Order fulfillment encompasses all steps from when a customer places an order to when they receive it: order processing, picking and packing in the warehouse, shipping carrier handoff, transit, and delivery. Efficient fulfillment is crucial for customer satisfaction and operational profitability.
DTC brands typically choose between in-house fulfillment (managing their own warehouse), third-party logistics (3PL) providers, or hybrid models. Each has tradeoffs around control, cost, scalability, and speed. Amazon has raised customer expectations for fast, free shipping, pressuring all retailers.
Fulfillment costs significantly impact pricing strategy. Brands offering free shipping must either absorb shipping costs (reducing margin), build them into product prices, or set minimum order thresholds. Analyzing competitor shipping policies reveals how they handle this tradeoff.