Micro-fulfillment is a fulfillment strategy that aims to utilize small and highly automated fulfillment centers at locations closer to the end customers to expedite order delivery and decrease shipping costs. It’s a retail strategy employed by retailers to manage inventory and streamline the order fulfillment process.

On top of optimizing order processing, micro-fulfillment also facilitates various delivery and fulfillment options like curbside pickup, click and collect, or home delivery. More and more eCommerce businesses leverage this strategy to offer their customers rapid, accurate, and diversified shopping experiences without substantial cost increases.

Many giant retailers use micro fulfillment as a critical strategy to expand their supply chain, reach more customers, and optimize the fulfillment process, thus boosting sales. Some well-known brands that have already deployed this strategy include Walmart, Kroger, and Jewel-Osco.

Micro warehousing refers to a warehouse management strategy that harnesses a system of small storage facilities rather than depending on one major distribution center to fulfill orders. Micro-warehousing means moving the inventory closer to the end consumers to cut costs and delivery times. It’s a core component and basis for any kind of micro-fulfillment strategy.

Retailers often place micro-warehouses in or near the densely populated areas where the majority of their customers reside. In other words, business owners use micro-warehousing to stock inventory near the customers who are likely to purchase it. Therefore, this strategy helps improve last-mile fulfillment while meeting local demands.

A micro fulfillment center is a small-scale storage and fulfillment facility that stores inventory close to consumers to accelerate order fulfillment speed. To help increase operational efficiency, these centers are often equipped with automated software and other micro fulfillment technologies.

Micro-fulfillment centers are often smaller than traditional warehouses and are used to store stocks for a short time before delivering the products to customers. Contrary to the main warehouses located on the outskirts of cities, micro-fulfillment centers are often positioned in urban areas where most consumers concentrate. Thanks to that, retailers can offer more fulfillment options to their customers, including curbside pickup or buying online, picking up in store.

Businesses can establish standalone micro-fulfillment centers or build them into their existing brick-and-mortar stores to serve a specific geographical radius. MFCs can also be set up at the back of a supermarket, garage, basement, or any other convenient space provided by a 3rd-party.

Below is the working process of a micro fulfillment center.

• Receive and store inventory: MFCs receive products from main warehouses or suppliers, and then check to see whether there are any faulty, wrong, or missing products. The products are then stored appropriately and tracked with SKU numbers.
• Pick and pack: After receiving orders from customers, MFCs pick products, then pack and label them to prepare for shipping. In this step, the centers should pick orders as fast and accurately as possible, and use proper packaging materials to avoid damage.
• Ship orders: The order delivery is arranged and assigned to shipping carriers to transport to customers.
• Handle returns and exchanges: MFCs examine the returned items and record all the damages, then handle returns and exchanges based on retailers’ return policy.

What distinguishes micro-fulfillment centers from large ones is mainly their sizes.

Micro fulfillment centers

Typical micro-fulfillment centers are from 3,000 – 10,000 square feet. They can store up to 15,000 different items. As MFCs are often placed within or close to a retail store for picking up, packing, and shipping orders rapidly, they normally can only store about 24–48 hours’ worth of inventory.
For instance, Walmart has built a 9,000-square-foot micro-fulfillment center equipped with Alphabot automation technology within a Walmart Supercenter in New Hampshire and put it into operation in 2020.

Large fulfillment centers

On the other hand, large fulfillment centers can be from 30,000 square feet or more depending on business sizes. Large fulfillment centers require vast space to store massive amounts of inventory in the long term, so they are often located far away from urban areas, which causes the delivery times and costs to go up. Thus, if operating a large fulfillment center, you should pay attention to the proper warehouse design and fulfillment software to route the optimal picking path.
For example, Amazon’s fulfillment center in Tennessee is about 3.6 million square feet and Nike’s is 2.8 million square feet.

eCommerce business owners can reap enormous benefits from incorporating micro-fulfillment into their retail strategy. Let’s take a look at some key advantages below.

Accelerate order fulfillment

Most micro fulfillment centers use automated software and AI technologies to speed up order processing. For example, some software automatically generates a picking list for faster fulfillment. With the support of these modern micro-fulfillment systems, retailers can receive and fulfill orders rapidly with fewer human errors and more fulfillment efficiency, thus reducing the number of wrong orders and returns. The small-scale warehouses also ease the process of picking, packing, and shipping items, thereby making last-mile delivery cheaper and quicker.

Improve customer experience

Storing and fulfilling orders from locations near the end consumers enables sellers to quicken order delivery and process exchanges and refunds faster, thus meeting customers’ expectations and improving their loyalty. Besides, micro-fulfillment allows retailers to provide a wider range of fulfillment options for customers, including click and collect and local pickups, which also helps enhance customer service and customer retention.

Reduce costs

The utilization of automation in many micro fulfillment centers reduces the amount of manual labor in need, thus saving on labor costs. For example, automation technologies can decrease order fulfillment costs from $10 – $15 to $3 – $6 per order as compared to manual fulfillment. Besides, shipping orders from closer locations to customers also lower transportation costs. With micro-fulfillment, retailers can minimize order errors, thus lessening additional costs to fix mistakes or refund customers.

Enhance inventory management

Micro-fulfillment facilitates effective inventory management. Retailers need to apply advanced micro fulfillment technology to get accurate inventory visibility in real time across locations. With that live view, merchants can effectively route the order fulfillment process and make the right decisions on reordering to avoid stockouts or overstocking.

Observing order history and patterns allows retailers to forecast demands for products at the local level. On that basis, sellers can optimize inventory allocation by storing the products in high demand for each local market.

Flexible to scale

Building and operating large fulfillment centers or warehouses often costs a bundle and consumes much time. In contrast, establishing and adding micro-fulfillment centers to your current supply chain is more affordable and faster. Therefore, retailers can handle high-volume fulfillment quickly where customer demand rises. What’s more, businesses can also easily scale their operations without immense investments as there’s no need to hire large space for fulfillment.

Clearly, great challenges often accompany huge advantages. To effectively execute micro-fulfillment strategies, retailers should be aware of the following challenges to consider carefully before deployment.

1. Unpredictable customer demand

Consumer demands don’t stay steady all the time. In contrast, the demands keep changing continuously and can be affected by lots of unprecedented factors like natural phenomena. Besides, the limited storage capacity of micro fulfillment centers makes it hard for retailers to adjust to abrupt demand changes caused by any other social or economic trends.

For example, a storm or tornado can cause a surge in demand for specific types of products and disrupt fulfillment operations in certain areas, thus leading to inventory imbalance of some MFCs.

2. Frequent stock replenishment

Due to small space for storage, a micro fulfillment center can only hold a certain amount of stock in the short term. Therefore, these centers need to be replenished constantly. To avoid stockouts, retailers have to accurately manage their inventory in real time to make timely replenishment decisions.

In addition, how much inventory to place in each center is also challenging. Sellers should consider carefully to balance the inventory among these facilities so there are enough stocks to meet the demands of each location.

3. Ineffective micro-fulfillment systems

Using ineffective systems to operate and manage order fulfillment might cause great damage. An outdated system that can’t integrate with other retail systems such as ERP or POS makes you lose track of the inventory levels and any order changes. Not grasping inventory and order updates might result in inaccurate deliveries, underselling, or overselling, which may discourage customers from more repeat purchases.

As a result, finding a suitable system that integrates seamlessly with other software and apps helps you deal with complex fulfillment operations. A good micro fulfillment solution can inform you of the stock replenishments and generate demand forecasts to decide which products to stock in specific locations.

4. Unsuitable for all product types

The limited storage space of micro-fulfillment centers also restricts the type of products they can store. Intended for short-term inventory storage, these centers are not an appropriate place to hold large or bulky items that might occupy a large area. Besides, these products are not purchased frequently and are difficult to stock. Micro-fulfillment centers are more suitable for seasonal or perishable products like groceries or clothes.

Consequently, retailers must consider which types of products they should store and fulfill in micro-fulfillment centers.

Micro-fulfillment is beneficial to both small, medium, and large businesses. Retailers can choose whether to outsource the fulfillment to a 3rd-party logistics company or fulfill orders in house. To help those who want to do self-fulfillment, Magestore provides a range of effective fulfillment solutions.

Capturing the needs of small and medium businesses, Magestore offers Magestore Order Fulfillment software to speed up order processing and fulfillment. The software lets users manage cross-channel orders and update inventory status in real time. Moreover, you can optimize the fulfillment process and manage the order fulfillment from a central place.

Magestore also enables retailers to manage inventory effectively for order fulfillment with the retail management PWA. The software supports syncing inventory between retail systems like POS or eCommerce websites, and marketplaces like Amazon, eBay, Etsy, tracking stock levels across locations, informing stock replenishments, and forecasting demands. Magestore’s solution gives you complete inventory control, thus contributing to accurate and fast order fulfillment.

You can also use Magestore POS at your physical stores to give your customers more fulfillment options with store pickup, buying in store, and shipping to home, or buying online and paying in-store.

If you’re confused about what choice to make, talk to our experts now to find out what best suits your business needs.

What companies are using micro fulfillment centers?

Some big brands in retail have deployed micro-fulfillment centers for faster order fulfillment, including Kroger, Gopuff, Walmart, Walgreens, and Safeway.

What is the difference between a micro fulfillment center and a dark store?

Micro-fulfillment centers are small spaces within existing stores or an independent space near the store to handle a high order volume quickly without impacting in-store operations. Meanwhile, dark stores are retail stores that are set apart to fulfill online orders.

How much does a micro-fulfillment center cost?

Retailers need to make an upfront investment to set up a micro-fulfillment center. The costs can vary depending on the scale, location, and site conditions of the center. However, after years of operations, the benefits retailers get can offset the initial expenses.

eCommerce fulfillment services refer to a type of service offered by a 3rd-party company to fulfill online orders on behalf of an eCommerce merchant. The top eCommerce fulfillment companies help online retailers manage the entire order processing and supply chain. It often encompasses managing inventory, picking and packing the items, shipping them to the end customers, and handling returns.

Fulfillment by Amazon, Shopify Fulfillment Network, ShipMonk are some of the popular service providers. And we’ll talk about them in detail in the following part.

An online business owner can choose whether to fulfill eCommerce orders in-house or hand over the fulfillment to a 3rd-party service provider. Each fulfillment strategy can yield distinct benefits that suit different business requirements.

Self-fulfillment utilizes in-house facilities, labor, and technology. It’s easy to implement and cost-saving as retailers process orders themselves. In-house eCommerce fulfillment gives sellers complete control over the fulfillment process, packages, branding, and customer services.

Forwarding fulfillment to a 3rd-party logistics company enables online retailers to harness their facilities, technology, and expertise to fulfill orders. These fulfillment services for eCommerce reduce operating costs, accelerate delivery speed, simplify retail operations, and scale up with the business growth.

Opting for an appropriate fulfillment solution requires the assessment of certain aspects of your business. Take into consideration the following factors to decide whether you should fulfill orders yourself using self-fulfillment software or cooperate with a fulfillment service provider.

Order volume

The number of orders plays a key role in choosing your go-to fulfillment solution. Startups or businesses with low order volumes can fulfill orders in-house to minimize additional costs.

However, when sales increase to the points that exceed your ability to handle orders internally, you can risk processing orders inaccurately and slowly. Therefore, businesses with rapidly growing sales or large order quantities might consider employing one of the best eCommerce fulfillment services for efficiency, accuracy, and cost-effectiveness.

Customer locations

Considering where the majority of your customers place orders is worthwhile. If your customer base is in areas far away from your business facilities, using 3rd-party fulfillment services will help reach your customers quickly without huge costs.

The network of eCommerce fulfillment centers and warehouses enables the service providers to transport products from the locations closest to the customers. In this way, you can shorten the delivery time while keeping the costs down, thus satisfying customers.

Product types

The type of support you require from an eCommerce fulfillment solution provider depends on what kind of product you sell. Some products need simple packaging while others may demand more special handling techniques and storage. Besides, the product characteristics also affect shipping costs.

For example, if you’re selling heavy and bulky items, switching to a fulfillment service may be beneficial. The fulfillment company can help you handle the item properly with secure packaging materials and lower shipping costs as they can get discounts for bulk shipping.

Sales channels

Selling on many channels like eCommerce platforms, websites, or social media has become a norm to attract more customers and boost sales. If this is your case, you should consider choosing a fulfillment service provider to help you fulfill your omnichannel orders.

Oftentimes, these eCommerce order fulfillment services can assist you in meeting different expectations and requirements about delivery speed, cost, and more to satisfy customers. Otherwise, if your revenue comes from one channel only, it’ll be enough to fulfill orders yourself with the support from suitable software.

If you choose in-house fulfillment after reviewing your business context, you’ll need workable software to automate and simplify the process. We’ve singled out the best solutions for self-fulfillment by consulting our experts, looking into the key features, and customer reviews about each solution.

1. Magestore Order Fulfillment: Best for Magento small and medium omnichannel merchants

As one of the best eCommerce fulfillment solutions for Magento (now Adobe Commerce), the Magestore Order Fulfillment module facilitates cross-channel order management and efficient order processing. The software allows sellers to deliver fulfillment requests to different warehouses when there’s a sale and recommends the best warehouses to fulfill the orders. With Magestore Order Management, you can also supervise the full order fulfillment process from a single place.

Magestore’s eCommerce order fulfillment software speeds up your fulfillment work with 2-step barcode scanning which ensures you pick the correct items quickly. Besides, you can assign different tasks of the fulfillment process to different employees to reduce processing time and increase accuracy.

Highlight features

• Automate order processing with 5 steps: Verify, Fulfill, Pick, Pack, and Deliver
• Manage orders across online and offline channels and update inventory status in real time
• Manage order fulfillment from a centralized system
• Provide a quick view of sales orders with 6 types of visual charts: Orders by status, Orders by day, Orders by carriers, Verified orders by day, Picked request by day, and Packed request by day
• Check inventory from different warehouses to route order fulfillment efficiently
• Support 2-step barcode scanning to ensure order accuracy and speed
• Assist order fulfillment from multiple warehouses
• Manage and locate orders by batch, status, and customized tags
• Optimize the fulfillment process with 4 insightful reports, including Fulfillment by staff, Fulfillment by staff (Daily), Fulfillment by warehouse, Fulfillment by warehouse (Daily)
• Allow assigning each order processing step to each staff for easier tracking staff performance
• Handle product returns and exchanges and allow customers to oversee the whole process
• Seamlessly work with various shipping carriers to provide more shipping choices for your customers

Pricing

Magestore Order Management software comes with custom pricing. Contact the Magestore team to get a quote based on your business needs and states.

2. Zoho Inventory: Best for small online businesses

Zoho Inventory comes with many features that help business owners optimize their eCommerce order fulfillment. This eCommerce fulfillment system supports creating packing slips and shipping labels with ease, at the same time finding real-time shipping costs for each shipment. What’s more, sellers can also consolidate all unfulfilled orders from the same customers into a package for convenient shipping.

With Zoho Inventory, online merchants can track packages after shipping and keep customers updated. There’s also no difficulty in watching the stock quantities across sales channels, setting reorder levels, reminders, and preferred vendors to timely re-stock.

Highlight features

• Manage multichannel orders in a single platform
• Allow users to easily and quickly create packing slips and shipping labels
• Find real-time shipping expenses for each package
• Track packages after shipping and deliver real-time updates to customers
• Support dropshipping in case of stockouts
• Enable merging all unfulfilled orders of a customer for single shipping
• Automatically keep inventory levels consistent through sales channels
• Track products through different stages with serial numbers
• Enable setting re-order levels, notifying, and choosing vendors for replenishment
• Support bundling items to sell as a single unit
• Keep close tabs on batches and expiration dates of products
• Integrate with many shipping carriers

Pricing

The prices of Zoho Inventory are charged per organization per month with 4 following plans.

3. Linnworks: Best for small and medium online businesses

Linnworks removes much of your manual work by automating many order eCommerce fulfillment processes. Besides centralized management of orders, Linnworks automatically routes orders for efficient fulfillment and compares shipping carriers to define the cheapest services for orders.

This eCommerce fulfillment software keeps you informed of stock levels across sales channels, warehouses, and bin locations in real time. If you’re using fulfillment services, Linnworks enables you to track inventory at their fulfillment centers for timely stock replenishment.

Highlight features

• Manage inventory from bin locations and warehouses in real time
• Manage orders from numerous sales channels in a single place
• Allow creating and editing any orders on the same page
• Attach tags to orders for easy and fast identification
• Automatically allocate orders to the right batches for shipping
• Support tracking inventory levels at 3PL fulfillment centers and demand forecast
• Use rules to route orders to optimize the order fulfillment process
• Compare shipping costs among carriers to find the cheapest service for orders
• Generate complete reports on key business metrics

Pricing

Linnworks hasn’t published the prices yet.

4. ShipBob: Best for startups or small businesses

ShipBob, a global eCommerce fulfillment platform, offers comprehensive fulfillment software for online merchants that perform in-house fulfillment or use the services of a 3rd-party service provider. The software enables users to set up reorder points and distribute the inventory between ShipBob’s fulfillment centers based on historical data. With ShipBob’s software, you can automate the returns process and keep track of all return information.

The software can integrate with different eCommerce platforms to streamline the order fulfillment process. The detailed reports delivered by the software, which provide pivotal data like sales on each channel, expenses, and demand forecast, give you insights to make informed decisions for business improvements.

Highlight features

• Track inventory levels, and notify when the stocks run low for replenishment
• Support stock allocation between warehouses based on historical order data
• Oversee orders from purchasing to delivery
• Filter orders using the tracking number, order type, order date, and more
• Provide detailed reporting to make business decisions
• Automate the returns process and allow users to track all returns
• Integrate with different eCommerce platforms like Shopify, WooCommerce

Pricing

You need to contact ShipBob for pricing details.

If you’re looking for a 3rd-party service provider to help you fulfill online orders, take a look at the best eCommerce fulfillment solutions below.

1. Shopify Fulfillment Network: Best for large Shopify businesses with high sales volumes

Shopify Fulfillment Network owns many eCommerce fulfillment warehouses that ensure your customers get products as soon as possible. Partnering with many major shipping carriers, Shopify Fulfillment Networks can help you deliver items to customers within 2 days at affordable costs. The services can fulfill orders from multiple sales channels and deal with order surges during peak seasons. Besides, it allows custom packing slips with your own logos or discount codes.

When it comes to business growth, Shopify Fulfillment Network is willing to give you practical advice on logistics and shipping. It also helps track your inventory in real time and handle returns effectively.

Highlight services

• Support fast and affordable delivery with their wide fulfillment center network
• Ship inventory from overseas to Shopify’s fulfillment centers
• Provide experts’ advice on logistics and shipping for business growth
• Deliver packaged and labeled stocks directly to one location within the network
• Fulfill orders across sales channels integrated with Shopify stores
• Handle flash sale fulfillment during peak periods quickly
• Support order fulfillment for subscription business
• Offer custom packing slips with logos or discount codes
• Support real-time inventory tracking and dynamic routing
• Assist fast and seamless returns with return rules

Pricing

Shopify Fulfillment Network charges a single fee per unit for fulfillment.

• Set-up fees: Free
• Receiving, picking, and packing fees: Included in a single fulfillment price per unit
• Storage fees:
  • 6-month free storage
  • $2.25/ cubic foot storage for products not sold within 6 months
  • Storage costs are calculated daily.

2. ShipNetwork: Best for large businesses with high order volumes

With fulfillment centers for eCommerce in strategic locations across the U.S., ShipNetwork offers 1-day fulfillment and 1–2 day ground shipping within the U.S. without increasing costs. The service provider also guarantees 100% of order accuracy thanks to their 3-point inspection process.

In addition, using the services by ShipNetwork lets you give customized experiences to your subscription customers with custom packing and delivery. ShipNetwork also has temperature-controlled fulfillment centers in the U.S. to serve some special product types.

Highlight services

• Guarantee 100% order accuracy with 3-point inspection
• Support 1-day delivery and 1–2 day U.S. ground delivery
• Offer sellers multiple shipping options with different costs and time
• Simplify the return process, manage, and handle returns efficiently
• Assist subscription fulfillment services with custom packing and delivery
• Bundle different items into a single unit for shipping
• Supply temperature-controlled order fulfillment centers in the U.S.
• Support lot tracking to manage and fulfill products by expiration dates

Pricing

You need to contact ShipNetwork for pricing details.

3. Fulfillment by Amazon: Best for online businesses selling on Amazon

Fulfillment by Amazon (FBA) offers you a comprehensive solution to storing, picking, packing, shipping, and answering your customers’ queries. Amazon has numerous warehouses worldwide, which helps expand your business reach to customers around the globe. Using Fulfillment by Amazon enables you to provide your customers with Amazon Prime two-day delivery free of charge.

In addition, Amazon develops many tools to manage your inventory effectively, from stock optimization to replenishments based on demand forecast, sales history, seasonality, and your own inputs. This eCommerce fulfillment solution provider also allows you to deliver all of your inventory to a single fulfillment center, then they’ll help you distribute the inventory for different locations when there’s a shipment.

If you sell products off Amazon sales channels but still want to fulfill with Amazon warehouses, you can consider their Multi-Channel Fulfillment (MCF) solution.

Highlight services

• Extensive fulfillment network around the world
• Provide many incentives to start using FBA like free shipping and returns
• Offer tools for managing excess inventory and tracking inventory age
• Restock inventory based on sales history, demand forecast, and seasonality
• Support fulfillment across different eCommerce sales channels
• Track orders after shipping until received by customers
• Handle customer inquiries and returns for products
• Offer the inventory placement service that allows sending all stocks to one fulfillment center
• Integrate with multiple eCommerce platforms like Shopify, BigCommerce

Pricing

FBA charges fulfillment costs for each unit, including picking, packing, shipping, handling, customer service, and product returns. The costs are calculated based on the weights and dimensions of the products.

• Set-up fees: Free
• Receiving fees: Not published
• Monthly storage fees:
  • For non-dangerous goods:

• • For dangerous goods:

Some sellers have to pay storage utilization fees besides the above base monthly costs.

• Picking and packing fees: Included in the fulfillment costs of each unit. We recommend you check it carefully to fully understand the pricing.

4. ShipMonk: Best for fast-growing online businesses

Considered one of the best fulfillment companies for fast-growing businesses, ShipMonk brings customers top-notch fulfillment services that can scale in conjunction with their growth. ShipMonk combines their best eCommerce warehouses, equipped with state-of-the-art technologies, and powerful software to support rapid fulfillment to customers while ensuring high-quality standards and cost savings.

ShipMonk speeds up picking orders with their automated mobile robots and automatically sorting packages for faster carrier pickups. It’s also customizable and adaptable enough to keep up with the rapid expansion of your business.

Highlight services

• Can fulfill 10o,000+ orders a day and support shipping to 200+ countries
• Enable cost-effective shipping with ShipMonk’s Virtual Carrier Network
• Support inventory management, including stock level forecast or bundle creation
• Offer customizable packaging to help deliver a unique unboxing experience
• Provide many options for reverse logistics to control costs like returning to stock, donating, disposing, reworking, and returning to vendors
• Automatically route your inventory to optimal storage areas
• Let users record, track, and address claims on the claims portal
• Integrate with many eCommerce platforms

Pricing

• Set-up fees: Free
• Receiving fees: Contact for a quote
• Monthly storage fees:

• Picking and packing fees: The actual amount you have to pay depends on the monthly number of orders that needs fulfilling.

For example, the picking fees for 3 levels of monthly order quantity are as follows.

table

Refer to their pricing plan to estimate how much you need to pay based on the actual order volume of your business each month.

5. Red Stag Fulfillment: Best for new sellers with special packing or handling needs

Red Stag Fulfillment is a company that provides eCommerce fulfillment services USA. Founded by eCommerce operators who understand clearly what online stores need to drive brand loyalty, Red Stag Fulfillment makes solid pledges for inventory and order accuracy. The company promises to minimize stock loss and damages, and give you complete visibility into inventory during each phase. On top of that, Red Stag Fulfillment also offers same-day eCommerce order fulfillment services so that your customers can receive their items as fast as possible.

Highlight services

• Support order, inventory, and warehousing monitoring
• Reduce a considerable amount of inventory loss or damage by minimizing supplier errors, receiving errors, employee theft, improper handling, and expired stocks
• Consolidate as many items as possible into a package to lower shipping costs
• Provide same-day eCommerce shipping and fulfillment
• Deliver real-time and mobile reports on fulfillment operations
• Monitor return processes and handle return requirements in no more than 2 days
• Support custom packaging to protect items from damages

Pricing

Red Stag fulfillment pricing is as follows.

• Set-up fees: Free
• Receiving fees: $14.25/pallet or $6/non-pallet package
• Monthly storage fees: $0.75 per cubic foot, based on the daily inventory average for items stored no more than 180 days
• Picking and packing fees: $1.80 – $2.25 per package, and $0.32 per item after the first item in each order

Geared towards Magento merchants, Magestore Order Fulfillment possesses many outstanding features to assist SME business owners in dealing with a high quantity of orders smoothly and accurately. With multiple charts and insightful reports, retailers can optimize order fulfillment operations, thus delivering the best eCommerce fulfillment experience to customers.

As fulfillment is an inseparable process of retail operations, retailers should streamline the whole operations to get the optimal performance and complete view of business performance. A good way to simplify retail operations is using a full-fledged Magestore Retail Management PWA, which includes inventory, procurement, reporting, and also the Magestore Order Fulfillment modules.

Let’s talk to our experts to get straight to your business pain points and find out the best eCommerce fulfillment solutions for your retail business now.

1. What are the fulfillment strategies for eCommerce?

The fulfillment strategies for eCommerce refer to the methods employed to manage the process of receiving online orders from customers, preparing orders, and delivering products to them as fast as possible.

2. What does a fulfillment company do?

A fulfillment company is a 3rd-party organization that helps business owners fulfill their customer orders, which often includes managing inventory, picking and packing items, shipping products, and handling returns.

3. Is outsourced fulfillment right for you?

It depends on the number of order volumes, product types, customer locations, and other factors. To decide whether outsourced fulfillment is a good fit, retailers should consider different aspects of their business carefully. Please refer back to the section—What to consider before opting for an eCommerce fulfillment solution—we’ve discussed previously.

What is a product catalog?

A product catalog is simply a set of information about all the products that you are ready to showcase on your website. A product catalog on a website acts as product display booths in an offline store. Depending on customer understanding or business purposes, the information in product catalogs is divided into different sub-categories varying from industries to industries.

(An example of a product catalog on Magestore POS)

What does it include?

A product catalog typically includes the following information:

• Product name, title
• SKU (Stock keeping unit) (which is unique for each product used for inventory management)
• Product category/sub-category
• Dimensions (size, length, volume, height, etc.)
• Product description/short description (constituents, features, version, year of the launch, ideal conditions of usage, safety measures, etc.)
• Price
• Pictures 
• Terms and conditions

Who needs a product catalog?

To better answer the question: “Why is product catalog management important”, we first should understand who needs a product catalog.

• Merchants: you are the very first one to need this information. You need it to showcase what you’re selling to customers, for inventory management, for marketing activities.
• Customers: they are the ones reading your product information the most. Before making a purchase, they will research the products carefully, consider information from various sources. If they visit your website and see that you’re providing the items they demand, they are more likely to buy from you. In this case, a concise and comprehensive product showcase on your website will help you win these customers.
• Your sales staff: They may be the second-most readers of a product catalog. Your sales staff can refer to the product catalog to communicate, consult with customers about the product benefits or other crucial information about a product.
• Your partners: You’re a wholesaler and have a lot of retailers, do you like to spend some time every day just informing or answering questions about products again and again from your retailers? It’s kind of time-consuming, isn’t it? Show them your well-organized and real-time product catalog to save time for both.

What is product catalog management?

Product catalog management is now a must-have in retail businesses. The managing task refers to the strategic approach of structuring, organizing, standardizing, and publishing the product information across all online sales channels. To put it simply, it is about maintaining the product database in a well-organized and well-structured manner and keeping it up to date.

Why is it important?

Now that you’ve known what product catalog management is and who needs the product catalog. Thus, it’s now easier to understand the importance of product catalog management. A well-organized, concise product catalog on your website will help you set up a foundation for your business.

Create an Omnichannel experience

Going omnichannel is now more than just a trend. It may be one of the best ways to operate a retail business thanks to its outstanding benefits over multichannel. The primary concern of any retailer is to maintain a consistent omnichannel experience. Effective and proper product catalog management will allow you to ensure the correction and consistency of the product database.

Enhance customer service

When a customer visits your website, does it mean you’ve successfully won this customer? It’s too early to make that conclusion. You want that customer to have further engagement with you. The customer will read the product information provided on your website and compare it with other information they’ve collected from different sources.

If they can’t find the information needed or find the information confused or poorly organized, they will soon leave your website and may never come back. When you haven’t had the opportunity to talk directly with customers, let your powerful words on your website take the lead.

Develop your business

Looking at a good product catalog management, you can easily see what products you can sell fast, what your key products are. Based on that, you can add more products to your catalog, have more marketing activities to promote key products. That is how excellent product catalog management can grow your business.

Offer relevant and quality product information

This is the first and foremost point to notice when talking about managing a product catalog. As business owners, you need to make sure you’re delivering the correct and updated information to your customers. This helps ease the product search process of customers and increase their trust in your brand.

Categorize your products properly

How you convey product information to customers is as important as what information you want to convey to them. At this point, you should pay attention to easy product navigation options and clear categories. For example, your first product catalog looked like this:

Fashion Store

• Casual clothing
  • Women
  • Men
  • Children
• Underwear
  • Women
  • Men
  • Children

But after you’ve observed your customer’s behaviors carefully and consulted from other stores, you decided to change the current catalog to:

Fashion Store

• Women
  • Casual clothing
  • Underwear
• Men
  • Casual clothing
  • Underwear
• Children 
  • Casual clothing
  • Underwear

Another example maybe instead of using L to denote Large size, you change it to 38. A good product catalog structure comforts the filtering process of customers.

Provide alternative products

An effective product catalog should not only show the right products customers are looking for, but also can suggest alternatives for different products. This benefits both your customers and you.

One tip in this part is to use tags. Sometimes, customers don’t have a particular intent for a specific product, they just search for products by keywords. In this case, your search result should show them many options rather than just a few ones. When your customers have more choices and you have more chances for upselling or cross-selling.

A good product catalog shows how profoundly you understand your customers which is the pillar stone in successfully managing a product catalog. When you haven’t had the opportunity to talk directly with customers, let the powerful words on your website interact, and keep customers staying. For more discussion about how to design a great-fit product catalog management plan, let’s talk with our experts.

Every day, hundreds or thousands of inventory activities may happen in a business. They create an increase or decrease in the quantity of products.

Let’s explore eleven operations that can create a change of quantity in stock.

1. Deliver items ordered from both website and POS to customers 
2. Return items after customer’s refund or exchange
3. Purchase items from suppliers 
4. Return items to suppliers
5. Dropshipping
6. Transfer items between warehouses
7. Adjust inventory 
8. Stocktaking
9. Delete items in the product catalog
10. Import product list including quantity as master data for the first time using the system
11. Changes in the warehouse structure

To run a business efficiently, merchants nowadays need to utilize technology such as websites, POS system, inventory, or an ERP system. However, no system is perfect, and there’s no guarantee that everything will run smoothly at all times. 

In particular, in inventory systems that record a lot of transactions every day, the differences between theories and real quantity can happen in any period. 

Human error or system issues are where the differences can come from. For example, your staff is unfamiliar with the system, so they record the wrong quantity when receiving items from the supplier. 

Your system upgrade can also result in conflicts and data differences.

Let’s find out some inventory management pains that merchants can face: 

• The system doesn’t record a decrease in quantity although items have been shipped to customers or record an incorrect number.
• The system doesn’t record an increase in quantity although items have been returned to warehouses.
• The quantity doesn’t change after an inventory adjustment or transfer.
• The order is not synchronized to the admin backend.

To help merchants relieve headaches of stock discrepancies, Magestore has released the stock movement report feature on the POS system as well as retail management software.

The report will save and display all information about the stock movement by item in a grid for easy tracking.

Let’s see how it looks!

Inventory movement report in Magento backend

(Inventory movement report on Magestore POS system) 

• Date: Day, month, year, and hour your business create changes of quantity
• Status: It shows Completed if there is no error in the stock change update. In contrast, it shows Failed.
• Product info: Names and codes (such as SKUs) of items that increase or decrease in quantity
• Action: Activities or reason that results in the changes of quantity such as ship to customers or transfer between warehouses
• Source: Location that has the changes of quantity
• Old quantity: Quantity on hand before the changes
• New quantity: Quantity on hand after the changes
• Change of quantity: Quantity of stock moved into or out of the location. For example, if you ship 2 items to a customer, it means that the quantity decreases by 2. The report then will show -2. In contrast, if you receive 3 more items from the supplier, you can see +3 in this column. 
• Action details: The reference that results in stock changes. Admin can click the link to go to the reference such as a purchase order, a sales order, an inventory adjustment, etc.
• User: The person in charge of tasks that created the quantity change.

Magestore inventory movement report includes the following information:

Besides viewing the report, you may want to export it in CSV or Excel for later reference or sending to others.

(Merchants can export inventory movement report CSV file on Magestore POS system) 

Last but not least, merchants can check the list of error orders in a centralized view and proceed to correct inventory data.

(Merchants can check the list of error orders on Magestore POS system) 

Inventory movement history on PWA

The inventory movement report is also available on our Retail Management PWA. With it, store managers can keep track of inventory transactions in their location.

For more details, check out our detailed article on managing inventory on a Magento PWA.

You may invest in a big website, POS system, or a huge inventory system with multiple warehouses and forecasting. However, it still lacks an overview of how each item moves in and out. 

The inventory movement report offers a place to detect issues and find the solution to solve them. 

If you’re interested in implementing a movement report that gives you peace of mind, don’t hesitate to contact us now.

Awaiting fulfillment means the seller has confirmed the order and its associated payment. The order is now sent to fulfillment staff, who will pick and pack the listed items into packages. After this step, the package will be handed to a delivery service provider. It is assigned a tracking number, which buyers use to monitor their orders.

Let us examine an awaiting fulfillment example to understand the workflow better.

If a customer orders from a large retailer and the order tracking dashboard says awaiting fulfillment, their order has been successfully paid for and noted. Afterward, the retailer’s fulfillment team will pick out the items listed on the invoice, and prepare packages appropriate for shipment.

If the retailer is of a smaller scale (like a start-up project), one person may handle all fulfillment duties. In the case of a custom product, if it’s awaiting fulfillment, the item is being customized by the seller. 

Typically, awaiting fulfillment status lasts for 48 to 72 hours. Buyers can expect a notification or an email stating that the fulfillment is complete and the items have been shipped.

In addition, the merchant will likely send the order ID and tracking information. With these details, you can check the shipment status from your computer or mobile device. 

However, remember that order awaiting fulfillment time can take longer than this estimation. Disruptions and delays can happen quite often, and the issue may come from the merchant or what occurs is out of their control. 

Why should retailers care about awaiting fulfillment?

Understanding order awaiting fulfillment and other order statuses in the retail fulfillment pipeline is vital for retailers. The information helps retailers gain a general view of logistic processes. They will also achieve better order management. This knowledge will be the key to solving hiccups caused by disruptions such as wars, natural disasters, and accidents.

Furthermore, it enables them to provide timely support for buyers, improve overall experience, and earn good reviews. Buyers can ask many urgent questions like:

• When will my order arrive?
• My order is awaiting fulfillment. What does it mean?
• How can I check if there’s an issue with my order?

Understanding the term helps the merchant address customer concerns instantly. 

What happens after awaiting fulfillment?

When the fulfillment process is complete, the order is packed, assigned a shipment number, and ready to be picked up and shipped to the buyer. Buyers will receive a notification and see the status changing from awaiting fulfillment to awaiting shipment. 

However, delayed shipping can occur due to a myriad of reasons such as logistics disruptions and the increased workload of peak seasons. In this case, the status “awaiting fulfillment” can remain unchanged for longer than usual. 

In the order processing pipeline, apart from orders awaiting fulfillment, there are many status updates that you may have not yet fully understood. We have gathered relevant order statuses in the list below.

Pending

If an order is pending, it means the checkout process is incomplete. On some eCommerce platforms, the word “Incomplete” may be used, though the meaning is still the same. 

You have a few days to complete the transaction, usually up to 7 business days. However, the time allowed for pending varies greatly, and some sites may allow just 5-10 minutes. If a buyer fails to finish the payment process after that deadline, the order is canceled. The buyer needs to start from scratch if they still wish to place the order. 

Pending fulfillment

If the order status reads “pending fulfillment”, it usually means you are one step closer to seeing the package arriving at your front door. Compared to awaiting fulfillment, pending fulfillment indicates that the fulfillment process has started but is not yet finished. Your order is now being packed and labeled.

Pending fulfillment is placed after awaiting fulfillment and before the shipment step. However, since pending fulfillment and awaiting fulfillment share a lot of similarities in their meanings, some platforms may use them to indicate the same order status. 

Processing order

After an order is noted, the status will appear as “processing order”. It means that the merchant is in the process of picking, packing, and preparing your order for shipment.

An order’s processing time can range from a few hours to several days, depending on the merchant. The ideal time is no more than 3 business days. For example, if the seller has the item in stock, they can process the order instantly. If the product has to be transferred from somewhere else, it certainly will take longer. The type of product is also a decisive factor. Customized products can take up to several weeks to be made, significantly increasing the processing period. 

Awaiting shipment

You may notice that your order is at a phase called awaiting shipment, meaning the purchased item is ready to be dispatched and the merchant is waiting for the courier to pick it up. Couriers are usually employed by small businesses without dedicated employees for this task. For large-scale retailers with in-house delivery teams, “awaiting shipment” may signify that the item has been handed to them and is ready for shipping.

“Awaiting shipment” sometimes can be displayed as “shipment awaiting pickup”. Moreover, “awaiting shipment” and “awaiting delivery” can be used interchangeably since they share a similar meaning. 

One may wonder: How long does awaiting shipment or awaiting delivery take? Although it typically takes 1-2 days for the courier to pick up your order, during peak seasons, it is not uncommon for this status to remain unchanged for several days. This is similar to the duration of awaiting fulfillment.

Many people feel negative about the “awaiting fulfillment” phase, assuming their orders are arriving later than they expect. However, the status does not necessarily indicate a late delivery or delayed processing. Your case may fall into one of the following scenarios.

Your order has been received and acknowledged by the seller

The seller has noted this but has not yet started preparing and packing your order. Due to the possibility of a high number of orders, it may take a while for this to happen and for your order status to change. 

There is a delay in the fulfillment process

This may happen if the status does not change within a few days. The items you requested may be out of stock for now, so the merchant must wait for them to be shipped from another warehouse. 

Another solution to an out-of-stock item is putting it on the backorder. Unlike pre-order, backorder is an item that is temporarily unavailable but is guaranteed by the seller to be delivered within a timeframe. 

If you are buying a backorder, it makes sense that the awaiting fulfillment phase can last for days and even weeks.

You have requested a customized product

A customized product needs additional production efforts from the seller before it can be shipped to you. In this case, buyers may have to wait for months before they can see the order status switching from awaiting fulfillment to something else.

Your order is affected by external factors

Your order may have been affected by other external factors, which caused the logistic teams to be unable to proceed.

For example, during COVID-19, work safety restrictions were imposed on facilities worldwide, leading to a significant slowdown in picking and packing. As a result, the fulfillment time experienced a dramatic increase.

So how can your business improve the fulfillment process? 

Undoubtedly, enhancing the process plays an essential role in their profitability. The faster and more efficiently a retailer can fulfill customer orders, the more reliable they appear. Consequently, they gain more revenue from the growing number of satisfied buyers.

In the fiercely competitive retail landscape, providing excellent customer service is a key differentiator. Customers can easily reach out to your competitors if your service is unsatisfactory and the loss is yours to take. 

We have compiled a comprehensive list of actions that can measurably raise the quality and efficiency of your fulfillment process.

Sync data across fulfillment-related systems

For retail businesses, the order fulfillment pipeline can involve more than one system, which is common for those of medium and large scale. The process is even more complex with the addition of third-party service providers such as logistics companies. 

Cross-system data synchronization ensures a streamlined workflow. It allows participants in the order fulfillment process to stay informed and eliminates bottlenecks. If an issue occurs, all stakeholders can quickly figure out how to solve it and avoid downtime. 

Choose a suitable location for your warehouse

Retailers should place their inventory near where their target customers are. It should be also close to where order fulfillment is performed. The proximity helps them save transportation costs, which can be a significant figure, and decrease wait time for buyers. As a result, the items awaiting fulfillment will not pile up in warehouses and take up resources.    

Maintain traceability of the fulfillment process

Customers are eager about their orders and want to know when they receive the package. Thanks to visibility into the order fulfillment process, customer service staff and managers can quickly locate the order and answer customer inquiries. 

Make sure the inventory is always accurate 

Accurate and real-time inventory reports allow retailers to start working as soon as they receive an order. Moreover, they can truthfully report to customers if the product is unavailable or when they expect a delay. That is why keeping track of inventory is beneficial for overall supply chain management.

Plan for fluctuations in demand

Retailers need to have a clear idea of upcoming changes in customer demand. In the holiday season, shopping demand can skyrocket. Forecasting helps retailers avoid facing an overwhelming number of orders awaiting fulfillment. Conversely, accurate demand forecasting means they will not overstock their inventories when the market is less busy. 

Keep the workflow simple

While maintaining an adequate level of monitor and control, retailers should keep the management hierarchy as simple as possible. Consider combining or removing steps, and make sure the number and complexity of decisions and actions are minimal. This practice saves your time and effort and also reduces fulfillment errors.

It is a common practice to leverage innovative digital solutions to optimize the order fulfillment process. With digitally enabled automation and efficiency, managing order statuses such as awaiting fulfillment is a breeze. Magestore’s Magento Order Fulfillment Software allows merchants to: 

• Easily and quickly monitor the order fulfillment pipeline with live-update statuses in one single system
• Instantly locate orders to see whether they are awaiting fulfillment or are ready to be dispatched
• Check stocks across all your warehouses to define the most optimized fulfillment route
• In-depth and highly visual reports 
• Allow both default shipping methods and integration of 3rd-party couriers

Looking for something beyond order fulfillment? Seeking a holistic approach to managing your retail workflow? Check out Magestore Retail Management Software. 

Magestore Retail Management Software is a comprehensive store management solution that covers inventory, purchasing, and fulfillment aspects.

What it unlocks:

• Powerful inventory management and highly accurate demand forecast to regulate stock effectively
• Real-time supervision of omnichannel order fulfillment 
• Insightful reports that foster informed decision-making

To conclude, awaiting fulfillment indicates that the order has been confirmed. Afterward, fulfillment staff will proceed with packaging and shipping it. 

Retailers need to gain a thorough understanding of order statuses, including order awaiting fulfillment. It helps you manage orders with confidence and transparency. With process visibility, you can handle customer inquiries effectively and boost their satisfaction. 

Having reliable order fulfillment software such as Magestore will help you stay informed and run your business more efficiently.

1. What is the difference between awaiting fulfillment, pending fulfillment, and awaiting shipment?

These are the three statuses found in the order fulfillment pipeline. They can be differentiated by whether or not the fulfillment process has started and the order is ready for shipment. 

• Awaiting fulfillment: Your order is soon going to be packed and ready for shipment by the fulfillment staff.
• Pending fulfillment: The fulfillment process has begun. Fulfillment staff are now handling your order. 
• Awaiting shipment: The fulfillment process has been completed. The courier will soon pick it up and ship the item to the buyer. 

2. Are “orders fulfilled” and “orders shipped” the same thing?

No. While “Orders fulfilled” means the orders have been dispatched from the warehouse, “Orders shipped” means the items have been received by the customer. 

Nonetheless, the meanings of the two terms also depend on what e-commerce platform you’re using.

• Shopify defines orders fulfilled as items that have been packaged and soon will be ready to be dispatched.
• WooCommerce identifies an order as “fulfilled” when it has been shipped. It means that to WooCommerce, orders fulfilled and orders shipped are the same thing. 

3. What is the difference between awaiting fulfillment and processing?

The difference lies in whether the fulfillment process has begun.

• An order awaiting fulfillment means the fulfillment team has not yet started working on it. 
• “Processing” means the process has started. The order is now being packed and prepared to be shipped to buyers.

You need to do the following before carrying out NetSuite and Magento integration.

• Define the type of data you want to sync between the 2 platforms, the frequency of data synchronization — in real time or at scheduled intervals, and the data sync directions — one-way or two-way. This step will help you easily choose the most suitable connector.
• Make sure to centralize both online and offline data of your store in Magento before syncing to NetSuite. This helps ease the data transfer process to NetSuite and prevent data duplication or conflict, giving you better control over inventory, order management, and customers. The process of syncing online and offline data in one place becomes much easier by using a retail POS for NetSuite and Magento like Magestore POS.

Below are the 7 best NetSuite and Magento integration connectors in detail. We’ve arranged them in the relatively ascending order of ratings. Let’s dig deep and find the best solution for your own use case.

1. NetSuite Connector by NetSuite

NetSuite provides a ready-made connector for Magento 2 Oracle NetSuite integration with no additional charge. The connector helps you sync important product data, such as prices, quantities, names, and order information like customers’ addresses, items, and order fulfillment in two ways. The NetSuite Connector also lets you govern your integrations and sync frequencies. With this solution, the data integration process can take place both in real time or at defined intervals.

Features

• Synchronize product, order, and customer data
• Support two-way synchronization in real time or as scheduled
• Automatically update order fulfillment and refunds
• Sync shipping data, including shipping methods, tracking numbers, carriers
• Transfer product information, including product names, prices, quantities
• Allow creating invoices in Magento 2 upon order fulfillment syncs
• Handle gift certificates, coupons, and sales taxes
• Monitor automated syncs and sync frequency
• Enable manual syncs

Pricing

Free. The price is included in the SaaS price for NetSuite ERP.

Compatibility

This NetSuite Connector is compatible with Magento 2.x.

Pros and cons

2. Magento 2 NetSuite Integration Addon by Firebear

The Magento NetSuite ERP integration addon facilitates the data exchange between the two systems. This Magento connector for NetSuite supports bi-directional data synchronization for inventory, categories, orders, customers, and prices. In addition, it allows automatic or manual data syncs and enables you to build the integration processes that suit your needs.

Features

• Sync product inventory, category, order, customer data, and pricing
• Offer bi-directional sync between Magento 2 and NetSuite ERP
• Allow customizing integration processes to meet specific needs
• Automate data sync with cron scheduler
• Sync data manually or automatically

Pricing

You need to contact Firebear for pricing details.

Compatibility

Firebear’s Magento 2 NetSuite Integration Addon is compatible with Magento 2.4.6.

Pros and cons

3. Magento 2 NetSuite Integration by Netable

NetSuite Integration extension by Netable is another good option for Magento integration with NetSuite. This connector facilitates syncing inventory, orders, pricing, customers, and some other policies. By offering one-way or two-way, manual or automatic sync, the Magento NetSuite extension fosters a smooth data flow between the two systems, ensuring data accuracy and consistency to improve customer experience.

Features

• Sync orders, stocks, customers, pricing, and some business policies
• Sync data one way or two ways, automatically or manually
• Provide data mapping for product attributes
• Deliver daily reports on events and exceptions to your emails
• Support multiple stores
• Transfer billing and shipping address information
• Update order status in NetSuite
• Sync credit limit for different groups of customers

Pricing

The extension has a price of $7,000.

Compatibility

The NetSuite and Magento integration by Netable is compatible with the following Magento versions.

• Adobe Commerce Cloud 2.4
• Adobe Commerce: 2.4
• Magento Open Source: 2.4, 2.3

Pros and cons

4. NetSuite Magento Connector by Folio3

Keeping data in NetSuite ERP and Adobe Commerce aligned is hassle-free with the NetSuite Magento connector offered by Folio3. With this Magento 2 NetSuite integration module, you can synchronize different types of data in real time or at scheduled intervals between the two systems, including inventory, products, customers, orders, and shipping details. Magento NetSuite Connector also hands you the capabilities to customize as you need like syncing order cancellations or group items.

Features

• Enable sync for inventory, product, customer, order, and shipment info
• Synchronize data in real time or at scheduled intervals
• Create additional functionalities and workflows
• Provide a complete view of integrations and sync status
• Allow managing integrations within NetSuite
• Support multi-currency and multi-pricing levels
• Support updating level inventory from multiple warehouses
• Sync order fulfillment status and order cancellations
• Support partial fulfillment in Magento

Pricing

You need to contact Folio3 for pricing details.

Compatibility

The NetSuite Magento Connector by Folio 3 is compatible with Magento 1 and Magento 2.

Pros and cons

5. Harmony Integration Platform by Jitterbit

With ever-improving functionality over the years, Jitterbit’s Harmony has become one of the leading solutions for NetSuite and Magento integration. This Jitterbit Harmony iPaaS (Integration platform as a service) smoothly connects Magento 2 and NetSuite ERP systems, speeding up the order-to-cash process for greater revenues. It comes with a multitude of pre-built connectors and templates to rapidly design, develop, and execute integrations. This Magento 2 NetSuite connector assists bi-directional sync of customer, product, order, inventory, and shipment information both in a real-time or scheduled manner.

Features

• Synchronize product, customer, order, inventory, and shipping data in real time
• Assist two-way data integration between Magento and NetSuite
• Automate many business processes, including order processing, and inventory updates
• Develop and manage integration workflows with an intuitive drag-and-drop interface
• Supply 400+ pre-built connectors, templates, and recipes to build and automate workflows
• Comply with many security standards like ISO 27001 to ensure high security and safety
• Automatically move shipping information upon order fulfillment
• Deliver real-time alerts and consolidated dashboard to identify and tackle any issues
• Provide Message Queue Service to efficiently deal with workloads during peak times
• Create and publish APIs and manage API life cycles

Pricing

Jitterbit’s Harmony provides 3 plans, including Standard, Professional, and Enterprise. Contact Jitterbit to get pricing details.

Compatibility

Harmony integration platform is compatible with Magento 2.x.

Pros and cons

6. NetSuite integration Magento 2 with Cleo Integration Cloud

Cleo’s regular presence in the top list of iPaaS on many prestigious review websites proves its powerful capability to implement a seamless Magento NetSuite ERP integration. Armed with loads of pre-built integration flows, connectors, and APIs, Cleo Integration Cloud enables you to create any integration flows that fit your business. This NetSuite and Magento connector offers both real-time and batch sync for customers, orders, fulfillment, and inventory. What’s more outstanding about Cleo is that it helps you identify transaction or integration errors and their origins, then alerts you in real time for you to tackle any issue promptly.

Features

• Synchronize customers, orders, fulfillment, and inventory
• Enable two-way real-time and batch sync
• Provide pre-built integration flows for faster connections
• Build integration flows with APIs, pre-built connectors, and integrations
• Automate business processes like inventory updates or order capture
• Map or transform data with pre-built or custom-built rules
• Provide a complete view of transactions with configurable dashboards
• Offer real-time insights into business processes and operational performance
• Detect transaction or integration errors and their causes, alert in real time, and track error status

Pricing

Contact the team to get the quotes for 4 major pricing plans, including Express, Essentials, Business, and Premium.

Compatibility

No information is available.

Pros and cons

7. Celigo Integration Platform

Regarding NetSuite Magento 2 integration, the top-of-mind name is Celigo. Celigo is a cloud-native integration platform that facilitates bi-directional data sync between the Magento eCommerce platform and the NetSuite ERP system. This Celigo NetSuite Magento 2 solution transfers customer, product, sales order, inventory, fulfillment, and financial data between the two systems on a real-time or scheduled basis. The Celigo NetSuite and Magento connector also comes with AI/ ML-driven features, which support effective error management, including categorizing and handling errors automatically, and provide guidance throughout the integration work.

Features

• Sync products, customers, sales orders, inventory, fulfillment, and financials
• Sync order cancellation and refund data
• Provide both real-time and scheduled sync
• Automate major business processes, like order processing
• Supply an intuitive dashboard to build and manage integrations
• Offer many AI/ML-based features, including automapping and handling error
• Provide multiple pre-built integration flows for data transfer
• Provide many tools for users to build and customize complex integration flows
• Ensure high security with end-to-end encryption and compliance with security laws
• Connect numerous Magento websites or stores to a single NetSuite account
• Offer great customizability

Pricing

Celigo offers 3 plans, including Professional, Premium, and Enterprise plans. Contact the Celigo team for pricing details.

Compatibility

Celigo integration platform is compatible with the following versions of Magento.

• Adobe Commerce Cloud: 2.4, 2.3
• Adobe Commerce: 2.0, 2.1, 2.2, 2.3, 2.4
• Magento Open Source: 2.0, 2.1, 2.2, 2.3, 2.4

Pros and cons

Netsuite Magento eCommerce integration streamlines many business processes, ensures data accuracy and consistency across systems. You’ll enjoy a unified and live view of your business performance in one place, thereby giving you actionable data in satisfying customers and bolstering revenues.

Therefore, choosing a suitable Magento 2 NetSuite connector requires careful thought. Each connector has specific strengths and weaknesses to bring to the table. It’s worth taking into consideration some factors below.

• Your business needs: You need to define clearly your business needs to choose the most suitable connectors. For example, if you’re a fast-growing business, you’ll need a connector that can handle the increasing volume of data on orders, inventory, or customers. It’s also better for your future growth if this integration solution can scale and connect with other applications to solve more complex business problems. If that is the case, then an integration connector like Celigo or Harmony will be a good option. Otherwise, if you just need to sync data for better governance and improved user experience, using the NetSuite Connector is enough.
• Technical resources: Some NetSuite Magento 2 connectors are easy to use and require no or little coding knowledge while others need some technical expertise to fully employ and customize. If you don’t have an in-house technical team or you’re not a technical expert, you need to think carefully about which connector to choose. Another option is to use a Magento-native ERP for direct integration if choosing Magento Connector for NetSuite integration deeply troubles you.
• Budgets: Acquiring a connector for a smooth Magento NetSuite integration is a worthwhile investment, but you should consider how much you’re willing to pay and whether you want to pay a one-time price or monthly subscription fees. The price structure varies depending on different types of integration solutions and the pricing plans they provide. It’s a good idea to choose a scalable and customizable connector that can offer essential features for your current needs while adapting quickly to your future demands when you grow.

Connecting the frontend and backend systems to streamline front office and back office operations gives you an upper hand over your competitors. To gain more benefits from NetSuite eCommerce integration, you can implement a NetSuite POS integration. Be ready to smooth your business operations and win more customers now!

Does Magento integrate with NetSuite?

Yes, Magento can integrate with NetSuite. You can choose one integration solution that we’ve provided here for seamless and fast Magento NetSuite integration.

Can you use Magento and NetSuite together?

Yes, you can use Magento and NetSuite together. You can integrate Magento with NetSuite ERP by using an integration connector to leverage the strength of both platforms.

What is the NetSuite connector?

The NetSuite connector enables the NetSuite ERP system to communicate and exchange data with other systems or applications, including the Magento platform.

How to integrate NetSuite with Magento?

There are 3 ways to integrate Magento 2 with NetSuite.

• Point-to-point integration: Small businesses with tight budgets can utilize this integration method to connect Adobe Commerce and NetSuite ERP. Nevertheless, a limited number of features and customizability are major drawbacks you need to consider. Netable’s NetSuite Magento Integration extension, NetSuite Connector by Folio 3, and NetSuite Connector by NetSuite exemplify this way of integration.
• Custom integration: As long as you have in-house technical teams or can afford to hire a 3rd party vendor, you can create a custom integration to facilitate the data transfer between Magento and NetSuite systems. This integration method, though costly and difficult, can meet specific requirements to handle complex business processes.
• Cloud-based integration platform: This integration method often comes with more advanced functionality and great customizability. Although you’ll have to pay monthly subscription fees for these platforms, the price is more affordable than that of custom integration. Some noticeable integration platforms are Celigo, Jitterbit Harmony, and Celo.

How to map Magento 2 data into NetSuite?

You can utilize a Magento to NetSuite connector that supports moving data from Magento 2 to NetSuite. Some connectors provide pre-built data flows and process templates for mapping data. Besides, you can also configure specific data mapping fields on your own to fit your business requirements.

SRM system is the tool to store and centralize all supplier data, source new vendors, create inquiries, and identify related risks with suppliers. If your business relies on suppliers to provide direct and indirect goods or services, SRM tool is a crucial application. It monitors all procurement activities for your company, including gathering and evaluating all bid proposals, managing contracts and purchase orders, and generating invoices.

The system helps you automate processes, synchronize all data, and control suppliers in one place for smooth communication. The best supplier relationship management software allows you to get instant access to necessary information to improve budget spending, tackle supplier problems, foster the relationships with vendors and negotiate better terms with them.

There’re 2 main purposes of vendor relationship management software. Firstly, it aims to evaluate if the supplier performance meets up to your standard, and secondly, determines aspects for improvement while cooperating with suppliers.

When choosing supplier management software, here’re the features you should look for:

1. Supplier data management

• Store all supplier documents like invoices, transaction receipts, contracts, supplier certifications, suppliers’ compliance, etc
• Register new vendors and suppliers, and allow contractors to register themselves via a supplier portal
• Create complete supplier profiles by automatically linking all supplier records, such as their background data, their experience, and the projects they’ve worked with you
• Send notifications when there’s an update in supplier data
• Store and track all supplier data, including current capabilities, ongoing contracts, pricing, and remarks on terms and conditions

2. Supplier risk management

• Monitor, alert, and mitigate supplier risks in real time, including operation and contractual risks
• Display a detailed dashboard with an overview of risks involved, driving factors per risk, the risk possibilities of each supplier
• Latest vendor compliance regulatory check
• Carry out supplier audits and recognize potential issues

3. Procurement management

• Quickly generate purchase requisitions and orders
• Assign suppliers to provide a specific service or location depending on your criteria and data insights
• Track supplier execution status on their current purchase orders
• Automate the three-way matching process to prevent inconsistencies, including purchase orders, order receipts, and suppliers’ invoices
• Provide a communication tool to discuss orders and projects with your team and the suppliers
• Generate invoices accurately
• Schedule procurement when your inventory reaches a threshold

4. Bidding and supplier selection

• Provide the pre-qualification tools to assess vendors for their financial health, track record of similar projects, stability to provide the goods and services, compliance to your company’s regulations, etc.
• Automate the workflow to approve the sourcing activities
  Support collaboration among different teams to nominate and select suppliers
• Establish requirements for supplier compliance, such as quality standards, experience, sustainability, delivery terms, etc
• Offer templates to create tenders and auctions
• Compare bidders based on quality, pricing, and terms

5. Supplier performance management

• View a comprehensive dashboard on supplier activities
• Show past data, orders, and performance analysis of vendors
• Segment suppliers based on performance and engagement level
• Send automatic alerts on disrupting supplier performance

6. Supplier contract management

• Create contract using templates
• Track the status of each contract
• Store all previous and current contracts in one database
• Automate contract renewal

7. Cost management

• Set up cost limits per supplier or per department
• Provide real-time spend analysis

8. Supplier portal

• Edit and update supplier catalog
• Provide a supplier forum with Q/A sections and attached files
• Create supplier surveys to get feedback

1. Magestore supplier management

Magestore is a Magento-native supplier management system that has robust in-built functionalities for supplier relationship and contract management. Magestore is ideal for store owners who want an all-in-one system to control their retail operations.

With Magestore, all your internal process data and external data about suppliers and customers are connected to give you the big picture of your company. SRM tool is a part of Magestore software and thus completely aligned with your inventory, procurement strategies, demand forecasting, sales, and order fulfillment. This unifies all business functions in one Magento single source of truth, and also integrated with your ERP to help you make data-driven replenishment decisions and foster relationships with vendors.

Moreover, you can use the software in the front-end to reduce the workload on your Magento database which then helps your eCommerce store run faster.

Highlight features:

Vendor and purchasing management:

• Manage suppliers and purchasing in one platform, store and instantly sync all information of vendors and contracts, purchase orders, and link to product SKUs and inventory management
• Keep track of inventory level to know which items and how much should be re-ordered to prevent stockouts or overstocks
• Analyze past sales performance and lead time to establish product low-stock threshold and get alerts when products are running low
• Generate purchase orders automatically with a few clicks
• Forecast demand to eliminate guesswork, optimize production timelines and shipments
• Control unit of measurements (UoM) to convert stock units to purchase order units

Inventory management:

• Determine the optimal inventory levels and working capital to reduce holding costs
• Sync inventory data with your website, point of sale, and back office in real time
• Arrange items into standardized bins and pallets to easily find the location
• Stock counting to ensure you have the right products in the right quantity and inform procurement actions
• Track all inventory movement from placing a PO, receiving the stock at the warehouse, transferring to stores and making sale

Comprehensive reports:

• Customize reports to your specific needs and preferences
• Sync and analyze all data in Magento for efficiency and avoid mismatched data
• Gain insights into purchasing, suppliers, and customers to improve your SRM and your CRM
• Other features: warehouse management and omnichannel order fulfillment

Price

Contact the Magestore team to get a custom quote based on your needs and requirements. Magestore offers a 90-day money-back guarantee with no extra cost to add users and devices when you want to scale up in the future.

2. SAP Ariba

SAP Ariba is an eProcurement and supply chain management system that streamlines source-to-pay operational processes. It offers an all-in-one solution for growing and large companies, including supplier management, sourcing, procurement, contract lifecycle, and spend management.

SAP Ariba allows you to control the entire interface journey with suppliers, from the initial sourcing stages to bidding, and negotiating, to contract execution, performance analysis, and risk management. You can incorporate all supplier data and transactions into a single place, optimize your workflows to cut costs, make better procurement decisions, automate invoice capture, and get the visibility to track supplier performance.

Highlight features:

Sourcing and contracts: The supplier relationship management software (SRM) helps you reduce costs and control risks. Here’re what you can do:

• Gather and classify all your purchases
• View your total spending and identify sources for savings
• Standardize the entire source-to-contract workflow
• Maximize materials cost savings
• Improve speed and collaboration among teams
• Find better suppliers to reduce the risk of relying on a few vendors

Procurement: You can connect the spend categories and boost supplier collaboration, such as:

• Handle direct, indirect, and services spend
• Improve procurement with guided buying
• Achieve greater efficiency and cost control
• Centralize data, analyze, and get insights

Supplier management: The vendor management system helps you manage performance, lifecycle, performance, and risks in one place. You can obtain the right products with the right quantity, at the right time, from the right suppliers.

• Prioritize spending to the key suppliers
• Integrate supplier management features with procurement
• Unify supplier records for management
• Manage risks at scale across your supply chain

Invoice and payment management: Automate your payables workflows to take advantage of the working capital management:

• Digitalize the payment process with invoice capture and approval
• Enforce control over cash and payable accounts
• Manage early-payment discounts
• Other features: external workforce and services, travel and expenses.

Price

The pricing of SAP Ariba subscription varies depending on location and usage requirements. You can contact SAP directly for a custom quotation. However, the starting price is $50.00 per month.

3. ProcureWare

ProcureWare is cloud-based software of eBid Systems that offers a suite of tools for supplier relationship management. It supports the vendor’s self-registration process and provides you with a searchable supplier database. Some notable features of ProcureWare are drag-and-drop functionality, message delivery tracking, log notification, receipt acknowledgment, and e-distribution of tender documents.

The supplier management solution allows you to create competitive bidding for pre-qualified suppliers with templates for various RFx types. After you receive proposals, ProcureWare helps you facilitate the bid evaluation of the sourcing team to analyze and score bidders’ responses. In addition, ProcureWare’s contract management functions let you control the ongoing supplier engagements. It stores all contract documents, saves modifications and tracks contract milestones.

Highlight features:

Supplier management: A centralized system that offers supplier pre-qualification, self-registration, and bid notifications. You can gain visibility of all supplier data to manage risks and make better decisions.

• Vendor self-registration
• Customized supplier categories
• Supplier approval
• Diversity management
• Certification management

Sourcing: ProcureWare helps you control the entire sourcing lifecycle, including vendor selection, pre-qualification, online tendering, bid evaluation, and contract award.

• Bid document distribution
• Pre-made pricing forms for multiple items
• Supplier notification
• Pre-bid question and response
• Bidder list management
• FRx templates
• Configurable bid questions
• Bid analysis and team bid scoring

Contract management: You can keep track of all contracts and ensure compliance with the terms and conditions. The SRM software sends you alerts for contract renewals, warranty expiration, and any key contract milestones to give you a proactive risk management approach.

• Automated award-to-contract processes
• Contract document repository
• Create and send modifications and change orders

Price

The price starts at $12,500.00 per year. To get a customized solution for your business, contact eBid Systems for a quote.

4. Oracle Supply Chain Management

Oracle Supply Chain Management (SCM) is a solution combining supplier management features with supply chain and manufacturing functionalities. It’s suitable for industrial companies that need complete supply chain visibility, from product development to order fulfillment. It offers tools for planning and controlling inventory, vendor sourcing, production, and delivery.

Oracle SCM helps you proactively devise strategies to grow revenue and reduce costs, and monitors the execution to ensure you meet your goals. You can use visual analytics and view the deviations in your plans and reality, examine the alternatives, and revise your plan in real time.

Highlight features:

• Supply chain planning: You can plan supply, demand, manufacturing, manage sales and operation, and order fulfillment across your supply chain. It enables different teams to collaborate smoothly to increase productivity, minimize disruptions, and save costs.
• Inventory management: Control stock flow across your locations and your global supply chains with in-built features for materials management, cost management, and financial and supply chain orchestration.
• Procurement: Streamline source-to-pay workflow with an intuitive interface for analytics and collaboration. It simplifies supplier management, including selecting vendors, imposing compliant spending, and improving profitability.
• Analytics: Enrich your analytic insights to identify and resolve supply chain problems faster.
  – Detect bottlenecks and cost-saving opportunities
  – Find the correlation between supply chain operations with business outcome
  – Monitor consistent order execution to enhance customer satisfaction
  – Understand inventory status to better fill customer demand

Other features:

• Logistics management that lets you control warehouses, product transportation, and global trade.
• Product lifecycle management accelerates the speed to launch products, improves quality, and reduces costs by unifying your supply chain with product master data.
• Manufacturing and maintenance features such as scheduling the projects, controlling quality and costs, procurement of spare parts, etc.
• Order management: Keep track of the pricing, sales channels, and fulfillment sources to improve the order execution process

Price

You can contact Oracle for the pricing schedule suitable for your requirements.

5. Ivalua

Ivalua is a spend management platform that offers a complete solution for businesses to effectively manage all suppliers and spending. It simplifies the source-to-pay process and digitalizes all procurement workflow, including sourcing, contract execution, analytics and strategy, and invoicing. With Ivalua, you can ensure accurate data quality and transparent information. It has robust features to manage vendors, such as supplier master data management, request management, sourcing, and contract management.

Highlight features:

Supplier risk and performance management: You can control all supplier data, identify risks, and measure performance in one place:

• 360-degree view of supplier information and activities to gain insights
• Transparent data to lower risks and enhance performance
• Easy collaboration between your team and the suppliers

Sourcing: The SRM software automates the sourcing processes and expedites strategies

• Collect and categorize your spending: direct, indirect, services, capex
• Manage projects effectively, and track the status, timeline, quality, etc.
• Provide analysis of bidders to choose the optimal suppliers

eProcurement: Simplify the purchasing experience for your procurement team

• Upgrade the eCommerce experience for the team
• Connect the buyer and seller seamlessly with a supplier portal
• Customize your digital workflows for procurement of all spending types

Invoicing: Digitalize the accounts payable and compliance

• Centralize all invoices from PDF email to EDI
• Automate invoice checking with an intuitive 4-way matching and one-click approvals

Payments: Facilitate payments for global suppliers

• Streamline processes for domestic and cross-border vendor payments
• Minimize supplier inquiries and fraud
• Update payment status in real time

Price

Ivalua offers a custom quote for each business. You can contact their sales team for a consultation.

6. AdaptOne

AdaptOne is a vendor management solution that can holistically connect and manage your procurement processes. It provides you with accurate real-time visibility to take advantage of data insights, establish compliance and reduce risks. It has a user-friendly design, with scalability and security to assist companies with effective supplier management.

AdaptOne allows you to control suppliers and manage diversity and certifications. It also has a supplier portal for vendors to actively manage and update their information.

Highlight features:

• Consolidated company data governance allows all relevant stakeholders and departments to access trusted real-time information. Thus, your team can work smarter and have the insights to validate, oversee, and measure suppliers.
• Control compliance and mitigate risks by determining qualified suppliers, gathering certifications, tracking expirations, and automatically sending email alerts and reminders.
• Flexible supplier onboarding feature creates a robust, configurable vendor-facing platform to onboard your suppliers. You can classify supplier types and tailor the onboarding process to fit your internal requirements.
• Reach and engage with diverse suppliers easily. In this way, you can add more competition to the game and drive down costs. Furthermore, it creates opportunities for new networks or innovations that may bring you future value and grow your market.
• Manage data and configure reports in real time to gain insights based on various dimensions such as direct or indirect spend, contracts, and business units.
• Set up and control your spending goals: You can monitor timesheets and overtime, track and process funds, and facilitate your payment procedures.

Price

Contact AdaptOne to get a custom proposal.

Pipefy is a solution to automate business processes. It has in-built features for supplier management, procurement, purchasing, and contract management. Using Pipefy, you can get a full overview of supplier information to improve communications, speed up approvals, and monitor department spending with tailored dashboards.

In addition, you can integrate Pipefy with your existing systems to create a smooth and unified operation for better stack extensibility. Thus, Pipefy enhances cooperation between vendors and your key approvers in the connected processes, all securely and from a single hub.

Highlight features:

• Communicate with stakeholders to create a single flow for status updates via a customer portal
• Collect and share information easily to ensure everyone is aligned and avoid errors. You can share your online forms and company portal with all necessary information.
• Streamline the procurement execution along all steps: engage with suppliers, customers and colleagues, receive approvals, and incorporate with ERPs or other purchasing tools
• Get accurate data from spending, PO cycle time, to supplier performance to further optimize and improve the numbers with customizable dashboards.

Price

• Starter: Free. This is recommended for startups, small teams, and freelancers.
• Business: $19/user/month. This is suitable for mid-sized companies that need to centralize and scale business workflows.
• Enterprise: $32/user/month. The package is best for organizations that require enterprise-level control, security, and support to handle complicated business processes.
• Unlimited. This is for companies that need unlimited power to enhance their enterprise processes.

What is the difference between SCM and SRM?

SCM stands for supply chain management. It means managing the goods flows from sourcing raw materials to delivery of the completed merchandise to customers. On the other hand, SRM, or supplier relationship management, refers to the management of how each supplier contributes to your business, and how you can improve the relationships with them.

What is an example of SRM system?

Some supplier relationship management examples are Magestore, SAP, Oracle, Procureware, Ivalua, AdaptOne, and Pipefy.

What is CRM vs SRM?

Customer relationship management (CRM) is the method or system to deal with customer interactions and customer data throughout their CX journey. The purpose of CRM is to nurture relationships with customers, gain an understanding of customers’ needs and pain points so that you can improve your marketing and sales strategies.

In contrast, SRM is all about managing relationships with suppliers to strengthen collaboration and build a win–win partnership in the long run. SRM helps you establish a more efficient supply chain to save costs and improve the quality of products and services.

Vendor sourcing involves finding, evaluating, and selecting the best suppliers for your goods and services. However, it’s a complex process requiring careful planning and execution. Inturn, this will help you find the suitable vendors to meet your specific needs, such as price point, quality expectations, reliability, customer service, and delivery schedule.

Let’s take a look at this example of vendors sourcing:

A company needs to purchase office supplies. They conduct sourcing vendors by evaluating multiple suppliers, comparing prices and product quality, and negotiating the best deal. They ultimately select a vendor who can consistently provide high-quality office items at a reasonable cost.

What is the sourcing strategy?

Strategic sourcing or sourcing strategy is a comprehensive procurement method that focuses on the overall value gained from a vendor relationship instead of solely considering the cost of their products or services. As an important aspect of supply chain management, it emphasizes tailored solutions and strong vendor partnerships. This is often seen as a continuous cycle comprising spend analysis, supplier evaluation, and ongoing engagement.

Procurement vs sourcing

Sourcing and procurement are frequently used in the context of retail supply chain management. However, they are not interchangeable. They refer to different aspects of the process.

Understanding the distinction between them is crucial for creating efficient and effective systems for each. Let’s start by defining the terms:
Sourcing is the process of researching and evaluating different suppliers to determine the best fit for the company’s needs in terms of quality, price, delivery, and other factors.

It aims to find the most reliable and cost-effective suppliers who can meet the company’s requirements and expectations.

Procurement, on the other hand, refers to the process of purchasing the goods and services that have been sourced. This involves various activities, such as planning purchases, placing orders, tracking delivery, paying for orders, handling inventory management, negotiating conditions with suppliers, and purchasing the products, among other things.

The goal of procurement is to ensure that the company receives the right products and services at the right time, in the right quantity, and at the right price.

In short, sourcing focuses on finding the best suppliers, while procurement focuses on purchasing the sourced goods and services.

Selecting suppliers isn’t just about finding the cheapest goods and services. Instead, you should focus on building good rapport with your suppliers. Depending on what you’re looking for, you could work with wholesalers, manufacturers, or distributors.

These terms can be confusing and overlapping, although we’ll express them in the most understandable way. So, let’s take a look!

Outsourcing

Outsourcing is when an organization transfers some of their supply chain and procurement functions to a third party. This helps many businesses benefit from third parties’ market knowledge and expertise, as well as to reduce costs. Besides, companies typically outsource materials, activities, and labor which is referred to as indirect procurement.

Insourcing

This term refers to a company using their own employees and resources to handle procurement and supply chain functions without hiring an external third party. With insourcing, the company is relying on their own workforce to meet everyday supply chain needs.

Near-sourcing

Near-sourcing or local vendor sourcing is a procurement strategy that involves locating operations close to the target market or where the end products will be sold. This means that everything from sourcing to manufacturing and supply occurs in one place.

With near-sourcing, companies can only operate within a limited supply chain space due to being in one geographical location.

However, this strategy can save organizations a lot of money on transportation costs, and if the company invests in empty lands, they can also save on warehouse costs.

Global vendor sourcing

Global sourcing involves purchasing goods and services from vendors located in different countries or regions. This type of sourcing provides broader access to a range of products and services, as well as the ability to find the best prices and quality.

Moreover, global sourcing can help a business achieve economies of scale, higher production capacity, reduce costs, and mitigate the risks associated with relying on a single supplier or market.

However, global supplier sourcing also presents challenges, such as language and cultural differences, longer delivery times, additional local tariffs and taxes, and higher transportation costs.

There are numerous advantages that retail businesses can derive from an effective sourcing vendor process. These benefits include, but are not limited to:

Cost savings

The ability to achieve cost savings through strategic sourcing is undoubtedly the biggest benefit of this process. A recent survey conducted by Deloitte revealed that cost reduction is the top priority for 74% of Chief Procurement Officers (CPOs).

By reducing the cost of goods and services, a company can increase their margins and improve their financial performance. This can have a positive ripple effect throughout the organization, leading to increase in new project investment, employee morale, and customer satisfaction.

Reduced risk

Strategic sourcing focuses not only on finding the right vendor but also on avoiding a problematic partnership. Deloitte survey also shows that 75% of CPOs see improved vendor information sharing as their top risk management strategy, and collaboration is a key aspect of strategic sourcing.

Therefore, strategic supplier sourcing is based on the idea of a relationship rather than just a transactional approach with a vendor. This approach leads to a stronger and more trusted partnership characterized by reliability, accountability, and open communication between both parties.

This relationship will help you ensure a consistent supply of high-quality goods and services and minimize the risk of losing customers because of inventory shortage during high season such as holidays.

Enhanced sustainability

By considering sustainability factors such as environmental impact and labor practices, a business can ensure that suppliers align with their values and contribute to a more sustainable supply chain.

Improved consistency

When a vendor and a buyer work together in a mutually beneficial partnership, they can quickly fix any issues with defective products or the supply chain. This helps maintain the supply chain integrity and prevents any operational delays.

Stronger vendor relations

An effective supplier sourcing process helps build strong and mutually beneficial relationships with suppliers. By working closely with vendors, a business can ensure that their suppliers understand their needs and can provide the best products and services.

The supplier sourcing process typically involves several important steps, including:

Step 1 — Assess needs and requirements

Before searching for vendors, brands should evaluate the needs of each department by conducting an examination of current resources.
This includes determining the current costs as well as any additional expenses that will be incurred in obtaining the necessary items.

Step 2 — Access the market

A thorough market assessment is essential to ensure that you’re making informed decisions about your strategic sourcing. This involves researching and analyzing the market trends, competitive intelligence, key vendors, and industry best practices.

Step 3 — Build sourcing guidelines

To get the best from your supplier pool while minimizing risk and cost, it’s important to determine your method and location for procurement.
Start by defining your business objectives and setting minimum requirements for suppliers. Then, you can create a set of selection criteria based on which suppliers meet your needs, capabilities, and resources. This will help you choose the right vendors for your business.

Step 4 — Select the sourcing process

The next step is selecting the appropriate method for soliciting bids. One common approach that many businesses use is issuing a request for proposal (RFP).

The RFP is a document drafted by the procurement team that seeks proposals through a bidding process. It outlines the specifications, requirements, pricing, legal and financial terms, and evaluation criteria for the desired product or service.

Step 5 — Negotiate

After receiving responses from multiple suppliers to your RFP, it’s time to narrow down the list of potential suppliers. You should review the information or conduct clarification interviews if needed.

Having comprehensive information on each supplier will facilitate the decision-making process. Additionally, storing all information in one place reduces the need for lengthy email exchanges and conference calls.

Step 6 — Incorporate vendors into the implementation process

Once the negotiation phase is complete, it’s time to finalize the supplier selection and inform the chosen partners.

The next move you need to make after selecting the ideal supplier is to ensure the smooth delivery of goods and services through annual and inventory forecasting.

Step 7 — Monitor supplier performance through benchmarking

Vetting vendors’ performance regularly is crucial to assess their progress. This starts with establishing a baseline for the product’s current status, continuously tracking its performance, and confirming that the desired outcome is being achieved.

By taking these measures, you can quickly identify any issues during implementation and notify your suppliers accordingly to help mitigate the problem’s impact on business.

Keep communication open

Every member of your strategic sourcing team has something valuable to contribute. To make the best decisions, it’s essential to stay connected and collaborate. And when you face new challenges, work together to find the best solutions.

Look beyond the price tag

The goal of strategic sourcing isn’t just to reduce costs but also to improve operational efficiency, identify underperforming suppliers, standardize processes, and build profitable partnerships. By focusing on productivity, profits, and progress, you can achieve long-term success.

Evaluate your suppliers regularly

To ensure that you’re working with the best vendors, gather your sourcing team regularly and seek feedback. Ask questions about what’s working and where improvements can be made. By evaluating suppliers and the sourcing process, you can continuously improve.

Use the right vendor requests

There are three types of vendor requests: request for information, request for proposal, and request for quotation. Understanding when to use each type is critical for engaging potential vendors effectively.

Request for information (RFI)

An RFI requests vendors to provide suggestions and creative solutions to a problem. While it can be a precursor to an RFP or RFQ, its main purpose is to inform the potential buyer of the vendors, services, or goods that are available.

Request for proposal (RFP)

An RFP is a formal process used when a purchase or strategic partnership is imminent. It helps you compare vendors and find the best fit for your needs.

Request for quotation (RFQ)

An RFQ is a simple request for pricing and payment terms. It’s best to use when you already know what solution you’re looking for and want to evaluate vendors based on price.

The 7 tips provided in this article should serve as a useful starting point for companies looking to implement a successful vendor sourcing strategy in 2023. These tips include conducting thorough research, establishing clear goals and criteria, building meaningful partnerships, and regularly monitoring and evaluating supplier performance.

With the right approach, companies can create a sourcing strategy that delivers long-term value to their business and supports the growth and success of their organization.

As vendor management is only one task of a retail business, to automate and streamline your whole retail operations, a store management system will help.
We hope you found the article informative and engaging. Lastly, if you have any other questions or concerns about this topic or how to manage your vendors fruitfully, you can contact us anytime.

Order cycle is the average time between when you receive an order and when you hand it to a carrier for delivery to the customer, excluding the actual shipping period.

It is a necessary KPI to measure the efficiency of your supply chain operations. All retailers want to reduce this time amount, as the longer it is, the worse it impacts your ability to attract and retain shoppers. A deep study into this metric can help you determine where to enhance your order processing and devise plans to boost your fulfillment activities.

On the other hand, inventory order cycle time refers to the duration (days) you need to sell all products once you receive them from the supplier. You can take your supplier’s minimum order quantity (MOQ) as the target selling volume and measure how quickly they are sold. The stock cycle time reflects the number of stock you’ve used and how many you need before placing a restock.

Therefore, the inventory order cycle accounts for the orders, re-orders, and economic order quantity so you can decide how much stock they should keep for each SKU and when you should replenish the products.

From a customer perspective, the order cycle has 4 main steps: order transmission, picking, packing, and shipping. When calculating the time to process an order, you add up the time it takes to complete these steps.

• Order Transmission: You’ll receive a notification after customers checkout online and submit their payment and delivery information. That’s when the customer order cycle starts. Today modern eCommerce platforms allow quick order transmission within a few seconds. Getting an automated system will help you optimize order cycle time.
• Picking: After transmission, your warehouse management software will send the order details to the warehouse operation. A picker will be assigned to pull the correct SKUs to fill the order.
• Packing: The ordered products will be handed to a packer once the picking is completed. This person is responsible for packing, sealing, and labeling the order accurately to prepare for the last step: shipping.
• Shipping: At the shipping station, you send the items to a delivery provider such as UPS or FedEx. Usually, companies have less control over the delivery time and mainly rely on the carrier.

For retail store managers, the process is different. Inventory cycle time involves purchasing and receiving stock from vendors and ends when all those products are sold or turned over.

• Purchase order: You place a purchase order with your supplier, specifying the product specifications, quantity, price, delivery time, and other terms and conditions.
• Receive stock: You receive the inventory and put them into your warehouse.
  Fulfill customer orders: You use these products to handle customer orders as the above fulfillment process: pick-pack-ship.

Consider several elements from the order date to the shipping date to calculate your order cycle time. Here is the formula for your calculation:

Order Cycle Time = (Delivery Date – Order Date) / Total Orders Delivered

The first thing to remember is you’re measuring the order cycle time within a specific time frame. It can be quarterly, monthly, daily, or even hourly. Make sure all elements in the formula are consistent in the time frame before putting them on the calculator.

The delivery date is when you send the products to a carrier, while the order date is when the customer purchases the products. The total orders delivered refer to the number of orders sent to shipment successfully within a specific period.

For example, an electronics store wants to calculate its order cycle time in December 2022. The month has 31 days and the shop handled a total of 6,000 orders.

Their order cycle time is (31 days * 24 hours/day * 60 minutes/hour)/ 6,000 orders = 7,44 minutes/order.

It means this store completes each order in 7,44 minutes.

After you get the result, compare it with your business goal to identify areas for improvement. You can record the data for each month and see the progress over time.

Here are the 6 best methods to improve your cycle time:

Calculate your order cycle time

First of all, you must measure your current order cycle time and see where you’re standing compared to your goal. This metric provides valuable insights into your supply chain performance.

Check for aspects in the processes that slow down your cycle. For instance, if the fulfillment time is too long, you should evaluate your warehouse or logistics flow. If there is a gap between when a customer places an order and when your warehouse receives the information, you must check your software for issues. Once you identify roadblocks, you can find solutions to optimize the cycle time.

Assess your warehouse flow

Bottlenecks in your warehouse process will hurt your cycle time. For example, you can look for inefficiencies that slow down the picking and packing activities:

• Can pickers locate the items easily?
• Are enough shelving racks in the right positions to move products quickly?
• Is your fulfillment center near the picking area enough?

After identifying these problems, you can reduce the order cycle time. Check your warehouse KPIs and seek improvement opportunities. For example, you can investigate your warehouse layout to minimize the walking path and place relevant product categories near each other for faster item picking. In addition, designing warehouse slotting to utilize the available space is also a good idea.

Negotiate with suppliers on inventory delivery

Late inventory deliveries from vendors can slow down your customer order fulfillment. Measure how long you need to wait for a restock to arrive and if it affects your cycle time. Try to negotiate with your suppliers to get the soonest supply shipment.

Think about handling late deliveries

Consider different scenarios where late or canceled deliveries may occur and how you would handle them. For example, if your warehouse staff picks the wrong items frequently, your cycle time will suffer. In this case, the customer will complain and return the products, which will take extra time to prepare a replacement package.

Therefore, you should list the most common mistakes in selecting and shipping the wrong products. With this list, you can make the necessary changes.

Frequently evaluate cycle time

Order cycle time can fluctuate if there are changes or disruptions in the supply chain. For instance, you can encounter an order exception that causes longer delivery than usual. In contrast, you may notice a shorter cycle time after adopting an automated warehouse management system.

In addition, if you have to deal with a large number of returns, recording and sorting these products will cost you more time, affecting the productivity of fulfillment tasks.

There are many variables that influence the cycle time. Therefore, it’s important to monitor and reassess this metric regularly. The result will let you know where to investigate further, and whether your action plans have a positive effect.

Accurate order cycles with an advanced tool

Implementing a digital solution can help you control the warehousing process and speed up the cycle time. Magestore Retail Management PWA is customized software that streamlines the store operation for you in inventory, omnichannel sales, and supplier management. All data from your website, POS, and back-office are centralized in real time for monitoring.

Inventory management:

• Track your stock level and stock movement across warehouses and store locations
• Update inventory for each SKU in real time in a single view with accurate inventory counting
• Control storage locations by standardized bins and pallets
• Generate stock on-hand report to get the current product quantity and location
• Calculate how much safety stock you should keep and when to restock

Supplier management:

• Control vendor lists and purchasing process in 1 central hub
• Measure historical sales performance to establish item low-stock threshold and know when to reorder
• Suggest which items need to be re-ordered to avoid out-of-stock products and automatically generate purchase orders
• Forecast demand for storing enough inventory and reaching an economic order quantity (EOQ) with suppliers
• Control unit of measurements that convert between purchase order units and stock units

Retail order management

• Manage all customer orders from multiple channels, including online and offline stores
• Unify stock data from all warehouses and choose the most efficient one for fulfillment
• Simplify omnichannel order fulfillment with a simple pick–pack–ship workflow
• Use Magento default shipping methods (DHL, FedEx, UPS, and USPS) or integrate your 3PL providers

With Magestore, you can reduce manual and repetitive tasks and process orders faster with fewer errors. An automated system will benefit you with a lower order cycle time.

Differentiate cycle time vs. lead time

Lead time is the period between when a customer checkout their cart and when they receive the ordered products.

On the other hand, cycle time refers to only the time that you take actual work to complete an order.

For example, it takes you 15 minutes to prepare an order (cycle time), but it takes 2 days for the package to reach the customer (lead time).

What is customer order cycle time?

Customer order cycle time is the amount of time to process an order. It includes receiving, picking, packing, and sending the order to a carrier for shipping.

Cycle time is an important metric. It tells you if your store operation needs improvement and whether you’re ready for expansion. If you want to grow your business, your supply chain must be able to deal with more customers. Optimizing your cycle time will prepare you with an efficient workflow and free up your human resources to handle more critical jobs.

Track inventory in omnichannel

Omnichannel sales have become critical to reach and engage with target customers. It offers many ways to purchase products, such as in-store, online, or via O2O methods like click and collect. Therefore, the OMS should be able to unify and control inventory data across channels. It means tracking the stock volume, velocity, and order fulfillment if you want scalable growth.

With a retail OMS, you can:

• See real-time updates on inventory data across channels;
• Check which SKUs are your best sellers and when to restock;
• Measure your sales performance and gain insights into your products.

Automate the order fulfillment process

OMS creates an interconnected supply chain system where retailers can automate the fulfillment process from customer orders to delivery. Here is how a retail management system can help merchants push their order processing:

• Handle different payment methods and currencies;
• Send order information to 3PLs or 4PL for fulfillment;
• Automatically print shipping labels for in-house processing.

Manage reverse logistics

Reverse logistics means a customer returns an item to your warehouse through a refund, exchange, or credit note. This aspect should receive the same attention as the packing and shipping processes to provide customers with a fast and convenient experience. With ordering management software, controlling product returns is now easier than ever. You will:

• Print return labels automatically with the auto-filled address of the customer;
• Let customers and retailers track the status of the product returns;
• Update inventory levels automatically when retailers receive the returned products.

Control customer data

Software for order management helps you control all customer data, including their demographics, location, historical purchases, and lifetime value. Merchants can gain insights into customer behaviors and preferences to personalize content and marketing offers. For example, you can divide customer segments based on locations, order value, or cart reminders.

Integrate order and financial data

An OMS should be able to integrate with other back-office functions like accounting software. The OMS can pull financial information from the accounting software and merge it with inventory and sales data. You can determine the product lines and the customer segments that are driving revenue and how to generate more profits. Besides, it automates invoice and PO creation, saving you from repetitive manual tasks.

Now you know what you should look for in a system for order management, it’s time to find the one that best suits your needs. We’ve summarized the top 5 software for you based on business scale, features, and pricing. Let’s dive in.

Magestore OMS

Magestore recently released an all-in-one retail management system (RMS) that offers many built-in functionalities, such as inventory management, order fulfillment, and warehouse management. The system is native to Magento and inherits all eCommerce powers with extensive integrations.

Order management is an app without backend access inside Magestore RMS. It syncs all order data in real time, helps retailers deliver an outstanding shopping experience for both in-store and online customers with its order fulfillment, store pickup, and dropship features. Here are the highlight features of Magestore OMS:

Features:

Streamline the order fulfillment process with large order numbers:

• Control orders across sales channels and warehouses in a fully-integrated system to prevent entry errors
• Simplify your order fulfillment workflow with 5 steps for efficiency and speed: Verify, Prepare, Pick, Pack, and Deliver
• Use barcode to track item status
• Search for orders easily with filters by tag, status, and batch
• Evaluate business performance with reports by staff and location

Create more sales opportunities:

• Omnichannel order management with Click and Collect, where customers buy online and pickup at store
• Create and edit all store location information like name, address, date, hours, and display them on the listing page and Google Maps
• View your Click and Collect orders on the app screen or in Magento backend

Use dropshipping to save inventory costs:

• Progress dropship orders with 3 steps: Request, Confirm, and Create shipment
• Manage order status with real-time updates and email notifications
• Offer accounts and listing pages for suppliers

Sync all data from inventory and warehousing systems, easily integrate with POS system and analytics tools to build a complete retail ecosystem.

In addition, Magestore is a fully-integrated platform that also works as an order tracking system, sales order management software, and purchase order management software. It lets store owners track their sales, order shipping status, and alert which stock should be replenished to generate purchase orders.

Pros:

• Add unlimited stores and users
• Ability to fully customize the OMS to suit your business needs
• The Magento Order Management PWA is fast, stable, and secure for you to track and process orders without logging in to the backend
• Integration with all Magento’s partners

Cons:

• The software is complicated to set up on your own but Magestore team will handle this task.

Pricing:

As the software price differs based on your scale and requirements, you’ll need to contact Magestore for a custom quote.

Shopify Plus

Shopify Plus is a cloud-based order management system for eCommerce. It is designed with scalability for growing businesses and enterprises with thousands of transactions per minute. Retailers can control orders in one central dashboard, no matter where customers purchase products: in-store, on an international website, or app.

Shopify Plus provides many powerful features to let your site perform fast and accurately, creating a pleasant shopping experience for customers.

Features:

• Support omnichannel sales for both online and offline stores, localize user experience with global storefronts
• Accelerate and customize the checkout methods with Shopify’s POS system
• Automate inventory management: control product information, oversee stock levels, optimize replenishment
• Fulfill orders quickly with its 3PL service called Shopify Fulfillment Network (SFN) to smoothly handle your orders with synced data from inventory and sales
• Create personalized offers to customers based on tagging and segmenting, and allow merchants to cancel high-risk or fraudulent orders
• Wholesale channel management: Create private online stores, customize orders and wholesale pricing for B2B customers across multiple marketplaces
• Create complex scripts for your marketing campaigns, such as gifts for a certain purchase value, discounts for specific items, free shipping, loyalty tokens, etc
• Control high-volume orders in flash-sale campaigns with Shopify Plus Launchpad tool: Real-time monitoring for top-selling products, total transactions and revenue, acquisition channels, and conversion rates

Pros:

• Unlimited bandwidth and process up to 8,000 orders per minute, per store
• Manage up to 10 stores at once
• Unlimited integrations, extensibility, and customization through Shopify App Store
• Custom automation with in-built apps such as Launchpad, Shopify Flow, and Scripts

Cons:

• Learning curve is quite difficult that requires your knowledge of the Shopify Language Liquid
• 3rd party analytics tools are tricky to integrate and use unless they are Shopify’s partners

Pricing:

Shopify Plus starts at $2,000 per month to get the standard features and integrations to manage your business. If you have a complex, higher selling volume, the variable fees will be applied based on your requirements.

Veeqo

Veeqo is a part of Amazon’s family that handles order management seamlessly for eCommerce retail businesses. It is specialized in shipping services and simplifies your order fulfillment with powerful inventory tools. It offers multi-currency functions and allows you to control and ship orders around the world. All data is centralized in your US sales channels.

Features:

• Automate your shipping process: tag orders, print templated order forms and invoices, attach internal notes and shipping carrier on each order, and track the order execution status
• Sync data from all your sales channels including, websites, marketplaces, and physical stores
• Real-time update of inventory across channels to maintain accurate counts and avoid backorders or out-of-stock situations
• Fast bulk shipping within a few clicks by automatically selecting the best rates and shipping up to 100 orders at once
• Warehouse management: Manage bin locations, regular cycle counting, and employee management
• Process sales from multi-channel stores and get orders packed and shipped from mobile devices
• Integrate with various eCommerce platforms like Amazon, Shopify, Esty, and eBay to sync inventory data
• Offer analytics and detailed reports on your product data and identify patterns with filtering tools like total sales, sales by location, product and bundle margins, inventory levels, supply chain movement, etc
• Provide a forecasting tool to predict and plan for future restocking

Pros:

• Easy-to-use platform with a intuitive user interface
• Comprehensive integrations with other eCommerce platforms, POS systems, and marketplaces

Cons:

• Technical difficulties in implementing and onboarding the software, which requires Veeqo support

Pricing:

Veeqo is free! Veeqo says they benefit from shipping volume with their partner shipping carriers. Thus they offer free service for online merchants with unlimited users, unlimited orders, no monthly cost, and no shipping label limits.