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Multichannel Fulfillment: All Things You Should Know

Ngoc Lee
Multichannel Fulfillment: All Things You Should Know
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Currently, customers are more eager than ever to purchase in many channels and locations, even in many countries, therefore the company must take into account all sale points to access customers easily, including multichannel eCommerce.

However, when starting to sell on multichannel, the problem of bringing a consistent customer experience, especially order fulfillment in all channels is a headache for almost all businesses.

That’s when businesses are struggling to find effective multichannel fulfillment solutions but they may not know exactly what it is, how it works, or the best way to have effective multichannel fulfillment. This article will cover all and give you a comprehensive insight. Let's scroll down right now.

What is multi-channel fulfillment?

Introduction to multi-channel fulfillment

Multichannel fulfillment is a strategy to fulfill orders from various sales channels, such as online marketplaces, e-commerce websites, retail stores, and more. It involves managing inventory and order processing across multiple channels simultaneously. This allows customers to purchase products through their preferred platform while ensuring efficient delivery and customer satisfaction.

This approach streamlines operations and expands the reach of businesses by catering to diverse customer preferences and maximizing sales opportunities across different channels.

👉 Read More: Order Fulfillment Service: Benefit, Cost, And Who Should Choose 

👉 Read More: Order Fulfillment Cost: All of the Fee You Need to Pay 

What is multi-channel fulfillment?
What is multi-channel fulfillment?

Multi-channel fulfillment VS omnichannel fulfillment

AspectMultichannel FulfillmentOmnichannel Fulfillment
DefinitionFulfilling orders from multiple sales channelsSeamlessly integrating all sales channels for a unified customer experience
FocusEfficiently managing orders across various channelsProviding a consistent customer experience across all channels
IntegrationChannels operate somewhat independentlyChannels are integrated, allowing for data sharing and synchronization
Customer ExperienceCustomers may have different experiences across channelsConsistent customer experience on channels
Inventory ManagementInventory may be managed separately for each channel or centralized.Inventory is centralized and synchronized across channels
Order FulfillmentOrders are fulfilled separately for each channelOrders can be fulfilled from any channel or location
CommunicationLimited communication and coordination between channelsSeamless communication and coordination across channels
GoalMaximizing sales by reaching customers on multiple platformsProviding a seamless and unified shopping experience
Omnichannel fulfillment vs Multichannel fulfillment
Omnichannel fulfillment vs Multichannel fulfillment

In general, multichannel fulfillment and omnichannel fulfillment offer distinct strategies for catering to customer needs across various sales channels. In multichannel fulfillment, each channel operates independently, managing its inventory and fulfillment processes separately. This strategy can lead to fragmented operations and difficulties in ensuring consistent customer experiences.

In contrast, omnichannel fulfillment seamlessly integrates all sales channels to deliver a unified shopping experience, irrespective of how customers engage with the brand. It emphasizes synchronization between online and offline channels, facilitating features like unified inventory visibility across all touchpoints.

To conclude, while multichannel fulfillment focuses on managing channels separately, omnichannel fulfillment emphasizes cohesion throughout the entire customer journey, resulting in high customer satisfaction and loyalty.

Benefits of multi-channel fulfillment to consider

Centralized inventory management

With multi-channel fulfillment services, businesses can gain access to a centralized inventory management system that offers a single platform for overseeing inventory across diverse sales channels. This consolidated approach enables e-commerce enterprises to effectively monitor stock levels, mitigating the risks of both overselling and underselling.

Streamlined order fulfillment

Multi-channel fulfillment services facilitate the streamlining of order fulfillment processes through automation. Tasks such as order picking, packing, and shipping are seamlessly automated, reducing the likelihood of errors while enhancing overall operational efficiency.

Faster shipping

By leveraging multi-channel fulfillment services, e-commerce businesses or retailers,... can expedite order shipments. These services grant access to a variety of warehouses and shipping carriers, facilitating quicker order processing and reducing shipping times. Consequently, customers benefit from more swift delivery times, enhancing their overall satisfaction with the overall purchasing experience.

Lower shipping costs

Multi-channel fulfillment services provide opportunities for e-commerce businesses to reduce shipping expenditures. Through access to discounted shipping rates and negotiations with carriers, these services enable enterprises to optimize their shipping costs, leading to significant savings over time.

Benefits of multi-channel fulfillment
Benefits of multi-channel fulfillment

Improved customer experience

Multi-channel fulfillment service plays a pivotal role in elevating the customer experience. By ensuring prompt and reliable shipping, accurate order tracking, and responsive customer support on sales channels, these services contribute to heightened customer satisfaction. Ultimately, businesses can foster stronger customer relationships and loyalty through consistently positive purchasing experiences.

How does multi-channel fulfillment work?

  • Inventory Syncing: Inventory syncing ensures that the available stock levels are consistent across all sales channels. This process involves updating inventory counts in real-time or at regular intervals to prevent overselling or stockouts.
  • Order Routing (Pick, Pack, Ship): Once the warehouse staff receives any notification of a new order on any channel, he/she will route it to the appropriate the exact location for picking, packing, and shipping. This step involves picking the items from the inventory, packing them securely, and shipping the orders to the customer's address. 
    - Pick: Items are gathered from the exact inventory shelves or storage locations based on the order details. The warehouse staff tends to use PDA scanners to know the exact place of the product.  
    - Pack: The items are brought and carefully packed on the Outbound Operation according to packaging guidelines and customer preferences, including any special instructions or gift wrapping requests. 
    - Ship: The packaged order is labeled and dispatched for delivery via the chosen shipping method, such as courier services or postal carriers at the fastest time to commit to achieving the SLA of sales channels.
  • Returns Management: Efficiently managing returned items in multichannel fulfillment involves swiftly receiving and inspecting customer orders to expedite their return to active inventory in the warehouse, while also promptly processing refunds for customers. This process is indispensable for any business, as it greatly impacts both customer satisfaction and financial performance.
Multichannel fulfillment process
Multichannel fulfillment process

How to choose a multi-channel fulfillment service

Flexibility and scalability 

A scalable fulfillment partner can swiftly adjust inventory, warehouse operations, and shipping capabilities whenever needed. Seek out a partner renowned for its adaptability, capable of managing all orders seamlessly through a unified platform and warehouse network, and poised to grow alongside you, effortlessly handling unexpected surges in demand.

Visibility and insights

A top-notch multichannel fulfillment partner is like having an invaluable asset on your team. Equipped with cutting-edge technology, they offer unparalleled visibility into order statuses, inventory levels, and even last-mile carrier tracking.

However, your fulfillment partner should also act as your guide, helping you navigate your customer landscape and fine-tune your delivery speed and cost-to-serve for maximum efficiency.

Furthermore, aiming to team up with a partner who excels at deciphering sales patterns and seasonal trends empowers you to make informed decisions about inventory management and even automate reorder points for smoother operations. With the right partner by your side, success is within reach!

Extensive Warehouse Network

Seeking a partner with an extensive warehouse network offers numerous advantages. Firstly, it enhances your reach, allowing you to store inventory closer to your customers, which can significantly reduce shipping times and costs as well as increase customer satisfaction.

Additionally, a widespread network provides flexibility and scalability, enabling you to adapt to fluctuations in demand and efficiently manage inventory levels across different regions or markets. Moreover, having multiple warehouse locations can serve as a safeguard against unforeseen disruptions, ensuring continuity in your supply chain operations.

Provide a multichannel order management system

Currently, various 3rd-party companies worldwide provide a multichannel order management system attached to fulfillment service. This software streamlines your operations by consolidating all orders from a wide range of sales channels into a single platform, simplifying order processing, and management as well as reducing the risk of errors.

This centralized system also provides real-time visibility into order statuses, inventory levels, and customer data across all channels, enabling you to make informed decisions and improve overall efficiency.

The best criteria to choose an effective multi-channel fulfillment service
The best criteria to choose an effective multi-channel fulfillment service

Best practices for a smooth multi-channel fulfillment process

Gain deeper information about the marketplaces

One crucial aspect of thriving in multi-channel fulfillment is thorough market research and understanding. While you might excel in one marketplace like Amazon, transitioning to platforms like eBay could present unique challenges.

Expanding to multiple marketplaces requires careful consideration of associated selling costs. After assessing these expenses, it's essential to adjust your pricing strategy to maintain desired profit margins.

Additionally, ensure that your products align with the requirements of each marketplace to avoid inadvertently breaching regulations and inconveniencing customers. Being mindful of marketplace compatibility safeguards against potential issues and fosters smoother transactions.

Performance Monitoring and Optimization

Regularly monitor key performance indicators (KPIs) to identify areas for optimizing your multi-channel fulfillment process continuously. These are some indicators you can monitor carefully:

  • Order Fulfillment Time: This metric tracks how long it takes for an order to go from placement to delivery. Analyzing it can reveal where there are holdups in the fulfillment process, like delays in picking, packing, or shipping. Identifying these bottlenecks lets businesses find ways to make operations smoother and delivery times shorter, which means happier customers.
  • Inventory Turnover: This measures how fast a company sells and replaces its inventory. A high turnover means good inventory management, while a low turnover might mean there's too much stock or it's not selling quickly enough. Keeping an eye on inventory turnover helps companies get stocking levels right, cut costs, and avoid running out of stock or having too much. This way, products are there when customers want them, leading to more sales and happier customers.
  • Customer Satisfaction Metrics: Tracking things like Net Promoter Score (NPS), customer reviews, or feedback surveys gives insight into how satisfied customers are overall. It helps understand what customers think about the whole process, from placing an order to getting it delivered. By spotting areas where customers aren't happy or where there are problems, businesses can make targeted improvements to make customers happier and keep them coming back.

Get a real-time WMS system

To achieve an effective multichannel fulfillment approach, brands need to grasp their current operational capabilities in real-time. Utilizing a Warehouse Management System (WMS), companies can monitor SKU inventory, order status, and fulfillment capacity, facilitating streamlined management across various sales channels.

By harnessing the capabilities of a WMS, brands can pinpoint the most efficient fulfillment location, whether it's a retail store or a distribution center, to swiftly meet customer orders and enhance satisfaction levels. Without this real-time oversight, maintaining inventory synchronization becomes challenging, increasing the risk of stockouts or mishandled customer orders.

Avoid overselling

Maximizing sales is a top priority for any business. However, it's crucial to strike a balance and avoid overextending your production capabilities.

While rapid inventory turnover is a key indicator of success, it's essential to avoid turnovers so swift that you struggle to keep pace. This situation can lead to customer dissatisfaction due to long wait times or unfulfilled orders.

Conversely, stockpiling excess inventory is neither cost-effective nor practical. It's wise to avoid purchasing more stock than necessary.

A practical approach is to ensure your inventory levels match your listing quantities across different channels. For example, if you have only 10 items available, refrain from listing 10 on every platform. Instead, distribute listings evenly among channels to maintain availability and manage customer expectations.

The last thing you want is to disappoint customers by explaining that their purchase is unavailable due to over-listing. Striking this balance ensures smooth operations and enhances customer satisfaction.

Collaborate with the reliable multichannel fulfillment partner

The success of your multichannel fulfillment strategy hinges on the capabilities of your 3PL partner. Without effective coordination across various channels, delivering a consistent customer experience becomes a significant challenge. By teaming up with an experienced multichannel fulfillment provider, your business gains access to timely insights for effortless order and inventory management.

Best practices to gain an effective multichannel fulfillment process
Best practices to gain an effective multichannel fulfillment process

EFEX - The best end-to-end multi-channel fulfillment solution

EFEX stands out as the pinnacle of multichannel fulfillment excellence combined omnichannel fulfillment flexibly, offering a seamless and integrated approach to order fulfillment. Whether you're selling on your website or online marketplaces, EFEX integrate all sales channels via a unified platform with our Order Management System to streamline your operations and elevate your customer experience.

Multichannel Order Fulfillment Process at EFEX
Multichannel Order Fulfillment Process at EFEX

What sets EFEX apart is our commitment to providing a holistic solution that covers every aspect of the fulfillment journey. From warehousing and inventory management to order processing, picking, packing, and shipping, we will be covered with precision and enthusiastic care.

With our state-of-the-art technology and robust network of warehouses and shipping carriers, we ensure that your orders are fulfilled accurately and efficiently.

EFEX is strategically located in potential markets such as Vietnam, Japan, Philippines, Indonesia, Malaysia, and the USA with the unique features in the world:

  • Commit to process up to 3000+ orders/day, including orders placed after 3 PM
  • Extensive & High-stand warehouse network throughout Asia (Vietnam, Philippines, Indonesia,...) and other potential markets such as USA, Japan,...
  • Provide Comprehensive Order Management System FREE when using Fulfillment by EFEX
  • Commit to achieving SLA (Service Level Agreement)
  • No hidden fee, no extra fee, and no deposit. Pay as you go
  • Various leading domestic and international couriers for sellers to choose

👉 Read More: Ecommerce Order Fulfillment Guide: Process And Strategy To Improve

EFEX’s Warehouse network in some potential countries
EFEX’s Warehouse network in some potential countries

The summary

Above is all the information you should know about multichannel fulfillment. We hope that this article will be helpful for your business on the way to expand and boost your business.

However, if you are researching an effective multichannel fulfillment solution, let’s consider EFEX - the end-to-end multichannel fulfillment partner of over 200+ sellers worldwide.

EFEX is always devoted to perfecting every shipment that leaves our facility. We are constantly brainstorming and innovating to bring unforgettable unboxing moments to your customers. It's our mission to make your brand exceed your customer expectations.

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Ngoc LeeNgoc Lee is an Content Creator Manager at EFEX. She wields her long-term expertise in Logistics and Supply Chain, harnessing her top-notch writing and research skills to bring incredibly valuable content. Whether you're a small startup or a well-established enterprise, Ngoc Lee is here to equip you with the essential knowledge of e-commerce, fulfillment, and all things business-related.