Hopefully, the reader remembers from the previous chapter that customer service is the best marketing tool at your disposal. Logistics and fulfillment is an arm of customer service. Thus to guarantee the best customer service, don’t separate your warehouse operations from your order management or from your customer service. This is true no matter what the size of the e-commerce operation.

A small entrepreneurial startup may have little experience with shipping products. A click-and-mortar has an infrastructure in place that is, in all probability, geared toward shipping palettes or cases to distributors or stores — not quantities of ones and twos. Websites have customers with high expectations, they want their products fast, and they may expect shipment of different products to different addresses, and ask for instant credit for returns.

Order Processing and Fulfillment

To be a successful e-commerce business you must be able to process customer orders efficiently and correctly and to deliver the product as promised. This can get messy unless you have the right tools to help you; but many times the e-commerce solution you use to power your site won’t provide you with all of the tools needed. To help you handle back-office order processing and fulfillment chores you need tools that can help you keep track of pricing (including special sales), sales tax, shipping costs, items shipped, split orders, back orders, returned orders, drop-shipped orders, customer inquiries, and more.

There are a few shopping cart programs that provide most, if not all, of those functions (as discussed later). But many of you will make do using separate applications — tabulating data from not only your shopping cart, but also using your accounting program paired with a spreadsheet and/or database program. Others will look for some type of application that spans their shopping cart as well as accounting or shipping applications.

First, let’s look at two applications that are designed specifically for online order management.

Dydacomp Mail Order Manager ( is design to serve the needs of a small business. It provides a complete suite of accounting modules for mail order and/or e-commerce. As an added bonus, this program also can be used with Yahoo! Store.

StoneEdge Order Manager ( is a full-function order management program based on Microsoft’s Access database. If you use the drop-ship fulfillment model, consider this product. The program can be used with a variety of other software including Miva, ShopSite, Americart, Able Commerce, eBay,, Yahoo! Store, SmartCart, and more.

Now let’s consider other order management methods that are popular with the e-commerce crowd.

The first is QuickBooks. Check to see if QuickBooks format order export is available with your shopping cart. Watch the wording carefully because the exact QuickBooks format must be built into the shopping cart system, don’t try it if you are told that it is “possible,” unless you are an experienced programmer (or you are willing to hire one for the job).

The next option for online order management is the use of spreadsheets and databases. Before deciding to use this method, you should be aware that it usually requires re-entry of data, which not only uses up valuable time, but also introduces another venue for order errors.

Some of you will want more sophisticated order processing and fulfillment features. That means a product that contains integrated shopping cart and order management features. If you decide to go this route, you should understand that the level of sophistication is not the same from program to program. Look for a program that allows you to, at minimum, mark orders as “shipped,” “back ordered,” “drop-shipped,” “suspended,” “cancelled,” etc. The following products can handle some or all of your order management duties. (Test this type of application to see if it meets your needs before laying out your hard-earned money.)


Once the customer order has been received, it’s dropped into the “order capture pipeline.” From there the e-commerce site must send each product order (there may be a number of “product orders” within each customer order) to the correct fulfillment provider, i.e. a fulfillment service provider (FSP), a drop-shipper, and or an in-house fulfillment center. That provider then assumes responsibility for delivering the product(s) to the customer. Even if that sounds simple, it’s not; the system must contain business rules to determine which fulfillment provider(s) to send what portion of the customer’s order to. An example of rules:

  • Use the same fulfillment provider for all the products, if possible.
  • Use the fulfillment provider that can give the customer the lowest per unit cost.
  • Check in-house inventory before using an outsource solution.

Remember, if more than one fulfillment provider is used, then the customer will receive separate shipments (more shipping expense). Then, sometime during this process (it varies with systems and is dependent upon whether all the fulfillment providers support real-time inventory queries), the website composes an XML message and transmits it via secure HTTP to the appropriate outsourcers. If the website has outsourcers that do not support real-time inventory queries then the site will need to rely on daily supplied inventory profile data.

Now this is where it gets sticky — and where sometimes there is a need for consultants and programmers. Each interaction requires mapping data from the e-commerce operation’s order management system (and pipeline) into messages that can understood by the fulfillment providers’ systems (including in-house systems). First, the data has to be represented — the way that is handled is dependent upon the provider’s systems. For example, a specific “flavor” of XML needed to represent the transaction, or a EDI X12 format might be used, or even a proprietary batch-file data format or a “special” crafted transaction-related variety with its own key-value-pair grammars may be used to represent the necessary transactional information.

The next step in the order process is collection of the customer’s shipping address and shipping instructions. Depending on decisions made upstream in the pipeline, the available shipment options are determined by the outsourcer(s). If multiple outsourcers are involved, then a shared shipping carrier is usually used to ship the order. If a single outsourcer is involved, then the website queries it for current delivery options. Other complications at this stage can include support for multiple ship-to addresses for the same order (for example, Christmas, Mother’s Day, Graduation season, etc.) as well as gift wrapping and messages (e.g. “Happy Birthday Grandmother, Love James”).

Now we are at the payment stage where credit card information is entered or retrieved from the customer database, and the credit card is authorized for the order total. The e-commerce site interacts with a credit-card clearinghouse to validate the credit card and to determine whether there is sufficient credit available. Communicating with a clearinghouse normally requires a dedicated line and transmittal of the requests using the clearinghouse’s proprietary protocol.

Once the credit card has been approved and the customer (all of the above should have occurred within seconds) has clicked on the confirmation button, the order is accepted by the website’s order management system. At this point, a few options exist depending on the site’s policy and outsourcer(s) capabilities. If the site offers the customer the opportunity to cancel the order within a specified time frame, the order is not immediately transmitted to the outsourcer(s). If the outsourcer doesn’t support a real-time protocol, then the order will be transmitted during the next batch-file generation cycle. If the outsourcer supports real-time order processing, then the site can transmit over secure HTTP, containing all of the information necessary for an outsourcer to process the order.

Open Source e-Commerce Solutions ( This product combines open source solutions to provide a free and open e-commerce platform that includes the powerful PHP web scripting language, the stable Apache web server, and the fast MySQL database server. This feature-packed out-of-the-box solution allows you to setup, run, and maintain online stores with minimum effort and with absolutely no costs or license fees involved.

Nexternal Solutions ( provides a hosted e-commerce solution. Its shopping cart can be used to sell directly to consumers or to other businesses. The product maximizes order conversion (orders / unique visitors) coupled with tools that increase site traffic. Since it is a hosted solution, the vendor handles the technical infrastructure and provides the back-end management tools.

Flashecom software ( is another hosted product that provides customizable order invoices, checkout with or without registration, inventory controls, banner manager, affiliate program, web storefront, shopping cart, catalog, integrated shipping system, eCoupons, and much more.

MonsterCommerce Ecommerce Software Shopping Carts for Small Business ( powers thousands of e-commerce sites. The product comes equipped with hundreds of pre-programmed features to help you manage all aspects of an online business with an easy-to-use, fully customizable web-based interface, including real-time shipping, product editor, inventory editor, payment manager, order status, and much more.

The Complete E-Commerce Book. Design, Build & Maintain a Successful Web-based Business
The Complete E-Commerce Book, Second Edition: Design, Build & Maintain a Successful Web-based Business
Year: 2004
Pages: 159

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