13 eCommerce Fulfillment Terms You Need To Know!

13 eCommerce Fulfillment Terms You Need To Know!

eCommerce Fulfillment Terms

The e-commerce landscape is flooded with acronyms and buzzwords. Few of them enough to scare you at first. If you’re a newcomer in this business, you might get perplexed trying to understand the terminologies used in this business. To save up the time which you would use to look up the definition, are compiled and given below. Continue reading to find basic eCommerce fulfillment terms and a glossary prepared for you.

eCommerce fulfillment terms

The process of e-commerce fulfillment is a task in itself. If you’re trying to understand the operations involved in the fulfillment procedure. You need to understand the true meaning of these little acronyms. 

Third-Party Logistics or 3PL in eCommerce

3pl is a service that allows you to outsource a company to carry out operational logistics. A 3pl takes care of everything right from inventory management to delivery. They know their job well. Hence, you have the time to focus on the remaining parts of your business. They provide several services pertaining to the logistics of a supply chain. You can outsource either all or part of your logistic processes.

Fulfillment Centre

The fulfillment center is a physical location. Wherein orders are picked, packed, processed, and shipped. It is a hub where order fulfillment activities take place. Vendors can receive and review goods before they ship them out with the help of a fulfillment center.

Distribution Center

A distribution center, also known as DC. Generally used to store products that a company needs to ship. A distribution center is smaller than a company’s warehouse. Furthermore, used as a receipt, temporary storage, and redistribution of goods according to customer orders. Also called to be a branch warehouse.

Dropshipping in eCommerce

A fulfillment model where products reach directly to customers through manufacturers or wholesalers. In this method, the store does not keep products in stock. Instead, it purchases items from a third party and ships them directly to the customer. The seller does not handle the product directly.

Inventory Management

Inventory management is the process of ordering, keeping in store, tracking, and using the company’s inventory. It involves operations like management of raw materials, components, and finished products as well as warehousing and processing. Firms that provide financial services do not have physical inventory.

Self-fulfillment in eCommerce

In this model, you manage all fulfillment operations starting from storage, inventory, order management, packaging, shipping, and returns. This means that you need to have a space to carry out all the fulfillment operations. This happens without any help from third-party logistics. It’s common among businesses that have just started.

Barcode

A barcode, consisting of bars and spaces, is a machine-readable representation of characters and numerals. The data in a barcode gives us information related to the purchase order.  

A shipping label can identify the order and give us access to information like the customer’s name, delivery address, mode of shipping, etc.

SKU

SKU is the full form for the stock-keeping unit. Used by retailers to identify and track their inventory or stock. It is a unique code consisting of letters and several numbers that identify the characteristics of each product. SHUs are alphanumeric that provide information like price, color, style, brand size, etc.

WMS

WMS is short for warehouse management systems that could provide simple functions mostly related to storage location information. The functionality of WMS ranges from basic practices such as picking, packaging, and shipping to sophisticated programs such as advanced interactions with material handling devices and yard management. The system can fulfill orders more rapidly and trace orders instantly.

SLA

A service-level agreement or an SLA defines the level of service that a customer expects from a supplier. Laying out all of the metrics by which the extended service measured, remedies and penalties too. An SLA is a contract provided by the fulfillment service provider. They tell business owners how to handle incoming orders, the shipment of items, and their role in overall business arrangements.

FIFO

Fifo or first-in-first-out is a type of warehousing method where the first items that arrive at a warehouse are also the first ones to be shipped out. Unlike quantum physics, this method is quite easy to understand. It’s known to be asset management and the valuation method.

Storage Fees

Very true to its name, storage fees are nothing but the fee charged by a store inventory owner or a fulfillment center. It is the amount charged to store goods in transit at the point of origin, destinations, and ports during the transport.

Cross Docking

Cross-docking is referred to as a logistics procedure. Wherein the products from the manufacturing plant distributed straight to a customer or a retail chain. Cross-docking usually consists of two trucks and dock doors on the inbound and outbound side. The term “cross-docking” called the process of receiving products through an inbound dock. Which then transferred to an outbound transportation dock.

We sincerely hope that this glossary of eCommerce fulfillment terms will help you understand the basic language used in the process of order fulfillment.

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