Order Fulfillment: Process and Strategy Guide (2026)

Ecommerce order fulfillment is the stage between a customer making an order and the product landing at their door. It’s a part of the sales process that, if not handled well, can lead to lost business.

Now that online shopping is the norm, customer expectations around ecommerce fulfillment have shifted. Ryder’s 2025 Ecommerce Consumer Study found that free shipping remains the top factor in purchase decisions for 76% of shoppers.

To meet evolving demands, you need a strong order fulfillment process. The less time spent picking items, packing orders, and managing delays, the faster a purchase can be delivered.

What is order fulfillment?

Order fulfillment is the complete process that begins when a customer places an order and concludes with the product delivery. It also includes the storage and processing of inventory, picking and packing of items, and delivery management. It may also involve accepting return transactions.

The goal of order fulfillment is to ensure accurate, timely delivery of products to customers by minimizing errors and costs. While some retailers fulfill orders manually, most use order fulfillment software or third-party logistics (3PL) services to automate and streamline the process.

The fulfillment process can vary by business size. For larger enterprises, it takes place in a warehouse or distribution center, where workers pick and package products for shipping. Brick-and-mortar stores with an online platform may fulfill orders from their stockroom using a self-service system.

Why is order fulfillment important?

Jessica Postiglione, founder of supplement brand Bonny, notes how the rise of ecommerce has caused more competition. Due to the delivery standards set by large retailers like Amazon and Walmart, the pressure is on to get orders into customers’ hands as quickly as possible.

“If you want to be taken seriously as a brand, you need to be able to fulfill orders within a business day, communicate the tracking number to the customer, and follow up with them when the package is delivered,” says Jessica.

Here are three benefits of a well-crafted order fulfillment strategy:

Reduced costs

Working with a fulfillment partner can reduce those costs by moving inventory storage and order processing into a shared logistics network. Shopify Fulfillment Network connects merchants with partners like Flexport, so products can be stored in fulfillment centers closer to customers.

Improved customer service

Having a solid order fulfillment strategy, whether it’s an in-house solution or a partner app, can make a big difference in a business’s customer service. It ensures orders are correct and delivered on time. 

Scalability

A well-planned order fulfillment strategy saves time, making it easier to scale your business. When you have the right strategy or partner, you can handle more orders without needing extra space or employees. This means you can fulfill as many orders as your marketing team can bring in.

How the order fulfillment process works

Bernie Schott, CEO of yoga mat maker REECH, shares what the order fulfillment process looks like for his business.

“We check unfulfilled orders around 7 a.m., print shipping labels, and write on the back of each product that needs to be picked for the order,” he says. “This way, we know what products to pick from the warehouse.

“[Then], before sealing packages, we double-check the order against what was packed. Once verified, we seal the shipment, apply the shipping label, and have a mail carrier pick them up later in the day.”

Order fulfillment processes vary among businesses. Here’s what the order fulfillment process looks like for an average ecommerce retailer:

1. Inventory is received from suppliers

The journey begins when inventory arrives from a manufacturer or supplier. Items are checked for quality when received, then stored according to an inventory management system in a warehouse, stockroom, or storage facility.

2. A customer places an order

After browsing an online store, customers choose products and place an order. Here, a user-friendly and secure checkout will help smoothly convey orders to your back office. The checkout process should also communicate accurate shipping costs and a delivery timeline to the customer.

3. The fulfillment team receives the order

Once an order is placed, the details are communicated to the person or team responsible for fulfillment. This information includes the customer’s details, products in the order, and the delivery address. A POS system can help to speed up this part of the process, integrating inventory management with shipping information.

4. The order is prepared

The fulfillment team then gets to work. They pick the ordered items using the inventory management system, pack them to prevent damage during transit, and attach a shipping label (and return form). Thoughtful packaging at this stage can enhance the unboxing experience for the customer.

5. The order is shipped

The packed order is handed over to a shipping carrier for delivery to the customer address. The end consumer may be the customer, or another retailer in the case of wholesale orders. Tracking information is usually provided to the customer, so they can monitor delivery progress.

6. Returns processing

If the store has a return policy, the customer may follow the guidelines and send the package back. The National Retail Federation (NRF) and Happy Returns estimate that 19.3% of online sales were returned in 2025, which makes returns processing a regular part of ecommerce order fulfillment.

The fulfillment team checks the returned products for any damage. If the product qualifies for return, they process the return. Depending on the product and quality, the item may be re-entered into inventory for resale, set aside, or disposed of.

6 tips to improve your order fulfillment process

Follow these tips to improve the order fulfillment process and get products to your customers faster.

1. Optimize inventory management

With order fulfillment, speed is everything. The faster you can get a delivery in your customer’s hands, the happier they’ll be.

Optimize your process by localizing inventory. This may involve holding inventory in warehouses close to customers, or distributing inventory across multiple retail locations. Shopify makes it easy to manage and fulfill orders by integrating with retail locations, to allow for faster fulfillment options.

2. Double-check products before shipping

How frustrated would you be if you received a parcel containing the wrong product? Not only would you be disappointed to have the incorrect item, but you’d have to ship the product back and wait for a replacement. Nobody has time for that.

Implementing an order-picking strategy with safeguards minimizes the risk of this happening to your customers.

“Always double-check that the products you’re shipping match what the customer ordered,” says REECH CEO Bernie Schott. “Even if you have the best customer service and can remedy the situation quickly, it’s still a waste of time and money between resolving the customer’s issue and shipping the new order.”

It’s not just picking products that matters. The way you package them matters, too.

“Ensuring the products are packed well and safely hopefully guarantees that nothing will break in transit and the customer has a great experience receiving their products, whether it’s for the first time or the 10th time,” says Laura Whitaker, founder of Wildcraft.

3. Improve relationships with your shippers

Shipping carriers play a large role in how fast you can get products to your customers. Build relationships with carriers to unlock lower shipping rates and priority treatment when dealing with issues.

Good practices for communicating with carriers include:

• Accurately estimate shipping volumes. Many carriers price their services on shipping volumes. If you expect a surge in orders, warn your carrier, so they can prepare.
• Be proactive with communication. Hold regular meetings with your carriers and ask if there’s anything you can do to make things easier on their end—like dropping off orders earlier in the day.
• Call out good service. Public praise and recommendations help build relationships.

4. Use data to drive decisions

Data can be a powerful tool in refining your order fulfillment process, ensuring you have accurate information about your stock. One metric to track is order fulfillment rate, or the percentage of customer orders fulfilled completely and on time. A higher rate means more orders are moving through picking, packing, and shipping without delays or stock issues.

Shaunak Amin, co-founder of the snack marketplace SnackMagic, used inventory data to identify which products were selling more slowly.

“We can now better identify our inventory turnover rate, improve our demand forecasting, and refine our safety-stock quantities using this information,” Shaunak explains.

Shaunak’s team also found a shipping strategy that works for their busy warehouse. Fulfillment staff catalog newly arrived inventory at the start of their shift, giving a clear picture of what items are available. Receivers then wait until the end of their shift to replenish inventory levels.

5. Automate where you can

Mistakes can occur at any stage of the fulfillment process and affect the customer experience. Misreading a packing slip or prioritizing the wrong orders, for instance, can lead to problems.

Order fulfillment software manages the steps between receiving an order and delivering it to the customer. It can route orders, send fulfillment data to a 3PL, and update customers with tracking information.

Elliott Davidson, an ecommerce consultant at Parcel Master, points out that manual processes increase the risk of errors.

“The best solution is to leverage ecommerce automation through integrations, so the data is automatically sent to your fulfillment provider without you having to touch it,” Elliott suggests.

Smart ways to automate your order fulfillment process include:

• Using omnichannel fulfillment systems to route orders to the fulfillment center closest to your customer.
• Using barcode scanners to find the location of inventory to be picked from a busy warehouse.
• Sending an order tracking link to your customer so they can access real-time information.

“Fulfillment takes a lot of time, and it’s expensive to get wrong. Between replacement products, extra shipping labels, and wasted time, the costs can really add up,” says Laura.

6. Be transparent with customers

Even with processes in place, issues still happen during order fulfillment. Some delays may be outside your control, but customers still need clear information about their orders.

Shipping costs and delivery speed can affect whether a shopper completes a purchase. Baymard found that, among shoppers who abandoned carts for reasons beyond browsing:

• 39% left because extra costs were too high, including shipping, taxes, and fees 
• 21% left because delivery was too slow
• 14% left because they couldn’t see or calculate the total order cost upfront

Customers appreciate transparency, especially about delivery times. That’s why Shopify offers the Shop Promise badge to verify products that are reliably delivered within five calendar days. The badge appears alongside delivery dates on eligible product pages and checkout pages, and in the Shop app.

If there’s a delay, let your customers know as soon as possible. Apologize for the delay and explain why their package will be late.

For example, Fussy, a retailer that experienced a sudden increase in sales after appearing on a reality show, sent an email to customers to let them know their orders would be late. The email was carefully worded, included an updated delivery estimate, and was accompanied by a sincere video message:

How to determine your ecommerce order fulfillment strategy

Choose the right ecommerce order fulfillment strategy by doing these three things:

Size your sales

The number of products you sell can help determine whether to handle fulfillment in-house or outsource it.

Examine order volumes across each of your sales channels. If you find yourself rushing through more orders than you can comfortably manage, it might be time to consider outsourcing.

For example, MR DIY’s ecommerce team moved to Shopify as daily order volume grew. The brand now fulfills 1,000 to 1,500 orders a day and increased daily order fulfillment by 113%.

Know your strengths

If your team doesn’t have strong skills in fulfillment and logistics, it might be best to outsource these tasks. This allows you to focus on sales or production.

Jessica takes this approach with Bonny’s order fulfillment process. The retailer uses a third-party service to fulfill orders, except for samples to editors, influencers, and other VIPs.

“I self-fulfill those packages, as they have handwritten notes and other personalized materials included,” says Jessica.

Locate your customers

The location of goods in relation to your customers can significantly impact shipping costs and delivery times.

Jason Wong, CEO and founder of Doe Beauty, has created a strategic localization approach. “We look at where our customers are placing their orders from,” he says. “We respond by placing our inventory near those cities to reduce the overall miles traveled by those packages."

If a large portion of your customer base is far from your headquarters, it might be worth outsourcing fulfillment to a provider with a warehouse closer to them.

Order fulfillment options and which one is right for you

There are three types of order fulfillment strategies: merchant fulfillment, dropshipping, and third-party fulfillment. Each is suited to different types of ecommerce store, shipping volumes, customer location, and team strengths.

Merchant fulfillment

Best for: Small ecommerce businesses with low sales volumes.

Merchant fulfillment happens when you complete the order fulfillment process yourself (also known as in-house fulfillment), and it’s common among growing brands. Radial’s March 2025 retailer survey found that 60% of brands with less than $50 million in revenue are still using this type of fulfillment with a single distribution center. 

“We don’t have a 3PL. We pick and pack our own orders in a warehouse,” says Aaron Harvey, creative director at Flamingo Estate. “We have tens of thousands of square feet of warehouse space and there are employees that are handwriting notes and tying ribbons. But this is what we do. This is our business.” 

Pros:

• No fulfillment fees—just shipping costs.
• More control over the unboxing experience, since your team packs the order. 

Cons:

• It’s a time-intensive task that needs to be completed by skilled workers.
• Shipping can get expensive without discounted rates offered to third-party providers.
• Human error is common without warehousing technology to pick and pack customer orders.

Dropshipping

Best for: Entrepreneurs starting a business on a budget.

Dropshipping is an order fulfillment model where the entire process is taken off your plate. Businesses can pick, pack, and ship inventory to their customers without ever physically touching (or seeing) tangible inventor .

Pros:

• You can start with no budget because there is no inventory purchasing or storage fees.
• Inventory management is taken off your plate, since items are only purchased when a customer pays.
• Frees up time to work on other areas of the business, such as marketing.

Cons:

• There’s no control over the unboxing experience.
• Shipping delays are common since dropshipping providers complete many orders each day.
• Reliable dropshipping providers are hard to find.

Third-party fulfillment

Best for: Growing ecommerce businesses with increasing sales volume.

A third-party fulfillment company, also known as a third-party logistics service, takes the entire order fulfillment process off your plate. It’s the service’s job to source inventory, print a packing slip, and ship an item to your customer’s home—all without your intervention.

Pros:

• It takes the job off your plate, so you can spend time on bigger-picture tasks.
• There’s no need to hire seasonal logistics staff during busy periods.
• Fulfillment speeds are faster, as companies use automation and warehousing technology to ship more quickly.
• It localizes your inventory by stocking goods in the warehouse closest to your customers.

Cons:

• The added fulfillment cost. The average pick-and-pack fee for a single item is $3.20.
• Third-party companies discourage custom packaging, making it harder to tailor the unboxing experience.
• Customer service issues. If the fulfillment center makes a mistake, your business still has to handle the customer fallout.

Order fulfillment challenges

Being aware of common order fulfillment challenges can help you prepare and address issues before they escalate. These challenges include:

Incorrect order information

Keeping accurate records of your product deliveries is crucial. Erin Mastopietro, co-founder of Dope Dog, warns that without a good record-keeping system, confusion can quickly set in.

“This can create more confusion for customers, making the entire experience negative for them,” says Erin.

Supply chain disruptions

From labor shortages to political instability, various factors can disrupt supply chains. In fact, 43% of brands have reported changing their shipping strategies to mitigate the impact of global delays.

Despite supply chain issues, customers are increasingly expecting fast delivery, driven largely by major ecommerce brands like Amazon.

When supply chains are off-balance, meeting these expectations can be challenging. Localizing inventory can help shorten delivery times, but it’s important to be transparent with customers when it’s not possible to meet fulfillment promises.

Seasonal and events fluctuations

Certain products spike in popularity at specific times of the year, leading to inconsistencies in shipping volumes that can make order fulfillment challenging.

For instance, if you usually process 100 SKUs per day, but that number jumps to 350 in the lead-up to Black Friday, you might not have enough staff to fulfill orders on time. In these cases, outsourcing fulfillment can be a solution.

International shipping

Ecommerce allows customers to order from anywhere, but international shipping doesn’t change their expectations for quick delivery. It’s your responsibility to ensure orders are picked, packed, and fulfilled internationally as quickly as possible, while also navigating tariffs and customs requirements that can impact delivery times.

“Fulfillment should ideally support all the energy the customer is bringing to their purchase and not get in the way of their enjoyment,” says Noah Chaimberg, founder of Heatonist.

Localizing your inventory can help address this issue. By storing inventory in an international warehouse and automatically routing orders there, goods will have already cleared customs, speeding up delivery times.

How to choose the right order fulfillment service

Outsourcing fulfillment has clear advantages. Yet with so many fulfillment providers to choose from, it can be difficult to know which one is best for your business.

Factors that can help determine which fulfillment service to use include:

• Experience. Look for a partner that has worked with ecommerce brands like yours.
• Cost. Review storage, pick-and-pack, shipping, and return fees.
• Software. Choose software that syncs with your ecommerce platform.
• Location. Pick warehouse locations that are close to your customers.
• Speed. Ask how quickly orders leave the warehouse.
• Customer service. Review how the provider handles fulfillment mistakes.
• Ethics. Ask about warehouse safety and labor standards.