Last Updated on November 28, 2019 by
If you’re planning to engage in an e-commerce business, it’s important to know what a fulfillment company is all about. It’s because you might need the help of a third-party order fulfillment service company as you take your e-commerce business journey. By doing so, you’ll greatly benefit from the cost-savings of shipping or logistics while you improve customer service and customer experience at the same time.
In this post, you’ll learn more about what fulfillment companies do and how their services can help your startup e-commerce business.
Order Fulfillment Options
An e-commerce business cannot grow on its own unless you have an unlimited budget to spend. If you employ a third party fulfillment company, it can help your online business grow. But how do you know if you need such services?
Check out these order fulfillment options to determine if you really need third-party fulfillment services:
- Fulfill Your Customers’ Orders: With self-fulfillment, you have direct control over the entire process of packing and shipping, and you can also brand and add personal touches to shipments. However, this fulfillment method is only applicable for low-volume orders.
- Outsourcing Orders: This fulfillment method employs a third-party fulfillment service, which can save you money on shipping costs and business operations associated with labor costs and packing materials in a self-fulfillment method.
- Mixed Order Fulfillment: If you have a regional business, you can fulfill some customers’ orders and hire a third party fulfillment company to outsource others. It’s also a great model for seasonal sellers to fulfill orders during peak times, like holidays.
- Drop Shipping: You might not even need to purchase or create products at all because drop shipping involves buying a customers’ orders from a distributor or manufacturer, wherein they ship the items directly to your customers.
A Fulfillment Company Offers Distributed Shipping Locations
Every customer wants to receive orders as fast as possible. If you want your shipments to arrive early or on time at your customer’s location, hiring a third-party fulfillment firm is a good idea. But how does it work?
So say you have a current warehouse in New York, but many of your orders are coming from your customers in Texas. You like to offer free shipping, so your e-commerce business becomes competitive. That’s when the services of a third-party fulfillment services company enter. You can hire a fulfillment firm in Texas so that when orders come in, the fulfillment service company can ship the package faster and at a lower price as compared if you’ll be shipping it from your warehouse in New York.
Here are the advantages of using a fulfillment company:
- The orders of your customers will arrive even earlier than expected.
- You can offer free shipping to your customers but still, make a decent profit so you can help fuel the operation of your e-commerce website and business.
- Less stress and hassle worrying about your customers complaining of non-shipment or items not received.
Using a Fulfillment Service Help Reduce Operating Expenses
When you’re starting an e-commerce business, budgeting is tight. Of course, it is seemingly impossible to set up a warehouse in every state or ship orders from your location and expect your customers to receive them within a day or two. A fulfillment service company understands the unique situations that e-commerce business owners undergo. That’s why fulfillment services are offered to benefit this competitive industry.
Here’s how a fulfillment service company can help when it comes to reducing operating expenses:
- Reduce or eliminate the cost of leasing a storage unit or warehouse.
- Reduce taxes and labor costs associated with direct order fulfillment,
- More affordable costs of packing materials because fulfillment services usually have better prices.
- Attain economic shipping services with quicker packing and shipping.
- Reduce shipping costs because of the warehouse location and volume of orders.
- With the money you save on packing and shipping, you can add it to your sales and marketing campaign or purchase more production materials.
What Does a Fulfillment Company Offers
A fulfillment company offers excellent warehousing, packing, and shipping services at very affordable costs. But that’s not all, fulfillment companies have a lot of services to offer.
Here are the other services that fulfillment companies offer:
- Returns Processing: Quick processing of returned shipments.
- Inventory Management: You have peace of mind about the smooth flow of your inventory, saving time, money, and effort.
- Kitting and Inserts: You can personalize shipping even with a third party fulfillment because services also include light assembly, kitting, and inserts.
How to Choose a Trusted Fulfillment Company
If you’re now set to choose a trusted fulfillment company to help you with your product shipping or logistics, then you should know what to look for to ensure you won’t have problems later. Choosing a reliable fulfillment company will help you achieve your short-term and long-term goals for your e-commerce business.
Always remember that choosing the best fulfillment company that will handle your needs and the needs f your customers tend to gear the best results. That’s why you should pick one that is experienced, dependable, and offers reasonable prices.
Here are some tips when choosing a fulfillment company:
- Choose a fulfillment company that offers a wide range of services, such as packing, shipping, inventory management and returns process handling.
- Compare different fulfillment companies and conduct an in-depth search. Check each company’s website to know more about their vision and mission, services offered, and contact information.
- Visit review sites, like Angie’s List and the Better Business Bureau, to get an idea about the company’s reputation. Social media is also a great platform to review testimonials from previous and current clients.
- You can narrow down your search by comparing the services and rates of different companies. That’s why it also pays off contacting one of the staff or a representative from the company so you can ask relevant questions about processes and fees.
- Determine the communications options available. Fulfillment companies are either located in the country or offshore. If you’re into global selling, make sure that you and the fulfillment company have a dedicated time for communication or find a way to smoothly communicated despite the differences in time zone. Also, there could be a language barrier that may delay operations, so make sure that an interpreter is always available on the line as necessary.
- Before signing any contract, make sure that you understood all the terms and conditions. Clarify any doubts and concerns to avoid sudden switches of companies later on, which can be costly and cause delays in business operations.
When it comes to starting an e-commerce website, fulfilling orders fast and smooth is very important to create a great, lasting impact on your target audience. A third-party fulfillment company can help you meet orders during peak times and save you money on packaging and shipping costs. Also, it helps you focus on the growth of your business, allowing you to devote your precious time to sales and marketing.
As a business owner, you have your short-term and long-term business goals, and you don’t want to waste time understanding and managing all aspects of your business, such as packing and shipping. You want to focus on the most important aspects, like sales and marketing, so choosing the best fulfillment company can help you a lot in attaining your business goals and eventually savor the sweet success of an e-commerce business.