We have all read or heard about the challenges we could face when starting a new ecommerce business, interested in reaching a new audience, giving your business a different approach or simply migrating from your local business to the vast universe of ecommerce, technology is here to help us build the appropriate strategies.
Although making sales is definitely the main goal, you probably wonder what happens when an order is placed, there is a process from purchasing online to the product that finally arrives at your customer’s home, this process could be: Warehousing, Shipping or Fulfillment. Whether you sell your product from a drop shipper who will fulfill the orders, you fulfill your own orders or you work with a logistics company that will manage your warehousing and fulfillment, there are ways to reach your customers.
Fulfillment Services. What are they? What do they do?
This service is a third party warehouse in charge of prepping and shipping your products and could be a good idea for those businesses that not only don’t want to deal with their shipping but also are unable to ship orders due to their warehouse capabilities. Some examples of third-party fulfillment providers are: Shopify Fulfillment Network, Colorado Fulfillment Co. and Ecommece South Florida.
Fulfillment services would be an efficient way to manage your order prepping and shipping needs, helping your business to deliver fast and affordable shipping to your customers. These services may charge by the hour or per unit/pallet, additional one time or recurring fees applicable for receiving, storage, pick and pack, shipping kitting or building, returns, custom packing, gift services and setup.
Now that you know what fulfillment services are and the role their providers have in ecommerce, if you haven’t tried this before, you may wonder if it is really worth it before you consider it for your own business. The good news is that their benefits on using a third-party logistics company (3PL) and this article is meant to share some of them with you.
– You don’t have to deal with your own fulfillment, they’ll work on it for you.
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– Outsourcing warehousing and fulfillment would have a meaningful impact on your business’ growth.
– Flexible pricing could be a synonym with adaptability when it comes to the costs of these services and your business growth.
– Hiring a fulfillment service provider is getting warehouse space.
– Managing staff is challenging for emerging businesses which is why you would outsource the work to a logistics company with the appropriate staff that will eventually help you manage tasks like receiving, inventory management, order processing and shipping.
– When you have doubts about this process and know that you won’t be able to manage it, in a third-party logistics company you count on the right staff, they are experts.
– Time optimization is the goal. When you let someone else take care of logistics details, you will focus on different aspects that may require your attention, as well as improving the productivity and impact your business have on your customers.
– Your customers are expecting fast shipping, this means you want to make sure your products are delivered on time, what you can’t always do by yourself and this will change their perspective and of course, your customer service experience won’t be the best one, that’s when the 3PL company offers their experience.
Once you understand what they are, how they work and their benefits, you may want to determine at what point of your business growth it would be good to switch to outsourced fulfillment, although it isn’t necessarily easy to know exactly when it is the ideal moment, you can use the following sign to consider taking action:
– One of the characteristics of these 3PL companies is adaptability, which is the key when your number of orders fluctuates or you may have unexpected, great sales along the year, in the first case, it won’t make sense to run your own warehouse and the second case, represents a delivery challenge, on both situations, the third-party company will offer you solutions.
– When you are in charge of the business there are several aspects to think about such as sales, marketing, expanding your ecommerce platforms, creating new products, new ideas, improving strategies to achieve long term goals which means you need time to focus on what really matters, your growth.
– When the business is literally growing, geographically. This would be a reason to let a global fulfillment company run our warehousing and shipping, not only they are better equipped to serve the growing customer base, leveraging multiple locations, optimizing fulfillment but also they possess the knowledge and experience to work accordingly.
It is important to highlight that hiring a fulfillment services provider isn’t the solution for every business because:
– At times, especially when you start a business, cash flow is limited and your best resource is time, so you work with what you have, you would probably bootstrap business growth using your time instead of paying employees and contractors.
– If you run a highly specialized business, you may find hard to work with one of these 3PL companies because although they offer customization, they may not do what your business wants and you will probably have to work on the fulfillment process yourself, unless of course, you realize these companies are a good option on time and cost-saving.
– When you ship 5 to 10 orders a day you could still consider fulfillment is manageable so you may not exactly need to outsource this process to another company. In fact, one of your employees or even you can handle fulfillment.
Fulfillment: in-house or outsourced.
While In-house fulfillment requires a significant amount of time managing staff, the process itself and providing excellent customer support, outsourcing changes the approach of this process. It would require you to focus on making sure your service provider has enough inventory, in some cases, they will be in charge of packing and shipping orders.
Part of these services may include timely deliveries, low shipping costs, processing returns problems, issuing refunds, and of course, providing the best customer experience, as well as the opportunity to facilitate your experience with this third-party logistics company’s integrations, by using several apps, a good example of this would be the Shopify Fulfillment Network.
It is well known that a satisfied customer is the more likely to buy again or refer friends to your products when it comes to how your package looks like, it’s challenging to find the proper company that meets your needs but they will surely recommend the best options so you save money on packaging, keep in mind that although many large companies would probably use their own packaging standards, there are some that would let you add branding, stickers or samples, just make sure you ask the potential companies about these options.
It is time to choose my fulfillment services provider.
Like many of your colleagues and friends, you would probably make a google search on these services but once you have all the information about several companies, you know this is an important step to your business and you may wonder how to choose the right one.
Here are some factors you may consider:
– Similarities are essential. When it comes to your industry, you certainly want the right fit and here is when the niche defines which industry the providers serve and their focus. On the other hand, it is important that the 3LP company understands your business because they work with others similar to yours, they will know your needs. Understanding your business could be particularly good for ecommerce businesses because of the fulfillment accuracy and timely manner as well as the guidance and advice through your partnership. Feel free to ask questions and request references, be clear about your needs and doubts.
– Comparing rates based on the quality of the services is important, even if it represents a higher shipping cost. Many companies may offer lower costs and the lack of quality may generate unhappy customers.
– Ecommerce companies may use multiple platforms and require B2B wholesale channels and vendor management, some logistics companies use machine learning to help you keep your inventory and smart replenishment to restock and where to do it based for example on your sales or trends.
– Real-time analytics tracking is certainly helpful to make decisions about purchasing or inventory, your fulfillment service provider is part of the data you can use.
In conclusion, with this general idea of what fulfillment services providers would do for you and how important it is to choose the right one, you can make your research before choosing a company for this important role in your business, make sure it is the right moment for your company, that they match and understand your business needs and always ask for references, the last thing you want is to switch in a month.