What is a meal kit?

A meal kit is a subscription-based service that delivers pre-portioned ingredients, recipes, or prepared meals directly to customers on a recurring schedule. The model blends convenience, customization, and lifestyle alignment, allowing subscribers to enjoy fresh, chef-curated meals without the complexity of meal planning or grocery shopping.

Meal kit businesses rely on recurring orders to drive predictable revenue while offering flexibility for customers to adjust menus, delivery dates, and dietary preferences. Beyond logistics, successful meal kit brands use personalization and digital engagement to build loyalty and reduce churn.

What is SKU swapping?

SKU swapping is a feature in subscription management that allows businesses to change the stock-keeping unit (SKU) associated with a product in a customer’s order while maintaining an active subscription. This capability enables companies to automate the delivery of a sequence of different products over time, ensuring that customers receive the right items in the correct order. SKU swapping is particularly beneficial for businesses offering subscription boxes, educational kits, or any service that provides a variety of products over a subscription period.

Why is SKU swapping important to ecommerce strategy?

Implementing SKU swapping in your ecommerce strategy can significantly enhance your operational efficiency and customer satisfaction. By automating the product delivery process, businesses can reduce manual intervention, minimizing errors and saving time. This feature allows for greater flexibility in managing inventory and can help ensure that each subscriber receives a tailored experience that meets their needs. SKU swapping also supports scalability, enabling businesses to grow their subscription base without the added complexity of manually adjusting orders.

What is a fulfillment center?

A fulfillment center is a centralized facility where ecommerce businesses store inventory, process orders, and prepare shipments for delivery to customers. These centers play a crucial role in the logistics chain, serving as hubs for inventory management, order fulfillment, and shipping operations.

Equipped with advanced technology and efficient processes, fulfillment centers are designed to optimize the storage and movement of goods, ensuring timely and accurate delivery to customers.

How can a fulfillment center enhance ecommerce performance?

Partnering with a fulfillment center offers numerous benefits that can drive ecommerce success. Firstly, it allows businesses to leverage economies of scale, reducing storage and shipping costs through centralized operations and bulk discounts.

Additionally, fulfillment centers employ advanced technology such as inventory management systems and automated picking and packing processes, enhancing accuracy and efficiency while minimizing errors and delays. By outsourcing fulfillment to experts in the field, ecommerce businesses can deliver faster shipping times, improve order accuracy, and enhance overall customer satisfaction.

How to choose the right fulfillment center for your ecommerce business

When selecting a fulfillment center, it’s essential to consider factors such as location, capacity, technology infrastructure, and service level agreements. Assess the proximity of fulfillment centers to your target market to minimize shipping times and costs. Evaluate the facility’s capacity and scalability to ensure it can accommodate your current and future needs.

Additionally, prioritize fulfillment centers with robust technology platforms that offer real-time visibility into inventory levels, order status, and shipping updates. Finally, review the provider’s track record and reputation for reliability, accuracy, and customer service to ensure a seamless partnership that aligns with your ecommerce goals. By choosing the right fulfillment center, you can optimize your ecommerce operations, streamline order fulfillment, and deliver exceptional experiences that drive customer loyalty and business growth.

What is order processing?

Order processing is a key element of order fulfillment that occurs on the business end after a customer places an order. It begins when a business receives an order, and ends when the order is shipped. Several aspects of inventory management, including batch picking, as well as shipping, packaging, and sorting inventory, fall under the order fulfillment process. Depending on the size and nature of the business, order processing can be conducted by a single individual, or it can occur in order processing operations like distribution centers or warehouses. By handling order processing efficiently and accurately, businesses can decrease the amount of time it takes to fulfill customer orders.

What is order processing software?

An order processing system, which captures all necessary information related to a customer and their order, can be either manual or technology-based. Once businesses reach a certain size, their order fulfillment operations may gain complexity. In these situations, it may be valuable to invest in order processing software, such as an order management system (OMS). This software can help automate certain manual processing operations, helping minimize human error and ultimately increasing sales. These order processing systems can store order data, check inventory availability, and track deliveries—actions that can increase customer satisfaction and increase sales by improving order accuracy and reliability.

What is order management?

Order management is a process used by businesses to digitally manage the entire lifecycle of a customer’s order. The typical order management process begins when a customer places an order, and ends when the customer receives their purchase. In between, the order management process includes other essential operational functions such as order processing, inventory management (including inventory visibility), sales, order fulfillment, and returns. Because order management is so closely tied to customer satisfaction, it is an essential consideration for customer relationship management.

What is an order management system (OMS)?

An order management system is the way that businesses organize their order management processes and strategy. Order management systems can take a variety of different forms, including various types of order management platforms and order management software. As businesses grow, order management needs may gain complexity. Certain manual processes of order fulfillment may be subject to human error—but by automating those business processes, businesses can better meet or exceed customer expectations.

What is a SKU (stock keeping unit)?

SKUs, or stock keeping units, are unique product codes that facilitate supply chain and inventory management for both online retailers and brick-and-mortar stores. The SKU architecture provides information on essential aspects of the product—color, size, style, price, etc.—and lists this information in order of importance. SKUs are intended to be unique to your brand, physical or online store, products, and customer base.

SKUs vs UPC codes

While UPC codes (universal product codes) and SKUs may look similar, they have different purposes. Universal product codes, or barcodes, are for external use and remain the same no matter who is selling their associated product, while SKU codes are used internally. While a SKU provides information on product traits, a UPC code identifies the item and its manufacturer. Additionally, SKUs are alphanumeric and between 8 and 12 characters long, while a UPC code is numeric and always 12 characters long.

SKUs and your inventory management system

One of the major ways your retail business can leverage the benefits of SKUs is by using them to accurately track inventory in real-time. This can allow you to assess your inventory levels more easily and know when you’ll run out of certain products so you have time to reorder. SKUs can also be a powerful tool for forecasting sales, increasing customer loyalty, and even leveraging cross-selling and upselling opportunities.

What is order fulfillment?

Order fulfillment is the steps a business takes to deliver orders to customers. The order fulfillment process begins with receiving customer orders. In between, the complete process can include sending order confirmation emails to customers, locating items in warehouses or fulfillment centers, managing the shipping process, sending the customer tracking information about their purchase, and more. Optimizing your order fulfillment strategy plays a key role in increasing customer satisfaction, boosting customer retention, and driving revenue for your business.

Considerations for optimizing your order fulfillment strategy

The order fulfillment process is hugely important to customers. When customers have a negative delivery experience, their opinion of your online store can plummet—but ship in an orderly and timely manner, and you can build trust in your brand. Therefore, before implementing an order fulfillment strategy, be sure to compare shipping costs between different shipping carriers to determine which and how many options you should provide. For inventory management, consider the amount of incoming inventory you expect to bring in and how much space you’ll need for inventory storage. Depending on your unique business needs and resources, you can opt to provide in-house fulfillment or outsource some or all of your fulfillment needs to third-party fulfillment providers.

What is partial shipping?

A partial shipment is the fulfillment of a single order in more than one delivery. In other words, when a customer makes a purchase of multiple products, they are delivered in multiple shipments rather than all at once. Having partial shipping capabilities can improve the customer experience when an entire order is not able to be fulfilled at one time. For example, if certain items are backordered or delayed but not others, or if certain items could be delivered more quickly if sourced from different warehouses, partial shipments allow the customer to receive each item in the order as soon as it is available.

Partial shipping should not be confused with partial truckload shipping or less-than-truckload (LTL) freight shipping, which are separate shipping logistics processes.

Challenges of this shipment solution

Though customers benefit from the convenience and speed of this shipping strategy, it can present some challenges on the merchant side. This added complexity can make tracking the individual shipments more difficult in scenarios like sending separate invoices for each shipment and notifying customers of each shipment. Additionally, as the process of fulfilling a single order in multiple shipments requires more packaging materials than a single shipment, some customers may find this strategy concerning from an environmental perspective. 

Clear notifications and communication surrounding partial shipping is crucial to mitigate confusion and frustration on the customer end. Properly setting customer expectations in this way can help streamline the purchasing process, improving trust in the brand.

What is an order management system (OMS)?

An order management system (OMS) is a method used by businesses to centralize the tracking and handling of essential operational functions like inventory management, sales, order fulfillment processes, and returns. There are many different types of order management solutions, including manual order processing, ecommerce platforms, and order processing software systems. Having an OMS platform or software can help prevent human error when handling customer orders, helping businesses optimize their operational processes while creating a more seamless customer experience. 

What can an OMS do?

An OMS can handle many vital functions for both ecommerce and brick and mortar retailers. It can track and monitor customer orders, which is particularly important for omnichannel businesses that operate across a variety of channels. It can perform inventory management, helping optimize forecasting and prevent issues like overstocking products. It can manage aspects of order fulfillment, handling processes like printing shipping labels, and can streamline the processes of returns, refunds, and exchanges.

What is the drop shipping business model?

Drop shipping, or dropshipping, is a business model where an ecommerce store sells products that are kept in stock and shipped by a third-party supplier, not by the store itself. Unlike a typical order fulfillment method, the store does not own or maintain any inventory; instead, it purchases the inventory as needed from the supplier. First, a shopper places an order via the store’s website. Next, the store sends the customer’s order to their third-party supplier for fulfillment. Finally, the supplier prepares and ships the order directly to the customer, without the store ever having handled the product. 

Risks and benefits of the dropshipping business model

There are many benefits of dropshipping for an ecommerce business. Because inventory is often a significant startup cost for new businesses, the dropshipping model requires upfront less capital. It also doesn’t require a brick and mortar storefront to operate, or a warehouse and warehouse staff to manage that inventory, making it often a faster and less costly way to launch a business. 

An online store should also consider the potential risks of the model. For one, the processes of inventory management, shipping, and returns can all become particularly complex when not managed in-house. Outsourcing inventory, while reducing upfront costs, can create low margins, which can make it difficult to cover other business expenses. If supply chain issues occur, drop shippers have little control over resolving the issues themselves. Finally, despite enabling stores to sell a wide variety of products, the model can present barriers to customization of those products.