What is Multichannel Fulfilment?

Thursday November 25, 2021 | Posted at 3:14 pm | By Paul Dicken
November 25, 2021 @ 3:14 pm

In this post we introduce the idea of ecommerce multichannel fulfilment to complement multichannel marketing and sales.

What is the promise of multichannel, as it relates to ecommerce? The channel is the avenue your buyer engages with you on, which could be in store, on your web store, via a marketplace or retail network, or via search, social media or messaging platforms. The buyer might use more than more channel to complete one transaction, perhaps splitting the research and purchase.

So the promise of multichannel is the increased sales from being visible in more than one place, together with the increased resilience which comes from having your eggs in more than one basket. If there’s a serious problem in one of your channels, it’s recoverable. If it’s your only channel, not so much.

The other side of the equation is the productivity side. When you increase the places where you sell, you increase the amount of work you have to do for your business processes. It’s an additional place or places to list your products, keep track of stock, fulfil orders and serve your buyers. This is where technology comes in, using automation to centralise and streamline your operations so that you’re not duplicating processes for each channel. The more you can automate, the more time and resources you save, the better your productivity, the better your profitability. Sustainable, profitable growth is the name of the game.

You can of course run a multichannel sales and marketing business by working directly on the channels. This requires expertise in each of the channel interfaces and process flows, and it requires additional time. It also calls for extra work on the reporting side. You’re getting your performance data in channel silos, which is fine if you’re analysing performance separately by channel, but calls for more work if you want to consolidate your data into one view of your business performance. So when we at Volo are talking about ‘multichannel’, what we’re really talking about is ‘multichannel centralised into a single place for running your business’.

Multichannel sales and marketing is a well understood concept, but we need to extend the multichannel discussion to what happens after your buyers decide to buy, which takes us into the realm of multichannel fulfilment.

Consider all the different ways you can fulfil orders. You can fulfil orders from your own warehouse yourself. You can drop-ship. You can use Fulfilment by Amazon (FBA) or Merchant Fulfilled Prime. You can use eBay Fulfilment. You can also use another marketplace fulfiment service or indeed a third party logistics (3PL) company to contract out some or all of the warehousing, order management, shipping and customer service. You can connect to individual couriers electronically, or you can use shipping aggregators who have arrangements with multiple couriers to increase your options and flexibility.

Different fulfilment partners have different terms, prices and services to suit different parcel sizes, weights, contents, destinations, collection windows and delivery times, so that even relatively straightforward ecommerce businesses could have multiple fulfilment arrangements in place.

With this much potential complexity comes the potential to improve efficiencies through automating the fulfilment aspect. This is the promise of multichannel fulfilment, where integrations with multiple partners enables sellers to set up rules that can automatically govern what fulfilment service delivers what order the most cost-effectively, collecting at what time of day, for true round-the-clock responsiveness to buyers. After all, if most buyers are doing their buying outside of work hours, it makes sense to be able to offer the most responsive fulfilment during peak buying times.

At Volo Commerce, for example, we integrate with Amazon FBA, Amazon MFN, eBay Fulfilment, other marketplaces with their own fulfilment arms, and over 60 couriers and courier aggregators. So the channel is not just the avenue your buyers engage with you on, it’s also the avenue through which you deliver their order. The idea of being able to fulfil orders through multiple channels, to complement multichannel marketing and sales, means a better overall buying experience. It also means a more productive and profitable ecommerce business, since you’re automating your processes and streamlining your operations from one end to the other.

Let’s not forget the cost and resilience arguments as well. Automation and rules allow the system to select the most cost-effective delivery partner every time. On the resilience side, especially during times of peak buying, or during prolonged pandemic issues associated with supply chain and delivery partner workforces, being able to flick a ‘digital’ switch from one fulfilment option to the next can be invaluable.

To discuss multichannel fulfilment further, please send us a note here.

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