A fulfillment service is a third-party warehouse that handles the preparation and shipping of your purchases. It is done through its fulfillment center. Ecommerce fulfillment services are perfect for companies that either don’t want to deal with shipping or have expanded their present storage capacity to the point where they can no longer send orders themselves.
While each fulfillment center is unique, they all serve the same purpose: to function as a command center for all of your order preparation and shipping needs. Fulfillment centers also serve as warehouses for storing goods, allowing you to have items on hand.
Some fulfillment service companies have many fulfillment centers, which allows them to serve diverse geographic regions faster than if they only had one. It enables e-commerce businesses to provide rapid and economical delivery to many customers.
Why use Fulfillment Services:
Online and multi-channel retailers must handle all aspects of their business, including accounting, purchasing, marketing, and operations. Thankfully, a new class of service providers lets merchants outsource goods receiving, inventorying, packaging, and shipping.
Fulfillment services function similarly to a retailer’s warehousing and shipping operations, checking in items as they arrive from manufacturers or distributors, arranging and storing them, and finally fulfilling orders and providing professional service to online buyers.
Although outsourcing these activities may not be appropriate for every company, there are some compelling reasons to do so.
Large and small merchants alike are entering the busiest season of the year at the time of writing. The National Retail Federation estimates that about 20% of all yearly retail sales occur between November 1 and December 31. Holiday sales in the United States are estimated to hit $465.6 billion this year.
Because of the high volume of seasonal purchasing, businesses, especially pure-play e-commerce merchants, sometimes discover that they need to hire temporary staff or invest in new capital equipment to keep up with the demand.
Retailers can avoid hiring and training temporary workers or purchasing new scales, elevators, and the like by outsourcing order fulfillment. Instead, the retailer should merely make sure the goods are at the fulfillment service’s warehouse and leave the extra hands and tools to the fulfillment service. The merchant will have seasonal flexibility as a result of this arrangement. The fulfillment service is in charge of handling the rise in Christmas purchases. There is no idle equipment or surplus personnel to let go of in January when sales are weaker.
Lower Shipping Costs:
Free shipping or free shipping upgrades are quite popular marketing tools.
It makes it logical to do everything necessary to keep shipping prices low, whether businesses absorb shipping and freight expenses to offer free delivery or pass those costs on to customers.
With this in mind, utilizing a fulfillment firm with warehouses all over the country can help you save money on shipping. Most package-shipping firms charge based on how far the goods travel, at least in part. It costs more to send a package from Los Angeles to New York than from Philadelphia to New York.
Retailers may save expenses by distributing inventory over many regional warehouses, giving them a competitive edge.
Convert Fixed Costs to Variable Costs:
Physical inventory must be received, housed, and accounted for unless a merchant solely sells software, music, or ebooks. It needs physical space. A garage could do for family enterprises, but large e-commerce operations will eventually require substantial infrastructure. There is a set cost associated with these facilities, whether purchased or rented. Consequently, whether the business is slow or brisk, the rent remains the same.
Using a fulfillment service allows merchants to convert some of their fixed costs, such as rent, heating and cooling, and other comparable expenses, into variable costs that rise and fall in response to sales which may help with cash flow.
Concentrate on what you’re good at:
Online entrepreneurs frequently start firms because they are passionate about the product or marketing, but this is far less usual for someone or a group to create a tee shirt company or an online hardware shop because he is skilled at stacking or packing boxes. Operations managers that can handle this portion of the business successfully are in great demand, but they are less prevalent in tiny e-commerce start-ups.
Using a fulfillment service for many retailer business owners outsource many unfamiliar tasks and focus on what one does best.
Benefits of using Fulfillment services:
The apparent advantage of outsourcing fulfillment to a third-party logistics (3PL) provider is that it relieves you of the burden of doing it yourself. However, there are further advantages. Outsourcing warehousing and fulfillment can boost your company’s development significantly.
Avoid Long-term leases:
Many logistics providers offer a variety of price options. It implies they’ll be able to adapt to your demands and modify expenses as you grow or as you go through quiet periods. Renting your own warehouse space usually necessitates a considerable financial investment.
Bring in the professionals:
Not only do you get warehouse space when you employ an outsourced fulfillment services provider, but you also get staff to handle the fulfillment center. When you fulfill and ship your orders, you will need to hire employees as your business grows. It takes time to manage a team. If your company is still in turmoil, you may be hesitant to offer someone a position. Instead, you may outsource the work to a logistics firm and delegate the task of locating and employing qualified personnel to them.
Each 3PL has a dedicated team of logistics specialists and support personnel on hand to assist you. They handle all of the work for receiving, inventory management, order processing, and shipping, allowing you to attain a new level of agility that you would not have been able to achieve on your own.
Be more adaptable:
While doing it yourself is usually free, it might end up costing you money in the long run. Because customers demand speedier shipping times, doing it in-house may cause you to fall short of these goals and provide a poor customer experience. You can benefit from their efficiencies and leverage their buying power on packaging and shipping costs by partnering with a 3PL for outsourced fulfillment services. Some even provide real-time stock levels and status updates, allowing you to stay ahead of the game.
Be more flexible.
While doing it yourself is typically free, you may wind up spending money in the long run. Customers want faster shipping timeframes. Therefore, doing it in-house may cause you to fall short of these expectations and create a terrible customer experience. By working with a 3PL for outsourced fulfillment services, you can take advantage of their efficiency and leverage their buying power on packing and shipping costs. Some even offer real-time stock levels and status updates, allowing you to keep one step ahead of the competition.
It allows you and your team to try new techniques, inventory management strategies, and other initiatives. It helps achieve rapid growth without worrying about back-end logistics or recruiting lines.
Our e-commerce fulfillment services, technology, and fulfillment facilities make it simple to get running with Custom Crating and Logistics. Whenever you’ve connected your business, you’ll be able to give us your inventory, and your e-commerce orders will be fulfilled immediately once your consumers have made a purchase. Contact us to find out how to get started with Custom Crating and Logistics and begin fulfilling orders.