Ecommerce Ecommerce Logistics and Fulfillment

Question 1

What does 'fulfillment' mean in ecommerce operations?

Accepted Answer

The complete process of receiving, processing, picking, packing, and shipping customer orders

Answer

Fulfillment encompasses every step from when an order is placed to when the package arrives at the customer's door.

Question 2

What is a third-party logistics provider (3PL)?

Accepted Answer

An outsourced company that handles warehousing, picking, packing, and shipping for ecommerce merchants

Answer

A 3PL (e.g., ShipBob, Red Stag) stores your inventory and handles fulfillment operations so you don't need your own warehouse.

Question 3

What is dropshipping in ecommerce?

Accepted Answer

Selling products you don't stock — the supplier ships directly to the customer when an order is placed

Answer

In dropshipping, the merchant never holds inventory; when a sale occurs, the order is forwarded to the supplier who ships directly to the buyer.

Question 4

What does SKU stand for in inventory management?

Accepted Answer

Stock Keeping Unit

Answer

A SKU (Stock Keeping Unit) is a unique alphanumeric identifier assigned to each distinct product variant for inventory tracking.

Question 5

What is the primary benefit of having multiple fulfillment centers distributed across the US?

Accepted Answer

Reduced shipping times and costs by placing inventory closer to customers

Answer

Distributed fulfillment centers reduce the shipping distance to customers, lowering freight costs and delivery times.

Ecommerce Practice Test