How Fulfillment Statuses and Processes Impact Your Customers (2024)

When a customer orders a smartwatch, running shoes, and a pair of socks from your online fitness store, they set in motion an entire process. After they’ve made the purchase and received a confirmation email, their work is done, and the order life cycle at the company begins. Each item is processed, picked, packed, and shipped. Any specific point during this process is referred to as the order’s current fulfillment status.

What is a product’s fulfillment status?

A fulfillment status is the current stage of an order within the order processing life cycle. It provides your business with real-time information about a customer’s order status. Fulfillment statuses help businesses track and manage orders efficiently, ensuring a smooth and transparent experience throughout the entire process.

Types of fulfillment statuses

An order fulfillment status is a clear and concise label that represents a specific point in the order processing timeline. Here are common statuses and what they mean:

• Unfulfilled. An order has been placed, but no action has been taken to process or ship the items.

• Scheduled. The order is scheduled for processing and shipment on a specific date. This is often used for preorders or back orders.

• On hold. The order is temporarily suspended because it’s awaiting payment or stock issues must be resolved before proceeding.

• Awaiting shipment. All items in the order have been processed and packaged but have not yet been shipped.

• Partially fulfilled. Some items in the order have been processed and shipped, while others are still awaiting fulfillment.

• Fulfilled. All items in the order have been shipped.

• Completed. The order has been successfully delivered to the customer and may be closed.

Fulfillment status vs. order status: What’s the difference?

Although fulfillment status and order status are closely related, they represent different aspects of the order management process. An order status provides a general overview of an order’s progress from the customer’s perspective, while fulfillment statuses provide more granular details about an order’s progress within the warehouse.

Order statuses encompass the entire journey of an order, from placement to delivery. They are customer-facing and are designed to keep customers informed about their purchases. Common order statuses include:

• Pending. The order has been placed but has not yet been confirmed.

• Processing. The order is being prepared for shipment.

• Shipped. The order has left the warehouse and is en route to the customer.

• Delivered. The order has reached the customer’s delivery address.

• Canceled. The order has been canceled by either the customer or the business.

• Returned. The customer has initiated a return process for the order.

Steps of the order fulfillment process

1. Order placement
2. Order processing
3. Order picking and packing
4. Shipping
5. Returns and exchanges

Understanding the order fulfillment process can help you optimize your business workflows, identify significant cost savings, and streamline business operations. Fulfillment processes vary from business to business, but here’s how they generally unfold and translate to fulfillment statuses:

1. Order placement

When a customer’s order is placed, your business springs into action to ensure a smooth and efficient fulfillment process. This crucial first step involves capturing all the necessary information, such as the customer’s shipping address, payment details, and product specifications. Your order management system (OMS) should be able to quickly validate the order, check inventory availability, and initiate the next steps in the fulfillment process. At this stage, the fulfillment status is “pending.”

2. Order processing

Order processing involves the steps your business takes to prepare a customer’s order for shipment. You verify the payment status with the customer’s credit card company or bank to ensure that the transaction is legitimate and funds are available. With payment statuses out of the way, the next step is to update inventory levels and generate necessary documents such as packing slips and shipping labels.

During this stage, determine the estimated fulfillment date and communicate it to the buyer, setting clear expectations and fostering customer trust in your business. For both you and the customer, the fulfillment status at this stage is “processing.”

3. Order picking and packing

Order picking and packing is the process of retrieving the ordered items from your inventory and preparing them for shipment at a fulfillment center or logistics warehouse. Once the items are picked and packed, the order is marked as “awaiting shipment” and awaits shipment to the customer.

4. Shipping

Shipping is the stage of the order fulfillment process where your business sends the packaged order to the customer through a shipping method, such as ground, air, or expedited shipping. Your choice of shipping carriers and methods can significantly affect the customer experience, as shipping speed, cost, and reliability play a crucial role in customer satisfaction. Offer a range of shipping options to meet diverse customer needs, such as same-day, next-day, or standard shipping, while also ensuring that your shipping prices remain competitive.

On your end, the fulfillment status is “Fulfilled,” and the customer sees the new status of their order as “Shipped.”

5. Returns and exchanges

Not every fulfilled order will completely satisfy the customer, and your business should be prepared to handle returns and exchanges. Returns and exchanges are part of the reverse logistics process, which involves managing the flow of products back from the customer to your business.

When a customer cancels an order, requests a return, or wants to exchange an item, your friendly customer services team should be ready to help return the item for a full refund or exchange it for a different product. The return process may end with the order being partially refunded or credited for a future purchase. In each case, the status changes from “Completed” to “Returned.” Once the return process is complete, the order status can change back to “Completed.”

Outsourcing order fulfillment

You can outsource the entire order fulfillment process to a third-party logistics (3PL) provider or another business partner.

For example, Mike Alfaro, founder of the card game company Millennial Lotería, decided early on to license his game to publishers, thus shifting the burden of managing the order fulfillment process. Instead, he focuses on the creative aspects of the business, like dreaming up new versions of the game, creating viral campaigns on TikTok, and doing market research. “I don’t have to worry about when shipments are arriving from Colombia to the US,” Mike says on an episode of the Shopify Masters podcast. “That’s something my publisher can take care of.”