Glossary
Fulfillment Terms Brands Should Know
Demystifying logistics jargon so you can make smarter decisions about your 3PL.
Fulfillment and logistics can feel like another language, especially when you’re trying to protect your brand, keep retailers happy, and scale DTC at the same time. That’s why we built this glossary: a plain-English guide to the terms you’ll hear from 3PLs, retailers, and carriers. Each entry explains what it means, why it matters for beauty and wellness operators, and how Capacity approaches it.
Last updated: August 2025
EDI (Electronic Data Interchange)
Definition: A standardized method to exchange purchase orders, invoices, and shipping notices electronically, required by retailers like Sephora and Ulta.
Why it matters: Errors in EDI can trigger delays, penalties, and failed retail relationships.
Stat to know: U.S. retailers issued $6 billion in compliance-related chargebacks in 2023, much of it tied to EDI and labeling errors (Supply Chain Dive, 2023).
Capacity POV: Our systems are fully EDI-ready and built to meet major retailer requirements with precision.
Nodes
Definition: Strategic fulfillment centers used to store and ship inventory.
Why it matters: Faster shipping and lower costs come from multi-node networks (e.g., East + West Coast).
Stat to know: Splitting fulfillment between two U.S. nodes can reduce parcel costs by up to 25% and cut delivery time nearly in half (Pitney Bowes, 2023).
Capacity POV: Our node footprint across the U.S. and U.K. flexes with your growth.
Rate Shopping
Definition: Automatically comparing carrier rates to choose the most cost-effective option per order.
Why it matters: Parcel costs continue rising. Without automation, margins erode fast.
Stat to know: UPS/FedEx hiked rates by 5.9%, USPS by 6–8%, with actual costs up 12–16% due to surcharges.
Capacity POV: Our platform auto-rate shops to protect your margins while keeping delivery promises.
SLAs (Service Level Agreements)
Definition: Formal commitments on fulfillment performance (order accuracy, processing speed, on-time ship rates).
Why it matters: SLAs protect your customer promise. If your 3PL misses, your brand reputation suffers.
Stat to know: 69% of online shoppers say they won’t return after a poor delivery experience (PwC, 2023).
Capacity POV: We engineer SLAs around your growth goals, not just averages, and we stand behind them.
Chargebacks
Definition: Retail penalties for non-compliant shipments: mislabeling, missing ASNs, or other infractions.
Why it matters: Chargebacks slash profits and can strain retailer trust.
Stat to know: Fraud-related chargebacks are forecast to cost merchants $15B in 2025, with total volume rising from $33.8B to $41.7B by 2028
Capacity POV: Our compliance team audits all requirements to minimize costly chargebacks proactively.
Cut-Off Time
Definition: The daily deadline for same-day order processing and shipping.
Why it matters: Late cut-off times enable faster fulfillment and better customer experience.
Stat to know: Approximately 45% of online orders are placed by 1:00 p.m., which aligns with the typical cut‑off time for same‑day delivery
Capacity POV: Our operations are designed around flexible cut-offs that align with your customer expectations.
Last-Mile Delivery
Definition: Final delivery leg from carrier hub to the customer’s doorstep.
Why it matters: This leg is costly and time-sensitive, vital for beauty brands delivering experience, not just product.
Stat to know: Last‑mile delivery represents about 53% of total shipping costs (ShipScience).
Capacity POV: We optimize last-mile options for both speed and economy based on order profile.
Reverse Logistics
Definition: Handling returns, exchanges, product recycling, or disposal.
Why it matters: Beauty products often need expiration checks or safe disposal, especially in DTC.
Stat to know: In 2024, eCommerce returns accounted for $362 billion in merchandise, with an average online return rate of 24.5%, significantly higher than the 8.7% in-store rate.
Capacity POV: We manage returns with compliance, sanitization, and brand experience in mind.
DIM Weight (Dimensional Weight)
Definition: A shipping cost model based on package volume rather than just weight.
Why it matters: Bulky items like gift sets or influencer kits can cost more even if light.
Stat to know: A lightweight package (e.g., 2 lb) can sometimes be billed the same or more than a heavier one (e.g., 15 lb) because dimensional weight rules apply the higher of actual vs volumetric weight .
Capacity POV: Our packing strategy minimizes DIM penalties by balancing box design and cost.
Exception Management
Definition: Resolution process for order issues (damages, delivery errors, or system failures).
Why it matters: Fast recovery protects customer loyalty and retention.
Stat to know: About 10% of shipments experience some form of delivery exception, making effective management a non-negotiable operational capability. (Supply Chain Tech Insights)
Capacity POV: Our support team monitors exceptions proactively and resolves issues immediately.
Accessorial Fees
Definition: Extra shipping charges beyond base rates—like residential delivery or liftgate service.
Why it matters: These can add 10–30% to costs if unmanaged.
Stat to know: Accessorial charges alone account for 25–35% of total invoice costs with FedEx and 8–16% with UPS.
Capacity POV: We forecast and avoid unnecessary accessorials whenever possible.
Lot Tracking
Definition: Tracking inventory by production batch codes for traceability.
Why it matters: Crucial for recalls and expiration-sensitive products in beauty.
Stat to know: Retailers using lot tracking tech cut waste by up to 40% by improving traceability.
Capacity POV: Our WMS supports full lot tracking for safety and compliance.
Expiration (Expiry) Management (FIFO / FEFO)
Definition: Inventory rotation: First-In-First-Out or First-Expiry-First-Out to prevent obsolescence.
Why it matters: Beauty items have finite shelf lives; expiry mismanagement = waste and brand risk.
Stat to know: Over 10% of beauty products in supply chains are wasted, around $4.8 billion annually, with 4% of that loss due to spoilage or expired inventory (Professional Beauty).
Capacity POV: Our systems automate FIFO/FEFO to ensure freshness and minimize losses.
Kitting
Definition: Assembling multiple SKUs into a single packaged offering (e.g., subscription kits or gift sets).
Why it matters: Beauty brands often bundle items for seasonality or promotions.
Stat to know: Implementing kitting yields up to a 30% improvement in order processing speed and a 25% decrease in shipping errors (eCommerce Fulfillment).
Capacity POV: We offer flexible, low-error kitting workflows to support creative campaigns.
Bundling
Definition: Pairing complementary SKUs in one order (not physically pre-packaged).
Why it matters: Encourages upsell without inventory complications.
Stat to know: Bundling or cross-selling can drive a 10–30% increase in AOV, and accounts for 10–30% of e-commerce revenue, often delivering a 20% boost in profit (Shopflo).
Capacity POV: We support smart bundling logic within order flows for better AOV.
White-Glove Fulfillment
Definition: Premium handling and packaging—often for luxury or sensitive items.
Why it matters: Beauty packaging is often part of the unboxing experience.
Stat to know: The white‑glove services market is booming—projected to reach $53.7 billion by 2027, growing at a 6.5% CAGR (Ryder).
Capacity POV: We provide customizable white-glove workflows to elevate customer experience.
ASN (Advanced Shipping Notice)
Definition: Electronic notification sent before a delivery arrives at a retailer’s facility.
Why it matters: ASNs are often required by retailers for receiving and compliance.
Stat to know: ASNs can reduce receiving costs by around 40%, leveraging scan-based processing and minimizing manual steps (Inbound Logistics).
Capacity POV: Our system auto-generates ASNs to keep your inbound flows smooth.
DTC (Direct-to-Consumer)
Definition: Fulfillment model where brands ship directly to end-customers.
Why it matters: Offers higher margins and full brand control—common for new beauty brands.
Stat to know: The global DTC e‑commerce market is set to grow from $200B (2024) to $420B by 2033 (Business Research Insights).
Capacity POV: We specialize in scalable DTC fulfillment workflows optimized for cosmetics.
Omnichannel Fulfillment
Definition: Coordinated distribution across multiple channels—DTC, retail, marketplaces.
Why it matters: Beauty sells across Shopify, Amazon, brick-and-mortar and requires unified logistics.
Stat to know: As of 2025, 78% of brands sell on 2 or more channels, highlighting the importance of unified logistics across platforms
Capacity POV: We unify orders across channels with one system for visibility and efficiency.
Subscription Box Fulfillment
Definition: Recurring, box-based order fulfillment for subscribers.
Why it matters: Popular in beauty and wellness (e.g., monthly sample kits)—requires precision and compliance.
Stat to know: The global beauty subscription box market grew to $2.26 billion in 2023 and is projected to reach $10.7 billion by 2030, at a 24.7% CAGR (Market.us).
Capacity POV: We handle recurring shipments with inventory forecasting and cGMP-aligned processes.
Value-Added Services (VAS)
Definition: Custom offerings beyond basic warehousing—like gift-wrapping, inserts, or promotional packaging.
Why it matters: Manual touches help beauty differentiate and enhance brand perception.
Stat to know: 60% of customers are more likely to repurchase when they receive personalized order experiences.
Capacity POV: We offer tailored VAS to support promo strategies with control and quality.
Warehouse Management System (WMS)
Definition: The software system governing how inventory is received, stored, picked, and shipped.
Why it matters: Efficient WMS means fewer errors and faster throughput.
Stat to know: WMS adoption yields 25–40% more storage capacity and improved order accuracy in 87% of companies.
Capacity POV: Our proprietary WMS is built specifically for beauty’s mix of speed, compliance, and customization.
Automation & Robotics
Definition: Tech-based picking, scanning, and handling to speed up sorting and packing.
Why it matters: Scales order volume with consistent accuracy—especially during peaks.
Stat to know: Robotic systems increase accuracy from 95% to >99.7% and boost pick rates by 200–300%, while reducing safety stock by 15–30%.
Capacity POV: We integrate automation where it helps brands grow without compromising precision.
Onboarding Process
Definition: The structured integration period where systems, ops, and teams align.
Why it matters: Without solid onboarding, fulfillment starts shaky and stays that way.
Stat to know: Well-designed onboarding can deliver 82% higher retention and 70% greater productivity, while lack of onboarding leads to 20% failure rates within 45 days.
Capacity POV: Our onboarding aligns IT, operations, and expectations before going live for smooth scaling.
Real-Time Visibility & Analytics
Definition: Live dashboards tracking fulfillment metrics like order status, inventory, and error rates.
Why it matters: Insights inform decisions and keep fulfillment aligned with brand goals.
Stat to know: Real-time visibility led to 28% fewer backorders, 40% fewer “Where Is My Order?” inquiries, and a 15% lift in retention (Simpl Fulfillment).
Capacity POV: Our client portals equip you with actionable visibility from day one.