If you run an e-commerce business, you know that ensuring a seamless shopping experience from ordering all the way to receiving the delivery is essential to increasing customer satisfaction and building repeat business opportunities. This is why having an in-depth understanding of the fulfilment process and making the right choices when it comes to your e-commerce fulfilment strategy are key elements in ensuring business growth. It is also why returns, the harder and costlier half of fulfilment today, now need a plan of their own, and why a growing number of retailers are treating ecommerce retail fulfilment as a sustainability question too, as we explain below.
What is fulfilment?
Starting with the basics, letโs look at what fulfilment means. The term โfulfilmentโ in retail relates to the process involved in delivering goods to a customer, from the moment the order is received to the moment the package arrives at the customerโs address.ย
Fulfilment is mostly associated with the e-commerce trade, as shops that sell to customers in person are less likely than online retailers to have to use the mail to deliver an order. As many businesses donโt have the infrastructure to handle the fulfilment process in-house, a fulfilment services provider is often employed to take care of fulfilment.ย
Here are some of the steps included in the fulfilment process:
- Warehousing productsย
- Managing stock availability
- Processing payment for received orders
- Packaging the order
- Placing the correct labelsย
- Shipping and delivering the order
- Keeping the customer notified of the delivery statusย
- Dealing with returns
Types of fulfilmentย
There are different ways to approach fulfilment. Generally, there are three types of fulfilment strategy you could go for: a fully hands-on merchant fulfilment, a shared-responsibility dropshipping approach, or delegating your fulfilment to a third-party fulfilment services provider.ย
Merchant fulfilment
The merchant fulfilment approach is a hands-on solution where the responsibility for fulfilment lies solely with the business owner. With no outside parties involved, the retailer will manage and execute all stages of fulfilment in-house, including order taking, stocktaking, invoicing, storage and shipping.ย ย
The Pros
Maintain control: The main benefit of merchant fulfilment is that it allows you to stay in control throughout the entire process, so you can oversee the packaging, labelling and all other details. This gives you the opportunity to make executive decisions and last-minute changes whenever you see fit.ย
Save money: Doing everything in-house means you wonโt have to worry about the added cost of outsourced fulfilment services.ย
The Cons
Time-consuming: Packing and labelling can both be extremely time-consuming processes. While youโll be cutting down on the cost of hiring a third party to deal with this, you will have to account for time in-house to get the job done.ย
Limited scalability: The above is especially true for bigger businesses. The more orders you have the more difficult it becomes to fulfil the orders by yourself to the point where it becomes impossible. Therefore, if you want to scale your e-commerce operation, you will eventually need to move away from merchant fulfilment.ย
Hard to organise: Keeping track of all orders, where they are in the fulfilment process and the available stock, can be quite difficult. To be able to manage this, you will have to implement a centralised organisational system.ย
Dropshipping
Dropshipping is the middle ground of order fulfilment strategies. In this scenario, you, as the online retailer, act as a distributor for a certain supplier. Your role is to advertise and sell goods but the responsibility for stocking the product and then shipping the orders to the customers stays with the supplier.ย
The Pros
No logistics responsibilities: The challenges of distribution are not something you will have to worry about. Organising and tracking deliveries are both within the duties of the supplier.ย
No need to deal with warehousing: Storing large amounts of goods requires space, machinery and organisational systems in place. Not having to plan for warehousing is a major weight off your shoulders.ย
Little to no cost: With warehousing and logistics out of the equation, there are little to none fulfilment-related costs for your business to pay.ย
The Cons
Low-profit margins: In a dropshipping business most of the profit for each sale goes to the supplier, which means you will have to rely on high volume sales to make money.ย
High Competition: Landing an exclusive deal with a distributor is nearly impossible, so chances are there will be many direct competitors selling the exact same product as you at competitive prices. This further hurts your profit margins and limits your opportunities to build a unique brand.ย
No control over quality: Whether itโs the quality of the product itself or the punctuality of the delivery, you will have no way of directly impacting the quality of the service.ย
Third-party fulfilment
It may sound like the name of a Star Wars robot character but 3PL, in fact, stands for third-party logistics. This fulfilment strategy means that you keep control over the production of your product but the entire fulfilment process, including order processing, storage and shipping, is handled by a third-party fulfilment services provider.ย
The Pros
Multiple shipping locations: A third-party provider could give you access to multiple strategically placed warehousing facilities, allowing you to expand your business nationally and even globally.ย
Same-day shipping: When it comes to online retail, being able to offer same-day or next-day delivery might be what drives the final decision to buy from you. 3PL ensures you can deliver express services.ย
Professional services:ย Outsourced fulfilment services are done by specialists in each area, from stocktaking to packing and project management.
Easy to budget for: When choosing a 3PL provider, you will be given a quote to tell you exactly how much you will have to pay. This takes unpleasant surprises out of the fulfilment process.ย
The Cons
Commitment to a single 3PL: Choosing a fulfilment services provider is naturally followed by signing a contract and committing to long-term services. It takes time and effort to research suitable options and to compare quotes from competing providers.ย
Transferring goods to a warehouse: Another thing to put on your list of added costs is that it is your responsibility to deliver your goods to the third-party providerโs warehouse.ย
Personalisation isnโt a given: Adding branded packaging or sending a handwritten โThank youโ note with each order arenโt part of the basic fulfilment process and you will be charged extra for those.ย
What do the third-party fulfilment services include?
A third-party fulfilment services company is a business that is solely devoted to building expertise in the different stages of the fulfilment process.ย
There are three main things a fulfilment centre operator will do for you:
- Inventory storage for all your goods
- Pick & pack order processingย
- Shipping for all ordersย
Of course, those are just the core services. Third-party logistics can also include a number of added-value services, including:
- Reducing the cost and speeding the deliver of blister packaging
- Kitting similar products together to minimise costย
- Personalised/branded packaging
- Dealing with returns, including reverse logistics and even refurbishing
- Safe disposal of discontinued productsย
Outsourced fulfilment services benefits
Choosing to go down the 3PL path not only takes a huge load off your shoulders but it also allows your business to grow faster as it frees up your time, gives you access to expert services and presents you with opportunities to scale your business.
Some of the main benefits of third-party fulfilment services are:
- Scalability
The more your business grows, the bigger the volumes of orders you will have to deal with. Using third-party fulfilment services allows you to grow your fulfilment capabilities at suitable rates. - Reduced shipping cost
fulfilment specialists deal with large shipping volumes daily, therefore they have established relationships with carriers and can secure better rates. - Increased efficiency
Using the help of a fulfilment centre means that only trained personnel will be involved in the fulfilment process. With existing systems in place, a 3PL provider can easily manage the warehouse staff without a need for supervision from you. - Automated order processing
From the shopping cart to the warehouse and the customerโs front door – the whole process will be automated. - Detailed reporting and tracking
Outsourced fulfilment services providers use a comprehensive digital system which allows you to keep track of every order and gives you detailed reports on all transactions. Order tracking should also be an available function for both you and the client. - Itโs budget-friendly
Third-party fulfilment for large shipping volumes usually is cheaper than handling the process in-house, as you wonโt have to commit to long-term warehouse leasing, employ more permanent staff or invest in upskilling. Not to mention, itโs easier to budget for as you will know exactly how much you need to pay in advance. - Easier returns
Automated returns handling and processing are some of the added benefits of third-party fulfilment. Certain providers will even deal with refurbishing returned items and restoring them to a sellable condition. - Less stress
Letting someone else deal with the hassle of warehousing, stocktaking, shipping and delivery issues frees you up to spend time on sales and marketing and reduces the amount of stress you are under. Also, in case you have questions about fulfilment issues, you have an expert support team to answer them for you. - Professional advice
Sometimes organising your fulfilment can be challenging. Having a team of experts to give you advice can be a huge asset to your operation. - Opportunities for global expansion
By offering a number of domestic and international warehousing locations, a 3PL provider can increase the speed of delivery and enable a global market expansion for your business.ย
How is the cost of fulfilment calculated?ย
There is no generic answer when it comes to the cost of fulfilment. Many factors influence the price you will be asked to pay, so a fulfilment services provider will always start by giving you a free quote.ย
Depending on the size of your order, whether you need express services or not, where your clients are based (in the UK or international), the estimated cost will vary. Some of the things that you are likely to be charged for in a fulfilment quote are:
- Onboarding fees for new customers
- Cost of delivering your goods to the warehousing facility
- The assembly of the final products (if applicable)
- General storage fee and additional storage requirements fee(e.g. special temperature)
- Packaging fees per individual item or by pallet
- Labelling and placing barcodesย
- Express delivery servicesย
Some fulfilment specialists also offer additional services, such as sending related items together rather than individually (also referred to as kitting), refurbishing returned items and ensuring retail compliance.ย
The rising cost of returns
When this guide first appeared, the talk was all about getting orders out. The harder problem now is what comes back. Returns cost UK retailers an estimated ยฃ27bn a year, and online return rates average around 20%, rising above 23% in clothing.
Why returns now shape fulfilment
The pressure has changed how retailers act. About 76% of the UK’s top 100 retailers now charge for returns, and many warehouses run at 85 to 95% of capacity, leaving little room to process what comes back. A clear reverse logistics plan is now a key part of fulfilment processes.
How reverse logistics handles it
Reverse logistics is the process of taking a product back from the customer, checking it, and either returning it to stock or refurbishing it for resale. A fulfilment partner can log each return against your stock, sort sellable items from damaged ones, and get the good stock back on sale quickly, so a return becomes recovered value rather than pure cost.
Sustainable and ethical fulfilment
Fulfilment has an environmental cost as well as a financial one, and ecommerce retail fulfilment is under growing pressure to prove it can manage both. Every unnecessary mile a van drives, every return that ends up in landfill instead of back on a shelf, and every oversized box padded out with air adds to that cost.
In 2026, 73% of UK shoppers say they would pay more for products that use sustainable packaging, and returned parcels typically account for 37% of the ecommerce industryโs total greenhouse gas emissions.ย
A number of specialist โgreenโ 3PLs, including some certified under the B Corp standard for social and environmental performance, have built their whole pitch around this gap, because many retailers are already choosing a fulfilment partner on this basis, not just on price.
Much of what makes fulfilment greener is the same as what makes it efficient, which gives an established 3PL an advantage over a newer, less structured operation:
Fewer, fuller journeys
Route-optimisation software plans the most efficient delivery paths rather than sending vans out half-full, and a single, centrally located fulfilment centre (ADP’s is in the Midlands, with direct access to the M5) cuts the distance goods travel to reach customers across the UK.
Consolidated shipping
Kitting similar products together into one parcel instead of several separate ones means fewer boxes, less packaging material and fewer van journeys per order.
A second life for returns
The reverse logistics process described above, sorting, restocking and refurbishing returned items rather than writing them off, is a sustainability measure as much as a financial one. Every item put back on sale is one that doesn’t go to landfill.
Packaging sized to the order
Bespoke, tailored packaging is available as an added-value service and avoids the oversized boxes and excess void-fill that create wasted material and unnecessary transport weight.
Ethical ecommerce fulfilment and green fulfilment practices come from the same operational discipline that also makes fulfilment cheaper and more reliable, which is worth knowing if you’re comparing providers on sustainability as well as cost.
Is third-party fulfilment right for you?
In the beginning, most start-up e-commerce businesses manage fulfilment on their own but as they grow, many switch to outsourcing for their fulfilment needs. However, deciding whether the time has come for you to choose 3PL can be tricky.ย
The decision is ultimately down to each individual businessโ needs and capabilities but there are four main factors to consider when deciding whether to outsource:
Time
If being responsible for order fulfilment prevents you from growing your business because you are too preoccupied with stocking, packing and shipping, then you should probably look into outsourcing.ย
Quality consistency
If you have cyclical order increases, you may find that when you have fewer orders your deliveries are done on time but when you find yourself in a busy period, fulfilment quality is lacking. This is a clear sign that itโs time to look for a third-party fulfilment partner.
Volume
If your business is growing and you suddenly find yourself swamped with new orders, you would have an increase in sales to celebrate on one hand and an unmanageable volume of orders to handle on the other. You shouldnโt let that stop you from expanding your business, all you have to do is outsource fulfilment to a specialist in the field.ย
Space
The bigger your business gets, the bigger your warehousing needs become. Therefore, when you are running out of space to keep your inventory, you should find a warehousing provider to help you out.ย
Of course, third-party fulfilment isnโt right for every business. That being said, you probably shouldnโt outsource if:
- You only deal with a small volume of orders
- You sell highly-personalised, one-of-a-kind items, usually one per order
- You donโt have enough funds to pay a 3PL
How to choose a fulfilment partner?
If you have decided that itโs the right time to start using third-party fulfilment services, the next step is to choose the right fulfilment partner. Itโs important to take the time to find the right fit. Starting with comparing quotes is the natural thing to do as the cost will play a major role in the final decision. However, you should also know what questions to ask a fulfilment services specialist in order to fully understand what you are getting for your money.
Hereโs a list of things to consider we have gathered for you:
Have they worked with clients similar to you?
Having similar experience ensures inside knowledge about potential issues associated with your specific industry.ย
What technology do they use?
Allowing for easy integration is extremely important to building a functional fulfilment process. Some fulfilment services will offer better tech that allows for more automation and even gives you smart suggestions for development.
What data and reporting do they offer?
Knowing your customers and understanding your performance is key when running an e-commerce business. The reports you receive from your 3PL provider should give you enough actionable data to be of use when planning your overall strategy, as well as with making decisions related to purchasing and inventory.ย
What added value services do they offer?
Some businesses can benefit from a range of added value fulfilment services but not all third-party providers offer those. Even if you donโt currently require any extras, choosing a provider that has the capability to offer those if you need them in the future can be a smart decision.ย
Where are their warehouses located?
The location of the 3PL providerโs warehouses is important because it can impact the cost and speed of shipping. This is why you should look for someone who can offer a warehousing solution close to your target market.ย
Do they offer express shipping?
Same-day and next-day delivery are big drivers for conversion. You would benefit from working with a fulfilment specialist who can offer this type of express service.ย
What is your five-year plan?
Even though this question is directed to your own business rather than the fulfilment services provider, it plays an important role in finding the right partner. If you are looking to expand internationally in the near future, finding a 3PL provider with global shipping capabilities is important.ย
How can ADP Distributions help?ย
At ADP Distribution, we rely on our 50+ years of combined experience to help businesses with their e-commerce fulfilment needs. We value each of our clients and we provide a tailor-made service to suit your individual requirements. With our fast, reliable and affordable fulfilment services, you can focus on making a profit while we take care of the rest. Hereโs what we have to offer:ย ย
- Modern UK-based fulfilment centreย
- Same-day and Overnight services
- Global fulfilment services for the international marketย
- Tracked delivery options
- Easy to use online orderingย
- Stock control and inventory management
- A bespoke approach to every clientย
For a relationship with a fulfilment partner you can trust, get in touch with ADP Distribution today and let us take care of your order fulfilment from start to finish.ย
Frequently asked questions
Do I have to pay for e-commerce returns?
Increasingly, yes. About three in four of the UK’s top retailers now charge for at least some returns to cover the cost, which can run to ยฃ10 to ยฃ25 per parcel before any refund. Many offer free returns to store but charge for postal returns. A 3PL partner can process returns for you, sort sellable stock from damaged items, and put good stock back on sale, which keeps the cost of each return down.
What is ethical or green ecommerce fulfilment?
Ethical and green ecommerce fulfilment means choosing a 3PL partner whose operations are already built to cut unnecessary mileage, packaging and waste, for example through route optimisation, a centrally located warehouse, kitting and a genuine reverse logistics process for returns, rather than one that treats sustainability as an add-on.
