E-Commerce Fulfillment 101: A Guide For Managing Your Business

E-Commerce Fulfillment 101: A Guide For Managing Your Business

Whether you are a new company entering the game, an established organization introducing this part of fulfillment, or an organization trying to scale to keep up with the demand that’s been growing out of proportion since Covid hit, you need to know how to handle orders.

Logistics has become essential and with it the ability to navigate materials handling seamlessly. People’s expectations are high, and there’s no time to waste if you want to stay afloat, let alone compete.

What is E-Commerce Fulfillment?

E-commerce fulfillment is the process of storing, packing, and shipping online orders. This includes picking from shelves, packing orders, and even handling returns. Typically, order fulfillment encompasses 6 components:

  1. Inventory Management
  2. Warehouse and Storage
  3. Receiving
  4. Pick & Pack
  5. Shipping 
  6. Returns 

Having a good process in place can be hugely beneficial because you will waste less money and other resources, as well as increase your efficiency and keep your end customers happy.

Why is E-commerce Fulfillment Important?

E-commerce fulfillment is usually high in the number of orders, but low in the number of items per order, causing the Cost Per Unit to go up – shrinking profits and/or pushing prices up. Depending on the number of daily orders received, there are two ways in which organizations can handle growth: by hiring more people or adopting automation.

Let’s explore:

Due to the labor shortage, hiring more people is challenging, but it’s viable option, at least until the numbers no longer add up. You can only have so many people in your Distribution Center and still run an efficient operation, at some point the place becomes chaotic and less efficient (think of a small ice cream shop with 5 people scooping out ice cream, adding 5 more people will likely actually slow everything down because people will be getting in each other’s way.) Also, the human margin of error is higher, what are those errors costing you? The cost of not implementing some sort of automation is difficult to measure, but it’s there.

These challenges have made it so that automation is increasingly replied upon.

How to Choose a Fulfillment Model 

For Small Businesses:

If you’re a small business with less employees, Goods to Person solutions like AutoStore and AGVs can make a big difference because they are incredibly scalable. You can start with something as small as your budget and facility will allow, and continue to grow your operation as you see fit. In the case of AutoStore, you can add more robots and grow the grid as you continue to increase your inventory. If you get AGVs, you can add more robots and increase the number of pods being brought to the pickers.

Another viable option with a smaller amount of automation is Light Directed Picking. This option can allow you to start with a smaller budget while still increasing the efficiency of your DC. It can also be used in unison with other solutions in order to bring the most out of your operation. If you deal with hanging garments, perhaps you’d like to consider a solution such as Garment On Hanger, which does not sort individual units, but it can process large numbers of hanging garments and transport them to different parts of your DC, where they can be pushed to and from trolleys, etc. 

For Medium and Large Businesses

Depending on unique needs, timelines and budgets, solutions for these businesses can differ greatly.

  • Pouch Sorters can provide you with the ability to make use of the space above your DC and can be a great solution for an e-commerce operation
  • AutoStore doesn’t need aisles with pickers or lights, and is as dense as they come! So the savings in the long run can continue to increase, and so will the opportunity to continue scaling
  • Tilt tray sorters can be an excellent choice for parcel sortation, as it’s fast and the trays are specifically designed to handle packages really well
  • Bomb Bay sorters provides a great option for retail, it’s fast, it’s versatile and you can fulfill many stores’ orders by waves

Catered to You

At SDI Element Logic, we know that all businesses do not operate the same. We offer flexible solutions based on the unique needs of your business. Contact us