Over the last few years, customer expectations have sky rocketed.
In a world where customers expect to get their orders fast, an efficient fulfillment process is vital for the success of any ecommerce business. As a growing ecommerce business, you can’t afford to have delivery delays resulting from backorders and stockouts.
As a result, the order filling process should be closely monitored and effectively optimized to improve fulfillment and delivery speeds. This is why fill rate is an important metric that ecommerce businesses should track.
What is fill rate?
Fill rate, also called order fulfillment rate, is the percentage of orders that you can ship from your available stock without any lost sales, backorders, or stockouts. It’s a good reflection of your ability to meet customer demand and the overall effectiveness of your ecommerce operations. It also helps you gauge the demand for various SKUs in your inventory and plan your procurement accordingly.
Types of fill rate
Although people generally refer to order fill rate when they talk about “fill rate,” the metric is also used in different stages in order fulfillment process. The different types of fill rate are:
Order fill rate
Order fill rate is a measure of how many orders you managed to fulfill completely without any backorders or stockouts.
ShipBob maintains a solid track record in fulfilling orders, helping brands achieve a near-perfect order fill rate.
Line fill rate
Line fill rate refers to the percentage of line items that you managed to fill completely out of all the order lines that need to be filled.
Case fill rate
Typically used by wholesalers and distributors, case fill rate is the percentage of product cases that they manage to ship out initially out of all the product cases that were ordered.
Warehouse fill rate
Used for measuring the efficiency of warehousing operations, this metric follows the same concept as order fill rate. Warehouse fill rate measures the percentage of orders that a warehouse is able to fulfill and ship from all the customer orders.
ShipBob continuously maintains a high warehouse fill rate with automated order processing and efficient picking and packing processes.
Vendor fill rate
A useful metric for assessing vendor performance, vendor fill rate is the percentage of vendors who were able to complete order shipments.
What is the fill rate formula?
The fill rate formula is pretty straightforward. You just need to divide the number of orders that were shipped by the total number of orders placed and multiply by 100. That means:
Fill Rate = (Total Orders Shipped / Total Orders Placed) x 100
How is fill rate calculated?
You can calculate fill rate by counting the number of orders that you were able to fulfill at one time. Then divide the number by the total number of orders you received and multiply the sum by 100.
For example, let’s say you received 60 orders but were only able to ship out 45, your fill rate will be as follows:
Fill Rate = (45/60) x 100 = 75%
Automated tools like the ShipBob Analytics dashboard makes the job easier by automatically recording the number of orders that were placed and fulfilled as well as orders that are still processing. This way you can quickly calculate your order fill rate.
Why calculate fill rate?
So now that you know how to calculate fill rate, why should you?
Calculating your fill rate is an effective way to gauge other aspects of your fulfillment process and identify opportunities for improvement. Your fill rate may be impacted by a number of factors.
For example, issues with order accuracy could result in extra time spent on recounting inventory, putting items back on the shelf, and repacking items. This means you’re able to fill fewer orders and the fulfillment process is significantly delayed. So a low fill rate may be reason to take a closer look at different steps in your fulfillment process to see what’s causing delays and inefficiencies.
Additionally, your fill rate can help you better understand your inventory management process. If you’re consistently seeing low fill rates due to stockouts, you may need to review your reorder points, or recalculate with the reorder point formula, so you can restock inventory at the right time. Or in some cases, you may even need to look for alternative suppliers.
Calculating your fill rate is also an effective way to understand customer demand. This can help you plan your procurement more accurately to maintain optimal stock levels and ensure that you can meet changing demand.
What is a good fill rate?
To achieve a perfect order rate, your fill rate should be as close to 100% as possible. This rate would indicate that you’re fulfilling all the orders placed without encountering stockouts or backorders. However, this is virtually impossible due to the many factors that can play a part in your filling process.
On average, companies typically maintain a fill rate of about 85%-95%. But ideally, you should strive for a fill rate between 97% and 99%. A 3PL like ShipBob can help you achieve these high numbers using a distributed fulfillment network and robust automation tools. For example, ShipBob helped BAKblade to ship out 20,000-30,000 units in a short amount of time.
How to increase order fill rate
The fastest way to improve your order fill rate is by partnering with a tech-enabled 3PL like ShipBob. With powerful proprietary software that integrates with your ecommerce store, ShipBob lets you automate most of your ecommerce fulfillment processes while giving you better visibility into your inventory management and warehousing operations.
ShipBob automatically processes orders so they’re quickly sent to the fulfillment queue, where items are picked, packed, and ready for shipment in a short amount of time.
Moreover, it eliminates the need for manual entries, which minimizes the risk of mistakes and increases order accuracy. All of these factors significantly speed up the order filling process and enable you to fulfill larger amounts of orders.
By giving you full visibility into your inventory levels, ShipBob’s software lets you know when you’re running low on stock and when you need to reorder. It also lets you set reorder point notifications so you never miss important inventory \ dates.
Additionally, it uses historical sales data to make accurate predictions about future demand. This enables you to keep optimal inventory levels on hand so you never experience filling delays due to stockouts and backorders.
When eco-friendly brand, Ocean & Co. switched from ShipBob to another company, they experienced a number of issues with fulfillment. From inaccurate inventory counts to lost inventory to increased fulfillment errors–the brand was unable to fill orders accurately and on time. Moreover, the lack of visibility into inventory levels caused additional problems.
After moving back to ShipBob, the brand was able to fulfill over 10,000 shipments per month with minimal hassle. Outsourcing their fulfillment to ShipBob enabled Ocean & Co. to save time and money, giving them the opportunity to focus on scaling their business.
“We looked into opening our own warehouses and hiring employees, but couldn’t come close with what 3PLs charge for picking, packing, and shipping. We’d also be worried about scheduling fulfillment shifts, ordering boxes and shipping labels, and dealing with the extra headaches of running logistics.
Most of all, those are hours we’d spend on tasks that are not scaling our business when we could be using those resources for growth. Our order volume has seen ebbs and flows, and ShipBob has fulfilled over 10,000 shipments per month for us, with Black Friday/Cyber Monday.”
Gerard Ecker, Founder & CEO of Ocean & Co.
Fill rate FAQs
Here are the answers to the top questions about fill rate:
How do you calculate fill rate?
You can calculate fill rate by dividing the number of orders that were shipped by the total number of orders placed and multiplying the sum by 100.
What is the difference between fill rate and inventory turnover?
While fill rate calculates the percentage of orders that were fulfilled at one time, inventory turnover is a metric for measuring the number of times inventory is sold and then replaced during a certain time period.
What is the fill rate formula?
The fill rate formula is: Fill Rate = (Total Orders Shipped / Total Orders Placed) x 100
What is a good fill rate?
A good fill rate is as close to 100% as possible, which means brands should strive for a fill rate of 97% to 99%.
Can ShipBob help improve fill rate?
ShipBob fulfills orders fast–all orders imported by noon local time are guaranteed to go out on the same day (though many fulfilled after 12 pm local also go out same-day). In addition to scalability, ShipBob also has a high order accuracy rate.