Fulfillment
The entire process from receiving an order to delivery: pick, pack, label, ship.
In practice
Fulfillment is the 'moment of truth.' Customers don't see the advertising — they see the package. Fast, accurate packing means a positive experience.
Common misconception
'Fulfillment just means shipping a package.' It includes: inventory management, receiving, distribution, picking, packing, labeling, shipping, tracking.
How to fix it
Fulfillment inefficient? (1) error rate — target < 0.5%, (2) order-to-ship time — target < 24 hours, (3) consider a 3PL above 100 orders/day.
Example
A cosmetics store: 80 orders/day, 6 work hours. A 3PL at $3.50/order saved $140/day. Positive ROI from day one.
Priority
Handle fulfillment in-house up to 50 orders/day. Above that, use a 3PL.
Related terms
Keep learning. Metrics that touch the same area:
- SKU – Stock Keeping UnitOperationsA unique identifier for each product variation. The basis for precise inventory management.
- Inventory ManagementOperationsTracking, ordering, and maintaining inventory. Too much means cash tied up. Too little means stockouts.
- StockoutOperationsA product unavailable for shipping. Immediate lost sales plus damaged trust.
- DropshippingOperationsSelling without holding inventory — a supplier ships directly to the customer. Low margin (5-20%), no quality control.
- Lead TimeOperationsThe time from ordering with a supplier to receiving inventory. Critical for calculating the reorder point.
- MOQ – Minimum Order QuantityOperationsThe minimum quantity a supplier requires. Affects cash flow and risk on new products.
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