Fulfillment centers permit e-commerce retailers to outsource warehouse management as well as delivery. This allows online businesses to eliminate the physical space required to store all their products and is advantageous for sellers who cannot manage inventory directly. Sellers can send their products to fulfillment centers, and outsourced providers ship them to the customers.
Inventory management is a common issue for many online stores; however, it is important to ensure the most satisfying customer experience. Fulfillment centers help manage inventory easily and give owners of stores more time to concentrate on other aspects they are working on.
Table of Content
What is a fulfillment center?
Fulfillment centers are third-party-owned warehouse that picks, package, and delivers your orders. They do this via their physically-located fulfillment center. Fulfillment services are ideal for companies who don’t want to handle shipping or have outgrown their warehouse facilities to the point at which they’re no longer in a position to fulfill orders by themselves.
There are numerous large third-party fulfillment services, such as Shopify Fulfillment Network. Shopify Fulfillment Network and smaller regional options such as Colorado Fulfillment Co. and Go Sunship. If you’re growing quickly and looking to enhance your fulfillment plan, using a company with a central overview of your information and efficient inventory allocation across several warehouses can give you the greatest flexibility.
What is eCommerce fulfillment?
Ecommerce fulfillment is the component of your eCommerce business that delivers your products to your customers. The e-fulfillment process includes several aspects. The process of getting your product on the shelves of fulfillment centers is known as eCommerce fulfillment. The process of picking and packing orders is a fulfillment of orders. Methods and times for shipping are part of your logistics operation.
In reality, eCommerce fulfillment has been an integral component of your business since the beginning. When you used to pack containers in the garage, it was your fulfillment service. However, if your company has grown, you might have to outsource your fulfillment to a third party.
Benefits of using a Fulfillment Center for ecommerce
Here are our top 10 benefits of using the fulfillment center in alphabetical order, of course (we’re very organized here at The Fulfillment Lab).
1. Benefit from their expertise
Indeed, you’re not trying to be an expert in fulfillment. You’re running your own business! When you outsource your storage, packing, and shipping to a well-established and trusted fulfillment center, you will gain knowledge of their staff, equipment, and software. They know their business and the back of their hands and are on the ground daily, often around all day hours. The fulfillment process will be effortless when you partner with a fulfillment service provider.
2. You can concentrate on making sales (and more)
Let’s get to the point. The biggest benefit of outsourcing your fulfillment process is that you will not wish to continue doing it. The time you spend making labels and tapes on boxes can be invested back into your company.
Although order fulfillment is feasible for smaller companies, this job becomes difficult and costly as you expand. In addition, when orders flow from various sales channels (in-store and online, sales events), you may be unable to devote the time to complete other aspects of your work.
3. Extend Your Reach
It is expected to be over 2 billion online shoppers in 2020. With a world population of 7.7 billion, this is close to 25 percent of the world’s population who shop on the internet!
As you can observe, it pays very literally to be global. With fulfillment centers that benefit from a worldwide network and are aware of the rules and regulations of other nations, it can take orders from around the world and elevate your enterprise to the highest step.
4. Lower shipping costs
Many people are reluctant to outsource fulfillment because they view it as a cost. However, third-party logistics firms can help you save money in various areas, such as shipping.
The first thing to note is that the fulfillment company may have warehouses across the country and sometimes overseas. Balancing the inventory among the various warehouses in this network can ensure that your products are closer to your customers. By distributing inventory this way, you could cut shipping costs by a 25 %
5. Free up Your Space
It’s a breeze! Many new eCommerce companies operate from garages, basements, or attics–just about any place they can store materials and products. The “workspaces ” often become a chaotic pile of boxes, bubble wrap, and other packing materials. With a fulfillment center, you can delegate all tasks to your provider of choice to concentrate on other aspects of your company, such as ensuring that your customers are happy.
6. Get faster delivery
If you manage fulfillment in-house, it’s likely done in a location that’s easy for you. However, it’s also good that your location isn’t in a spot that offers optimal costs and delivery times for your customers. Utilizing a centrally-located warehouse located in the mid-sized U.S. is how you’ll reduce shipping costs and speed up deliveries to clients.
What is the primary difference between fulfillment centers and warehouses?
As mentioned earlier, although commonly used interchangeably, there are several significant distinctions between fulfillment centers and a warehouse, as well as the roles they play while delivering the goods to customers.
The primary purpose that a storehouse serves is to store inventory. In contrast, the fulfillment center is designed to improve the customer experience of placing an order and receiving the goods promptly. This is achievable since sellers store their inventory in the 3PL fulfillment center close to their customers, which helps cut shipping times and save on costs.
What is included in eCommerce fulfillment Operations
Storage Services – Warehousing
The most fundamental fulfillment task for eCommerce is warehousing, or how you store your items. It involves the storage of your goods in an organized manner to facilitate access.
Warehousing allows you to store your goods in one place without confusion to sort them out quickly and keep an inventory tracker in a more efficient method.
Inventory Management
The other crucial aspect of fulfillment is the management of inventory. There is a log of all items that are kept so that you’re always aware of the items which are out of inventory and replenish inventory accordingly.
Management of inventory allows you to analyze customer demand and make forecasts in advance for your own business. It also helps you remain organized and organize the process of managing your inventory and demand in line with your needs.
Order Management
Management of orders refers to the administration of orders accepted on your eCommerce site. By implementing efficient order management, it is possible to ensure that every order is not left out and that all of them are properly processed before delivery.
The order management system must be fully in time with the warehousing and the inventory control system to ensure that information is up-to-date on every level and subsequent processing steps are executed almost immediately.
Order Picking & Packaging
When an order has been received After receiving an order, after receiving an order, the order fulfillment chain moves on into the picking and packing process. This is where the order is taken from the specified location within the warehouse and packaged using the appropriate packaging material for the product. The package is labeled to ensure that all the required information is added to the package for an easy shipping process.
The picking and packaging must be completed with absolute accuracy and precision to ensure that the order is not damaged when delivered on time and to the correct address. In addition, if the order is not packed correctly, your order could cause a negative impression on the consumer and decrease the likelihood of them returning to your site for business.
Shipping & Logistics
The second and most important aspect of fulfillment is the transportation and the logistics accompanying the purchase. After the above processes are complete, a delivery professional is picked up and transports the order to a courier hub, where it’s then delivered to the delivery address for the customer.
All orders must be handed over to delivery managers in time so that delays are not averted in fulfillment in the first and last mile.
The proper delivery of the order will ensure that the orders are delivered in time to your customers without tampering or causing damage. So, it is suggested to use the most reliable courier for your deliveries to ensure that you do not have to pay for it in the future.
Returns Management
Finally, fulfillment and eCommerce are not limited to the delivery of orders. They also account for returning orders that may be received from customers who are not satisfied with the item they bought. Therefore, reliable reverse logistics and order management can enhance your customers’ buying experience.
Best Ecommerce Fulfilment Companies of 2022
- ShipBob – Best Overall
- Delivery – Great for Startups that have U.S.-located customers
- Falcon Fulfillment – Ideal for established businesses with U.S.-located customers
- Amazon Multi-Channel Fulfillment
- Complemar
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