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Steps in Order Fulfillment editorial staff editorial staff

Gain a complete understanding of the several steps involved in order fulfillment.

  • There are many steps that are part of order fulfillment, and it's important you fully understand each.
  • When considering the order fulfillment steps, you should make sure that you follow the specific order of the steps. 
  • There are many steps in the order processing stage, which includes confirming all of the items the customer ordered.

Broadly speaking, order fulfillment comprises the process in receivingprocessing, and shipping a customer order. More specifically, order fulfillment entails the following steps, in roughly chronological order.

1. Maintaining inventory

According to Oberlo, this is a combination of receiving and storing inventory. Inventory can be handled in your building or you can use an outside source. When you keep inventory in your facility, you are responsible for labeling and keeping quality control of the stock, as well as managing your inventory system. You also need to store your inventory in a way that it is easy for you to see what is available for you to ship quickly. When using an outside source, they handle these functions for you. 

2. Responding to a sales order to determine availability and location in inventory

This is when you initially receive the order for your items to make sure that you actually have the item in your inventory. If you are using an inventory app, then you should have the expected number in inventory, but you must verify the amount and location of the items.

3. Confirming pricing

In this stage, you confirm the price the customer has paid for the item and that it matches the amount you want to charge for it. You want to prevent problems later on in the process.

4. Configuring the order (if there is more than one piece or product)

This is part of order processing. You must make sure that you have all of the items that the customer has purchased. If there are multiple items, you could have them in different locations in your warehouse. If you source your inventory outside of your own warehouse and you have it in two different places, you may need to ensure the inventory in multiple locations. 

5. Booking the order (placing a request into the inventory system for what is ordered)

This step is telling your inventory system that you are taking this item or items from your inventory. This may also include special instructions about the shipping and packing materials, such as boxes, bubble wrap, packing tape or bubble mailers. It may have custom packaging or special inserts that you want to include in the packaging that your customers will receive. 

6. Acknowledging and confirming the order is booked

You want to make sure that the items have been scheduled to ship from your facility to the customer.

7. Invoicing/billing the customer

If the order has not been paid for by some means of cash or other tender, you may want to consider a consolidated invoicing system. You can use the zip codes from your customers' addresses to determine the consolidation intervals. The order number is decided by the fulfillment orders. The system comes with a default billing code, which you can change with a fulfillment rule. 

8. Determining the shipping address

Before you actually ship the items to your customer, you want to make sure the shipping address has been verified.

9. Sourcing the order (determining which facility to ship it from)

If your items are stored at an outside source, you must decide from which the items should be shipped. You want to pick a facility that is closest to the shipping address of the customer. This helps save on shipping costs. 

10. Determining which carrier will ship the item

You must decide the most cost-effective way to ship the items. The shape, size, and weight of the items, as well as the shipping address, dictates which carrier may be the best one to use. 

11. Issuing order changes

This includes making changes initiated by the customer after the sale, substituting for pieces no longer in inventory, or updating the order with newer pieces in inventory. You want to make sure that any changes to the order have been processed before you ship it to the customer. This ensures that your customer gets exactly what they want. 

12. Processing the order

This is the physical picking and packing of the order at a warehouse or distribution center.

13. Shipping the order

The order may go directly to the customer or to one or more distribution points. This is one of the most important steps to ensure the customer gets the items they ordered. You must decide if the items go directly to the customer, or a distribution point and then on to the customer. 

14. Delivering the order to the customer

When the item is delivered, the order is fulfilled.

15. Settling, receiving and processing payment

Once the order is fulfilled, you can begin to process the payment for the received items. 

16. Handling returns

You may need to manage returns of unacceptable or damaged goods by either refilling the order or refunding the customer.

17. Updating inventory

Whether you use an inventory app or take care of your inventory manually, you must make sure you update your inventory records.

Now that's a lot of steps! We tend to take them for granted, or bundle them together under a term like "shipping," but an order must pass through many stages that involve software and physical systems. It's no wonder companies large and small are contracting out this function to specialized order fulfillment services providers.

Image Credit: Yozayo / Getty Images editorial staff editorial staff Member
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