Fulfillment house overview

Fulfillment, also known as order fulfillment or product fulfillment, is the process where by a person or company fulfills their obligations to send a person an item or product that the person has ordered, purchased, or requested from the organization.

Fulfillment typically will refer to the services provided by a company that offers to store, receive the orders, package, and then ship the ordered item to the end consumer.

Standard fulfillment company services

Storage and warehousing

A fulfillment company stores items until an order for the item comes in. Storage facilities can be prepared for perishable items requiring refrigeration, temperature sensitive items requiring air conditioning or heating (such as certain types of chemicals that can break down due to extreme heat or cold), or typical warehousing protection from the elements.

Third party fulfillment services will often charge a storage fee based on the product storage requirements and any special handling that may be required.

Inventory Control

A fulfillment company will typically maintain and publish inventory counts as goods are shipped. Reporting systems can vary by company and range from simple excel spreadsheets to web-based systems.

Pick and pack services

Pick and Pack is the process of selecting items currently being stored by the fulfillment company to prep for shipping. Companies have employees known as “pickers” that will receive an order manifest. These “pickers” will then wander the warehouse to the location (known as a BIN or INTERNAL SKU) of the individual items, and pull them from the warehouse shelves to prep for shipping. With the “picker” taking the items in the order manifest back to the packing station, another employee known as a “packer” will then check to make sure all items in the order manifest are present and then begin the packaging process. Packaging of the product according to its type is then performed, optionally, a packaging slip may be attached, and the product is labeled with address identification of where the item is to be shipped.

A packaging slip may not always be required to accurately pick the contents of an order. Other methods of product identification exist, such as Pick to Light, and BINQTY strings, that allow for accurate picking of items. Such newer methods, allow for an increase in productivity. However, systems of picking items for shipping will vary based on variables such as the number of items, and sku diversity of the goods to be shipped.

Shipping

It is rare for a fulfillment company to provide its own courier services due to the size of courier companies. In most cases, the shipping is outsourced to courier or delivery companies. However, often fulfillment companies are able to provide larger shipping discounts than smaller retailers may be able to negotiate on their own merit. This is because fulfillment service providers ship a high volume of orders every day. Because of this volume, small parcel carriers such as UPS, DHL, and FedEx will negotiate a better discount. For smaller, light-weight parcels, USPS will often be used (typically 1 pound and under).