Finding Fulfillment

By SmallBusinessComputing Staff | Posted May 01, 2000
by Steve Bennett

Pull back the curtain of any e-commerce Web site, and there you'll find its real potential for success. The processes that churn on the "back end" are what drive the sales transactions and other activities taking place on the "front end."

"Back end" has come to mean a number of different behind-the-scenes functions. This article looks specifically at order fulfillment, a vital back end function for any e-commerce site that sells and delivers physical goods.

Take a lesson from the 1999 holiday season, which proved to be a difficult time for some of the major online e-tailers and click-and-mortar merchants. Their success was hampered by incorrect orders, late deliveries, and dissatisfied customers. As they learned, conducting e-commerce successfully requires a solid fulfillment system on the back end. We talked to one fulfillment veteran and gathered his tips.

From Warehouse To Customer's House
Fulfillment involves all of the steps for getting goods from the warehouse to the customer's front door or loading dock. This includes order processing, customer service, warehousing, and shipping. Sometimes it makes sense to farm out these duties to a third-party vendor, especially if a company has never sold or shipped direct before. Outsourcing will not only save a significant capital investment, but will provide a business with the breathing space to iron out the kinks and learn about the unique demands of conducting e-commerce, while keeping customers happy.

One company that took this approach is Museumshop.com, an Arlington, Massachusetts-based collaborative of museums from around the world that sells everything from African art to lithographed greeting cards. While in the midst of a total redesign of its Web site's front end, [see Sites for Sore Eyes, March] the business also sought a more effective fulfillment system.

"Originally, we forwarded the purchase requests to the individual museums," explains Sara Volino, Museumshop.com's director of merchandise. "The museums did a fabulous job. But museums aren't designed to do commerce 24 hours a day, 7 days a week. We are. And we have to be, because many of our customers want to make purchases during off-hours, at their leisure. That's one of the big attractions of the Web. To meet that 24/7 service demand, we needed to control our inventory and the fulfillment process."

Rather than investing in costly warehouses and staffing up to take control of handling, shipping, and other fulfillment requirements, Museumshop.com determined that it made good dollars and sense to outsource the back end tasks to a third party, Fulfillment Plus.

When an order comes in, Museumshop.com authorizes the credit card. If the order passes muster, it sends an e-mail notification to Fulfillment Plus, detailing the specifics of the order information. Fulfillment Plus' staff members have access via a browser to certain areas of the Museumshop.com site, where they enter the shipping information. This part of the order entry process also triggers an e-mail notification to the customer, which provides the shipping details and tracking number.

When seeking a third-party fulfillment vendor, Volino suggests keeping in mind the following considerations:

Make sure their system is technically compatible. There's no need to scrap your existing order entry database or accounting system to match the vendor's. Rather, the fulfillment operation should be able to adapt their systems to yours. In the case of Museumshop.com, it was important to use a vendor that could integrate seamlessly with the company's SQL database that stores the catalog and customer order information.

Look for experience in handling the kind of product you'll be shipping. "It's critical to work with a company that knows how to pack your particular type of goods," Volino cautions. If a fulfillment operation only has experience with clothing, and you sell a variety of breakable hard goods, such as glassware or pottery, look elsewhere. This should be high on your list of items to check with the vendor's reference accounts.

Check the level of customer service. When outsourcing fulfillment, you're betting the farm on a third party. So make sure that it is easy to get through to the right people whenever they may be needed. The quality of customer service is an essential factor to check out before signing on the dotted line.

Consider the location of the warehouse(s). "Don't just assume that a fulfillment company will be able to get your goods into a shipper's hands," Volino advises. "You want a provider that's geographically close to the shipper's hub. We liked the fact that Fulfillment Plus was located very close to a UPS hub." You should also make sure that the fulfillment operation has good relationships with couriers and other shippers. The best way to assess that relationship is to talk to the fulfillment center's other customers and find out what their experiences have been.

E-business is different from conventional business in many respects. But to be successful it's still vital to offer exemplary customer service and follow-through. Web customers can easily go elsewhere when their needs are not being met. So, before getting caught up in the design of the site, be sure to invest as much time (and even more money) in back end technologies. It's the processes going on behind the scenes that can take your site to the next level.

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