Glossary of Fulfilment Words and Terms

Wondering what 3PL, omnichannel or DDU mean?

eCommerce and fulfilment has a myriad of terms that are specific to the industry. I have put together a list of common fulfilment words, with a user friendly definition to help you get started.


3PL
This refers to a ‘3rd Party Logistics’, which is where a warehouse is managed on behalf of the owner of the stock. The type of activities and how a 3PL operates will vary according to the type of organisation it is. A 3PL could operate as a fulfilment services provider or as managed warehousing facility.

Backorder
A backorder is a type of customer order where there is insufficient inventory available to fulfil the order immediately. This can be managed either by splitting the order so that part of the order that has inventory can be shipped, or the whole order is held until such time that the backordered stock is goods receipted into the warehouse.

Carrier
This refers to the business that is used for delivery. Examples of carriers include: Royal Mail, Parcelforce, UPS, Yodel, City Link, etc.

Carrier Service
This term refers to the type of service that a carrier offers. This may relate to speed, package or shipment size, special handling requirements or signature.

DDP
Delivered Duty Paid. Relates to international delivery where the price quoted by a seller and/or paid by the customer for their order includes all of the relevant charges such as customs import fees, any taxes and/or duty charges. These fees / taxes / duties are to be paid for by the shipper of the order.

DDU
Delivered Duty Unpaid. Relates to international delivery where the quoted by a seller and/or paid by the customer does not include all charges, such as customs import fees, any taxes and/or duty charges. These fees / taxes / duties are to be paid for by the recipient of the shipment on delivery.

Delivery Confirmation
An electronic message sent by the carrier to confirm that the shipment has been successfully delivered. Depending on the carrier service, this may be the final delivery status update message.

Delivery Option
This is the choice of delivery that a customer may choose when placing an order.

Delivery Service
This term refers to the type of service that a retailer/shipper offers and might be agnostic to carrier/carrier service. A delivery usually relates to speed of delivery, timeslot for delivery or the type of delivery. For example, “standard”, “next day”, “pre 12pm” or “deliver to locker” are all examples of delivery service.

Delivery Status
Information captured by a carrier that pertains to the location and the delivery status of a specific parcel, package or shipment while it is in their network. A delivery status maybe made available via the carriers own website, or sent electronically to a retailer/shipper’s systems for presentation in their own systems

Despatch Confirmation
An electronic message sent by the warehouse to confirm that a specific parcel, package or shipment has successfully left the warehouse. A despatch confirmation may contain the parcel tracking number.

Fulfilment Services Provider
A fulfilment services provider is an organisation that operates on your behalf to receive delivery of stock from your suppliers, store inventory on your behalf and fulfil your customer orders. May also be referred to as a fulfilment house or fulfilment company or a 3PL.

Goods receipt
This is where the warehouse confirms that the products have been received from a supplier, as per an issued purchase order and are put into stock. On receipt, products may be checked against a packing list or ASN, go through QA, are labelled and put away in bin or shelf location.

Gross margin
The difference between the total selling price and the total cost of goods sold

Handling costs
The cost involved in moving, transferring a product and otherwise handling inventory whilst in the warehouse.

Inventory / Stock
This is the products and quantity that you own and store in order to sell to your customers .

Last Mile
Description for the final leg of home delivery, where the carrier,  courier (or delivery agent) is responsible for final handover to the customer. 

KPI
Key Performance Indicators (KPI) are the events that you can measure that matter to your business and help you assess how well your business is achieving its objectives. Examples include: your eBay Rating, % orders delivered on-time or % customer complaints.

Multi-channel
Multi-channel was a term used to refer to how retailers offered their products to their customers across many sales channels, i.e. Store Catalogue, Web or Call Centre. This has now evolved into Omni-channel.

Omni-channel
Omni-channel is the seamless way in which a customer interacts and shops with a retailer across multiple channels (such as store or web) and while using multiple devices, whilst experiencing no material difference in customer experience.

Pick & pack
Picking of products from inventory and packing it into packages for shipment to customers.

Pick ticket / pick instruction
An instruction used in the warehouse that lists the products and the quantities to pick for order processing

QA
Quality Assurance. Typically this refers to a verification check that is conducted (usually on goods receipt from supplier or on product return from customer) in order to ensure that the products delivered match those expected.

RMA
Returns Material Authorisation or Return Merchandise Authorisation. This an identifier given by a manufacturer or supplier that confirms that item(s) can be returned back to them for repair or refund. An RMA is then used to track the returned product(s) through the returns process.

SKU
Stock Keeping Unit is a classification given to distinguish one unique product from another, where it differs by its virtue of its form, fit and /or function. A separate SKU maybe identified for selling purposes. For example:

Unattended delivery
A carrier service or event where neither the customer nor the carrier need both be present in order to enable a successful delivery. Usually used with a postal service or a lockbox service.

UPI number
Unique Parcel Identifier. A series of characters that are assigned to a specific parcel that enable it to be tracked throughout delivery by a carrier.

About 

Hi, I am the Founder and Editor-In-Chief of eCommPoint.com.
I launched eCommPoint.com to share the fruits of my experience designing order management, fulfilment, home delivery and customer service systems and processes for ecommerce retailers.