While it is undoubtedly the least glamourous and exciting part of e-commerce, fulfillment plays a critical role in online selling. It encompasses all activities related to completing customer orders, including taking orders, procession, packing, delivery and also the processing of any customer returns. Issues surrounding fulfillment of e-commerce transactions are very similar to that of mail/phone-order catalogues. The burden of delivery is on the merchant, as goods cannot be simply shipped off in bulk to distribution channels – they must be individually packed and delivered to customers. (School of International Business, 2004, p.91)
The fulfillment function can be very complicated, depending upon the nature of product to be delivered. Physical products (e.g. from Amazon.com - books, videos, CD's, etc) are much harder to organize than digital products such as software programs, Mp3’s, or electronic documents (such as e-books). The cost of shipping physical items (which is what most e-tailing companies still do) can be extremely high, and often results in the business losing money and fulfillment proving to be the biggest challenge of trading online. This is often why shipping and handling costs can seem ridiculously high; however the case is usually that the cost is only just covered.
For many e-commerce businesses, fulfillment also entails a ‘customer demand for transparency’. (School of International Business, 2004, p.92) This means that customers want (and now expect) details of their orders to be available at all times. This not only includes product availability and shipping status (shipped or still in processing) but also external order status and delivery tracking, and most postal services provide numbers for customers to check their package’s journey online.
The key to successful fulfillment is good management. This means the company must be able to effectively manage the logistics of accommodating so many activities and parties simultaneously.
Queensland University of Technology, School of International Business (2004) Introduction to e-business Australia: McGrawHill & QUT Custom Publication, ISBN 7777772570.
Catherine Cherry 13:18, 3 Sep 2004 (EST)
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