http://www.vendorseek.com/what-is-fulfillment-process.asp

The fulfillment process is what happens in a company when an order for a product is received-the "fulfillment" of the order.   This includes warehousing, finding the item ordered, packaging it, and shipping it to the right address.

It sounds straightforward. But because every company is different, the fulfillment process varies between companies. And the Internet has brought about some changes.

In many businesses that have a strong e-commerce component, fulfillment can also entail maintaining online inventories, activating new accounts for online customers, and managing active customer lists.

Companies handle fulfillment two ways: by doing it in-house, or by outsourcing. Most new businesses start out doing their own fulfillment, and while your business is small, this is the best and most cost-effective choice. As your business grows, however, consider how much time fulfilling orders takes up for you and your employees. Generally speaking, if your business reaches a point where you could make more money focusing on other areas-such as product research and development, for example, or sales and marketing-it's time to think about outsourcing fulfillment.