In the world of ecommerce and supply chain operations, efficient product fulfilment services play a vital role in ensuring smooth order processing, inventory handling, and timely deliveries. Whether you’re running an online store or managing high-volume B2B orders, outsourcing fulfilment operations can help streamline processes and improve customer satisfaction.
This guide covers everything you need to know about product fulfilment, including key concepts, service types, logistics, and answers to important questions such as:
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What is the difference between inventory and fulfilment?
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What is the meaning of service fulfilment?
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How to calculate cost per order?
What Are Product Fulfilment Services?
Product fulfilment services refer to the complete process involved in managing orders from storing inventory and picking items to packing, shipping, and handling returns. These services are often provided by third-party fulfilment companies that specialise in warehousing and logistics.
Instead of handling fulfilment in-house, many companies outsource to expert providers who manage the day-to-day operations of order fulfilment.
Core Fulfilment Services Explained
Here’s a breakdown of the most commonly used fulfilment-related services:
1. Ecommerce Fulfilment
This involves integrating your online store with a fulfilment centre, enabling automatic order processing. Key features include:
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Real-time inventory syncing
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Order picking and packing
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Courier integration
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Returns management
This model is especially useful for businesses selling on platforms like Shopify, WooCommerce, and Amazon.
2. Third-Party Logistics (3PL) Warehouses
A 3PL warehouse offers storage, inventory management, and distribution services for companies looking to scale without building their own infrastructure. Services typically include:
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Bulk storage
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Freight coordination
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Same-day and next-day delivery
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Reporting and analytics
3PL partners can support complex supply chains and offer custom solutions tailored to industry needs.
3. Pallet Storage Solutions
For products shipped in bulk or larger items, pallet storage provides a structured and secure storage method. Fulfilment centres often offer:
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Short-term or long-term racking
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Pick-from-pallet options
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Temperature-controlled environments
This service is ideal for high-volume stock keeping and wholesale distribution.
4. Integrated Logistics Services
Modern fulfilment providers offer full-service logistics, covering:
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Inventory receiving and inspection
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Multi-channel order integration
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Courier label printing and dispatch
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Shipment tracking and reporting
End-to-end logistics support enables greater visibility and control across the entire supply chain.
What Is the Difference Between Inventory and Fulfilment?
Understanding the distinction between inventory and fulfilment is crucial for efficient supply chain management:
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Inventory refers to the goods a company owns and stores, whether in raw form or as finished products. It includes stock levels, storage locations, and stock valuation.
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Fulfilment, on the other hand, focuses on the movement of those goods from picking and packing to delivering customer orders.
Example:
You may hold thousands of items in stock (inventory), but fulfilment starts only when an order is processed, packed, and shipped to the customer.
What Is the Meaning of Service Fulfilment?
Service fulfilment describes the complete process of delivering a product or service after a customer places an order. In a fulfilment context, this means:
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Ensuring accurate order dispatch
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Using proper packaging materials
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Meeting delivery expectations
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Offering seamless return solutions
The goal is to satisfy the buyer by delivering the right product, at the right time, in the right condition.
How to Calculate Cost per Order (CPO)
Cost per order (CPO) is an essential metric to track fulfilment performance and profitability.
Formula:
Costs May Include:
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Storage (per pallet or cubic metre)
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Picking and packing fees
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Packaging materials
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Courier or shipping charges
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Software or integration fees
Example Calculation:
If the monthly fulfilment cost is £2,500 and you shipped 500 orders:CPO = £2,500 ÷ 500 = £5 per order
Knowing your CPO helps in pricing strategy, profitability planning, and comparing fulfilment partners.
Advantages of Outsourced Fulfilment
Here are the key reasons companies choose to outsource their fulfilment operations:
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Improved Efficiency: Automation, fast shipping, and expert handling streamline operations.
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Cost Savings: Reduces the need for renting warehouse space and hiring internal staff.
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Scalability: Easy to manage growth during seasonal peaks or business expansion.
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Focus on Core Activities: Delegating fulfilment allows more time for product development, marketing, and customer service.
Choosing a Reliable Fulfilment Provider
When evaluating fulfilment partners, it’s important to consider the following factors:
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Location of fulfilment centres: Close proximity to major delivery routes enables faster shipping.
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Integration capability: Should support popular ecommerce platforms and real-time stock updates.
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Customisation: Availability of branded packaging, kitting, or bundling services.
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Transparent pricing: All charges should be clearly listed with no hidden fees.
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Industry experience: Look for providers with a track record in your product category.
Conclusion
Product fulfilment services are the backbone of modern ecommerce and retail logistics. From pallet storage to 3PL warehousing and logistics integration, choosing the right fulfilment strategy can make a huge difference in operational efficiency and customer satisfaction.
By understanding the difference between inventory and fulfilment, grasping the concept of service fulfilment, and knowing how to calculate cost per order, businesses can make informed decisions that support long-term growth and profitability.
