Common Ecommerce Fulfillment Terms and Definitions

Common Ecommerce Fulfillment Terms and Definitions

Hey guys!

Another day, another blog post!

Today, I'd like to share a short and sweet blog that can greatly assist you in dealing with outsourced fulfillment or 3PL fulfillment. Sometimes in conversations with them, you might come across industry jargon that leaves you wondering, "What is this?" or "What does that mean?".

Alright, let's dive right into it.

Commons Ecommerce Fulfillment Terms

Backorder: means customers can order out-of-stock items and receive them later when available.

Barcoding: is the process of assigning unique codes to products for electronic scanning and identification.

B2B: stands for "business-to-business," which means transactions between companies rather than between businesses and consumers.

B2C: stands for "business-to-consumer," which refers to transactions between businesses and individual consumers.

B2G: stands for "business-to-government," which describes transactions, interactions, or commerce between businesses and government agencies.

Bundling refers to the practice of packaging together multiple products or services to be sold as a single unit, often at a discounted price compared to purchasing each item individually.

Chargeable weight is the weight used by shipping carriers to determine the shipping cost of a package, which may be either the actual weight or the dimensional weight, whichever is greater.

Cycle count is a method of regularly counting a portion of inventory to ensure accuracy without disrupting operations.

Dimensional weight is a pricing method used by shipping carriers that takes into account both the weight and the size of a package when calculating shipping costs.

FBA stands for Fulfillment by Amazon, a service offered by Amazon that allows sellers to store their products in Amazon's fulfillment centers. Amazon then picks, packs, ships, and provides customer service for these products.

FBM stands for Fulfillment by Merchant, which is an e-commerce fulfillment method where sellers fulfill orders using their own resources rather than relying on a third-party fulfillment service like Fulfillment by Amazon (FBA).

Inbounding refers to the process of receiving and handling incoming goods or materials into a warehouse or fulfillment center.

Inventory turnover ratio measures how quickly a company sells its inventory. It's calculated by dividing the cost of goods sold by the average inventory value.

Kitting involves assembling individual items into kits or packages, typically to fulfill specific orders or to create new product bundles for sale.

Last mile courier is the final delivery step and the carrier involved in bringing packages from a distribution center or fulfillment center to their destination, often homes or businesses.

Order fulfillment is the process of handling and delivering customer orders from start to finish.

Preorder: means customers can reserve and pay for an item before it's released or available for purchase.

Put away is the process of storing received goods or materials in their designated locations within a warehouse or fulfillment center after unloading.

Receiving is the process of accepting and checking goods or materials upon their arrival at a warehouse or distribution center, typically involving inspection, documentation, and recording of the received items.

Shipping zones are geographical areas used by shipping carriers to determine the distance between the point of origin and the destination of a package, which in turn affects shipping rates and delivery times.

SKU stands for Stock Keeping Unit, which is a unique code assigned to each distinct product in inventory for the purpose of tracking and managing its stock levels.

Unloading is the process of removing goods or materials from a vehicle, such as a truck or ship, upon arrival at a destination, typically a warehouse or fulfillment center.

Final Thoughts

Today's blog was simple, yet from my personal experience, it's an important consideration for direct-to-consumer (DTC) brands when it comes to outsourcing to a 3PL fulfillment center. Costs are a significant factor, and some 3PLs structure their pricing based on common terms. I hope this information proves helpful!

See you in the next blog!


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