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A Straightforward Guide to E-commerce Order Fulfillment

In the world of online retail, your customer experience must be smooth and consistent, especially when it comes to your order fulfillment—the process of delivering your product to your customer. 

Next-day and same-day delivery-once an option that e-commerce stores could choose to offer -is now an expectation in online shopping rather than the exception. Fast delivery is no longer enough, today’s online shoppers now want instant delivery. 70% of e-commerce customers say convenience is one of their top reasons for shopping online. 41% of customers are willing to pay for same-day delivery.  

It follows that a key to any successful e-commerce business is fast and efficient e-commerce order fulfillment services.

Whether you’re trying to set up a new online e-commerce platform or just improving your existing operations, this easy-to-read guide explains everything you need to know about e-commerce order fulfillment.

From the process of fulfilling an order to order fulfillment success strategies and everything in between, we’ll walk you through the basics of e-commerce order fulfillment to keep your customers coming back, boost your brand reputation, and give your business a competitive edge. 

What is e-commerce order fulfillment?

E-commerce order fulfillment is an essential e-commerce business process that incorporates the entire process of receiving, processing, packing, and delivering goods to a customer. It begins from the moment a customer places an order on an e-commerce platform/website and ends when they physically receive their order. 

In certain cases when a customer seeks an exchange or reimbursement of the items, the return process also becomes a part of the order fulfillment process.  

Some retailers and companies take care of the entire fulfillment of orders in-house, while others use a third-party logistics (3PL) provider to shoulder some of the burdens. There is also the option to outsource your order fulfillment to a micro-fulfillment provider like Ohi, to enable two-hour, same-day, and next-day delivery in key metro areas.

What are the steps in e-commerce fulfillment process?

Your e-commerce fulfillment process is something that should be streamlined and optimized to get your orders from the warehouse to your customers’ doorstep as quickly as possible. 

While there is no one-size-fits-all order fulfillment strategy, the broader steps that a product moves through within the order fulfillment process are very similar, regardless of the company size or type.

1. Receiving inventory 

The first step in the e-commerce order fulfillment process is the retailer receiving their products at a nominated distribution location. 

This can either mean receiving the goods first-hand at your place of business or outsourcing to a 3PL provider to manage to receive the stock at an external storage location such as a warehouse or a fulfillment center. 

You also have the option of joining a micro-fulfillment center network, which can work very well if you’re a DTC brand with an urban client base. In this scenario, you can inject inventory into the network at one or more hubs, which are traditional distribution centers that then handle the transfer of your inventory throughout the micro-fulfillment center network (and into all major cities).

2. Inventory storage

This refers to the location when and where orders are logged into inventory and stored ready to be filled.

Ideally, each item must have a Stock-Keeping Unit (SKU) identification code associated with specific storage space. This space can be as small as a spare room or as large as a warehouse, depending on the size of the business and its merchandise. 

Well-managed, organized, easy-to-access inventory storage is essential to the process of e-commerce order fulfillment to mitigate delays in customers receiving their goods.

3. Order processing

Once the customer completes their online transaction, the order is received and processed by the retailer’s e-commerce platform, ready to be filled at the storage facility.

This stage of order fulfillment includes item selection, packing the product/s suitably for transit (including choosing the right packaging to minimize costs and damage), and preparing the order for shipment. 

A few considerations to ensure smooth order processing are:

  • Accuracy: Small mistakes in your order can quickly snowball into logistical disasters or customer disputes that go from bad to worse. Keeping your inventory in fulfillment centers that are close to your customers is helpful here, especially for enabling instant delivery.
  • Supply chain visibility: Knowing how your orders are selected and packed before shipping can help you identify bottlenecks in the fulfillment process.
  • Packaging: Amazon sellers are instructed to select the right kind of packaging for their products, but this applies to e-commerce fulfillment in general. Choosing the right boxes and packing materials can help ensure your orders arrive in good condition. For example, any fragile or hazardous materials need to be identified and given clear, corresponding labels indicating they need special handling. If you are using micro-fulfillment (such as Ohi’s instant commerce solution), you may need little or no exterior protective packaging, since orders only need to travel a short distance to the end customer.

4. Shipping

At this stage, the order leaves the storage location and is shipped to the customer via a variety of methods of transportation. 

Small businesses usually opt to ship their orders via services like UPS or FedEx. Larger brands and e-commerce companies with the resources to do so have access to a wider variety of shipping methods, or often choose to partner with micro-fulfillment services like Ohi, to ensure that each order is accurate and arrives quickly, which can drive increased conversions and improve customer loyalty.

Shipping logistics are a crucial element in the e-commerce order fulfillment process. A 2018 study showed that 83% of US shoppers said that free delivery/shipping was their most important deciding factor when ordering online. The study also showed that shipping costs are a major factor in customers’ online shopping cart abandonment, whereby 54% of shoppers did not proceed with their order because of e-commerce delivery fees.

97% of online shoppers want full transparency when their orders are shipped, including live updates at each step, from when it leaves the fulfillment center to when it’s dropped off. It minimizes the anxiety they have about their orders going wrong – and practically the worst thing you can tell a customer when they ask you how their order went missing is “I don’t know.”

Integrating live-tracking and giving customers SMS and email updates when their order gets loaded onto the delivery vehicle leaves the fulfillment center, starts its transit, and arrives at their location gives them confidence in your brand and makes it more likely they’ll have a positive experience and possibly even leave a positive review for you. It also reduces the burden on your customer service team because it reduces the margin for error that causes complaints and disputes to happen. 

Be sure to also keep your messaging consistent with your live-tracking updates and overall brand guidelines—it’s an essential part of your post-purchase experience.

5. Returns processing

When you are considering your e-commerce order fulfillment process, it is advisable to plan beyond the shipping stage and consider customer exchanges, returns, and reimbursements, too.

A fast, accurate, and hassle-free process for dealing with returns, restocking, and discarding of damaged items, as well as customer refunds, must be established as part of your online order fulfillment service.

This need is inherent in almost every e-commerce business. It’s how you manage it that will make all the difference.

Types of e-commerce order fulfillment

There are a few different ways in which to manage your e-commerce order fulfillment. We’ve outlined some of the most popular here.

Third-party logistics (3PL) 

Many third-party logistics providers will handle the warehousing, packing, shipping, and even return steps of the order fulfillment process for e-commerce businesses.

As businesses grow, outsourcing order fulfillment becomes necessary to ensure all online orders are fulfilled to meet customer expectations.

Using a third-party fulfillment service also tends to speed up order fulfillment as many of these companies use automation technology to complete the process faster than manual completion. Shopify acquired 3PL provider Deliverr this year to simplify their inventory management and offer two-day and next-day shipping for this reason. Similar services from other providers can offer DTC e-commerce brands reliable nationwide order fulfillment capabilities, which they can later augment with instant delivery services (for faster delivery to end customers) via providers such as Ohi.

Micro-fulfillment

Micro-fulfillment involves the strategic placement of smaller-style storage facilities in densely populated areas, or near your target market demographic.

Online shopping and e-commerce platforms are driving the micro-fulfillment center trend, allowing e-commerce brands to forward-position their inventory closer to their customers’ geographic location, reducing the cost of transportation and offering their customers instant delivery.

Ohi specializes in enabling instant delivery for direct-to-consumer brands via micro-fulfillment on its platform of micro-fulfillment centers.

In-house fulfillment

This is a popular approach for larger businesses and e-commerce brands that have the resources to do all their fulfillment themselves, in their own spaces, and within their own management. Doing order fulfillment in-house gives you a higher degree of control over your logistics, but also requires that you store and process your orders yourself.

However, doing your own fulfillment in-house can be very resource-intensive and is therefore beyond the ability of many e-commerce brands to execute. In-house fulfillment requires an extensive network of brick-and-mortar stores and distribution centers (if delivery speed is a priority) and the personnel to ensure reliable and accurate order processing.

Dropshipping

In dropshipping, most of the supply chain process is outsourced for a more hassle-free and hands-off experience. However, you uniquely never actually own the merchandise you are selling.

Dropshipping is when a seller purchases their inventory from a third-party middleman rather than keeping it in stock themselves—they only buy products to fulfill when the customer makes an order. This way, the e-commerce seller doesn’t have to handle the fulfillment logistics themselves. e-commerce stores that make use of dropshipping often work with multiple suppliers to fulfill orders.

Outsourcing your warehousing requires low overhead and smaller upfront investment, but it comes at the expense of losing supply chain visibility and control over the fulfillment process.

How to plan your e-commerce order fulfillment strategy?

To determine which e-commerce order fulfillment process and strategy is going to work best for the nature of your business, there are a few important factors to consider.

Location

To cut shipping costs and keep delivery time to a minimum, it’s advantageous to forward-position your e-commerce order fulfillment centers close to your customers or at least have them in a central location (to ensure consistent, if not fast, delivery speed).

Location is especially important in micro-fulfillment-and it’s also one of its major advantages. 3PL service providers often store inventory in rural areas where warehousing costs are lower. Ideally, DTC e-commerce brands should have access to a national distribution network where they’re able to fulfill their online orders across the country in two days or less.

Delivery time

3-5 day delivery no longer cuts it. We live in an age when customers want their online orders instantly, in minutes rather than days.

In a 2018 study, 53% of shoppers identified speed of delivery as the second most important factor when it came to evaluating online or e-commerce purchases, with 24% canceling their orders due to poor delivery speed.

Customers want their products fast, and because e-commerce order fulfillment begins with the customer placing an order, the management of everything leading up to the delivery phase is just as important as the delivery of the product itself.

Creating a Standard Operating Procedure (SOP) for any in-house order fulfillment, as well as being clear about any 3PL processes and the estimated timeframes for fulfilling an e-commerce order, can assist in saving time across the board.

With delivery speed being one of the most competitive advantages in the e-commerce order fulfillment industry, it is not surprising that repeat purchase rates tend to be higher for retailers who offer the shortest delivery times.

It’s come to the point where instant delivery is what customers expect, rather than just a nice-to-have option. In the last part of 2020, Target increased its same-day e-commerce fulfillment by 273% over the previous quarter.

To achieve this speed of service, some companies team up with an instant commerce provider like Ohi—we offer businesses the ability to provide instant or next-day delivery that is also carbon-neutral; another big plus for any consumer in our current climate.

Source: ShipperHQ

SKU count 

When devising your e-commerce order fulfillment strategy, you also have to consider how many types of products you sell (your SKU count), and how quickly you can fulfill and ship them.

How many different types of products do you offer? How big or heavy are they? How quickly can you deliver and ship them to the end customer? How quickly does your inventory turn over?

Micro-fulfillment tends to work best with smaller products, smaller inventory variety (and fewer SKUs as a result), and fast-moving inventory.

Customer support

How you support your customers, particularly in an online environment on e-commerce platforms, is central to your order fulfillment strategy’s success. Some things to look out for include:

  • Reply times must be short;
  • Online chat, click-to-call, and SMS text support are preferable;
  • Having an in-app chat is a great way to offer quick support; and
  • Additional and complementary social media customer service is also highly favorable. 

Supply chain tracking

Tracking and managing your supply chain in e-commerce order fulfillment is another important consideration.

The supply chain includes:

  • Suppliers
  • Producers
  • Warehouses
  • Logistical and transportation services. 

Effectively managing the different stages and steps of the supply chain will help you to continue to meet your customers’ ever-evolving expectations. Supply chain management ensures you have all the necessary inventory and logistical means to deliver almost instantaneously and to create an on-brand positive customer experience.

The challenges of e-commerce order fulfillment

Despite the perks that a well-executed e-commerce order fulfillment strategy can bring, several challenges must be addressed within any online order fulfillment strategy. 

Delays in shipping 

Modern consumers expect fast delivery, and where instant delivery is not an option, finding ways to reduce shipping time is the key.

Streamlining your processes and being strategic with your business or warehouse locations are two ways you can do this. In particular, the location of your e-commerce fulfillment centers will dictate how quickly your products can get to your customers.

Most customers also want either free shipping or shipping at a very low cost. This can be achieved by bringing up the price of your products to include the cost of shipping, or by adding free shipping on orders over a certain amount. 

Shopping cart abandonment

The rate of online shoppers abandoning their carts is high, especially when compared with in-store shopping purchases. 

This can be for a variety of reasons, particularly when additional costs are too high (such as shipping), when they’re forced to create a new account, or when your website doesn’t support an adequate variety of payment methods.

One way to combat the high rate of abandoned shopping carts is to create easier online checkout and payment options for consumers. Research suggests that avoiding the requirement for customers to create an account to be able to purchase with you can also reduce cart abandonment on e-commerce platforms.

Source: Feedvisor

Customer service

With the pandemic accelerating the shift to e-commerce and online order fulfillment, the market is much more competitive than it used to be. That means your customer service needs to be spotless for your e-commerce brand to be competitive. 

Creating a positive overall customer experience includes customer service communications options like automated chatbots and a dedicated customer support email.  Having systems like these in place makes ordering from you streamlined and hassle-free, and makes cancellations and returns less likely.

Inefficient returns

Returning orders promptly is just as important to the success of your e-commerce fulfillment as delivering them.

Your fulfillment centers (or at least one of your fulfillment centers or partners) must be able to quickly receive, evaluate, and restock returned goods as well as manage any exchanges that may be required.

Additionally, offering your customers the option of free returns can be a major perk that will help your e-commerce brand stand out.


At Ohi, we’ve flipped the script for e-commerce fulfillment, transforming it from what is traditionally seen as a cost center into a growth engine. Brands join the Ohi platform to deliver powerfully fast, brand-focused, and memorable post-purchase experiences that enable them to grow. Want to learn more about how Ohi enables instant commerce? Get in touch today.

How to Choose the Right E-commerce Fulfillment Partner

e-commerce fulfillment partner

Order fulfillment can make or break your e-commerce business. It sounds cliche, but a reliable e-commerce fulfillment partner will help your brand delight customers and grow your business. In contrast, a poor e-commerce fulfillment service will cause you to lose your customers and leave your brand reputation in tatters, no matter how awesome your product is. 

So, how do you choose the right e-commerce fulfillment partners? What are the best criteria? 

Before we delve into the essentials to help you make the right choice, here’s a brief introduction to help you understand e-commerce fulfillment services a bit better. 

What are e-commerce fulfillment services?

Think of an e-commerce fulfillment service as a command center for your e-commerce business that deals with the post-checkout process of delivering online orders to the customer.

However, e-commerce fulfillment is much more than placing a parcel on a customer’s welcome mat. Fulfillment includes receiving and storing inventory, processing orders, picking items, packing boxes, and shipping the items to the customer’s destination, along with the requisite communication to both internal parties and the end customer.

Who would need e-commerce fulfillment partners? 

  • Businesses that run on a direct-to-consumer model and have no high street store or storage facilities
  • Companies that have simply outgrown in-house fulfillment capabilities to the point they can no longer dispatch orders at scale
  • Omni-channel businesses that are looking to add an e-commerce channel 

Typically, most fulfillment services run on large warehouses on the outskirts of cities, but modern-day fulfillment solutions make use of multiple small-scale warehouses called micro-fulfillment centers. These micro-fulfillment centers are set up in metro areas and rely on automation to cater to customers’ needs and fulfill the goals of faster and more sustainable delivery across different geographic locations. 

Difference between e-commerce fulfillment services and traditional 3PLs

Although traditional 3PLs share some overlap with e-commerce fulfillment services, most 3PL companies focus on just providing basic functions of logistics, i.e., pick and pack, warehousing, distribution, etc.) whereas full-service fulfillment centers offer more comprehensive services, including customer support and returns. 

  • Delivery speed – given their model, traditional 3PLs lack the means to enable instant delivery for brands; they can cut down the wait time to two days or one day (next-day delivery), at best. However, cutting down on delivery time is costly for them. But this is where modern e-commerce fulfillment services like Ohi shine; Ohi, for example, is able to provide deliveries same-day and often in under two hours.
  • Cost – 3PLs often charge based on weight, time, and distance, whereas modern e-commerce solutions like Ohi charge a flat fee. Instant commerce solutions often forward-position inventory in micro-fulfillment centers around the country, significantly reducing the transportation and delivery required on a per-order basis, even if the number of dedicated deliveries increases significantly. 
  • Sustainability – another key difference is proximity to end customers, which allows these modern e-commerce fulfillment services to use eco-friendly transportation (walkers, bicycle messengers, and electric vehicles) and reduce the need for wasteful cardboard packaging. In contrast, this is far from possible with a traditional 3PL.

While there are a few patent differences, 3PLs and instant commerce providers like Ohi tend to serve different needs. Because providing two-hour or same-day delivery coverage throughout the nation (including in rural areas) is impractical and unrealistic for any fulfillment service, many merchants leverage modern e-commerce fulfillment providers like Ohi alongside their 3PL in synergy, to offer an incredible instant commerce experience (where available) and reasonably fast delivery elsewhere in the country.

How to choose the right e-commerce fulfillment partner?

According to an eMarketer report:

“The biggest challenges facing retailers today include transportation, scalability, inventory management, order processing speed and accuracy, and profitability.”

You need a fulfillment partner that can reliably provide services to reach and exceed KPIs in all five of the areas above. This guide will walk you through key factors to keep in mind as you go fulfillment hunting for the right e-commerce fulfillment service.

1. Delivery speed

If your customers are like most shoppers today, they expect fast delivery (and will expect it to get faster and faster).

According to PWC’s recent global consumer insights survey, fast delivery is shoppers’ #1 overall consideration when buying online (ranked top three by 41% of respondents).

With the emergence of same-day and two-hours or less delivery options, the benefit or strength of two-day delivery as a competitive advantage has started to wane. This is because these options are no longer considered fast enough by modern shoppers. Therefore, growth-mindset e-commerce retailers are increasingly pivoting to instant delivery, as this is a proven strategy to improve their customer experience and help enhance customer acquisition and retention.

With instant delivery fast becoming the expectation, longer delivery times may propel your customers to shop from your competitors, hurting your business.

2. Warehouse locations

Nowadays, consumers increasingly are not satisfied with two-day delivery. And it’s near impossible to meet the delivery speed needs of today’s customers with outdated fulfillment models that solely rely on gigantic warehouses based in the middle of nowhere, where land is cheap. While this may seem attractive on the surface, consider what that fulfillment approach means for your last mile delivery experience and delivery speed.

If speed is what you’re after, you need to look for a micro-fulfillment-based solution that utilizes small warehouses (or micro-fulfillment centers) in densely populated urban areas, to shorten the time/distance to the end customer. By keeping your inventory hyperlocal to customers, the last mile delivery experience can be extra quick, since a delivery courier can then deliver one order at a time (point-to-point) instead of hundreds of orders by the truckload.

3. Scalability

A good potential partner should be just as focused on your company’s continued growth as you are. Furthermore, they should be flexible and prepared to acclimate and grow with you as your business grows. You should see evidence that they have the capacity (or are actively adding the capacity) to meet your growing order volume in a way that maintains a high standard of operational excellence and your all-important customer experience.

In summary, make sure you team up with an e-commerce fulfillment provider who is flexible, adaptive, scalable, and capable of tackling unprecedented situations and volume spikes.

4. Data tracking

The only way to scale your business is to have complete visibility into your metrics to maximize your efforts on areas of growth and create solutions for bottlenecks discovered. In addition, as a critical component of brand differentiation, e-commerce businesses must be able to provide excellent customer service, which is dependent on having accurate and timely data at their fingertips.

Choose a fulfillment provider that provides these critical data tracking capabilities in as near real-time as possible:

  • Inventory levels for your products (as well as forecasted ordering schedules)
  • Real-time customer order tracking for all your deliveries
  • Real-time inventory order tracking so you know your products are available
  • Analytics for better insights into product purchase trends

5. Order fulfillment technology and integrations

Technology is critical when it comes to selecting the best e-commerce fulfillment provider. The two most important aspects of this are how your online store communicates with the fulfillment services and how they help you with data leveraging.

With the right technology, you can send product orders from your e-commerce platform to your fulfillment provider for distribution without needing additional insight from you or your team. Furthermore, the software automatically updates order statuses and inventory levels in the warehouse and your company’s website. These should be simple, automated processes designed to streamline your operations and ensure that your online store functions reliably.

Look for a fulfillment service that offers these features:

  • State-of-the-art software
  • Automated fulfillment processes and accurate reporting
  • Integrations with the top e-commerce platforms on the market, i.e., Shopify, Magento, etc. 

6. Returns management

92% of consumers in a survey said they would buy again if the product return process was easy, whereas 79% of consumers expect free return shipping. (source)

E-commerce fulfillment entails more than just delivering packages to customers. Many providers also help merchants with receiving returns and processing refunds, referred to as reverse logistics. An experienced third-party logistics provider understands how to manage returned products efficiently. They can assist a retailer in developing a return policy that keeps profit margins way above the red line.

7. Costs

It is reasonable to expect some initial costs associated with offloading your order fulfillment needs to an e-commerce fulfillment service provider. However, when you do so, you will most likely later save a considerable amount on labor, overhead, packing supplies, and other variable expenses down the road. Furthermore, if you choose a modern e-commerce fulfillment solution, such as one that practices micro-fulfillment with fewer overhead costs, like Ohi, you can often benefit from transparent and low flat-rate pricing, as inventory is forward-positioned and last mile delivery is greatly simplified.

It’s important to understand that cost is often overemphasized as a criterion when looking at e-commerce fulfillment providers. By enabling fast delivery, retailers often see outsized ROI via gains in conversion rates and customer loyalty metrics like repeat purchase rates and customer lifetime value, which more than justify the initial cost of enabling these fulfillment services.

‘Modern problems require modern solutions.’ 

Outdated traditional e-commerce fulfillment solutions might still dominate the e-commerce landscape today but will increasingly fail to meet the needs of modern customers who want instant delivery. Look beyond a single 3PL partner approach and consider using a mix of fulfillment partners that together address your customers’ needs.


At Ohi, we’ve flipped the script for e-commerce fulfillment, transforming it from what is traditionally seen as a cost center into a growth engine. Brands join the Ohi platform to deliver powerfully fast, brand-focused, and memorable post-purchase experiences that enable them to grow. Want to learn more about how Ohi enables instant commerce? Get in touch today.

2-Hour Delivery Is the Future of DTC Sales — How Ohi Enables Instant Commerce 

two-hour-delivery

Key Takeaways

  • Too many DTC sellers focus on the pre-purchase experience with slick apps and marketing. Neglecting the post-purchase experience is a missed opportunity to drive repeat purchases. 
  • By using powerful AI software, Ohi predicts where a purchase will take place and positions products nearby so delivery is shockingly quick and flexible.
  • E-commerce shipping and packaging are very harmful to the environment — Ohi’s core principle of sustainability means more packages delivered from hyperlocal micro-warehouses in reusable totes, instead of planes, trucks and wasteful cardboard.

Let’s face it, Amazon has set the standard — consumers expect to receive purchases in two days — longer shipping times are no longer acceptable.

That’s a tall order for many DTC Shopify merchants, which are still bogged down by long shipping times. The result: Amazon continues to dominate. 

But it doesn’t have to be that way. 

Instant delivery is possible for DTC e-commerce companies. It goes without saying that it will impress the heck out of your customers who will be sure to come back for more. 

On an episode of the eCommerce Fastlane podcast, Ohi Founder and CEO Benjamin Jones talked about how faster delivery is integral to the future of DTC e-commerce and how Ohi is making it possible — and sustainable — for a range of merchants.

The secret weapon powering instant e-commerce 

We’ve crunched the numbers. Brands that partner with Ohi realize significant ROI via improved customer satisfaction, an average increase in conversion of 28%, and increases of up to 120% in repeat purchase rates. Consumers who order with Ohi have up to 35% higher LTV for brands than those who choose a UPS/FedEx shipping option.

How is this possible? 

The “secret” is micro-warehousing. Traditional warehouses are a relic of old-world logistics. They’re very large and due to their size, they’re often located in the middle of nowhere. This is inefficient in so many ways, and it also presents a challenge for quick shipping times. 

Micro-warehousing is a different approach. Mico-warehouses are smaller than traditional warehouses, which means they don’t need to be housed too far from major commercial areas. 

In fact, micro-warehouses take advantage of unused retail spaces and old commercial spaces, repurposing them into small distribution hubs. This means products can be warehoused directly in the cities where orders are placed, allowing for fulfillment to happen in a matter of hours, rather than a few days. 

The ROI of instant delivery (sub 2-hour) has become hard to ignore.

And, even better, fulfillment isn’t dependent on UPS or FedEx — Ohi works with pools of local drivers that can fulfill these orders, taking advantage of the existing local courier system

Before we get into the markets that benefit most from instant e-commerce, let’s look at some of the things that position Ohi to deliver two-hour delivery windows — and to do so in a way that doesn’t harm the planet. 

Predicting future orders with AI

Our micro-warehousing is also backed by vital technology to make sure products are in the right places at the right times. How do we do that? With the power of AI-based optimization. 

Our AI will predict where demand is and where orders will be placed before they happen, allowing us to allocate inventory around our network of micro-warehouses. This tech, combined with our network of last-mile providers, is what gets your product to your customers in two hours.

Instant e-commerce doesn’t have to kill the planet

Making things better for consumers and businesses is critical — but not if it comes at the expense of sustainability, a core principle of Ohi.

The fact is that e-commerce hurts the environment. From trucks and planes to cardboard and packaging material, the industry comes with a lot of unsustainable baggage.

Ohi promises carbon-neutral delivery in three main ways:

  1. Inventory is kept hyperlocal — Since Ohi uses micro-fulfillment centers (MFCs), deliveries only travel a short distance to get to their destination.
  2. Eco-friendly transportation — Ohi uses bike/e-bike/scooter couriers and foot couriers to further minimize our carbon footprint in urban areas.
  3. Minimal/re‑usable packaging — Shorter travel distances enable a reduction in wasteful (and expensive) packaging. Ohi encourages the use of eco-friendly reusable totes for two-hour and same-day orders.
  4. Carbon offsetting — Through our partnership with EcoCart, we take the residual carbon footprint (after the above measures) and offset it, resulting in carbon-neutral ecommerce fulfillment.

Markets that flourish with instant delivery

At Ohi, we work with a range of consumer packaged goods. Things like food and beverages, alcohol, pet food and supplies, baby supplies, and health products — these are items the consumer wants and needs quickly. And that’s perfect for instant delivery. 

How does it work? Ohi integrates right into your Shopify and will display a widget to your customer if two-hour delivery is available based on your customer’s location. If it’s not available, we won’t offer it. It’s that simple. 

Merchants often wonder about charging more for fast delivery. Again, Amazon has set consumer expectations high, which is why we believe offering instant delivery for free is essential. To enable this, we provide flat-rate pricing to help make merchant costs more predictable. 

Instant, free delivery can add millions of dollars of extra revenue every year — and we want to make it as easy as possible for you to add to your bottom line!


👉 This is based on an episode of the eCommerce Fastlane podcast featuring Ben Jones of Ohi.


👉 At Ohi, we’ve flipped the script for e-commerce fulfillment, transforming it from what is traditionally seen as a cost center into a growth engine. Brands join the Ohi platform to deliver powerfully fast, brand-focused, and memorable post-purchase experiences that enable them to grow. Want to learn more about how Ohi enables instant commerce? Get in touch today.

Instant Delivery: A Quick Guide for Retailers

instant delivery

85% of online shoppers look for better options when delivery speed is too slow.

Within the last couple of years, delivery speed has become a top priority for online shoppers and a huge opportunity for retailers. The evolving preferences of the savvy shoppers, their increased reliance on online shopping and need for instant gratification have propelled the rise of various instant delivery platforms like Ohi and marketplaces like GoPuff, Instacart. These next-generation platforms take the delivery speed and convenience of Amazon, Walmart, and other retail giants, and deliver a better and faster approach to instant delivery.

So, what is instant delivery, and why is it a must-have for your success as a retailer? 

What is instant delivery?

Instant delivery isn’t a novel concept; many of us have already experienced ultrafast delivery via a quick and easy meal ordered through Grubhub, DoorDash, Uber Eats, or whatever your go-to meal delivery app is. 

According to Chris Walk, the Founder and CEO of Omni talk, the idea of instant delivery is based on ‘the universal truth of speed,’ according to which, when given a choice, people will always choose to get something as fast as possible instead of waiting.

Before sub-two-hour delivery entered the game and pushed the reset button on customer expectations, same-day delivery was the fastest delivery option, and 41% of online shoppers happily paid for the service. 

However, unlike same-day delivery, where products can be delivered within 24 hours, instant delivery is an ultrafast delivery that generally happens within two hours or as fast as 15 minutes from the customer’s time of order. 

It is e-commerce fulfillment on overdrive, made faster and better with advancements in e-commerce technology. Instant delivery is very much related to the broader quick commerce model.

Ultrafast delivery businesses like GoPuff and JOKR focus on products meant for immediate consumption that customers frequently want immediately. 

Instant delivery examples you might be familiar with

  • GoPuff – with facilities strategically placed across hundreds of markets, GoPuff maintains an extensive network of driver-partners, allowing it to deliver quickly within 30 minutes. Each brand’s products are sold alongside hundreds of other brands in GoPuff’s own marketplace. 
  • Walmart express delivery – customers get ordered items on their doorsteps in two hours or less. The express delivery is available on many Walmart purchases, including groceries, apparel, electronics, and other essentials.
  • Amazon two-hour – previously just for Prime Now users, two-hour delivery is now available on groceries and many other goods through the Amazon app or website.
  • Instacart delivery – picks and fulfills orders from third-party retailers’ brick and mortar stores in as little as 30 minutes.
  • Ohi instant delivery – Ohi’s hyperlocal micro-fulfillment centers allow direct-to-consumer brands to offer instant delivery in two hours or less.

Instant delivery stats

  • 68% of consumers said fast shipping would lead them to place an online order, according to a February 2021 Digital Commerce 360 survey. (Digital Commerce 360).
  • Around 61% of Nielson IQ’s latest survey participants said they would like to have their orders delivered as fast as possible.(Supermarket News)
  • Meanwhile, 65% of shoppers in another study said they would be willing to pay more for faster and more reliable deliveries. (Business Wire)
  • 55% of customers on average will switch to a competitor that offers faster delivery service. (RetailWire)
  • According to Ohi’s analysis, two-hour delivery is associated with 61% higher repeat purchase rates. (Ohi)
  • 85% of consumers in a study said they search elsewhere for better options when delivery speeds are too slow. (Flexe)
  • The same study also revealed that one of the top two reasons for shopping cart abandonment is that delivery speeds weren’t fast enough. (Flexe)
  • In addition, a 2021 global consumer insights survey conducted by PWC also shows that fast delivery is shoppers’ #1 overall consideration when buying online (ranked top three by 41% of respondents). (PWC)

How does instant delivery work?

Customers and retailers alike love a lightning-quick delivery service. But, have you ever considered how instant delivery services deliver, say, a carton of milk or a pack of sodas so fast?

There are a few different ways instant delivery platforms could operate to deliver your products to your customer’s doorstep in less than two hours. Instant delivery platforms and marketplaces can either run their own dark stores/fulfillment centers or fulfill orders from third-party retailers’ existing brick and mortar stores. Once a shopper places their order, they are fulfilled at the closest fulfillment center or third-party retail store by workers (“pickers”) and delivered by local couriers, often on bikes/scooters.

 Here’s a quick rundown of different models:

1. Vertically-integrated instant delivery model, i.e., GoPuff

In this model, instant delivery platforms like Jokr and GoPuff pick the ordered products from their dark stores or MFCs to deliver typically within 10–30 minutes.

Technicalities could vary; however, here are a few salient features of a vertically-integrated model:

  • These marketplaces run their own first-party MFCs, typically one in each neighborhood, similar to dark stores.
  • Employees pick up orders, and couriers deliver them.
  • Running the first-part MFCs is also less expensive compared to the hefty cost of renting space in retail stores.
  • Following a customer’s order, workers (called “pickers”) fill it at the appropriate micro-fulfillment facility, and a local courier (typically on a scooter or bike) fulfills it.

2. Third-party delivery platforms, i.e., Instacart  

These delivery platforms function on an “asset-light” model. For these platforms to operate, they don’t need to set up fulfillment centers, purchase inventories, or establish supplier relationships before expanding to a new city. Compared to the other two models, these are also far easier to scale. 

  • These delivery businesses do not need fulfillment centers or dark stores to operate. 
  • They pick products and deliver them directly from third-party physical retail stores. 
  • After an order is placed, a personal shopper goes to the store (or multiple stores) to pick up everything, then delivers it to you at your doorstep (typically within an hour or two).

3. Direct-to-consumer delivery model, i.e., Ohi 

This model is specifically for DTC brands or e-commerce retailers that are looking to add a DTC channel. The direct-to-consumer (D2C) instant delivery providers like Ohi provide instant delivery and micro-fulfillment solutions specifically for DTC sellers or e-commerce businesses looking to set up a DTC channel.

Although this model sounds very similar to the vertically-integrated model, they have some dissimilarities. 

  • For instance, under the DTC model, customers will place orders directly on a brand’s DTC website, rather than on a marketplace website/app.
  • The instant delivery service takes care of the back-end order fulfillment functions.
  • These services have dedicated MFCs hyperlocal to the consumer, enabling instant delivery for their clients.
  • In addition to the above, instant delivery platforms like Ohi use eco-friendly transportation for last-mile delivery.

For many direct-to-consumer e-commerce brands, pairing with an instant delivery provider like Ohi is the only viable option to meet their online customers’ demands and stand toe-to-toe with Walmart and Amazon when it comes to delivery speed. The reason is that many DTC-focused businesses lack the network of retail stores needed to pull off instant delivery on their own. That’s where Ohi’s DTC-focused website integrations, micro-fulfillment network, and post-purchase experience centered on instant delivery come into play.  

Here’s how Ohi’s quick delivery works:

Instant delivery vs. traditional 3PLs

All this instant delivery talk begs the question, how are instant delivery platforms different from third-party logistics companies? 

Instant delivery and traditional 3PLs are poles apart in terms of delivery speed, transportation, and approaches to warehousing. Here’s a breakdown of the differences between quick delivery and traditional third-party logistics.

  • Instant delivery typically relies on micro-fulfillment centers (MFCs) positioned within densely populated areas, enabling ultrafast deliveries, i.e., within 15 minutes to two hours after placing an order. Whereas traditional 3PLs deliver in 3 to 5 days, their fastest expedited delivery is typically two-day or the next day.
  • Traditional 3PLs rely on massive warehouses, typically as large as 300,000 square feet. On the other hand, instant delivery platforms rely on micro-fulfillment centers that are much smaller – usually 2,000 to 5,000 square feet – located hyperlocal to customers in the densely-populated areas of major cities.
  • Another difference is the form of delivery chosen for the last mile. For transportation, traditional 3PLs rely on bigger delivery vehicles, since orders are delivered in huge batches owing to the increased travel distance. However, because of the vastly reduced distance between MFCs and the end customer, instant delivery providers often use eco-friendly two-wheeled vehicles such as bikes, e-bikes, or scooters.
  • Depending on the size of the business, a typical e-commerce store may have 15,000 or more SKUs. Amazon, for example, has the potential to store about 350 million SKUs, including both fast-moving and slow-moving items. On the other hand, Instant delivery services rely on micro-fulfillment facilities with a capacity of 2,000 to 4,000 SKUs (total SKU count for all brands within the MFCs) of typically fast-moving items.

Types of businesses instant delivery works best for?

While it’s true that instant delivery has opened up a lot of doors to brands that couldn’t otherwise offer the convenience and speed of two hours or less delivery, it is not a one-size-fits-all solution. 

Here are three factors to help you determine if instant delivery is the right fit for your business:  

1. Brands that have a higher-order volume and lower SKU count 

Instant delivery is a good fit for products with a high order volume or products that sell fast and have a lower SKU count. As instant delivery providers rely on micro-fulfillment centers, a larger SKU count would reduce shelf space, therefore, it is ideal for fast-moving consumer goods.  

With the localized nature of MFCs, instant delivery doesn’t lend itself particularly well to highly specialized items like bespoke crafts, artisan goods, or customized products.

2. Brands that sell consumables or products that are needed right away

Instant delivery works well for products that customers want or need on an urgent basis. Products including food, beverages, beauty, personal hygiene, fem-care, or home-testing kits – the kind of products your customers might find at a local convenience store or pharmacy – are ideal for instant delivery.

3. Brands with non-bulky items 

Delivering bulky items such as large electronics or furniture is far from possible on a bike or scooter, which is the mode of transportation for many instant delivery businesses.

In addition, 15 minutes or two-hour or less delivery services use localized micro-fulfillment centers with a smaller storage capacity. Hence, it would be pointless to cram the smaller space with bulky goods that won’t turn fast.

For this reason, instant delivery works best for non-bulky products that can be packed and shipped quickly without a lot of manpower or special handling. This means that a carton of milk or a can of soda can be delivered with instant delivery; however, bulky items such as furniture, large electronics like TVs, and larger appliances are a no-go.

So, does instant delivery makes sense for your e-commerce business? 

Benefits of instant delivery

1. Cut down on delivery time and last-mile costs

The longer an order has to travel to get to the customer’s doorstep, the more chances for things to go wrong in that last mile, such as order mixups, traffic jams, and other delays.

As opposed to traditional 3PLs, instant delivery companies can get goods into the hands of customers in a relatively short time. As quick commerce businesses like Ohi rely on micro-fulfillment, the last-mile transportation times and costs are reduced considerably, making it more feasible to offer two-hour or less delivery. This converts to a positive post-purchase experience, enhanced consumer satisfaction, and a significant return on investment for e-commerce businesses.

3. Ensure operational excellence  

Instant delivery platforms like Ohi use modern technologies (including AI or machine learning forecasts) to provide your DTC with inventory accuracy and on-time delivery rates that outperform the conventional third-party logistics providers. Platforms like Ohi also integrate with various last-mile delivery providers to make sure your customers get fast and efficient delivery that translates into higher customer happiness and fewer or zero CX support inquiries on late/missing deliveries.

3. Potential for brands to be sustainable

According to Shopify, consumers demand fast, free, and sustainable delivery at checkout. In addition, nearly 72% of customers want brands they shop at to use sustainable packaging. According to another study, around 80% of customers say sustainability is essential. 

Not only does an instant delivery solution have the potential to meet your customers’ sustainability demands, but as mentioned earlier, it can also translate into better delivery and post-purchase experience as well. 

As instant delivery platforms rely on hyperlocal micro-fulfillment centers, there is very little reliance on fuel-based transportation or wasteful exterior packaging materials, which together minimize your brand’s carbon footprint.

Instant delivery providers like Ohi enable their partner brands to offer carbon-neutral delivery to their eco-conscious customers.

Instant delivery is transitioning from a nice-to-have to a must-have

Simply put, two-day and next-day delivery is not fast enough for the modern consumer. Therefore, growth-minded e-commerce retailers are increasingly considering methods of enabling instant delivery, as this is a proven strategy to improve their customer experience and enable enhanced customer acquisition and retention.


About Ohi

At Ohi, we’ve flipped the script for e-commerce fulfillment, transforming it from what is traditionally seen as a cost center into a growth engine. Brands join the Ohi platform to deliver powerfully fast, brand-focused, and memorable post-purchase experiences that enable them to grow. Want to learn more about how Ohi enables instant commerce? Get in touch today.

What is Micro-Fulfillment? A Simple, Straightforward Guide for E-commerce Retailers and DTC Brands

microfulfillment

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Retail shopping shifted towards online e-commerce during the pandemic in irreversible ways. That shift has come with the expectation that their goods be delivered at minimal cost, come with fast and responsive customer service, and that they are delivered to their doorstep within a few days or even a few hours.

Amazon popularized the concept of two-day order fulfillment – that with a few clicks on a website you can have almost every conceivable product from clothes to groceries delivered straight to your doorstep within two days or less. What was once unique to the e-commerce giant has now become the industry standard in online retail, thanks in no small part to the need for contactless shipping brought about by COVID. It’s estimated that COVID accelerated the shift towards online shopping by about five years.

That’s all well and good when you’re a national chain like Whole Foods or Walmart that has the resources and logistical capacity to offer two-day shipping to customers across the country. However, two-day shipping isn’t as accessible to smaller e-commerce brands that don’t have that kind of supply chain reach and raw economic power.

Traditional warehouses are too large to operate within urban city centers.

If you’re the owner of an e-commerce store that delivers nationwide, how can you ensure that your products can make it to your online customers in two days or less for the goods they need as soon as possible? You don’t do it by buying out one big warehouse floor in the middle of nowhere hundreds of miles away from where your customers actually live. You do it by using lots of little smaller ones in cities just across town from their house or office.

For many DTC e-commerce brands, micro-fulfillment is becoming the only realistic way that can satisfy the expectations of their online customers and enable them to compete with the likes of Walmart and Amazon.

They are becoming such a popular option for online retailers that it’s projected there will be one micro-fulfillment center for every 10 grocery stores by the end of 2030. It’s not just smaller retailers that are making use of them either – retail and grocery giants like Walmart and Whole Foods that see where the future of online delivery is heading are starting to repurpose their retail stores as MFCs for online order fulfillment.

We’ll explore what micro-fulfillment is and how it works, and how it stands to benefit your business.

What is micro-fulfillment?

When people think of online delivery, they typically think of huge warehouses the size of football stadiums or small airports filled with pallets and boxes sorted by minimum wage workers with orange vests preparing for deliveries across a state or the whole country.

Micro-fulfillment works differently. It operates on a much smaller scale, with less inventory, and with a much more automated workflow.

Micro-fulfillment makes use of small-scale warehouse facilities in big urban areas like New York City and Los Angeles where most online retail activity happens, to keep inventory closer to the consumer. 46% of urban shoppers prefer shopping digitally compared to 38% and 34% of those based in suburban or rural areas respectively.

The micro-fulfillment model makes use of automated warehouses to reduce the distance between customers, making deliveries cheaper, faster, and easier. The goal of micro-fulfillment is to reduce the distance between customers and their orders to reduce transportation costs and delivery times.

Organizing your e-commerce supply chain in this way enables brands to offer same-day delivery and potentially even sub two-hour delivery. Two-day delivery is becoming expected by consumers who are used to two-day order fulfillment from Amazon. Customers buying online now want delivery in a few days or even within hours, and this is quickly becoming the baseline for top-performing e-commerce brands.

It’s difficult for the vast majority of e-commerce brands to implement same-day delivery inhouse, due to the enormous capital needed to build their own warehouse networks. Enabling micro-fulfillment through partnerships makes instant delivery possible for these brands.

What is a micro-fulfillment center?

Micro-fulfillment centers (MFC) are small-scale storage facilities. They’re often in unused retail or commercial space that’s been repurposed for storage and order fulfillment. Micro-fullfilment centers are used by e-commerce brands to store their inventory closer to their customers to speed up delivery times and reduce the cost of transit.

MFCs typically occupy a space of 2,000-5,000 sq ft. of space. Apart from the physical facility itself, they also rely on inventory and order management systems to maintain sufficient inventory availability and to process online orders. MFCs are much smaller than traditional warehouses or fulfillment centers, which can often be larger than 50,000 square feet.

Large national brands with a robust network of brick-and-mortar stores can potentially implement micro-fulfillment using their brick-and-mortar stores to fulfill online orders. This is done more and more by chains like Whole Foods, which opened up dark stores during the pandemic used exclusively to fulfill online orders.

The micro-fulfillment model lets brands operate their own repurposed MFCs adding the convenience of multiple delivery methods, such as curbside delivery, in-store pickup, or delivery to the customer’s doorstep. Micro warehouses have proven highly successful for grocery chains, and they’re starting to catch on in other product categories like beverages and beauty/personal care.

Benefits of micro-fulfillment centers

So much for how MFCs work, but what makes them so much better than more conventional ways of fulfilling online orders?

There’s a reason why retail chains big and small are starting to embrace the micro-fulfillment model. It enables brands to offer two-day shipping, so they can elevate their customer service to a level that wouldn’t be possible otherwise.

1. Automation Creates Faster Fulfillment

Some MFCs, but not all, automate a lot of the shipping and storage process using robots and/or automatically generated packing lists, which cuts down on manpower and allows MFCs to processes orders quickly and efficiently

2. Efficient Use of Storage Space

Micro-fulfillment centers serve multiple brands rather than using a big space to serve just one. Therefore, they pack more inventory into a smaller space and store more items per square foot. The use of this smaller space is less expensive than setting up a new location or renting out your own warehouse, which means they involve much lower leasing and operating costs, especially when managed by a partner with sufficient scale, like Ohi.

3. Reduced Last-Minute Delivery Cost

The last mile of an online order’s delivery accounts for 41% of the total supply chain cost to deliver an item. The longer an order has to travel to get to its destination, the more chances there are for things to go wrong in that last mile like order mixups, traffic jams, and other delays.

When you keep the origin of fulfillment hyperlocal to the consumer, those items are subject to fewer delays like being stuck in traffic. Those faster delivery times optimize your order fulfillment and can also save you money on transportation. The potential cost savings are further magnified when your products are somewhat heavy, as traditional delivery methods charge by weight, whereas micro-fulfillment-based providers like Ohi have flat pricing regardless of weight.

3. Easier and Faster to Integrate and Scale

Not many brands can afford to open a huge warehouse staffed with people and have conveyor belts, sorting machines, and an inventory management system to go with it.

MFCs are smaller and less expensive to integrate into your existing operations. It’s a much smaller initial investment and a less risky commitment, which makes them more accessible to small businesses. That makes it much easier for them to expand into new areas and regions as they grow.

4. Ultra-Fast Delivery and Enhanced Customer Experience

Even one misplaced order or late delivery can tarnish your brand’s online reputation in ways that are hard to repair. The smaller scale and localized delivery model of MFCs make it easier to ensure that customers get the correct items on time and that they’re satisfied with their shopping experience, including their post-purchase experience.

MFC models like in-store pick-up and curbside delivery give customers more variety in how they receive their products.

5. Lower Environmental Footprint

MFCs aren’t just more efficient and cost-effective, they’re also more sustainable.

Using small, localized fulfillment centers rather than huge warehouses staffed with hundreds of people at the hubs of miles-long trucking routes reduces the carbon emissions your company produces.

Apart from being the right thing to do, it also reduces the negative externalities of carbon-positive supply chain logistics.

You can use it as a part of your marketing too. Using localized delivery systems makes you effectively carbon-neutral, so you can truthfully position your brand as an eco-friendly company. Consumers are more likely to purchase from a purpose-driven brand that supports a cause they believe in, such as climate change.

Difference between fulfillment vs distribution

The terms fulfillment and distribution are often mistaken from one another, and it may be necessary to distinguish them when deciding to transition to MFC-based fulfillment.

Distribution and fulfillment each refer to two steps of the supply chain, from the macro to micro-scale.

Distribution refers to moving sales inventory regionally across larger distances. It involves moving whole pallets or containers or goods to warehouses or distribution centers to be stored until they’re ready to be put on shelves. The products inside the distribution units are to be fulfilled individually.

While distribution moves large volumes of inventory from one place to another, fulfillment moves each individual item to the end-user.

The fulfillment process is usually carried out from a smaller warehouse, where items are stored locally until they can reach customers in a convenient and timely manner. While distribution centers store items in bulk in the long term, fulfillment centers use more limited storage space and store goods for shorter periods.

Delivery from fulfillment centers takes place locally and is carried out at a store, via curbside pickup, or delivered by and by a courier or a gig economy worker from an app like Shipt or Instacart.

Micro-fulfillment by the numbers

It’s one thing to point to the success of household name brands like Walmart, Target and Whole Foods who’ve managed to make the MFC model work for them. A closer look at the available studies and data examining broader trends about MFCs further confirm that micro-fulfillment is the future of online shopping.

With that in mind, here are some statistics about micro-fulfillment that are worth knowing:

  • MFCs Are Projected to Have a Cumulative Worth of $36B by 2030: and about 6,600 nationwide at its current rate of growth (source)
  • The Urban Percentage of the World’s Population is Projected to be 60% by 2030: and as much as 75-81% in more developed countries (source)
  • 38% of Online Shoppers Will Abandon Their Order if it Takes Longer Than a Week: this is due to the precedent that Amazon 2-day delivery set – now consumers expect the same thing whenever the shop online (source)
  • Most MFCs Will Be Retail-Based by 2025: this indicates that retail is the most common business model for micro-fulfillment – but by no means the only one (source)
  • Online grocery sales will more than double their current market share by 2025: which will be 21.5% compared to 10% in 2020. That will create more need for MFCs to fulfill those grocery orders (source)
  • Half of Online Shoppers Abandon a Purchase If They Can’t Get Their Order Within a Week: customers don’t just want fast delivery, they want free delivery – another standard set by Amazon (source)
  • More than 25% of Shoppers Would Abandon a Cart Online If Same-day Shipping Isn’t Available: offering 2-day or same-day delivery is no longer a nice-to-have option – more customers are starting to demand it (source)
  • Online Alcoholic Beverage Sales Grow by 8% per Year Between 2017 and 2022: as with groceries, there is a growing demand of online alcohol delivery, and for much the same reason – it’s the kind of product you’d want to have that same day rather than later that week
  • 75% of Consumers Expect Delivery to Be Free Even on Orders under $50: and for most brands, MFCs are the only realistic way to provide this (source)
  • 42% of Retailers Say That Faster Fulfillment of Online Orders Is Their Top Priority: which is an indicator that traditional fulfillment methods can’t keep up with rising customer demand for fast delivery and free shipping. MFCs can (source)

Micro-fulfillment business models

Micro warehousing can take on a few different shapes and forms, depending on a retailer’s specific needs and access to resources. Some make use of small, densely-packed warehouses that use machinery and automated inventory lists, and others make use of the floor space they already own to ship from their own stores or offer curbside delivery.

Here are a few different ways micro-fulfillment can work:

1. In-House Micro-fulfillment

In this model, retailers use their own physical brick-and-mortar locations to fulfill online orders, essentially turning their own stores into a network of MFCs.

The ease of scalability, economization of space, and added consumer convenience of this method have led more and more brands to embrace it, including national retailers like Kroger and Target. The caveat, of course, is that only sufficiently large retailers with a nationwide network of brick and mortar stores can implement in-house micro-fulfillment.

2. Marketplace Partnership

Let’s say that you’re interested in selling your products alongside hundreds of other competing brands in a marketplace that specializes in quick commerce or micro-fulfillment enabled e-commerce.

In that case, another option you can consider is partnering with a quick commerce marketplace that uses an existing network of micro fulfillment centers and dark stores to fulfill e-commerce orders. Such marketplaces include JOKR, GoPuff, and Gorillas. In this model, your customers order from the marketplaces (think Amazon but with micro-fulfillment), which control the customer experience and retain the customer data. 

3. Direct-to-Consumer

If you want to employ micro-fulfillment with your direct-to-consumer (DTC/D2C) channel, you can choose to partner with a DTC-focused instant commerce provider like Ohi, which gives you access to their nationwide network of MFCs and technology that enables instant delivery.

Ohi integrates with your existing DTC website (on Shopify, BigCommerce, WooCommerce, or other platforms), adding sub two-hour, same-day, and next-day delivery options to your online store.

As a new client, you simply inbound inventory to one or more of Ohi’s hubs (distribution), and the Ohi team manages distribution through the network to MFCs in many of the largest metro areas in the US.

Brands that work best for micro-fulfillment

Ecommerce micro-fulfillment centers have opened up a lot of doors to brands that couldn’t otherwise offer the convenience and speed of same-day delivery.

That being said, they’re not a one-size-fits-all solution and they come with their own limitations. The MFC model works best with certain kinds of brands and products, such as:

1. Higher-Order Volume, Lower SKU Count

E-commerce distribution centers are best for brands that ship a lot of the same kind of item using a relatively low number of SKUs. The localized nature of MFC delivery doesn’t lend itself particularly well to highly specialized items like bespoke crafts, artisan goods, or customized products.

2. Consumables

The instant and local nature of micro-fulfillment delivery means that brands that make use of MFCs usually carry things that customers want or need immediately. They’re often the kinds of products you might find at your local convenience store or pharmacy, such as:

  • Food, snacks, and beverages
  • Cosmetics and personal care
  • Toiletries and cleaning products

When you go to your local gas station to buy something like a roll of toilet paper or a liter of soda, it’s usually because you need it at that moment rather than two days from now. For this reason, micro-fulfillment is best for items that customers want immediately.

3. Non-Bulky Items

Local fulfillment centers do more with less and have a smaller amount of storage space to work with. They optimize for storage space and there’s no sense in filling a relatively small space with bulky items that don’t turn quickly.

For this reason, micro-fulfillment works best for non-bulky products that can be packed tightly together. Micro-fulfillment is better suited to smaller goods that can be packed and shipped easily without a lot of manpower or special handling. This excludes items like furniture, large electronics like TVs, and larger appliances.

Ohi instant delivery gives your DTC customers the convenience and speed they expect

The shift towards online retail has elevated customer expectations to the point where consumers now expect to be delivered their items within a day or even a few hours. Micro-fulfillment is the fulfillment strategy that lets you provide that.

To sum up, here are some of the benefits that micro-fulfillment gives your e-commerce brand:

  • Ultrafast delivery speed
  • Efficient use of storage space
  • Reduced last-minute delivery costs
  • Scalability for same-day and sub two-hour delivery
  • Enhanced customer experience, which leads to higher CLV
  • Lower environmental footprint

Partnering with a micro-fulfillment-based platform (like Ohi for DTC brands) gives you all of these benefits and lets you provide a level of customer experience and delivery speed that just isn’t possible with traditional fulfillment.


About Ohi

At Ohi, we’ve flipped the script for e-commerce fulfillment, transforming it from what is traditionally seen as a cost center into a growth engine. Brands join the Ohi platform to deliver powerfully fast, brand-focused, and memorable post-purchase experiences that enable them to grow. Want to learn more about how Ohi enables instant commerce? Get in touch today.

Quick Commerce 101: What is Quick Commerce & Key Considerations

quick commerce

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The COVID-19 pandemic and the lockdowns that came with it helped give rise to a new category of e-commerce – quick commerce (or q-commerce) – characterized by ultrafast delivery speed generally within two hours or less. Roughly valued at $25 billion in 2021, the Q-Commerce industry will expand to $72 billion by 2025. 

So – what is q-commerce, and what sets it apart from traditional e-commerce?  

What is quick commerce?

As the name suggests, quick commerce or q-commerce is all about speed and convenience. It may not be DC’s Flash-fast (2,532 miles per hour), but it is far faster and more convenient than traditional e-commerce. 

The term refers to e-commerce businesses that deliver goods within a couple of hours or even minutes, as in the case of some fast grocers. 

Although the term is sometimes used interchangeably with “on-demand delivery” or even terms like “instant commerce”, the idea of quick commerce isn’t a new one. It’s been around in the food industry for ages now, and it’s merely been ushered into the mainstream by evolving consumer preferences.

Many q-commerce companies, including many that focus primarily on groceries with a marketplace model, like GoPuff, Weezy, Jokr, Glovo, Delivery Hero, and Instacart, have seen increased interest over the past few years. These instant commerce businesses focus mainly on products intended for immediate consumption that customers often need or want instantly delivered. (More on product fit later.)

What are the key differences between quick commerce & traditional e-commerce?

From product fit to delivery speed and warehousing, quick commerce and traditional e-commerce are worlds apart. Here’s a detailed overview of how q-commerce is different from conventional e-commerce. 

1. Delivery speed: minutes & hours versus days

The most distinctive feature that sets quick commerce apart from traditional e-commerce is delivery speed/time. Quick commerce businesses typically have micro-fulfillment centers (MFCs) positioned within densely populated areas, enabling ultrafast deliveries, i.e. within 15 minutes to two hours after placing an order. 

With micro-fulfillment centers and requisite supporting technology for demand forecasting, inventory allocation, and last-mile courier delivery in place, q-commerce businesses are able to pick, pack, and dispatch orders near instantly.

In contrast, traditional e-commerce stores deliver in 3 to 5 days, with expedited delivery sometimes available for delivery in 1-2 days.

2. Micro-fulfilment centers vs. traditional warehouses 

As discussed, one key feature that sets quick commerce apart from traditional e-commerce are the micro-fulfillment centers or micro-warehouses. 

Traditional warehouses can be massive spaces – typically as large as 300,000 square feet. For example, the typical Amazon warehouse is around 800,000 square feet. 

Since these warehouses are so big, they tend to be located on the outskirts of cities, in industrial or rural areas where there’s more space for such large buildings. Because these warehouses are outside of big cities, they are typically not suitable for fulfilling last-mile deliveries into the city, as couriers would have to travel to and from the poorly-situated warehouses, making last-mile delivery both time-consuming and costly.

By contrast, q-commerce orders are typically fulfilled through a network of micro-fulfillment centers that are much smaller – usually 2,000 to 5,000 square feet – located hyperlocal to customers in the heart of major cities. This greatly reduces the distance to the customer and enables ultrafast and efficient last-mile delivery.

A common approach to establishing micro-fulfillment centers is to purchase or lease underutilized commercial spaces in urban areas, where people live and work. Some quick commerce companies are even looking at alternative means of converting rental flats or even shipping containers into micro-fulfillment centers, though these come with their own unique sets of challenges.

3. Sustainability: two wheels vs. truck or air delivery

Another distinction in quick commerce is the mode of transportation used for last-mile delivery. Quick commerce businesses can often use eco-friendly two-wheeled vehicles such as bikes, e-bikes, or scooters for delivery because of the significantly reduced distance from MFCs to the end customer. In very densely populated areas, quick commerce couriers even rely on foot couriers. 

With many brands and customers now demanding sustainable practices from businesses they frequent, quick commerce has seen great momentum due to its reduced reliance on traditional delivery vehicles like cars, trucks, and airplanes. 

Traditional e-commerce, on the other hand, frequently uses larger delivery vehicles for transportation. For instance, according to CNBC, Amazon owns 40,000 semi-trucks, 30,000 vans, and a fleet of more than 70 planes to ensure speedy delivery of its products. 

As an example of the difference between traditional and quick commerce, Stanford research showed that DTC quick commerce provider Ohi’s deliveries were 5x more eco-friendly than standard ground delivery and 22x more eco-friendly than next-day air.

4. Product Fit: Smaller, curated selection of goods versus a wide variety of goods

A typical e-commerce store might carry 15,000 SKUs or more, depending on the size of the business. For instance, Amazon warehouses are located in the outskirts of the city and are comparatively more extensive in the area; therefore, they have the capacity to store around 350 million SKUs, including both fast and slow-moving products.

By contrast, q-commerce businesses rely on micro-fulfillment centers that generally only have a capacity of 2,000 to 4,000 SKUs (total SKU count for all brands within the MFCs) of fast-moving items. Therefore, micro-fulfillment isn’t the best fit for every brand and type of product. Due to space limitations in MFCs, bulky products and products that don’t turn quickly are not ideal in the quick commerce model.

Understanding the different quick commerce models

1. Vertically-integrated instant delivery model, i.e., marketplaces like GoPuff

In a vertically-integrated instant delivery model, q-commerce marketplaces such as Gopuff and Jokr pick and deliver shoppers’ orders from the range of essential items they have in their dark stores or MFCs, typically within 10–30 minutes.

While the specifics might differ slightly, most of these vertically-integrated instant delivery services tend to have the following approach:

  1. These marketplaces have established their own first-party MFCs, akin to dark stores, typically one per neighborhood, and engage employees to pick orders and couriers to deliver them. GoPuff, for example, operates more than 500 micro-fulfillment centers. 
  2. Since dark stores or MFCs are not designed for shoppers, the space can often be utilized more efficiently than traditional stores.
  3. The cost of running them (at scale) is also typically lower than the cost of renting space in retail stores.
  4. These marketplaces rely on well-integrated software and IT systems that can effectively track and manage inventory in their fulfillment centers. 
  5. After a customer placed an order, workers (“pickers”) fill it at the appropriate micro-fulfillment center, and a local courier (often on a scooter or bike) delivers it.

This model operates in contrast to third-party platforms like Instacart, which frequently rely on offering substitutes and replacements in the shopping process, due to limitations with real-time inventory tracking and influence over product offering.

2. Third-party delivery platforms, i.e., Instacart 

Unlike vertically-integrated instant delivery and direct-to-consumer models, third-party delivery platforms function on a decidedly “asset-light” model. This means they don’t require fulfillment centers, inventories, or supplier relationships to be established before expanding a new city.

Unlike other on-demand delivery services, the third-party delivery model doesn’t involve any warehousing component. So, how does it work? 

  1. These services deliver products directly from third-party bricks and mortar retail stores. 
  2. After an order has been placed, a personal shopper goes to the store (or multiple stores) to pick up everything, then delivers it to you at your doorstep (typically within an hour or two).
  3. As these delivery businesses do not require fulfillment centers or dark stores, they are able to scale relatively quickly. For instance, from July 2020 to July 2021, Instacart increased its delivery reach from 30,000 stores to nearly 55,000 stores in North America and is presently available to over 85% of US households.
  4. To expand network density, these delivery platforms simply add new retail partners. For example, Instacart has added apparel (H&M), beauty (Sephora), general merchandise (Big Lots), and prescription delivery (Costco) to its portfolio to attract a more comprehensive set of audiences.

3. Direct-to-consumer quick commerce, i.e., Ohi  

With the rise of DTC e-commerce in recent years – as per eMarketer US DTC sales grew by 68.4% from 2019 to 2021.)  – it is inevitable that many DTC brands demand an instant delivery solution, too.

In recent years, quick commerce providers like Ohi have built instant delivery and micro-fulfillment solutions specifically for DTC sellers.

Many DTC businesses don’t have their own warehouses or order fulfillment capabilities. Instead, they traditionally rely on 3PLs (3rd Party Logistics companies) to fulfill orders, typically in 3-5 or 4-7 days. In some cases, orders can be delivered in 1-2 days depending on the proximity of the end customer to the warehouse fulfilling an order.

This is where direct-to-consumer (D2C) instant delivery comes into play. Instant delivery providers like Ohi can enable DTC brands to leverage micro-fulfillment with a robust technology platform that handles the requisite demand forecasting, inventory management, and handoff to an optimal last-mile delivery courier. 

The result? These DTC brands are then able to offer surprisingly fast e-commerce deliveries, with service levels ranging from sub-two-hour and same-day to next-day, depending on a customer’s location.

While this model may seem operationally similar to the vertically-integrated delivery model, there are a few key differences, for instance:

  1. With the DTC model, your customers can order directly from your existing website, accessing instant delivery options through an e-commerce platform integration. Ohi integrates with Shopify, Shopify Plus, WooCommerce, BigCommerce, Magento, and Salesforce Commerce Cloud, for instance.
  2. Your curated DTC shopping experience remains front and center; however, the instant delivery service takes care of the back-end order fulfillment functions and keeps this powerful ROI-generating capability operationally simple.
  3. However, similar to the vertically-integrated delivery model, DTC instant commerce providers like Ohi also operate micro-fulfillment centers in densely-populated urban locations with high demand. 
  4. These dedicated MFCs are hyperlocal to the consumer, enabling instant delivery in major metro areas such as New York City, Los Angeles, San Francisco, Brooklyn, Chicago, Philadelphia, etc. 

As was discussed previously, the use of micro-fulfillment enables Ohi to use eco-friendly transportation for last-mile delivery. Most of Ohi’s brand partners have opted into Ohi’s unique carbon-neutral delivery service, which relies on eco-friendly transport, sustainable packaging, and a carbon offsetting partnership.

Benefits of Quick Commerce 

1. Speed

Compared to conventional e-commerce, q-commerce businesses can get goods into customers’ hands in a small fraction of the time. This translates to increased customer satisfaction and has been shown to provide meaningful ROI for e-commerce brands. 

In addition, a 2021 global consumer insights survey conducted by PWC also shows that fast delivery is shoppers’ #1 overall consideration when buying online (ranked top three by 41% of respondents). 

2. Reliability

Many micro-fulfillment-based quick commerce companies like Ohi use advanced technologies (including AI or machine learning forecasting) that provide extremely high inventory accuracy and on-time delivery rates that surpass traditional e-commerce companies.

Platforms like Ohi also integrate with a wide range of last-mile delivery couriers to ensure timely and accurate delivery to the end customer, resulting in increased customer satisfaction and reducing or eliminating “where is my order” CX support tickets.

3. Sustainability

In a world where nearly 80% of customers say sustainability is important for them, quick commerce can align eco-consciousness with an objectively better delivery experience. Greatly reduced reliance on fuel-based transport, the ability to reduce/eliminate exterior packaging materials, and other provider-specific practices (like Ohi’s carbon-neutral delivery service) make quick commerce worth shouting from the mountaintops from a sustainability perspective.

Conclusion : 

Given current retail trends, the immense interest in quick commerce from retail and DTC businesses is not surprising. Businesses that want to evolve to meet increasing customer expectations for instant delivery now have an unprecedented range of options, and investing appropriately in quick commerce solutions can provide them with outsized returns for both customer acquisition and retention.


About Ohi

At Ohi, we’ve flipped the script for e-commerce fulfillment, transforming it from what is traditionally seen as a cost center into a growth engine. Brands join the Ohi platform to deliver powerfully fast, brand-focused, and memorable post-purchase experiences that enable them to grow. Want to learn more about how Ohi enables instant commerce? Get in touch today.

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