Understanding the Common Ecommerce Fulfilment Terminology

Ecommerce fulfilment services are the building blocks for any eCommerce business that helps it to catapult order delivery to different parts of the world. However, the vast jargon of the eCommerce fulfilment industry can sometimes be confusing. With so many acronyms, terms, and definitions, it can be challenging to navigate the eCommerce fulfilment world without help. To ensure you are familiar with the latest industry jargon, here’s a helpful overview of some of the most common eCommerce fulfilment terms. 

ECommerce Fulfilment Services

Fulfilment services are the complete package for storing, packing, and shipping orders for your business. When you partner with eCommerce fulfilment services in Australia, they take care of all aspects of order management for you – from inventory storage to customer service inquiries. By outsourcing your order fulfilment process to an experienced partner, you’ll have peace of mind knowing that orders are being taken care of quickly and efficiently. 

Pick and Pack

Pick and pack involves picking the correct product from the shelf and transferring it directly into the shipping box. It reduces the fulfilment time and delivers products quickly to the customers.

Fulfilment Centre (FC)

The fulfilment centre is the hub for order fulfilment and inventory management of an eCommerce business. Everything from receiving inventory to distributing goods to final consumers happens at the fulfilment centre. The companies’ stock is stored, managed, picked up, packed, and eventually dispatched to their consumers the same day or the next day through the fulfilment centres throughout the operational area.

Distribution Centre (DC)

A distribution centre is where commodities are received, temporarily stored, and then redistributed under customer requests. A distribution centre focuses on a faster turnover of items; as a result, it retains inventory for a shorter period than a warehouse, which stores inventory or goods for more extended periods.

Service Level Agreement (SLA)

A service level agreement, often known as an SLA, is a contract that the fulfilment service provider gives to the business owner outlining how they would manage incoming orders, distribute their products, and carry out their part in the entire business arrangement. SLAs include information on order correctness, the volume of orders shipped daily, inventory shortages, and other things. These reports are an essential component of order management since they show precisely how the fulfilment company is performing in terms of expectations vs deliveries.

Inventory

All the raw materials, components, and finished goods a business keeps on hand for future sales are inventory or stock.

Inventory Management System (IMS) 

An Inventory Management System (IMS) is a software program used by apparel fulfilment and other fulfilment services to keep track of their stock levels and manage inventory more effectively. An IMS and inventory management software allows businesses to monitor stock levels easily, set reorder points when supplies run low, generate reports about inventory trends over time, and more.

SKU

The SKU, or Stock Keeping Unit, is a unique number connected to a particular inventory in an online business. It is useful internally to manage the stock of the company. SKUs are alphanumeric designations that list the key characteristics of a product, including its cost, colour, style, and brand size.

Warehouse Kitting

Kitting is the process of combining various yet connected SKUs to make a completely new SKU. Instead of choosing and packing each item separately, warehouse kitting entails putting together single products into kits that are immediately ready to dispatch. For instance, in the ecommerce apparel fulfilment industry, if a customer purchases shoes, they may also order a pair of socks. In this instance, the supplier will combine these into a single kit and send it to the end user.

Last-Mile Delivery

The last mile is the final lapse of the order’s journey to the customer. Since it delivers the order to its destination, it is the most crucial step in the delivery process; supply chains must try to make it swift and effective.

Barcode

Typically, barcodes are a machine-readable type of data representation that includes details to identify objects more quickly. The information contained in a barcode relates to the purchase order. A shipping barcode locates information such as the customer name, delivery address, products in the box, shipment method etc., and identifies the order. 

Order Fulfilment Time (OFT)

Order Fulfillment Time (OFT) is a metric used by businesses in the eCommerce industry to measure how long it takes to receive payment and ship out goods or services after order placement. This metric is important because it helps businesses identify potential issues in their supply chain or delivery process that could cause delays in fulfilling orders and negatively impact customer satisfaction. By measuring OFT regularly, companies can ensure that they are consistently meeting their customers’ expectations regarding delivery times. 

In Conclusion

We hope the article familiarises you with some common eCommerce fulfilment terminology. Knowing these terms will help you understand how different aspects of the eCommerce industry work together and allow you to make better decisions when choosing a provider or to assess performance metrics associated with your business’s current operations. As always, we recommend researching before committing to any particular service provider or solution so that you choose what’s best for your business’s needs.

Efficient Services Group is delivering top-notch eCommerce fulfilment services in Australia. We indulge only in ethical practices to pick, pack and dispatch your orders at the earliest. We have ample experience in order fulfilment and offer a guaranteed same-day dispatch policy so that the orders reach your customers at the earliest and in the best possible package.