For emerging consumer brands, getting a product into a retailer’s hands is just one part of the journey. The real challenge lies in what happens between the “yes” and the shelf or the customer’s doorstep.

At Lunr, we talk to growing CPG brands every day who are navigating this transition. From choosing the right fulfillment model to managing inventory and meeting retail compliance standards, there’s a lot to figure out as you scale.

In this guide, we’ll walk through the definition of order fulfillment, explain the most common models used by emerging brands, and define the key logistics terms you’re likely to encounter along the way.

What Is Order Fulfillment?

Order fulfillment is the process of receiving, packing, and shipping customer orders. For retail-ready CPG brands, this often involves shipping products from a warehouse or fulfillment center to a retail distribution center, or directly to customers in the case of DTC (direct-to-consumer) sales.

Put simply: it’s everything that happens after a customer or buyer places an order and before they receive the product. Understanding how fulfillment works and which model makes the most sense for your business is key to keeping operations smooth as you grow.

Common Fulfillment Models

As brands grow, fulfilling orders becomes more complex. Here are a few common models:

• In-House Fulfillment: Many early-stage brands handle mail order fulfillment themselves. This works when order volume is low- for example, packing and shipping 20 Shopify orders per week from a home office- but it quickly becomes unsustainable as demand grows and logistics become more complex.
• Third-Party Fulfillment (3PL): A third-party fulfillment provider manages storage, packing, and shipping. This is a popular next step for brands using Shopify order fulfillment or other ecommerce platforms to manage orders. Well-known 3PLs that work with emerging CPG brands include ShipBob, Deliverr (now part of Flexport), ShipMonk, and ShipHero. These partners integrate with your online store, automate the fulfillment process, and help scale operations without the overhead of running your own warehouse.
• Fulfillment by Amazon (FBA): For brands that sell through Amazon, FBA offers a streamlined way to handle order fulfillment. Brands send inventory to Amazon’s warehouses, and Amazon handles the rest: storage, packing, shipping, customer service, and even returns. FBA is especially appealing for brands that prioritize fast shipping and want access to Amazon Prime customers, though it comes with strict requirements and storage fees that can add up if inventory moves slowly.
• Retail Distribution Partnerships: For wholesale orders, brands often coordinate with a retailer’s fulfillment center and comply with specific labeling, packaging, and delivery timelines. Inventory is usually shipped to the retailer’s distribution center directly from the brand’s manufacturer or co-packer, though some brands route it through their own warehouse or 3PL first for quality checks or bundling.

Choosing the right model is key to avoiding chargebacks, hitting deadlines, and keeping retailers happy.

Common Fulfillment & Logistics Terms

At Lunr, we get a lot of questions about basic logistics terminology, especially from founders scaling into retail for the first time. Here are some of the most common terms that emerging brands may start to see as they grow beyond early-stage operations:

• SKU (Stock Keeping Unit): An internal identifier used to track product variants like size, flavor, or pack count. Brands use SKUs to manage inventory and streamline order processing.
• UPC (Universal Product Code): A standardized barcode printed on packaging and scanned at retail checkout. Unlike SKUs, which are internal, UPCs are used by retailers and must be registered to avoid duplication.
• Fulfillment Order: A request to pick, pack, and ship specific SKUs to a customer, retail partner, or distributor. This can be triggered automatically through platforms like Shopify or manually through wholesale portals.
• Mail Order Fulfillment: A process used by DTC brands to ship products directly to customers after an online purchase. Many 3PLs automate this using ecommerce platform integrations for labeling, tracking, and inventory updates.
• Warehouse Distribution: The storage and movement of goods through a centralized warehouse network before they reach a retailer or end customer. In a warehouse distribution model, goods are often stored in bulk and shipped to retail locations or fulfillment centers as needed.
• Case Packs / Inner Packs: A defined quantity of units packed together for wholesale or retail distribution. Retailers may require different configurations for distribution centers (e.g., vendor case packs) versus individual stores (e.g., store ship packs). Mistakes like sending inner packs instead of full cases can lead to chargebacks, delays, or rejected deliveries.
• Pick and Pack: A core part of the order fulfillment process. “Picking” means selecting the right SKUs from inventory, and “packing” refers to boxing them for shipment, often with branded materials or inserts.
• MOQ (Minimum Order Quantity): The smallest number of units a manufacturer or supplier will produce or sell in a single order. MOQs directly affect how much inventory you’ll need to finance, store, and fulfill.
• Last-Mile Delivery: The final step in the shipping process, when a package moves from a fulfillment center or local hub to the end customer. This is a key factor in delivery speed and cost, especially in DTC.
• Zone Shipping: A pricing model where shipping costs vary based on the distance between your fulfillment center and the delivery destination. Understanding zones helps optimize warehouse location and cost-efficiency.
• Backorder: When a product is temporarily out of stock but still available for purchase. Backorders can delay fulfillment and strain customer trust if not proactively communicated and managed.
• Chargebacks: Penalties issued by retailers when a shipment doesn’t meet their specific compliance standards—such as incorrect labeling, missed delivery windows, or incomplete orders. These fees can erode margins quickly if not actively managed.
• EDI (Electronic Data Interchange): A standardized digital system used to exchange documents like purchase orders and invoices between retailers and suppliers. Large retail partners often require EDI compliance.

Why Fulfillment (and Funding) Matter

Order fulfillment is at the heart of retail logistics. Missed ship dates or incomplete deliveries can lead to chargebacks, lost shelf space, and damaged retailer relationships. On the flip side, reliable fulfillment builds trust, supports sell-through, and opens the door to reorders.

But great fulfillment takes cash, often before revenue comes in. At Lunr, we help brands cover the upfront costs of production, packaging, and freight so they can say yes to big opportunities without cash flow getting in the way.

Scaling your retail operations? Let’s talk about how to fund your next big order.

Contact Lunr here