With around 5 million stores globally, WooCommerce is a titan in the world of eCommerce platforms. Unlike Shopify, a hosted platform designed specifically for selling online, WooCommerce is an ecommerce plugin that runs on top of WordPress. Requiring more developer expertise to set up, users will need to find a website domain and host, install plugins, and at the very least add some basic coding to modify their store. With that said, retailers powered by WooCommerce are likely to be more hands-on, and so might prefer to carry out more tasks, such as order processing, in-house. In this article, we discuss the benefits and drawbacks of outsourcing order processing. This is known as third-party logistics services, or ‘3PL’.
WooCommerce-powered retailers are diverse, shipping anything from 1 parcel per week, to thousands per day. Where a retailer sits on this spectrum will inform their suitability to outsource operations, from marketing, to customer service and eCommerce logistics. Ecommerce fulfilment is the process of entrusting a separate business entity to orchestrate the intake, picking, packaging, shipping, returns and general inventory control of finished goods. Increasingly, 3PLs are providing complementary services that reach deeper into the supply chain and end-to-end customer journey, such as outsourced manufacturing, customs clearance, product customisation and contact centre services.
Finding the right WooCommerce 3PL
If you’ve decided outsourcing fulfilment is the right move, the first step is to check out third-party feedback of the various 3PLs on the market, along with WooCommerce shipping and fulfilment plugins. You may require one that is based in your own country, or one that has multiple warehouses internationally. It’s also sensible to check out their client feedback in the form of case studies, and reach out to their clients. Furthermore, it’s prudent to check their employee feedback, as this will translate to the quality of their offering. Finding a 3PL that specialises in WooCommerce is also important, to ensure seamless integration, and to minimise risk with the fact that they are experienced working with businesses with similar technological infrastructures.
3PLs vary in terms of pricing too, and this can be broken down into storage, shipping, picking, packaging, setup fees and monthly charges for their software. 3PLs also charge for returns processing, customs clearance, and handling inbound customer queries via phone, live chat and social media. Fulfilment centres typically demand average daily orders from 10, up to 300 packets and/or parcels. Once you’ve found a price-competitive fulfilment house, then it’s crucial to agree on established lines of communication, KPIs (key performance indicators), and OKRs (objectives and key results), to ensure both parties share the same expectations with regards to metrics such as order processing speed, on-time delivery performance, WISMOs (‘Where is my order?’ queries), and customer satisfaction ratings such as CSAT and NPS (Net Promoter Score).
How WooCommerce order fulfilment works
Once you’ve established KPIs and OKRs, and signed your contract, this is where integration from your WooCommerce store, order management system (OMS), suppliers, and chains of command, to the 3PL’s warehouse management system (WMS), goods-in team, and key contacts, begins. At this point, the warehouse can receive your finished goods in bulk, ready for distribution and allocation of your SKUs (stock keeping units) throughout the various picking locations.
As orders flow in from your WooCommerce store, and other sales channels, the pick and pack team will receive a picking note for the order, and will collect the items, scanning with barcode technology at each point, ready to take to the packing bench, reach for packaging and application of the shipping label. The moment the shipping label is printed, your customer will receive a tracking notification, which will give them access to in-flight delivery options, such as timed delivery windows, photos throughout the parcel journey, through the courier network, and the option to request a safe place for their parcel to be left, such as their rear porch. The fulfilment centre will then group each labelled parcel by carrier, and the 3PL’s courier partners will collect the shipments, as late at 10pm in the evening. Beyond the final mile, after successful delivery of your customers’ orders, they may require a returns service, or have questions about their order, which some providers offer as an additional service.
Alternatives to outsourcing WooCommerce fulfilment
While this article delves into 3PL, there are other forms of eCommerce logistics. 1PL, or ‘first-party logistics’, is where a retailer delivers its own goods with its own vehicles. 2PL is when a retailer utilises a courier such as DHL or DPD, to collect from their own premises. 4PL and 5PL are more enterprise-level, in which a specialist manages multiple 3PL centres on a client’s behalf, along with deeper supply chain support and strategic consultancy. Another method is dropshipping, which allows retailers to expand their product range by working with suppliers who deliver their products directly to the retailer’s customers, as a white label service. Another common trend is micro-fulfilment, in which retailers rent out some of their spare warehouse space to other retailers. Many merchants take a flexible hybrid approach, and combine their own infrastructure with third parties, to mitigate risk.
The future of WooCommerce fulfilment
As the WooCommerce ecosystem grows, so too does the 3PL market. Retailers looking for shipping plugins and extensions that allow them to offer a broad range of delivery and fulfilment methods, will give customers more choice at checkout, and this can increase conversion rates. Providers such as Zendbox, as highlighted in the video above, offer a 10pm order cut-off time, which has helped retailers such as Complete Strength convert more orders, by offering next-day delivery services later into the evening.
Technology-driven 3PLs can also help WooCommerce merchants with inventory analysis technology, helping them avoid understocking or overstocking, and as a result, minimise lost sales and capital unnecessarily tied up in inventory. In the future, the proliferation of fulfilment centres means 3PLs will have to work harder to differentiate. Meanwhile, consumers increasingly demand personalised, yet on-brand, omnichannel experiences on their terms, along with fast, free and environmentally-friendly shipping.
