Order fulfillment is required for fashion companies to match the demands of customers shopping 24/7 online and in-store. Most sophisticated fashion brands have their own internal guide on how they process their order fulfillments. While these can vary from brand to brand, most include at least the following five steps or phases.
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1. Receiving Inventory From the Factory or Manufacturing Company
Once the apparel or footwear brand receives their products from the manufacturing company, their teams inspect the items for condition, then label, stock, and count the number of each different garment. Damaged clothes discovered here will end up in landfills, donated, or reused.
Garments that the brand ends up not able to sell after stocking or that rotate out of season usually end up in stores like Burlington, Burkes Outlet, and Tj Maxx.
2. Inventory Storage
While the garments are stored in the company's warehouse, the fashion company will use an inventory control system to track what clothing items are the most and least popular items being sold, how much is gone, and what needs to be reordered. This system shows companies the stock level on their store shelves and in the warehouse. It also delivers data on garments such as the rate of sales, inventory level, and online and in-store purchases. The inventory control system prevents companies from having a shortage and overflow of items. It also shows them which garments should be put on discount, spot product trends, and determines when and how to place reorders.
Fashion brands are able to do this by creating an order alert within the inventory control system; each garment in the inventory control system will have a number determining when it needs to be reordered.
3. Processing The Order
Companies always keep track of items, but how do they know when a customer has ordered a garment? Most use a processing management system to monitor or plan various activities efficiently. This system often integrates with the brand’s online orders to allow customers to track the processing and shipment of their order without extra steps needing to be taken by the brand.
Three things tend to impact the effectiveness of a company’s processing management system:
Ownership – The fashion brand will need a person who is committed to the responsibility and the ownership of improving the company managing the system. This individual will implement ideas for improvement, management, and hold themselves accountable.
Engagement – Engagement is a necessity when it comes to running a business. Engagement helps the company improve in what they are lacking and execute new ideas. Communication allows the message to be adequately and accurately communicated. This allows the company to discover new areas of need and develop, making their business more well-rounded.
Measurement – This allows the business to seek out what tasks or assignments are the easiest and hardest and eliminates what is not essential. It also captures data such as productivity, how it affects customers.
Without process management, companies would have a more challenging time tracking data and information about a product. Each worker's responsibility within the company plays a significant role in monitoring this processing system and communicating the data correctly throughout the organization.
4. Shipping the Order
After the product is packaged, the company must measure the size and weight to determine the shipping cost and tax on it. Once the order meets the shipping specifications of the business’ selected carrier, it is then sent to that third-party carrier – a service like USPS, UPS, or FedEx. All businesses should fit the carrier's demand before sending their items for shipping, or there could be potential delays.
Some fashion brands do partner with carriers, but it depends on the customer's location. If a customer chooses to ship to a P.O. Box address, the package will be delivered via USPS while packages sent to a street address will be delivered via FedEx or UPS depending on the business preferred carrier.
Aside from the customer location factor, the fashion brand may select their chosen carrier with the below pros and cons of each in mind:
USPS
The United States Postal Service is run by the federal government and is responsible for delivering important mail to citizens. It was founded on July 1, 1971; it has been popularly used by everyone living in America.
Pros
- Free tracking available to customers
- Cheaper shipping option than FedEx and UPS
- Free insurance for damaged packages under $50
Cons
- Handles small and light packages only; nothing heavier than 20 pounds
UPS
The United Parcel Service, or UPS, is a multinational shipping and receiving company; it is also one of the world’s largest shipping couriers founded on August 28, 1907.
Pros
- Delivers huge packages such as furniture and huge electronics
- 24-hour emergency delivery service available
- Slightly cheaper than FedEx
- Free insurance for damaged or lost packages under $100
Cons
- Maximum delivery is 70 pounds per package
FedEx
This multinational conglomerate mainly transports business materials. It was founded on May 5, 1971, in Little Rock Arkansas.
Pros
- Known for overnight shipping and delivery as well as express delivery
- Overnight shipping costs less than the same service from UPS
Cons
- Mostly caters to B2B e-commerce
- Most expensive delivery carrier
Take each of these into consideration when evaluating which provider to use to deliver your products to customers. You may prefer to use one service for shipping and receiving goods from your apparel or footwear factory and another for delivering to customers, but you will need to evaluate if that is the model that best suits your business.
5. In Case Of Returns
According to CNBC, about 5 to 10 percent of in-store shoppers return clothes, and about 15 to 40 percent of online shoppers will return clothes. The most returned item is usually shoes bought online, as each retailer uses a different measuring system. That’s why apparel, accessories, and definitely shoe brands should always provide a shipping label with their goods delivery for a customer who may want to make a return or exchange.
Once a garment is returned, most fashion brands have an internal inventory process that triggers once the clothing item arrives back at the warehouse. For example, if the garment is delicate and the customer is displeased with the apparel, the item can then be restocked as a new item or cheaper depending on the returned condition; on the other hand, some brands throw away as much as 25% of their returned items.
Order fulfillments are essential to keeping fashion companies running smoothly with their warehouses stocked. Without order fulfillment, brands would have a hard time tracking their items online and in store. It provides an essential mechanism to constantly check inventory so the brand can best manage its supply chain, its customer relationships, and its plans for future designs and products.
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