Order Fulfilment in the UK Market: An In-Depth Guide

Martin Jezy24 January 2024

In the digital age, e-commerce has become an important part of global retail, with the UK leading the way. The growth of online shopping requires an efficient order fulfilment system, which is key to processing online orders and ensuring a seamless customer experience.

There are various ways to do this and the professional market is occupied by numerous order fulfilment providers who take care of the logistics of online shops. This guide looks at the intricacies of these systems and providers in the UK market, explaining their importance, different types, operating mechanisms, technology integration, challenges and best practice.

  • Understanding Order Fulfilment in the UK Market
  • Types of Order Fulfilment Services
  • The Order Fulfilment Process in the UK explained 
  • The Role of Technology in Order Fulfilment
  • Challenges in Order Fulfilment
  • Best Practices in UK's Order Fulfilment
  • How does logistics outsourcing work?
  • The biggest advantages of order fulfilment
  • 5 benefits of logistics outsourcing only experts know
  • Potential disadvantages of logistics outsourcing
  • Is logistics outsourcing and order fulfilment worthwhile?

Understanding Order Fulfilment in the UK Market

Order Fulfilment is a pivotal component in the E-Commerce landscape, especially in the dynamic and rapidly evolving UK market. This process is at the heart of operations for any online retail business, serving as the critical link between the sale of products and their delivery to customers. In the UK, where consumer expectations for speedy and efficient service are continually rising, mastering the art of order fulfilment is more than just a logistical necessity – it's a strategic imperative.

The Essence of Order Fulfilment

  1. The Core Process: Order Fulfilment encompasses everything from receiving an order to delivering it to the customer's doorstep. This includes inventory management, order processing, picking, packing, shipping, and handling returns. Each of these steps must be executed flawlessly to ensure customer satisfaction and maintain operational efficiency.
  2. Inventory Management: A key element within order fulfilment is inventory management. UK-based E-Commerce businesses must balance having sufficient stock to meet demand while avoiding excessive inventory that ties up capital. Advanced inventory systems are often employed to forecast demand accurately, a crucial aspect in a market as diverse and fluctuating as the UK.
  3. Order Processing and Accuracy: Prompt and accurate processing of orders is a cornerstone of successful fulfilment. This includes verifying product availability, confirming customer details, and ensuring timely dispatch. In the UK, where next-day delivery is increasingly becoming the norm, the speed and accuracy of this step are paramount.
  4. Picking and Packing: The physical handling of products – picking items from shelves and packing them for dispatch – needs to be swift and error-free. Automated systems and meticulous organization in warehouses can significantly enhance this process, a critical factor in a market where consumers value speed and precision.
  5. Shipping and Delivery: The final and perhaps most visible aspect of order fulfilment is shipping and delivery. In the UK, options like same-day delivery, click-and-collect, and nominated day delivery are popular, requiring businesses to have flexible and efficient shipping solutions.
  6. Handling Returns: A robust returns process is also integral to order fulfilment. The UK's E-Commerce market, known for its high return rates, demands a streamlined and customer-friendly returns policy. Efficient handling of returns not only improves customer trust but also helps in managing inventory and costs effectively.

The UK Market Context

In the context of the UK market, several additional factors play into the intricacies of order fulfilment:

  • Consumer Expectations: UK consumers are known for high expectations regarding delivery speed, convenience, and service quality. Meeting these expectations is vital for customer retention and brand loyalty.
     
  • Market Competition: The UK's E-Commerce space is highly competitive. Businesses that excel in order fulfilment often gain a significant edge over competitors, as efficient fulfilment directly impacts customer satisfaction and repeat business.
     
  • Technological Integration: The UK market is at the forefront of adopting new technologies in E-Commerce. Utilising cutting-edge technology in order fulfilment, such as AI and machine learning for inventory forecasting or drones for delivery, can provide UK businesses with a unique competitive advantage.
     
  • Sustainability Concerns: There is a growing emphasis on sustainability in the UK. Eco-friendly practices in order fulfilment, such as using biodegradable packaging and optimizing delivery routes to reduce carbon emissions, are increasingly important to UK consumers.

Types of Order Fulfilment Services

  1. Self-Fulfilment: In this model, E-Commerce businesses handle all aspects of logistics internally. This approach is often favoured by startups and smaller enterprises due to its direct control over operations.
  2. Third-Party Fulfilment (3PL): Here, the Fulfilment process is outsourced to specialized third-party providers, like us. Renowned for its scalability, this option is a go-to for businesses seeking expertise and efficiency without the burden of managing logistics infrastructure.
  3. Dropshipping: Under this model, retailers sell products that are shipped directly from the supplier or manufacturer to the customer. This approach minimizes inventory handling for the retailer.
  4. Hybrid Model: A blend of self-fulfilment and 3PL services, this model is tailored for businesses seeking a balance between direct control and outsourcing efficiency.

The Order Fulfilment Process Explained

In the UK, the Order fulfilment process is a well-orchestrated sequence of operations that begins from the moment goods are stored in a fulfilment centre and continues until products reach the end customer. This process, crucial for maintaining customer satisfaction and operational efficiency, involves several key stages:

  1. Storage of Goods in a Fulfilment Centre: The journey begins with products being securely stored in a fulfilment centre. In the UK, where space can be at a premium, especially in urban areas, the efficient use of warehouse space is vital. This involves strategic placement of goods for easy access and fast retrieval, often aided by advanced warehouse management systems.
  2. Receiving and Processing Orders: Upon receiving an online order, the fulfilment process kicks into high gear. In the UK's fast-paced E-Commerce environment, the speed and accuracy of this step are paramount. Advanced software is typically used to immediately process the order and initiate the picking process.
  3. Picking and Packing: This is where the ordered items are located and retrieved (picked) from their storage locations and then carefully packaged (packed) for shipment. Accuracy is critical in this phase to ensure the correct items are sent. In the UK market, where consumer expectations are high, many businesses are turning to automation and robotics to increase picking efficiency and reduce errors.
  4. Preparation for Shipment: Once packed, items are prepared for dispatch. This includes labelling and sorting packages based on their shipping destinations. In the UK, where diverse shipping options are available, including international shipping, this stage requires meticulous attention to ensure compliance with various shipping protocols and regulations.
  5. Dispatch and Shipping: The next step is the actual dispatch of the order. UK businesses often work with a range of couriers to offer various shipping options, such as standard, express, and next-day delivery. The choice of courier and shipping method can depend on factors like cost, destination, and customer preference.
  6. Customer Communication and Tracking: Providing customers with tracking options is standard practice in the UK. This not only enhances transparency but also builds trust. Customers appreciate being kept informed about the status of their order, including dispatch confirmation and expected delivery times.
  7. Final Delivery and Feedback: The fulfilment process culminates with the delivery of the order to the customer. In the UK, customer feedback post-delivery is becoming increasingly important. Many businesses actively seek this feedback to gauge satisfaction and identify areas for improvement.

Each of these stages is integral to the overall effectiveness of the Order fulfilment process in the UK. Given the competitive nature of the UK market, businesses must continually strive to optimise each step of this process. Embracing new technologies, enhancing operational efficiency, and maintaining high standards of customer service are essential for staying ahead in the dynamic world of UK E-Commerce.

The Role of Technology in Order Fulfilment

Technology is integral to the efficacy and efficiency of E-Commerce order fulfilment in the UK. Its application spans various aspects:

  1. Automated Warehousing: Utilisation of robotics and automated systems for improved speed and accuracy in warehousing operations.
  2. Inventory Management Software: Advanced software for real-time stock tracking, demand forecasting, and automated replenishment.
  3. Sophisticated Shipping Solutions: Integration with multiple couriers, automated label printing, and route optimisation to enhance shipping efficiency.
  4. Predictive Analytics with AI: Use of AI and machine learning for trend prediction and inventory management.
  5. Automated Order Processing: Streamlining order processing from placement to dispatch for faster turnaround.
  6. Enhanced Customer Service: AI-powered chatbots and automated order updates for improved customer communication.
  7. System Integration and Connectivity: Seamless connectivity between E-Commerce platforms, warehouse management, and shipping services.
  8. Sustainable Practices via Technology: Employing technology for greener fulfilment processes, including route optimisation and waste reduction.

In the UK, where E-Commerce is highly competitive and consumer expectations are high, leveraging these technological advancements is key to maintaining a competitive edge and ensuring customer satisfaction. We achieve this with our innovative Quivo Connector. A fulfilment software that is unparalleled on the market. Find out more!

Challenges in Order Fulfilment

Navigating the complex landscape of E-Commerce order fulfilment in the UK presents several challenges, each requiring strategic planning and adept execution. The efficacy of ecommerce fulfilment services, whether managed by a fulfilment company or through 3PL fulfilment, hinges on overcoming these obstacles. Key challenges include:

  1. Managing Large Product Volumes: E-Commerce fulfilment centres in the UK often deal with vast inventories. Maintaining accuracy and efficiency in such high-volume environments is a significant challenge, particularly for fulfilment companies striving to meet the diverse needs of online retailers.
  2. Rapid Delivery Schedules: The expectation for quick delivery, especially in a market like the UK, puts immense pressure on ecommerce order fulfilment processes. Adhering to these tight schedules while maintaining service quality is a continual challenge for fulfilment centre UK operations.
  3. Handling Seasonal Peaks: Seasonal fluctuations in demand, such as during holidays or sales events, can overwhelm even the most efficient order fulfilment company. Scaling operations to handle these peaks without compromising on delivery times or order accuracy is a crucial challenge.
  4. Optimising Shipping Costs: With rising transportation and logistics costs, keeping shipping affordable without impacting margins is a significant concern for ecommerce fulfilment services. This is especially true for 3PL companies and fulfilment companies in the UK, where shipping logistics can be complex.
  5. Adapting to Consumer Behaviour: The dynamic nature of online shopping behaviour necessitates adaptable and resilient strategies from ecommerce fulfilment services. This includes staying ahead of trends and adjusting fulfilment strategies accordingly.
  6. Utilising Third-Party Logistics (3PL) Effectively: For many E-Commerce businesses, partnering with a third party logistics company or 3PL company UK is essential. However, selecting the right 3PL fulfilment partner and maintaining a symbiotic relationship poses its own set of challenges.
  7. Integration of Technology: Integrating advanced technology into existing systems is critical for modern fulfilment centres. However, keeping up with technological advancements and ensuring seamless integration is a challenge for many order fulfilment services.
  8. Sustainability in Fulfilment: The growing demand for sustainable practices in ecommerce order fulfilment adds another layer of complexity. This includes eco-friendly packaging, reducing carbon footprint, and sustainable warehousing practices.
  9. Customer Service and Returns Management: Providing excellent customer service and managing returns efficiently are vital aspects of the fulfilment process. Order fulfilment companies must balance these aspects while managing costs and operational efficiency.
  10. International Shipping and Compliance: For UK-based ecommerce businesses, navigating the complexities of international shipping, including customs, taxes, and compliance, is a challenging aspect of global ecommerce fulfilment.

Each of these challenges requires a nuanced approach, particularly in the competitive and fast-paced UK E-Commerce market. Success in this domain depends on the ability of ecommerce fulfilment centres and order fulfilment services to be agile, innovative, and customer-focused. Continuously evolving strategies and leveraging the expertise of 3PL companies are essential to address these challenges effectively.

Best Practices in UK's Order Fulfilment

To thrive in the dynamic world of E-Commerce, adhering to best practices in fulfilment is crucial. These practices not only enhance efficiency but are also vital for customer satisfaction and retention. Key points to consider include:

  1. Investment in Advanced Technology:
    1. Utilise automated warehouse management systems to reduce errors and speed up processes.
    2. Implement cloud-based software for real-time inventory management and data analytics.
       
  2. Optimisation of Warehouse Layout:
    1. Efficiently design the warehouse layout to minimise time for picking and packing orders.
    2. Implement zoning concepts for quick access to frequently sold items.
       
  3. Choosing the Right Fulfilment Partner:
    1. Collaborate with fulfilment providers experienced in your market segment and with similar product types. 
    2. Review potential partners’ Key Performance Indicators (KPIs) for delivery time, accuracy, and customer service.
       
  4. Scalable Solutions for Growth Phases:
    1. Flexibility in warehousing capacity and logistics to handle peak times and growth.
    2. Partnerships with multiple couriers to ensure capacities and cost-effective shipping options.
       
  5. Focus on Customer Satisfaction:
    1. Ensure fast delivery times and transparent communication with customers about their order status.
    2. Introduce effective return policies and processes to bolster customer trust.
       
  6. Sustainable Practices:
    1. Implement eco-friendly packaging solutions and optimise logistics to reduce the carbon footprint.
    2. Promote sustainability through recycling programmes and the use of renewable energy in fulfilment centres.
       
  7. Data-Driven Decision Making:
    1. Use data analytics to predict sales trends and optimise inventory.
    2. Continuously monitor and analyse fulfilment metrics for ongoing process improvement.
       
  8. Personnel Management and Training:
    1. Invest in qualified personnel and regular training to maintain high performance levels.
    2. Establish a positive work culture to boost employee satisfaction and productivity.
       
  9. Adaptability to Market Changes:
    1. Flexibility and readiness to respond quickly to shifts in consumer behaviour and market dynamics.
    2. Continuously monitor the market and adjust fulfilment strategies to new trends and technologies.
       
  10. Continuous Innovation:
    1. Be open to new technologies and process innovations to gain competitive advantages.
    2. Experiment with novel approaches like AI-driven process optimisation or blockchain for more transparent supply chains.

Implementing these best practices can significantly optimise E-Commerce businesses' fulfilment processes, contributing substantially to their success. In a competitive market like the UK, this is crucial for enhancing customer satisfaction and achieving long-term success.

We at Quivo do this every day, for 1500+ customers worldwide. Find out more about our fulfilment services.

Do you operate an online shop and are you currently wondering if it would make sense to outsource your logistics management? Our fulfilment experts shed light on the advantages and disadvantages of logistics outsourcing and provide examples of the challenges that you may encounter.

What is logistics outsourcing and how does it work?

  • "Outsourcing logistics" means hiring external companies to take care of your logistics. So that you no longer have to deal with it.

    This usually happens with logistics companies named "fulfilment providers". They store your goods in so called "fulfilment centres" and connect your online shop to their system. Orders arrive automatically and are packed and shipped directly, without you having to take care of it.

All in all, you always keep track of everything that happens in the outsourcing of your logistics via logistics software.

Suddenly it has happened:  your number of daily orders is rising! And that means your sales too. Congratulations! Your small warehouse has almost become a small shipping centre. And naturally you are no longer running the shop alone but are reliant on colleagues who help you to keep your online shop up to date, process orders, pack and ship.

But the success of your online shop also means that the logistical challenges increase. So the following “growing pains” may be familiar to you:

Examples - The 5 most frequent logistics problems of online shops:

1. Storage space is becoming scarce

Your existing storage space is planned down to the last detail. Even upwards there is no more space and actually you need a separate incoming goods area. Furthermore, the packing area is also only set up for your current circumstances. What happens when your online shop is growing and more and more orders are coming in?

There are several options:

  • Renting space,
  • changing location,
  • or simply outsourcing your logistics to a so-called fulfilment provider.
    They not only outsource your warehouse, but also take care of packaging and shipping.

2. Keeping an overview is tough

New orders are constantly being received which need to be checked against stock. Yesterday’s orders still haven’t been dispatched. What's more, several returns have been lying around for days unprocessed – customers are waiting for their money. Your supplier will not be resupplying until the end of the week and the next transport needs to be organised again. A colleague needs to be there to receive and store the goods …

And all of these tasks and many more besides are your responsibility. So it’s difficult to keep an overview. What inevitably happens from a certain point?

3. Mistakes occur

Products more frequently reach your customers too late. There is transit damage or the wrong product is delivered. When your order volume grows, mistakes are made more often.

This directly affects your customers and has a huge impact on their satisfaction.

4. Packages pile up

Depending on how many products there are in your online shop, packing and shipping can quickly get out of hand. In particular if your items significantly differ in terms of type and characteristics, different packaging material is swiftly required. Logistics processes also become more complicated and require more of your team’s resources.

All of this delays the shipping of your orders, which can both negatively impact the satisfaction of your customers and result in lost sales.
 

5. More orders = more returns!

Depending on the sector, as many as half of all orders may be returned! In order to minimise the effort expended on returns handling, the returns process must be very effectively organised. Otherwise, the processing of returned goods can quickly cause significant costs.

From a certain point, it makes particular sense to consider outsourcing your logistics to fulfilment pros like us. All of your customers’ returns will be swiftly processed in accordance with your instructions without you having much to do.

The Biggest Benefits of Order Fulfilment and Logistics Outsourcing

You are probably familiar with the common advantages of outsourcing your logistics. We would also like to familiarise you with the positive aspects of logistics outsourcing, that are often not taken into consideration - or which only become apparent over the course of time.

These are the general benefits of outsourcing your logistics to an order fulfilment provider: 

  • A scalable storage system smoothly adapts to order volumes.
  • Thanks to automations the error ratio is kept to a minimum.
  • Improved efficiency in storage, swift packing and immediate shipping.
  • Your logistical effort will be hugely reduced, saving time and money.
  • You will also no longer be responsible for onerous returns processing.
  • The satisfaction of your customers increases, generally resulting in increased sales.
  • You would probably have to recruit your own logistics operative – so we save you time and reduce your administrative burden.

5 benefits of logistics outsourcing that are frequently overlooked:

  •  Resources

The most important advantage of outsourcing your logistics is that you can fully focus on your core business, without having to concern yourself with the distribution of your packages and other logistics factors.

In a nutshell: you sell, your fulfilment provider ships. It’s a textbook win-win situation.

  • Expertise

When you work with fulfilment experts, you can completely rely on their experience. Because storing, packing and shipping is their bread and butter! Thousands of times. Should logistical problems arise, they know what to do and solve them in a flash.

  • International growth

Geographical factors also play a role, as order fulfilment providers like Quivo generally have several warehouses throughout a country or even around the world. If you decide to outsource your logistics, we facilitate international shipping for you – so that your business is free to expand in every country!

We also take care of the shipping services, customs clearance and other regulations.

  • Shipping Costs

Low shipping costs are one of the keys to more growth! By outsourcing your logistics you automatically benefit from the good relationships and contracts of your logistics company. The conditions for the shipping of your packages are therefore on average lower than if you were to ship yourself.

This becomes all the more apparent the larger your order volume is.

  • Specialisation

From a certain business size logistics outsourcing is the logical next step. The larger your e-commerce business becomes, the greater the effort logistics requires, and the sooner it becomes worthwhile to outsource your logistics. It is with good reason that companies in every sector specialise in their corresponding direction. You are probably not a logistics company, with all that this involves.

So it is certainly conducive to the success of your company if you hand over all responsibility for logistics to fulfilment specialists and focus on what you do best. In this way you constantly avoid a great deal of effort and free yourself up again to drive the growth of your business.

What are potential disadvantages of logistics outsourcing?

Less control

If you hand over your logistics to someone else, you inevitably have less control over your logistics processes. This is necessary and to an extent also intentional. But it doesn’t mean that you don’t have access to your logistics or that you are completely relinquishing control. However, it will become difficult to handle single packages in the fulfilment centre completely individually as the processes are automated. But:

  • Everything happens only after consultation and in accordance with your instructions at the agreed prices.
  • A modern fulfilment provider always offers you a complete overview of your logistics with a digital logistics tool.
    This means you are always up to date and will be informed when you need to intervene.

Are you wondering what logistics software is and what you can do with our logistics tool, the Connector? You can find out more here.

The greater the effort, the greater the expense

If you outsource your logistics to a fulfilment provider, they pack your packages according to their standards. If you wish to provide your packages with an individual touch, be it with your own packaging, stickers or personalisations of any kind, this additional effort must be charged for. The price of the personalisation naturally depends on your picking requirements.

Fewer orders, larger costs

If your online shop only has a small order volume, outsourcing your logistics may not be worthwhile. The overall expenditure on automated processes would only pay off if your number of orders increases. Until then self-shipping could be a suitable solution for you.

This is another solution that we offer – discover our Send It Yourself service. Large, bulky products are also more cumbersome to handle in a fulfilment centre and could result in high costs which would not be incurred using our Send It Yourself service. It depends entirely on your products.

In this case we advise discussing the topic with our sales team.

Is order fulfilment and logistics outsourcing worthwhile?

A simple rule of thumb: If you calculate the cost of your internal logistics with self-shipping including:

  • Administration
  • Warehouse rent
  • Storage system and material costs
  • Staff costs
  • Picking
  • Shipping and returns processing
  • Customer satisfaction

… and you compare these costs with the offer of a fulfilment service provider, you should reach roughly the same figure.

From this point it’s also financially worthwhile for you to outsource your logistics! Quite aside from all of the effort and headaches, much of which disappears at a stroke!

 

How do you handle your logistics at the moment? Do you need support? Write to us with absolutely no obligation and we’ll come up with the perfect logistics solution for you. Fair, transparent and with no frills such as commitments or fixed costs.

Sources

Pictures:

Logsta / Quivo © 2023
pixabay
Canva