E-commerce fulfilment is a service in which a company stores an online brand's stock in its own shared warehouses, and picks, packs and sends the brand's orders. The brand hands over this work, and pays for each order and for the space that its stock takes. Fulfilment means everything that happens between an order being placed and the parcel leaving the warehouse. A company that does it for others is often called a third-party logistics company, or 3PL.
Why not keep the stock in the brand's own warehouse? A young brand cannot afford warehouses in several cities. But a parcel sent from Mumbai to Guwahati takes four or five days, while one sent from a warehouse in Guwahati can arrive the next day. A fulfilment network lets the brand keep stock near its customers in many cities, in warehouses that it shares with other brands. The brand pays only for the shelves it uses. In a busy season, such as the weeks before Diwali, it can take more space for a few weeks. Space rented in this way is called on-demand warehousing.
Consider a snack brand from Ratlam that sells on its own website and on two marketplaces. It sends its stock to a fulfilment company's warehouses in Delhi, Mumbai, Bengaluru and Kolkata. When a customer in Chennai orders three packets of namkeen, the brand's order management system (OMS) sends the order to the Bengaluru warehouse, the nearest one with stock. There, the warehouse management system (WMS) tells a picker which shelf to go to. The picker scans the packets, a packer puts them in a box, and the system prints the label. At 6 p.m., a courier collects the day's parcels and carries them into its express courier network. The customer receives the namkeen two days after ordering, instead of five. Every night, the brand sees how much stock is left in each city, and sends more where it is running low.
Quick commerce needs a different kind of fulfilment. To deliver in ten minutes, the stock must already be in a dark store, a small warehouse inside a neighbourhood that no customer enters. Some fulfilment companies now run dark stores, or keep them stocked, for brands and for quick commerce apps. The distance to the customer is two or three kilometres instead of hundreds, and each order is packed within about two minutes.
Fulfilment is different from a courier network. A courier moves the parcel, but does not hold the brand's stock. A fulfilment company holds the stock and packs each order, and then hands the parcel to a courier. Some large logistics companies do both.