Amazon Fulfillment Process

Order fulfilment is the complete process of fulfilling orders received online. This involves
several steps and depending upon its efficiency, customers perceive your business. A
customer who orders online expects seamless delivery of products in good shape and
within the time span promised. The customer is not bothered about how you do it, for the
her/him, only the end result matters.

Whether you do it yourself or outsource the activity, the process of fulfilment involves
warehouse management, order management, packaging, shipping and customer
communication. You have options of how to go through this process depending upon
your business model.

Let us explore the different ways you can do order fulfilment:

Drop shipping:
In drop shipping, you don’t purchase or own the product you are selling. You are the
middleman who may not even see the physical product. You concentrate on selling the
product and when an order is received, it is conveyed to the drop shipper or
manufacturer who packs and ships the product to the buyer. Your profit is made from the
difference of the selling price and the price that you pay to the drop shipper. The benefit
of drop shipping is that you don’t block money is stocks that are not moving. Though, in
this process you are removed from the process of fulfillment, you still remain
accountable for the sold product.

Third-party Fulfillment:
Another option for order fulfilment is third-party fulfilment where you own the products
you are selling. As a seller, you either purchase the product or manufacture it, store the
product with a third party logistics provider (3PL) and then sell the product. When an
order is received, the third party packs and ships it. Your profit would be the difference
between the retail price and the price you pay for the product plus the fees you pay to
the 3PL. If you have a unique product but lack storage space and you want to focus on
marketing rather than fulfilling, third-party fulfilment is probably the best option for you.

Self-Fulfilment:
In this model of fulfilment, you own the inventory and fulfil orders yourself without
involving any third party. The manufacturing and inventory control is under one roof, and
you may lease warehouse space which acts as your distribution hub where pickers and
packers ship your products to the customer. Your profit is the difference between the
retail price and the costs that you incur in manufacturing/buying the product, storage and
fulfilling orders. The main advantage of self fulfilment is that you are always in control.
Though it is a bit time consuming, you know how your products are being picked and
packed and when they are being shipped to the customer.