Broadly speaking, order fulfillment comprises the process in receiving, processing, and shipping a customer order. More specifically, order fulfillment entails the following steps, in roughly chronological order.
\r\nAccording 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.
\r\nThis 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.
\r\nIn 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.
\r\nThis 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.
\r\nThis 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.
\r\nYou want to make sure that the items have been scheduled to ship from your facility to the customer.
\r\nIf 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.
\r\nBefore you actually ship the items to your customer, you want to make sure the shipping address has been verified.
\r\nIf 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.
\r\nYou 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.
\r\nThis 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.
\r\nThis is the physical picking and packing of the order at a warehouse or distribution center.
\r\nThe 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.
\r\nWhen the item is delivered, the order is fulfilled.
\r\nOnce the order is fulfilled, you can begin to process the payment for the received items.
\r\nYou may need to manage returns of unacceptable or damaged goods by either refilling the order or refunding the customer.
\r\nWhether you use an inventory app or take care of your inventory manually, you must make sure you update your inventory records.
\r\nNow 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.
\n","docType":"article","guid":"articles_ac324e94e17a2a2bd2f477a1527610c3","lastModified":"2020-03-16T18:43:00.000Z","published":"2014-06-25T21:11:00.000Z","structuredData":null,"subtitle":"Gain a complete understanding of the several steps involved in order fulfillment.","template":"v1","title":"Steps in Order Fulfillment","type":"article","author":{"avatar":null,"bio":"The purpose of our community is to connect small business owners with experienced industry experts who can address their questions, offer direction, and share best practices.","name":"business.com editorial staff","image":null,"slug":null,"social":{"facebook":"","linkedin":"https://www.linkedin.com/company/business-com-/","twitter":"https://twitter.com/businessdotcom","website":"https://www.business.com/"},"status":"enabled","title":null,"type":"Old BDC Member","user":{"imagePath":"https://staging.business.com/images/uploads/user/profile/b14a2c1fa0158a2f46854597139a2067ee8ef.jpg","profile":{"company":"","jobTitle":"","website":"https://www.business.com/"}}},"breadcrumbs":null,"channels":{"primary":{"name":"Business Basics","slug":"business-basics"},"sub":{"name":"Entrepreneurship","slug":"entrepreneurship"}},"meta":{"robots":"index, follow","description":"Gain a complete understanding of the several steps involved in order fulfillment.","title":"Steps in Order Fulfillment - business.com"},"parsedContent":{"toc":[{"id":"1-maintaining-inventory","title":"1. Maintaining inventory"},{"id":"2-responding-to-a-sales-order-to-determine-availability-and-location-in-inventory","title":"2. Responding to a sales order to determine availability and location in inventory"},{"id":"3-confirming-pricing","title":"3. Confirming pricing"},{"id":"4-configuring-the-order-if-there-is-more-than-one-piece-or-product","title":"4. Configuring the order (if there is more than one piece or product)"},{"id":"5-booking-the-order-placing-a-request-into-the-inventory-system-for-what-is-ordered","title":"5. Booking the order (placing a request into the inventory system for what is ordered)"},{"id":"6-acknowledging-and-confirming-the-order-is-booked","title":"6. Acknowledging and confirming the order is booked"},{"id":"7-invoicing/billing-the-customer","title":"7. Invoicing/billing the customer"},{"id":"8-determining-the-shipping-address","title":"8. Determining the shipping address"},{"id":"9-sourcing-the-order-determining-which-facility-to-ship-it-from","title":"9. Sourcing the order (determining which facility to ship it from)"},{"id":"10-determining-which-carrier-will-ship-the-item","title":"10. Determining which carrier will ship the item"},{"id":"11-issuing-order-changes","title":"11. Issuing order changes"},{"id":"12-processing-the-order","title":"12. Processing the order"},{"id":"13-shipping-the-order","title":"13. Shipping the order"},{"id":"14-delivering-the-order-to-the-customer","title":"14. Delivering the order to the customer"},{"id":"15-settling,-receiving-and-processing-payment","title":"15. Settling, receiving and processing payment"},{"id":"16-handling-returns","title":"16. Handling returns"},{"id":"17-updating-inventory","title":"17. Updating inventory"}],"json":[{"component":"ul","children":[{"component":"li","children":["There are many steps that are part of order fulfillment, and it's important you fully understand each."]},{"component":"li","children":["When considering the order fulfillment steps, you should make sure that you follow the specific order of the steps. "]},{"component":"li","children":["There are many steps in the order processing stage, which includes confirming all of the items the customer ordered."]}]},{"component":"p","children":["Broadly speaking, order fulfillment comprises the process in ",{"component":"i","children":["receiving"]},", ",{"component":"i","children":["processing"]},", and ",{"component":"i","children":["shipping"]}," a customer order. More specifically, order fulfillment entails the following steps, in roughly chronological order."]},{"component":"h2","props":{"id":"1-maintaining-inventory"},"children":["1. 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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. "]},{"component":"h2","props":{"id":"5-booking-the-order-placing-a-request-into-the-inventory-system-for-what-is-ordered"},"children":["5. Booking the order (placing a request into the inventory system for what is ordered)"]},{"component":"p","children":["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. "]},{"component":"h2","props":{"id":"6-acknowledging-and-confirming-the-order-is-booked"},"children":["6. Acknowledging and confirming the order is booked"]},{"component":"p","children":["You want to make sure that the items have been scheduled to ship from your facility to the customer."]},{"component":"h2","props":{"id":"7-invoicing/billing-the-customer"},"children":["7. Invoicing/billing the customer"]},{"component":"p","children":["If the order has not been paid for by some means of cash or other tender, you may want to consider a ",{"component":"a","props":{"href":"http://docs.infor.com/sxe/11.18.x/en-us/sxolh/inw1525705277542.html","target":"_blank","rel":"nofollow"},"children":["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. "]},{"component":"h2","props":{"id":"8-determining-the-shipping-address"},"children":["8. Determining the shipping address"]},{"component":"p","children":["Before you actually ship the items to your customer, you want to make sure the shipping address has been verified."]},{"component":"h2","props":{"id":"9-sourcing-the-order-determining-which-facility-to-ship-it-from"},"children":["9. Sourcing the order (determining which facility to ship it from)"]},{"component":"p","children":["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. "]},{"component":"h2","props":{"id":"10-determining-which-carrier-will-ship-the-item"},"children":["10. 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Processing the order"]},{"component":"p","children":["This is the physical picking and packing of the order at a warehouse or distribution center."]},{"component":"h2","props":{"id":"13-shipping-the-order"},"children":["13. Shipping the order"]},{"component":"p","children":["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. "]},{"component":"h2","props":{"id":"14-delivering-the-order-to-the-customer"},"children":["14. Delivering the order to the customer"]},{"component":"p","children":["When the item is delivered, the ",{"component":"a","props":{"href":"http://www.purchasecontrol.com/blog/what-is-order-fulfillment/","target":"_blank","rel":"nofollow"},"children":["order is fulfilled"]},"."]},{"component":"h2","props":{"id":"15-settling,-receiving-and-processing-payment"},"children":["15. Settling, receiving and processing payment"]},{"component":"p","children":["Once the order is fulfilled, you can begin to process the payment for the received items. "]},{"component":"h2","props":{"id":"16-handling-returns"},"children":["16. Handling returns"]},{"component":"p","children":["You may need to manage returns of unacceptable or damaged goods by either refilling the order or refunding the customer."]},{"component":"h2","props":{"id":"17-updating-inventory"},"children":["17. Updating inventory"]},{"component":"p","children":["Whether you use an inventory app or take care of your inventory manually, you must make sure you update your inventory records."]},{"component":"p","children":["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. 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