlessly connect and monitor your data.
  • Value Added Services (VAS): These tech-powered features are like the power boosts of fulfillment, offering customers the ultimate customization and flexibility. The ability to pre-sell inventory or manage back orders, kit multiple products into bundles, and handle the entire returns lifecycle are complicated operations made simple with advanced technology. 

Top 6 Benefits of Moving From Spreadsheets to an OMS

You can stop managing your business in spreadsheets and gain key competitive advantages with an order management system. An OMS provides you with automated visibility into every step of the sales process, saves you time and money, reduces human error, and improves financial accuracy. True order management systems supports the full customer lifecycle and improves the overall customer experience. Here are the Top 6 benefits to switching to an OMS:

1. See all of your orders and inventory in one place

Firstly, a centralized, synchronized OMS makes it easy for companies to have a single view of their complex omnichannel fulfillment ecosystem. It protects against order errors, customer dissatisfaction, and lost revenue due to delayed or manual updates. These in turn can lead to low inventory, incorrect invoicing, and unforeseen transportation errors. 

Screenshot of a business software dashboard displaying graphs of shipped orders, current inventory levels, and an active SKU for women's sportswear

2. Streamline and automate operations 

Secondly, because an OMS is automated, you’ll save your company time and money, decrease human error across orders and invoicing, and spend more time analyzing data that will drive growth and customer satisfaction. An OMS also increases data security, as there is less need for manual intervention.

3. Improve inventory management

The real-time capabilities of order management systems benefit inventory management by distributing data in real time regarding shipments received and items sold, returned, or exchanged. This improves inventory accuracy and saves companies from over-selling inventory, and once again, ensures customer satisfaction.

Screenshot of a return merchandise authorization (RMA) module in an order management system, showcasing customer return details and line items for a black t-shirt

4. Reduce spending 

Along with the benefits of reduced time and errors, making the switch to an OMS means you are saving money for your business and generating more revenue. Investing in an OMS allows you to stop spending money on separate accounting, inventory management, customer service, shipping, and marketing software. A unified OMS gives you all of these components in one program. In addition, it can save you money by comparing shipping rates across national and regional carriers, and choosing the one that best fits your needs or budget.

Interface of an order management system featuring order tracking and same-day shipping options, demonstrating cost-saving measures and efficiency

5. Access your data from anywhere 24/7

Businesses can access their order management system online from any location, which means they are able to process orders remotely and at any time. As a result, they have greater data control, better customer service, and more efficient order processing.

A comprehensive dashboard display from an Order Management System showing graphs and data analytics for business performance monitoring

6. React quickly with real-time intelligence 

Thanks to the real-time data display of an OMS, companies can be proactive and react more quickly to any issues that may arise, rather than risking customer dissatisfaction with errors or delays. Moreover, this saves money and ensures that product and payment data are up to date, giving companies accurate financial information more insight into their current state of business.  

Screenshots of a fashion e-commerce website and a real-time order confirmation page, demonstrating the quick response capability of an Order Management System

When to Invest in an OMS

Are you overwhelmed by the prospect of order volumes rising again? That’s one sign that supply chain complexity is overshadowing your operations. You should be able to focus on growth without worrying about missing delivery dates, losing track of inventory, or losing your margins to operational inefficiency. 

Top 5 signs it’s time to invest in an order management system:

  1. Inventory costs are high while visibility remains low. 
  2. Deliveries aren’t consistent and often arrive late.
  3. Customer complaints are on the rise. 
  4. It’s hard to pinpoint the status of orders.
  5. Supply chain expenses are eating into margins.

Whether you’re packing and shipping orders yourself or already working with a fulfillment services provider, these are all signs of fast growth without the scalable practices to support it. 

An interface of an Order Management System displaying the active status of three clothing items, with detailed system information and sales statistics

How to Choose an OMS

Use this checklist to help guide you in selecting a scalable OMS that’s right for you:

  1. Is it a modern, well-maintained and secure software? 
  2. Can I integrate all my ecommerce tools?
  3. Can I see all my data in one place?
  4. Does the platform support an omnichannel strategy? 
  5. Will I have access to discounted shipping rates? 
  6. Can the platform scale when volumes skyrocket? 
  7. Can I customize the system for my brand requirements? 

Improve and Automate the Order Management Process with MasonHub

Modern retailers need flexibility both today and in the future as they scale. Flexibility is what businesses should shop for, not just today’s immediate needs. Fortunately, MasonHub has created the technology to handle this effortlessly. We understand that order management is more than just dropping an order and fulfilling it; our platform gives customers a one-stop shop with the most visibility and data, always consistently, across all our warehouses.

Integrate easily with your favorite ecommerce tools

View the status of an order in real-time and track its progress through fulfillment all the way to delivery, returns, refurbishment, and resell in your inventory. Support your omnichannel strategy with dynamic allocation and visibility of inventory across all channels: direct-to-consumer, retail, and wholesale. Get game-changing features, enhanced functionality and a holistic view of the entire consumer lifecycle. 

Unlock Value-Added Services

  • Branded packing slips
  • Special packaging
  • Gift messages
  • Gift wrap
  • Kitting
  • Marketing inserts
  • Product labeling
  • Rush Receiving
  • Returns refurbishment

Order Fulfillment Services for Omnichannel Retailers

Two cardboard parcels on a conveyor belt against a vibrant yellow background, indicative of a busy fulfillment center ready for shipping

MasonHub’s order management and fulfillment platform helps brands scale across every distribution channel.

Fast and accurate order fulfillment services are crucial to a retailer’s success, especially in the fast-paced world of ecommerce and omnichannel retail. The U.S. alone will ring up $645 billion in ecommerce sales this year. But today’s consumers have high standards and many choices, so a seamless buying experience is a must.

Why MasonHub?

MasonHub, founded by a team of ecommerce operations experts, understands the importance of making sure every order is right, every time. We’ve created an end-to-end solution with cutting-edge technology that tracks each piece of your inventory throughout its entire lifecycle. From the moment it arrives at our loading dock to the minute it lands at the customer’s door or back at our warehouse, you’ll know where it is. MasonHub allows you to entrust your omnichannel fulfillment to a reliable partner so you can concentrate on scaling your business. No investing in costly in-house operations or adding unnecessary complexity to your supply chain.

Real-Time Intelligence

Our easy-to-use, intuitive dashboard gives you complete visibility into your inventory across all channels. Plus, you get up-to-the-minute reporting that puts the power of information in your hands. Making smart decisions in a swiftly-moving retail landscape just got a little easier.

Operational Transparency

We directly handle all of the picking, packing and shipping to process your orders. You get unmatched transparency and insights for optimizing your business. View and track your inventory as our centralized order management system streamlines your operations so you can focus on building your brand.

This article will walk you through the basics of order fulfillment, and what to look for if you’re considering partnering with a fulfillment provider.

Fulfillment 101

How Fulfillment Companies Work

Fulfillment Center Technology

FAQs About Order Fulfillment Services

How MasonHub Makes Modern Fulfillment Easy

Fulfillment 101

What is order fulfillment?

Order fulfillment refers to the series of processes that occur between receiving a customer’s order information and delivering their package. The logistics of fulfillment begin when the order information gets transmitted to the warehouse or inventory storage facility. The product matching the order is then located or “picked” and packaged for shipping. The order must be accurately picked, packed, and shipped as efficiently as possible so the package arrives on time and exactly as the customer expects it.

What are order fulfillment services?

Order fulfillment services include all picking, packing, shipping, storage, and product return operations. Once a business begins to grow and scale, it may need a fulfillment service provider to handle these time- and labor-intensive processes. At MasonHub, we partner with you to design a custom fulfillment solution. You gain visibility and control over your inventory while we execute the order fulfillment process with speed and accuracy.

What is a fulfillment center?

A fulfillment center specializes in inventory storage, picking products, packaging them for shipment and handing them off to a shipping provider. It can serve ecommerce fulfillment as well as wholesale and retail fulfillment. A fulfillment center differs from a warehouse, which primarily stores goods, with minimal transactions, for several months to a year or more. It also differs from a distribution center, where bricks-and-mortar retail stores receive large pallets of product, break it down into smaller cartons, and distribute it to stores. People often use the three terms interchangeably, which can lead to confusion when referring to storage or “warehousing” of goods. The former may infer only a short time, whereas the latter could mean safekeeping long-term.

What does a fulfillment center do?

Once a customer clicks “Buy,” it triggers order creation, inventory allocation, and transmission of that information to a warehouse management system (WMS). Fulfillment centers then locate the inventory – known as “picking” the order – pack it, create a shipping label, and hand the package off to the carrier. This focus on the fulfillment process allows fulfillment providers to execute far more effectively than a company that’s performing several functions at once. Strategic advantages of partnering with a fulfillment company include access to a distributed fulfillment network and discounted shipping rates. Both translate into faster, more cost-effective shipping and a better bottom line.

How Fulfillment Companies Work

A smiling warehouse worker with a hard hat using a tablet to manage inventory, exemplifying efficient fulfillment operations

Here, we break down the six steps in the order fulfillment process.

  1. Choosing a Fulfillment Provider: You should evaluate potential order fulfillment services partners to ensure they can meet the needs of your business. For example, if the majority of your customers live in a particular part of the country, it makes sense to work with a fulfillment center close to your customers. If your product is fragile, oversized, or requires additional care during packing and shipment, you will want to find a partner that can accommodate your storing and packaging needs. If next- or two-day shipping services are important to your customers, you’ll want to know the fulfillment center’s shipping cutoff times, whether they offer shipping discounts, and what their service level agreements (SLAs) are with carriers.
  2. Adding Inventory: Once you’ve vetted a fulfillment company that’s right for your business needs, you can arrange to ship bulk inventory for storage and fulfillment. When receiving inventory, fulfillment centers typically rely on barcodes, including UPC, GCID, EAN, and ISBN codes to distinguish between various products. The fulfillment center will also tag the product’s location in the storage facility to easily find and package the product when your customer orders.
  3. Routing Orders: To make sure a fulfillment center can integrate effectively into your company’s operations, you must be able to direct ecommerce orders to your fulfillment center. This framework of technology is known as an order management system. Many order fulfillment services have the ability to integrate with major ecommerce platforms to immediately receive the order information from a customer’s purchase.
  4. Picking, Packing and Shipping: A fulfillment service specializes in the ability to pick, pack, and ship the correct items in a timely manner. When the order information arrives at the warehouse, workers locate and collect the products. Once gathered, they get packaged with the necessary materials, secured and affixed with a shipping label. The finished package is then ready for pickup by a shipping carrier.
  5. Managing Inventory: Although you will no longer have direct oversight of your physical inventory, most order fulfillment services provide a digital dashboard. This allows you to manage your inventory. The dashboard tracks daily, weekly, and monthly sales data and estimates when inventory needs to be replenished. The dashboard also serves as a tool for managing damaged products and customer returns. The best fulfillment providers offer up-to-the-minute inventory tracking, so you never miss an order.
  6. Handling Returns: Many order fulfillment services offer return management services but the degree to which they handle returns can vary. A fulfillment partner like MasonHub can handle returns from any of a company’s channels. Many sellers have direct-to-consumer, retail stores and wholesale. MasonHub can also inspect returned products, put the item back into inventory when possible (increasing your bottom line), and process the credit or refund. Our RMA system automatically notifies customers of their return and refund’s progress.

Fulfillment Center Technology

Modern fulfillment centers should have technology that automates processes and streamlines operations. A fulfillment provider’s platform should easily integrate with a company’s inventory catalog, existing ecommerce platform, and returns management system. Ideally, a fulfillment center should also have the ability to connect to a company’s order management system (OMS) to form one centralized hub for all operations. 

  • Ecommerce platform integration: Many fulfillment companies have software solutions that easily integrate with the platform you have chosen for your ecommerce business. This eliminates the need for you to monitor and report new orders as they come in, reducing friction and time spent managing the fulfillment process. Integrating your ecommerce store with your fulfillment partner also makes handling returns and customer service issues easier.
  • Inventory and order tracking: As your business grows, you must stay on top of your inventory levels because failing to do so can greatly affect your bottom line. The best fulfillment companies provide tools that let you track your stock level and help predict when your inventory will be exhausted. The inventory management dashboard also typically allows you to track products through the fulfillment and shipping process, as well as returns.
  • Barcodes and scanners: Fulfillment centers utilize automated barcode scanners when receiving a product to verify the correct item has been received and document where the product is stored. This reduces the likelihood of missing or otherwise inaccurate inventory.

    Barcode scanners also enable SKU location and management during the picking and packing process. This speeds up the time of order receipt and helping to ensure the highest order fill and fulfillment accuracy rates. For example, this reduces the likelihood that an order gets packed incorrectly or gets placed when an item actually isn’t in stock. Accurate inventory counts, and reporting all sellable inventory to the platform, also improves a customer’s sell-throughs.

    Finally, inbound returns also get scanned with barcodes to ensure a company can refund its customers faster. Modern fulfillment centers also employ these mobile devices to communicate status updates of the product throughout the fulfillment process.

FAQs About Order Fulfillment Services

What do order fulfillment services cost?

Most of the time companies get charged per transaction, such as receiving of goods, picking of goods and packing of orders. Additionally, a company accrues charges for shipping of goods if using discounted rates provided by the fulfillment company. Fulfillment centers also charge storage fees, account management and software licensing fees.

If I expand into different channels, can a fulfillment center handle in-store and wholesale orders?

You may start out as a small business with one online store, but as your brand grows, you’ll need a fulfillment center that can grow with you. Say you get a big order from a large bricks-and-mortar retailer. A fulfillment center like MasonHub has the experience and technology to help you support the compliance required to ship to a wholesale partner. The same goes for orders placed from your retail store. Make sure your fulfillment center’s systems can track inventory and enable orders from all sales channels, and ship to customers, retail stores, and wholesale partners.

Can order fulfillment services handle subscription box orders? 

Subscription box business models often require custom groupings of products, also known as pre-kit bundling or build-to-kit. MasonHub’s staff can help you finish your goods through kitting, and ensure that your custom materials and inserts get placed in your specified boxes.

What if my products have expiry dates? 

A fulfillment center like MasonHub can handle lot-tracking of each individual product to ensure that beauty products or perishables are always shipped well before their expiry dates. 

What value-added services (VAS) should order fulfillment services be able to provide?

How does an order fulfillment service handle pre-sell and back-orders?

Advanced inventory management systems let you create “virtual” quantities for inventory that is not in stock, so you can pre-sell a new product while you replenish inventory for hot-selling items. A centralized management system like MasonHub manages back-orders by giving you control of how many to accept. It automatically allocates inbound replenishment stock to back-orders. This way, the customer will receive their order as soon as possible.

Does an order fulfillment service provide tracking for the various shipping carriers? 

A fulfillment center should provide tracking for each shipping carrier so that clients know where their customer’s package is at all times. MasonHub currently provides carrier event statuses for FedEx, DHL, and USPS in both its user dashboard and API, with international shipping coming soon.

How often should an order fulfillment service provide progress reports and performance reviews?

The best way for a company to track its fulfillment center’s performance involves regular face-to-face or virtual meetings. MasonHub schedules monthly status meetings with every client and provides quarterly performance reviews to make sure your expectations are met and exceeded. 

What are the most important metrics to measure an order fulfillment service’s success? 

Small businesses and quickly-growing companies may not necessarily know which metrics are the most critical: inventory accuracy, fill rate, and shipping times. A business should seek a partner that will always be extra-vigilant about these KPIs. At MasonHub, we pride ourselves on our performance in these metrics and we always make sure our clients know how we stack up against the industry standards. 

MasonHub Makes Modern Fulfillment Services Easy

Fulfillment companies work hard behind-the-scenes to power the ecommerce lifecycle. They’re laser-focused on making sure your orders are delivered to the customer in perfect condition, as quickly as possible and with the lowest shipping costs. It may sound simple, but managing all these logistics efficiently is a complex undertaking.

MasonHub makes it easy by combining the best supply chain technology with reliable fulfillment services. Enjoy complete visibility into orders while we take care of inventory management, shipping, and returns at scale. MasonHub’s centralized order management system provides up-to-the-minute, real-time tracking of your inventory and orders throughout their entire life cycle. Customers get easy connectivity to Shopify (via our one-click private app), Netsuite and Returnly through API or web application. MasonHub’s system also generates automated reports and customized analytics to help you understand and optimize your business.

In Conclusion

We understand that order management is more than just dropping an order and fulfilling it. Our platform gives customers a one-stop shop with the most visibility and data, always consistently, across all our warehouses.