The A-Z of Marketplace Fulfilment
The A-Z of Marketplace Fulfilment
Estimated reading time: 5 minutes
When it comes to fulfilment and logistics there is lots of jargon and plenty of acronyms that can be confusing, especially for those new to the field.
At Warehow, our mission is to make fulfilment simple, so to help navigate some of this jargon we’ve compiled a list of terms and definitions, plus a few ecommerce related terms that may also be useful.
Whilst you might already be familiar with many of these terms, the constantly evolving nature of ecommerce means that it’s always beneficial to keep abreast of the latest terminology. This list isn’t all encompassing but is designed to serve as a handy reference, ensuring you have a clear understanding of the language of logistics.
The Warehow A-Z of Marketplace Fulfilment.
Advanced Shipping Notice (ASN)
An Advanced Shipping Notice (ASN) is an electronic document sent from a supplier to a retailer or distribution centre to provide detailed information about an impending shipment.
This typically includes details such as the contents of the shipment, expected arrival time, packaging information and tracking numbers.
The primary purpose of an ASN is to enable the receiving party to prepare for the shipment’s arrival, streamline the receiving process and improve overall supply chain efficiency.
At Warehow we tend to refer to these as Delivery Pre-Receipt documentation.
Automated Guided Vehicle (AGV)
An Automated Guided Vehicle (AGV) is a mobile robot used in industrial and warehouse environments to transport materials without human intervention.
AGVs follow predefined paths marked by wires, magnets, or other guidance systems, and can navigate complex layouts with the help of sensors, cameras, and onboard computer systems.
These vehicles are equipped with various load-handling attachments such as conveyors, lift tables, and robotic arms to perform specific tasks.
Backhauling
Backhauling refers to the practice of utilising the return trip of a transportation vehicle to carry freight back to its point of origin or another destination, instead of traveling empty. This logistics strategy aims to maximise vehicle utilisation and reduce transportation costs by ensuring that trucks or carriers are productive on both legs of their journey.
Backorder
A backorder occurs when a customer orders a product that is temporarily out of stock. In this situation, the retailer or supplier will place the item on backorder, meaning it will be shipped to the customer as soon as it becomes available. Not all sales channels will allow backorder fulfilment, especially marketplaces with strict delivery SLA’s.
Batch Picking
Batch picking is a warehouse operational process where multiple orders are grouped together and then all picked simultaneously. Instead of picking items for one order at a time, a picker will collect all items needed for a batch of orders in one go. This is usually a much more efficient process than picking orders one by one.
Bill of Lading (BOL)
A Bill of Lading (BOL) is a crucial legal document in the logistics and transportation industry, serving as a receipt for shipped goods and a contract of carriage between the shipper and carrier.
The BOL details the type, quantity and destination of the goods being transported and includes important information such as the shipper’s and consignee’s names and addresses, special handling instructions, and terms of the shipment.
It also acts as a document of title, allowing the holder to claim ownership of the goods. The BOL must be presented at the destination for the consignee to receive the shipment.
There are different types of BOLs, including straight BOLs, order BOLs, and negotiable BOLs, each serving specific purposes in the shipping process.
Bonded Warehouse
A bonded warehouse is a secure storage facility where imported goods can be stored without paying import duties until they are removed from the warehouse. These warehouses are typically used for goods that are awaiting customs clearance or for goods that are intended for re-export.
Buffer or Safety Stock
Safety stock, also known as buffer stock or reserve inventory, is an additional quantity of inventory that a company holds above and beyond its regular stock levels. This is to mitigate the risk of out of stocks caused by unexpected fluctuations in demand, supply chain disruptions, or lead time variability.
Safety stock acts as a cushion to ensure that sufficient inventory is available to fulfil customer orders even under adverse conditions.
Bundling
Bundling is a process in fulfilment (and manufacturing) where individual items are grouped together and packaged as a single unit or bundle.
This process involves assembling multiple products or components that are often sold together or required for a specific purpose, making them ready for shipment as a single SKU (Stock Keeping Unit).
Sometimes bundling happens pre-sale, in other instances the bundle is only complied once an order has been received. Most 3PL’s will be willing to offer bundling options.
Business to Business (B2B)
Business to Business, or B2B, refers to transactions between two businesses, such as a manufacturer and a wholesaler, or a wholesaler and a retailer. In the context of fulfilment, B2B operations often involve larger orders, bulk shipping, and more complex logistical requirements compared to B2C operations.
Business to Consumer (B2C) (Sometimes referred to as D2C: Direct to Consumer)
Business to Consumer, or B2C, involves transactions between a business and individual consumers. B2C fulfilment is the process of delivering products directly to the end customer, often through ecommerce platforms or physical retail stores. This type of fulfilment requires handling smaller, individual orders with a focus on speed, accuracy, and customer service.
Carrier vs Courier
In logistics and fulfilment, a carrier is a company or service provider responsible for transporting goods from one location to another. Carriers can be involved in various modes of transportation, including trucking, air freight, sea freight, and rail. Carriers typically transport larger quantities of packages at once.
Couriers typically transport smaller shipments or individual parcels. Generally, carriers do not offer door-to-door service, while couriers usually do. Some businesses offer both Carrier and Courier services.
Well known UK national courier services include Parcel Hub, Evri, DPD, DHL, Royal Mail, UPS and Yodel.
Consignment Inventory
Consignment inventory refers to a supply chain arrangement where the supplier/manufacturer retains ownership of the inventory until it is actually sold to the end customer. The inventory is stored at a third parties business premises (typically a shop or warehouse) until it is sold to the end customer, but the supplier still owns the inventory until the final sale transaction and is usually responsible for costs relating to the stock prior to sale. (eg warehouse fees). Most stock in 3PL’s is consignment stock still owned by the supplier.
Containerisation
Containerisation is the practice of using standardised containers to transport goods efficiently. These containers, typically made of steel, can be easily transferred between different modes of transportation, such as ships, trains, and trucks, without unloading and reloading the contents, thereby improving efficiency and reducing handling costs.
Content Optimisation
The process of taking digital assets (images videos etc) and other product information (titles, product attributes etc) and putting this into the format that will work best on the specific selling channel. Frustratingly what works well on one sales channel may not work so well on another.
Cross-Border Fulfilment
Cross-border fulfilment refers to the process of managing and shipping orders from a warehouse or distribution centre in one country to customers located in another country.
This type of fulfilment involves navigating the complexities of international shipping, including customs regulations, import duties, taxes, and compliance with local laws. Since Brexit European cross border trade from the UK has become more costly and complicated.
Cross-Docking
Cross-docking is a logistics strategy where incoming shipments are directly transferred at a receiving location (this may be a warehouse or possibly the docks) to an outbound shipping solution with minimal or no storage in between. The primary goal of cross-docking is to streamline the supply chain by reducing the need for long-term storage and speeding up the distribution process.
As an example, a supplier may deliver batches of orders to a centralised carrier location, which are then almost immediately ‘cross docked’ to be transported to local depots around the country. The orders are never ‘stored’ at the centralised location and may only be there for a few hours.
Cyclic Stock Counting (may be referred to as Perpetual Inventory Checks)
Cycle counting is an inventory auditing process where a subset of inventory is counted on a regular basis, rather than doing a full inventory count all at once, maybe once a year. This method involves counting different portions of inventory in a cycle, ensuring that all items are counted over a specific period.
DAM (Digital Asset Management)
Digital Asset Management refers to a software solution that encompasses the collection and management of an organization’s digital assets, such as images, videos, documents, audio files, and text.
DDP – Delivered Duty Paid (see Incoterms)
DDP is an international shipping term used in trade and logistics. Under DDP, the seller is responsible for delivering the goods to the buyer at an agreed-upon location, and the seller also covers all the costs associated with transporting the goods, including:
- Shipping charges
- Customs clearance
- Export and import duties
- Insurance
- Any other costs incurred during the delivery process
Essentially, DDP requires the seller to handle all risks and expenses until the goods are delivered to the buyer’s specified destination. This term ensures that the buyer has minimal responsibility and risk regarding the transportation and delivery of the goods.
Where stock is being delivered into Warehow’s facilities the Warehow default position is that all stock must be DDP
Dead Stock
Dead stock refers to inventory items that are no longer in demand, have not been sold for a long time, and are unlikely to be sold in the future. These items can tie up capital and storage space, leading to increased holding costs and potential losses for the business.
Demand Forecasting
Demand forecasting is the process of predicting future customer demand for products or services based on historical data, market trends, and other influencing factors.
Digital Assets
A digital asset is anything that is stored digitally and is uniquely identifiable that is related to your products. Examples of digital assets include images, videos, instruction documents etc.
Distribution Centre (DC)
A distribution centre (DC) is a strategically located facility used by logistics companies and retailers to efficiently manage the storage, handling, and distribution of goods.
It serves as a central hub where products are received from suppliers, sorted, stored, and then shipped out to various destinations, such as retail stores, fulfilment centres, or directly to customers.
Dropshipping
Dropshipping is a retail fulfilment method where the seller does not keep/own the products that it sells in stock. Instead, when the seller receives an order for a product, the seller then purchases the item from a third-party supplier, who then ships the product directly to the customer. This is often a fully automated process.
Dropshipping may also be used as a term to refer to a service option where a supplier has no facility/capability to ship individual customer orders but does have the stock they are selling on hand.
The supplier will receive the individual customer orders directly (sometimes in a daily batch of orders) and then ‘bulk pick’ the merchandise needed to fulfil these orders, and then promptly ship/deliver the merchandise to another service provider (typically a 3PL). The 3PL will then work through the bulk delivery splitting this into individual customer orders and then pack and dispatch these orders via a courier service for delivery to the final customer.
Drop Trailer
A drop trailer is a freight transportation method where a lorry driver drops off a trailer at a designated location for loading or unloading and then leaves without waiting for the process to be completed, with another driver returning later to collect the now loaded (or unloaded) trailer. This allows the carrier to utilise their equipment more efficiently and reduces down time for the driver.
Dynamic Routing
Dynamic routing is a logistics strategy that involves adjusting and optimising transportation routes in real-time based on current conditions such as traffic, weather, and shipment priorities.
Unlike static routing, which relies on predetermined routes, dynamic routing leverages advanced algorithms and real-time data to make quick decisions that enhance delivery efficiency and reduce transit times.
This approach is particularly useful in managing complex supply chains and last-mile delivery operations, where conditions can change rapidly.
EAN
EAN stands for European Article Number, a standard 13-digit barcode that provides European products with individual article numbers. An EAN identifies the specific retail product type, specific packaging configuration, and the specific manufacturer. If you need EAN codes for your product, you can apply for these through several organisations that issue EAN codes.
In most cases, you will need to provide some information about your product, such as its name, weight, and dimensions. You may also need to provide other information, such as the country where the product will be sold and the intended use of the product.
Once you have provided this information, the organisation will assign a unique EAN code to your product. It is important to note that there is a fee for obtaining a EAN code, and the cost will vary depending on the organisation you apply through and the type of product you are registering.
Ecommerce Fulfilment
Ecommerce fulfilment refers to the entire process of receiving, processing, and delivering orders placed through online stores. This process includes inventory management, order processing, picking and packing items, shipping, and handling returns.
Economic Order Quantity (EOQ)
Economic Order Quantity (EOQ) is a fundamental inventory management formula used to determine the optimal order quantity that minimises the total costs associated with ordering and holding inventory.
The EOQ model balances the trade-off between the ordering cost (cost incurred each time an order is placed, regardless of the order size) and the holding cost (cost to keep one unit of inventory in storage for a given period).
EORI
EORI number stands for Economic Operators Registration and Identification Number. This is an identification number that businesses, or economic operators, must provide at Customs when making imports or exports. In the UK, EORI numbers start with GB. UK EORI numbers are different from EU EORI numbers. When importing to the UK you will need a UK EORI number. These can usually be obtained quickly and free of charge from HMRC.
https://www.gov.uk/eori/apply-for-eori
Expediting
Expediting in supply chain management refers to the process of speeding up the movement or delivery of goods to meet urgent needs or deadlines. This can involve prioritising the manufacturing, handling and transportation of specific orders to ensure timely arrival.
Expediting is often necessary in situations where there are unforeseen delays, sudden increases in demand, or critical deadlines that must be met.
First In, First Out (FIFO)
FIFO is an inventory management method where the oldest inventory items are sold or used first. This approach ensures that perishable goods are utilised before they expire and helps in maintaining a fresh stock of products.
Fourth-Party Logistics (4PL)
Fourth-Party Logistics (4PL) is an advanced form of logistics outsourcing in which a business hires an external organisation to manage its entire supply chain operations.
A 4PL provider may oversee and coordinate the activities of various third-party logistics (3PL) providers, ensuring seamless integration and optimisation of the supply chain.
4PLs act as a single point of contact for the company, offering strategic management and consulting services to improve efficiency, reduce costs and enhance overall supply chain performance.
Freight Forwarder
A freight forwarder is a company or an individual that arranges and coordinates the transportation of goods on behalf of shippers. Freight forwarders act as intermediaries between shippers and various transportation services, including ocean shipping, air freight, and land transport.
They handle logistics, documentation, customs clearance, and other related tasks to ensure that goods are shipped efficiently and in compliance with regulations.
Fulfilment House Due Diligence Scheme (FHDDS)
The FHDDS is a UK government initiative managed by HM Revenue and Customs (HMRC). Enacted by the Finance (No.2) Act 2017, the scheme mandates fulfilment centre businesses to maintain detailed records and conduct thorough checks on their international clients who sell goods to UK customers.
It is a critical framework for maintaining tax integrity by ensuring that such companies are not part of any supply chain that leads to Value Added Tax (VAT) evasion or fraud.
https://www.gov.uk/government/publications/fulfilment-house-due-diligence-scheme
Incoterms
Incoterms® are a set of 11 individual rules issued by the International Chamber of Commerce (ICC) which define the responsibilities of sellers and buyers for the sale of goods in international transactions. Ie who is paying for which leg of transport, who is paying import duties etc. For more information please visit
Inventory
Inventory refers to the goods and materials that a business holds for the purpose of resale or production. In ecommerce fulfilment it is usually used only to refer to finished products ready for sale, but in other instance could also include raw materials and work-in-progress items.
Inventory Turnover (often called Churn)
Inventory turnover is a ratio that measures how many times a company’s inventory is sold and replaced over a specific period, usually a year. It is calculated by dividing the cost of goods sold (COGS) by the average inventory during that period.
A high inventory turnover ratio indicates that a company is efficiently managing its inventory, selling products quickly, and reducing holding costs. Conversely, a low inventory turnover ratio may suggest overstocking, obsolescence, or weak sales.
Put simply, storage will cost you money, so you don’t want to hold too much stock. Also, slow-moving stock will tie up your working capital, and every business understands the importance of good cashflow.
Conversely you also don’t want to run out of stock and then need to wait for new stock to be delivered before you can sell more. It’s sometimes a fine balancing act to make the right call on the best level of stock holding, and you’ll need to consider manufacturing lead times, possible deliver delays, seasonality and possibly Minimum Order Quantities (MOQ’s), and volume related discounts from your supplier.
Just-In-Time (JIT)
Just-In-Time (JIT) is an inventory management strategy aimed at increasing efficiency and reducing waste by receiving goods only as they are needed in the production process, thereby minimising inventory and storage costs.
Last-Mile Delivery (Final Mile Delivery)
Last-mile delivery is the final step in the delivery process where goods are transported from a transportation hub or warehouse to the end customer’s location. It is a critical stage in logistics that focuses on ensuring timely and accurate delivery, often directly to the customer’s door. Typically this is carried out by a courier company.
Lead Time
Lead time is the total amount of time it takes from the initiation of a process until its completion. In the context of supply chain and fulfilment, lead time refers to the period between the placement of an order and the delivery of the goods to the customer.
MOQ’s (minimum order quantities)
Many manufacturers will have a minimum quantity of a specific item that you can order. You need to understand your suppliers MOQ’s when planning your stock.
Obsolescence
In the context of inventory management and supply chain, obsolescence typically refers to products, components or materials that have become obsolete and are no longer saleable or usable.
Order Management System (OMS)
An Order Management System (OMS) is a software platform that facilitates the management and tracking of sales orders from their initial placement to final delivery. It integrates and automates various processes, including order entry, inventory management, order processing, fulfilment and customer communication.
Overstocking
Overstocking refers to the situation in which a business holds excessive inventory levels beyond what is necessary to meet current or anticipated demand. It occurs when a company accumulates more inventory than it can sell or use within a reasonable timeframe.
Perpetual Inventory System
A perpetual inventory system is an inventory management method that continuously updates inventory records in real-time with each transaction, including sales, purchases, and returns.
This system provides accurate and up-to-date information on inventory levels, enabling better inventory control and decision-making.
Picking and Packing
Picking and Packing is a key process in order fulfilment where items from a warehouse needed to fulfil orders are collected from their individual warehouse storage locations (picked) and then packed for shipping to the customer. Packing can vary from simply applying a courier label to a box, to very specific criteria such as folding a product in a certain way and bespoke packaging specifications. These packing requirements are also often dependent on the product, the sales channel and the seller.
PIM (Product Information Management)
A Product information Management (PIM) solution is a business application that provides a single place to collect, manage, and enrich your product information, create a product catalogue, and distribute it to your sales and eCommerce channels
Product Attributes
Product attributes are the specific characteristics or features that define and describe a product, distinguishing it from other products. These may be as simple as size and colour but can also be much more detailed.
In ecommerce these attributes are often closely aligned to the selection filters on the digital sales channels that enable customers to narrow their search.
It’s important that as a bare minimum the key attributes detailed for your products are both accurate and reflect the criteria used by the sales channels. Just having the information within a great product description isn’t enough. These attributes need to be entered at an individual attribute level into the sales channels content systems to ensure your product can be easily found online. Frustratingly many sales channels have differing attribute requirements for very similar products.
Real-Time Inventory
Real-time inventory refers to the continuous tracking and updating of inventory levels immediately as transactions occur. This approach provides up-to-date information on stock availability, allowing businesses to respond quickly to changes in demand, optimize inventory levels, and reduce the risk of unfulfilled orders or overstocking.
Real-time inventory management is facilitated by software systems and integrated inventory management systems.
Its worth noting that nothing is ever quite ‘real time’ as communication between the sales channels systems and warehouse inventory systems will always have some latency or lag. On very fast selling product, especially where an item is being sold across multiple sales channels from a single pool of stock, this can risk over selling which then leads to order cancellations. Whilst not ideal most digital sales channels understand this and allow for a low level of cancellations within their SLA’s.
This can derisked by using safety or buffer stocks.
Reverse Logistics
Reverse logistics refers to the process of managing the flow of products, materials and information in the reverse direction, from the point of consumption back to the point of origin. Or to keep it simple in ecommerce fulfilment it mostly means customer returns and the associated processes to manage these.
RFID (Radio-Frequency Identification)
RFID is a technology that uses electromagnetic fields to automatically identify, and track tags attached to individual items of merchandise. These tags contain electronically stored information that can be read by an RFID reader without direct contact.
Using RFID a warehouse would not need to manually check the contents of a delivery to check it has been delivered in the quantities advised. Instead, a simple scan will confirm the delivery volumes.
Shipping Label
A shipping label is a document affixed to a package or parcel that contains important information about the shipment, including the sender’s and recipient’s addresses, package dimensions, weight, tracking number and barcode.
Shipping labels are used by both couriers and carriers to identify and track packages throughout the shipping process.
Stock Keeping Unit (SKU)
You’ll often hear merchandise referred to as Sku or Sku’s. This is an acronym for a Stock Keeping Unit (SKU). ie a specific item of merchandise that can be identified via a unique code or identifier assigned to the specific product. This will often be the EAN and will be used to identify an item on inventory management systems and most digital sales channels.
It should be noted that some sales channels insist on a channel specific unique product code, but most inventory management systems will map your sku number against the channel specific unique code.
SKUs are used to track and manage individual products within a store or warehouse, facilitating inventory control, sales tracking, and order fulfilment.
Each SKU typically corresponds to a particular product variant, such as a specific size, colour, or model, allowing retailers to differentiate between similar items and accurately manage stock levels. SKUs may consist of alphanumeric characters, numbers, or a combination of both, and they are often displayed as barcodes or labels on product packaging or shelves for easy identification.
Within a warehouse you may have multiple units of the same Sku on hand.
Stockout or Out of Stock
A stockout occurs when an item is not available for sale or use due to inaccurate inventory. This can lead to lost sales and dissatisfied customers. Effective inventory management strategies are essential to minimise the risk of stockouts.
Stock Pool
A stock pool is a single set of stock (or pool) that is used to feed multiple sales channels.
Supplier Direct Fulfilled (SDF)
Supplier Direct Fulfilled (SDF) is a fulfilment method where the supplier ships products directly to the end customer on behalf of the retailer or marketplace. This approach bypasses the need for the retailer to handle inventory, reducing storage and handling costs and speeding up the delivery process.
Many of the UK’s biggest sales channels now offer a mix of merchandise supplied by the channel and supplier direct fulfilled. Typically, this reduces the selling channels costs whilst still offering a wide range to customers.
Supply Chain Management (SCM)
Supply Chain Management (SCM) is the coordination and management of all activities involved in sourcing, procurement, production, and logistics to efficiently move products from suppliers to end customers.
Supply Chain Visibility
Supply chain visibility is the capability to track and monitor all activities, data and inventory throughout the supply chain in real-time. It enhances transparency and decision-making by providing stakeholders with accurate and up-to-date information on the status and location of goods, enabling more efficient and responsive supply chain operations.
Tail Stock
In most businesses there are ‘best sellers’ or ‘core products’ and then the remainder of the product range. It’s not untypical for the 20% of best sellers to make up 70%+ of total sales. The stock that isn’t the best sellers is often referred to as the tail.
Tail stock is still important and can be vital in making sure that customers can access a broad range, and tail stock can still deliver very meaningful sales. However, ideally you don’t want a massive tail in your range as this becomes harder to manage effectively.
Third-Party Logistics (3PL)
Third-Party Logistics (3PL) refers to the outsourcing of logistics and supply chain management functions to an external provider. 3PL companies like Warehow offer services such as warehousing, transportation, inventory management, order fulfilment, and distribution.
This allows businesses to focus on their core operations while leveraging the expertise and resources of the 3PL provider to enhance efficiency and reduce costs.
Tracking
Tracking refers to the process of monitoring and tracing the movement of a parcel during the shipping process. By utilising advanced tracking technologies stakeholders can obtain real-time information about the location and status of orders. Tracked parcels are great for customers and significantly reduce WISMO (where is my order) calls to customer service teams.
Unit of Measure (UOM)
Unit of Measure (UOM) is a standard quantity used to specify and quantify the amount of an item or product in inventory management and sales. Examples of UOM include pieces, kilograms, litres, boxes, and dozens. UOM helps in standardising and simplifying the tracking, ordering, and reporting of inventory items.
UGC (User generated content)
UGC is any content, text, videos, images, reviews, etc created by customers rather than by the brands. Many selling channels allow customers to upload images or videos of the item ‘In-situ’ alongside reviews.
Warehouse Management System (WMS)
A Warehouse Management System (WMS) is a software application designed to support and optimize warehouse and distribution centre operations.
It provides tools for managing inventory levels, tracking goods, improving picking and packing processes, and facilitating the efficient movement of goods within the warehouse.
WISMO (where is my order)
When customers don’t receive their order as expected they often make a WISMO call or send an email to customer service teams. Ensuring that you parcels are fully tracked can significantly reduce these calls. It’s also important to make sure that accurate and realistic dispatch times and delivery lead times are clearly visible on the selling channel.
If certain delivery areas or product types have extended lead times always make this very clear pre-sale.
Zone Picking
Zone picking is an order fulfilment solution where a warehouse or distribution centre is divided into different zones, and workers are assigned to specific zones to pick items. Each picker is responsible for selecting products only within their designated area. The picked items are then consolidated from each zone to complete customer orders. This method increases efficiency and reduces the time spent moving across the warehouse.
Partner with Warehow for Ecommerce Fulfilment
Why not partner with Warehow for your ecommerce fulfilment needs? As ecommerce and marketplace fulfilment specialists, we can help you fulfil your orders; taking the stress away from your team, delighting your customers, and boosting your revenue.
Whether you’re looking to outsource ‘all’ or just ‘the non-standard’ elements of your fulfilment, we’re here to help. By working with us, you’ll save on costly IT development, operational layout changes, or changes to your ways of working, while empowering your core distribution team to focus on your primary channels.
Warehow offers:
- The classic 3PL model for larger clients.
- A white label solution for marketplaces or retailers to build their own “fulfilled by” proposition. A value adding dropship model -unpacking, repacking and dispatching to end users where clients may have either limited D2C capabilities or operational process restrictions.
- Micro warehousing: Aimed at fast growing and smaller sellers.
Get in touch with us today to schedule a call and learn more about how Warehow can help. We’re looking forward to hearing from you!
