A Short Guide to Direct-To-Consumer (DTC) Order Fulfillment

Our Supply Chain team here at JPG understands the amount of work it takes to set up a successful direct-to-consumer (DTC) fulfillment system. They’ve applauded the good, reworked the bad, and optimized setups for hundreds of F&B businesses.  

Knowing your brand has many details to work through before and during the fulfillment process, let’s explore a few key components and best practices.

Storage

A third-party logistics center (3PL) and a fulfillment center can be one and the same or specialized to focus on one operational aspect. Discussing what your brand specifically needs assistance with from a partner can help ensure the right fit.  

Either way, a 3PL/Fulfillment Center will want to understand logistics like how inventory is arriving, quantity and frequency of deliveries, FEFO or FIFO inventory management, and the amount of space needed for product and packaging materials. Be prepared to answer a warehouse’s questions on inventory movements at the pallet level, since many emerging brands are sending pallets from the production facility via LTL (less than truckload) carriers.  

Handling food and beverage products, the warehouse will need to meet FSMA (Food Safety Modernization Act) requirements for warehousing and have programs in place such as Good Manufacturing Processes (GMP), sanitation, and pest control. They should also be able to provide their recall and traceability protocols for your review.  

A warehouse will provide pallet configuration options to fit floor/ rack storage for the number of pallet spaces needed. They may ask for single SKU pallets to help with ease of building variety packs, or pre-kitting opportunities for shipping efficiency.  

Remember: When considering pre-kitting, the overall kit's expiration date is dependent on the soonest coded date of a single item. It’s crucial to have a volume forecast and inventory movement data before jumping into this option, otherwise you could waste time and money to re-kit due to an expired item.  

Packaging

What brand experience are you curating for your customers?  

Are they opening a plastic zip pouch or a branded box with custom colors and tape? Are you including any personalized inserts like thank-you notes, stickers, or discount codes for their next order? Is the product padded in tissue paper, packing peanuts, or packing paper?  

Remember that each 'extra item’ your brand decides to include with an order will need to be designed by your team, ordered and shipped to the 3PL/Fulfillment Center with clear, easy-to-assemble kitting instructions, and take up storage space within your brand’s allotted space. Assign someone to oversee inventory management of each packaging component and provide clear deadlines to the 3PL/Fulfillment Center on when to include specific promotional inserts.  

Carefully consider the number of product options your website will offer, whether it’s single units, variety packs, or bulk discounts. If you offer bulk options, can you ship in the cases your product was initially packaged in? If you offer variety packs, how many custom box sizes will you need? Most Fulfillment Centers will carry a range of unbranded corrugate that’s usually built into your shipping cost, so how could you use those to your advantage?

Fulfillment System

Having a simple system with clear deadlines helps provide a consistent customer experience.  

Your systems must work together while being efficient to use. We recommend integrating Shopify into your website to ensure accurate order processing with real-time inventory updates. Shopify can also connect to QuickBooks. There are certainly more solutions available, but sometimes the most popular solutions are this way for a reason!

All businesses are unique, and our team has seen a wide variety of backend setups utilizing paid tools, Excel sheets, manual trackers, etc. There isn’t a right or wrong setup as long as the tools you’re using or creating can clearly communicate an order’s full story and timeline.  

To set clear expectations for your customers, a fulfillment timeline should be spelled out. Will you guarantee a specific delivery window, or will orders ship within a certain number of days from a customer’s purchase date? Is there enough of a buffer for shipping delays if you are guaranteeing a specific delivery window? Are turnaround timelines realistic for your 3PL/Fulfillment Center to maintain a high percentage of success? What is the fix if you can’t deliver on said timeline?

Customer Service

The 3PL is responsible for fulfilling your orders, but it’s your brand that provides quality customer service. Our team recommends having a standard operating procedure (SOP) in place for issues and a tracker that tells the whole story.  

Think through common customer issues - missing items, mispacked orders, damaged delivery, lost packages, out of stock issues, expired product, etc. - as well as common questions about your brand, mission, ingredients, and processes to create a well-rounded SOP. We advise clients to craft email templates for each issue, ensuring consistency in customer management and brand voice. Many of these items are also great to add to your website’s FAQ section!

Set up an issues tracker that shows the entire customer order journey and update it as the situation progresses. You can use a pre-formed tool like Shopify or Gorgias, but you can also create your own Excel or Sheets document as long as it shares the complete story. Begin with the original order information such as the order number, date of contact, customer name, and contact information. Create a dropdown menu with a generalization of the issue type (damaged, expired, missing, etc.) for easy data comparison during quarterly meetings. Next, add in more notes unique to the issue, how and when the issue was rectified, and associated costs.  

Tracking customer issues in detail can guide upcoming business decisions. For example, if you notice that most issues revolve around expired products, you may have to focus on inventory management and set clear expectations around a last “ship by” date with your 3PL. If items arrive damaged, you may have to investigate different packaging solutions or switch to a different carrier.

DTC fulfillment isn’t just about shipping products...

It’s about creating memorable experiences for your customers to keep them coming back for more! Check out our Supply Chain & Operations page to learn how we can help optimize your DTC fulfillment search and setup.

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