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129. How to Optimize the Order Fulfillment Process in Your eCommerce Business

how to optimize your eCommerce order fulfillment process

Fulfillment isn’t sexy, but it does take up a lot of time and resources in your eCommerce business… so it’s worth taking a little time to optimize the process and make sure you’re as efficient as possible. 

How nice would it be to cut down on the time it takes you to fulfill an order so you could actually increase your orders without increasing your staff?

What You’ll Learn

  • The simple 4-step process to getting your orders out the door as quickly as possible
  • The 4 most common order picking processes used in eCommerce order fulfillment
  • How to organize your warehouse for maximum efficiency
  • How to save money on your shipping costs

Links Mentioned

Shipstation

PirateShip

Episodes Mentioned

How to Get More Done in Less Time

Smooth Operations in Business + in Life

Must-Have Tools for Your eCommerce Business


Read the Full Episode Transcript

I know, order fulfillment isn’t the sexiest topic ever – but it does take a good portion of your time and resources as an eCommerce business so it’s definitely worth optimizing!

Since the exact process that works for you business is going to be different than the next business, I’ll do my best to give you a few different ideas so that you can pick and choose what will make the most sense for you. 

Generally, I’m going to speak as if you have a wide assortment of product since that is the most complicated set up. If you don’t have a large assortment of product you can of course simplify this a bit.

A Simple 4-Step Order Fulfillment Process

First I want to start with a high-level run through of how we used to fulfill orders so you can get the full picture, and then we’ll break it down into some more specifics. 

  1. Print out all the packing slips for the orders that need to be fulfilled. 
  2. Pick the orders one by one and place in the staging area with it’s packing slip (we’ll talk more about this but we did find it easier and more organized to pick an entire order from beginning to end and there were less errors) 
  3. Pack the order on the packing table, leaving it unsealed with the packing slip in it. 
  4. Weigh the package, ship the order, seal up the box, and affix the shipping label. 

You’re batching each step in the process, focusing on one task at a time vs. doing the entire process from beginning to end order by order. 99% of the time, batching tasks, any task is going to be more efficient because your brain doesn’t have to switch between the tasks. And of course, if you have multiple people, they can each focus on the one thing they have to do, so they can do it well. 

This also allows for checks and balances in the process. You’ve got the first step where you’re picking the items and then you have the opportunity to check it one more time before it gets packed in the box. 

How to Set Up Your eCommerce Warehouse for Maximum Efficiency

Okay, so before we dive into each of those steps, let’s back up a second. Because before you can pick and pack efficiently, you need to think about the set up of your warehouse.

This is arguably one of the most important steps because if it isn’t set up in an efficient manner, especially when you have a lot product variants, you’re going to waste a lot of time looking for the items you need to put in your order. 

  • Set up a bin system—even if you’re not using physical bins. I recommend you use a combination of letters and numbers, each row or half a row (depending how large your warehouse is) being a letter and using numbers for the particular bin that product variant is in. So for example, you’d have row A, bins 1-50. 
  • Make sure that each bin only holds one variant—when you’re picking items you don’t want to have to dig through looking for the right size, color or scent, you just want to know that bin has a specific item, in a specific color and in a specific size. The only time I would deviate from this is if the items are REALLY easy to tell apart. For instance, if we had apparel that came in multiple colors and they were packed in poly bags—then maybe we would put both the black and the red smalls in the same bin if we were really short on space. But honestly, I would leave that as a last resort. The more mindless and foolproof you can make the picking process, the better.
  • You’ll also want to think about where you put specific items. The most popular items should be closest to your staging area or where you collect your orders and the least being the furthest away. The only thing you have to be careful of, is as you grow, if you have multiple people picking orders, you don’t want them tripping over each other. So maybe you want the first 10 bins in your first 3 rows to have the most popular product vs. putting them all in the first row. 
  • And of course, I’m no warehouse expert. As your business grows you can actually hire people to come and optimize the set up of your warehouse for you. They’ll tell you where to put things based on the velocity that it sells, how big it is, how to keep the best flow in the warehouse, etc. It doesn’t come cheap, so only the biggest of businesses really need this –  but know that it’s an option.

Create An Assembly Line for Your Order Fulfillment Process

Next up, you’ll want to think about how you can set up an assembly line for your fulfillment process. At a minimum, you’ll want an area where you collect the orders as they’re picked and then a separate table that is used only for the actual packing of the order. Even if it’s just you picking and packing right now, the sooner you can build in these habits, the better. 

How to Properly Set Up an eCommerce Order Packing Table

On your packing table, you want access to everything you need to pack an order all in that one place. If you use tissue, I would leave that laid out on the top of the table. Then you can have your 3-4 most popular box sizes on a shelf underneath. If you have stickers that you use, I would affix them to the wall along with some organizers for pens, markers, etc. 

This table should only ever have what you need to pack an order on it, you don’t want anything else in the way! 

The Best Way to Pick Your eCommerce Orders for Fulfillment

So let’s talk about actually picking the order… 

There are actually a few different standard ways warehouses will set this up depending on their needs. 

The 4 Different Order Picking Styles

The first is “piece picking” that’s where you pick an entire order from beginning to end all in one shot. This is the most straightforward and easiest to implement. 

The next is batch picking, this is where a picker will pick multiple orders at time and then bring them all to the staging area once they’re picked. Similar to piece picking, but likely more efficient for larger spaces so they don’t have to walk back and forth from the product to the staging area as often. This can also work for many of you, especially if you have a high volume or orders and lots of bestsellers. If they’re picking 5 orders at once, who all have the same item you can pick that item for 5 orders all at once. 

Third, is called zone picking. This is really reserved for those who have very large warehouses. Essentially, one picker is assigned to a zone. They pick everything in the order that is housed in that zone and then it gets passed on to another picker in the next zone. 

And then lastly is wave picking. This is essentially a combination of zone and batch picking. You pick a batch of orders in one zone and then it gets passed onto the next one. 

What Order Picking Style I Recommend for Small eCommerce Businesses

For 99% of you – I would recommend piece or batch picking. They are the most straightforward, easiest to implement, and are perfectly efficient for smaller warehouse spaces. This is what we did in my previous day job and it worked just fine. 

Tips + Tricks for a Smooth Order Picking Process

A couple of other tips when it comes to picking orders. If you have a high volume of orders that regularly includes multiple items, you’ll want some separate bins that you use to collect the items for each order. Think of it like a shopping basket you pick up at a store. This way you can collect those picked orders in a staging area as they wait to be packed and you don’t have to worry about things getting mixed up. 

Picking + Packing Slips for eCommerce Order Fulfillment

And before we move on, I want to talk about packing slips. Remember we talked about assigning bins to all of your products so you can easily find those items right? Well, how are you supposed to know where the product is? Where should you even store this information? Up until Shopify added metafields, you were quite limited in the amount of data you could store about a product. 

Adding Bin Locations to Your Pick Slips

In fact, back in the day before we upgraded to using Shipstation, we had a reference sheet where we would look up the product locations and handwrite them on the pick slips. Now back then we didn’t have all that many skus or that many orders, so it honestly wasn’t a big deal. So in the beginning, that might be fine. 

You do have the option of storing the location in a variant metafield – but at the time of the recording, Shopify’s order printer app or their built in packing slips apparently can’t see the metafield, so even if you add it to the template, it won’t show up on your document. 

You could try and add it to your SKU or barcode field which are both accessible on those templates, but that only works if those fields aren’t connected to anything else. 

At this point, if you don’t want to do it the manual way, your only option is a third part app, or a shipping platform like shipstation. 

at the time of this recording I don’t have any other individual app solutions, but I’m still researching so I’ll be sure to make an update if I find a good one. If you have one, please hit me up on instagram and let me know!

Add Images to Your Pickslips

And then one last note about pick slips. In many cases you can add image thumbnails to your pick slips which can be helpful for some product assortments. Shopify’s built in pick slips, which are somewhat newer – I honestly have no idea when they added those – I only discovered them recently, already have this included which is cool. If you’re using order printer you can add it to the template. It’s not necessary for everyone, but can be really helpful for verification purposes. 

How to Choose Packaging for Shipping eCommerce Orders

Should You Use Boxes or Poly Bags to Ship Your eCommerce Orders

First things first, is boxes vs. poly bags. In most cases, unless what you sell is fragile, you can get away with using poly bags instead of cardboard boxes. These are going to be less expensive, they weigh less, and they’re more forgiving in terms of the size of items that you put in them. The one trick with poly bags, is that when you close them – you’ll want to fold them over as tight as you can before you seal them – don’t leave a bunch of extra bag at the end with nothing in them since all shipping carriers use conveyer belts and they can get caught in them. 

You also have the option of bubble mailers if your product needs a little cushioning. 

If you do need to use rigid cardboard boxes, know that in most cases it’s going to be cheaper to use regular boxes where you pay based on the dimensional weight vs. uses flat rate boxes from USPS. Yes, if it fits it ships sounds easier – and it is – but it’s generally more expensive. 

How Many Different Packaging Sizes Should I Have to Ship eCommerce Orders?

The other thing to remember here, is that the fewer different sizes of packaging you have, the more efficient your packing process will be. Why do you think you get small items in way too big boxes from big retailers? Because they don’t have the time to find the “perfect size box”  That doesn’t mean you want to be wasteful like them, especially because you are charged based on the size of the box – but the point is – you don’t need 10 different box sizes. 

In fact, once your volume starts growing and you’re negotiating your own rates with the shipping carriers, fewer box sizes means you’ll be able to negotiate better rates. 

How to Ship eCommerce Orders

Okay, let’s talk about the shipping process. The actual purchasing of the labels, etc. It’s pretty self-explanatory, but there are a few key things I want to mention. 

Tools You’ll Need to Ship eCommerce Orders

Now wherever you’re shipping from you’ll obviously need a scale and you should definitely invest in a thermal label printer. My favorite is the Rollo. Thermal printers don’t use ink which will save you a ton of money overtime, and of course being able to print a sticker label is a lot better than using regular paper that you have to tape over or put into a little plastic sleeve. 

How to Get the Best Shipping Rates

You’ll also want to make sure you’re shipping through a third-party like Shopify shipping or Shipstation as you’ll get much better rates through them vs. paying retail rates directly to the carrier. 

And buying shipping labels is another reason why having fewer size boxes is better… because you need to include the size of the package to determine what you have to pay and with just a few standard sizes you can save those packages and then just have to enter the weight. 

Side note: Once you start using your own accounts vs. through the third party, you can technically be less accurate in your inputs because the carrier will just adjust the charge on their end. 

Understanding Dimensional Weight Shipping

Also, in general you should get well acquainted with dimensional shipping weights because just one inch in any direction can significantly increase your shipping costs. So maybe instead of longer, you need to go wider or deeper in the box sizes you’re buying. 

The quickest and easiest way to see dimensional weight shipping in action is with Pirate Ship. It’s free to get an account and you can get quotes on there as well. Pirate ship is best for subscription boxes where you’re sending multiple of the same exact size box, but it’s a good tool to just punch in some different box dimensions and see how that changes your rates so you can start to wrap your head around dimensional weight shipping. 

Whoa, that was a lot of information… I know. And like I said at the beginning, if you have a smaller business or product assortment, not all of this is necessary for you. Take what makes sense for your business right now, or what you have the capacity to implement right now and continue to refine the process. 

How Many Packages Can You Ship Per Day?

I also recommend that you start keeping track of how long it takes you to pick and pack orders to you can measure whether or not your changes are actually helping. The easiest way to do this, is to just take the total time you spent picking and packing orders, (from the moment you printed your pick slip to when you shipped the last order) and divide that by the number of orders you processed. That will give you an average. That’s your baseline. Then you can continue to measure and see how you’re doing. Now if it’s taking you 5 minutes on average now, you’re probably not going to get to a minute. That would be impossible – but even if you only save yourself 30 seconds or a minute per order, that’s time savings will add up. and free up your capacity to process more orders with the same amount of staff. Not too shabby, friend. 

So, I’d love to know where you’re at in your fulfillment journey? what was your biggest takeaway or aha moment from today’s episode. Please, come share it with me on Instagram or in the eCommerce Badassery FB group.

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Hey, I’m Jessica!

eCommerce + email Marketing Strategist

I support scrappy female entrepreneurs with actionable steps & strategies to grow and scale the traffic, sales & profit in their eCommerce businesses. Learning from the top experts in the digital marketing & eCommerce industry she loves working with female entrepreneurs and teaching the secrets of 7-figure eCommerce businesses.

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