Fulfillment

Fulfillment (order fulfillment) is the whole path of an order from the warehouse to the buyer: receiving and storing goods, order processing, picking and packing, shipping and handling returns. You can do fulfillment yourself or hand it to an outside operator.

In plain words

Sage describes fulfillment as the process of receiving, processing and delivering orders to customers, covering everything from storing inventory to handing the goods to the buyer, including returns (Sage). There are six steps:

1. Receiving goods from the supplier and checking them.
2. Storing them so the goods are easy to find.
3. Order processing: checking the data, payment and availability.
4. Picking and packing.
5. Handing over to the carrier and tracking.
6. Receiving, checking and restocking returned goods (ibid.).

Three models

Classification per Sage. The choice depends on order volume, budget, space and growth plans.

How it works in Ukraine

Nova Poshta offers fulfillment: storing goods in its warehouses, picking, packing, labeling, delivery to buyers, tracking through a WMS and barcodes. Orders accepted before 14:00 ship the same day to Kyiv, Lviv, Odesa and Dnipro. The page lists integrations with CRMs and platforms (Nova Poshta, fulfillment).

Terms worth knowing before signing a contract (per the same page):

• deliveries to the warehouse are agreed in advance by date and time;
• before shipping, you send the list of SKUs, quantities and the waybill (TTN) number;
• every unit needs a barcode, without it labeling is added for a separate fee;
• they do not accept, among other things, food, glass and fragile goods, bulky appliances, weapons and drones, goods without packaging or a barcode;
• the fee depends on the warehouse space used, and some services (extra sorting, labeling) are charged separately; specific prices are not given on the page.

When it makes sense to hand it over

Signs that your own warehouse is holding back growth: orders ship late at peaks, picking errors eat the margin, the founder or managers spend time on packing. Signs that it's too early to hand over: few orders, a non-standard range, goods that don't fit the operator's restrictions.

Comparison example (illustrative numbers)

A store ships 300 orders a month. Own warehouse: rent and a storekeeper's salary, say 35,000 UAH a month, which is about 117 UAH per order. The operator charges for space and operations; if that comes to less than 117 UAH per order for your range, handing over pays off. Compare on your own figures and put the result into your unit economics.

What to watch for

• Stock records: discrepancies between the site and the operator's warehouse lead to selling goods that aren't there.
• Returns: agree who receives them, checks them and puts them back on sale (returns).
• Delivery to the customer and the last mile are part of the order cost.
• Cash on delivery and refused parcels remain your risk, even if the warehouse is someone else's.

FAQ

What is fulfillment in plain words? Everything that happens to an order after payment: picking, packing, shipping and returns.

How is fulfillment different from dropshipping? With fulfillment, your goods sit in a warehouse (yours or the operator's). With dropshipping, the supplier ships the goods.

How much does fulfillment cost? It depends on the operator and volumes. At Nova Poshta the fee depends on the space used, and extra services are charged separately.

Can any product go to fulfillment? No, operators have restrictions: for example, Nova Poshta does not accept food, glass or bulky goods.

Related terms

• E-commerce
• Returning goods to an online store
• Last mile
• Cash on delivery and unclaimed parcels
• Unit economics of an online store

Sources

• Sage, What is the order fulfillment process? — sage.com/en-ca/blog/what-is-order-fulfillment
• Нова пошта, Послуги фулфілменту — novaposhta.ua/for-business/fulfillment