Are you looking to scale your eCommerce shipping and fulfillment process? As your company grows, it can be challenging to keep up with demand, but outsourcing to a fulfillment center can help streamline operations so that you don’t lose traction with your customers. However, it’s a big decision to trust a third party with your entire inventory, so it’s important to know about the pros and cons of using a fulfillment center.
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A fulfillment center is designed to handle the storage, shipment, and delivery of inventory for small to medium-sized businesses. By having a third party handle these processes for you, you can focus on building your business, adding more inventory, and increasing profits.
These centers keep costs low by combining inventory warehousing and order fulfillment procedures. Unless you choose to, you won’t have to outsource these tasks to several companies and pay multiple fees. You can pay one company, which will store your products until they are sold and then ship them to the buyer.
Fulfillment centers generally work one of two ways:
Once a fulfillment center has your inventory, it will store it for a fee until the inventory is sold. Then, the center will coordinate with various shipping carriers to get your products to consumers as quickly as possible. The outsourcer will also be able to obtain tracking numbers for the products and relay that information to the consumer so they can track their package.
Often, these centers handle the returns process for online stores as well. Depending on the company you choose to outsource to, they can potentially speak with the customer, coordinate return shipping, and dispense refunds without you having to do anything.
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Working with a fulfillment center can have many advantages, including:
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Fulfillment centers are a good fit for eCommerce businesses of small to medium size. Your business isn’t large enough to make having your own warehouse cost-effective, so it makes sense to work with a fulfillment center to store your goods. However, you sell large quantities of wholesale or B2B products, so you need help with getting your inventory to buyers in a timely fashion. A fulfillment center can help you achieve your order fulfillment goals much faster than you could yourself.
There are various expenses associated with using a fulfillment center. Fees will vary by company, but, at minimum, most will ask you to pay for storage and order fulfillment tasks. Here’s a breakdown of what those might entail.
Choosing the right fulfillment center is a big decision, and there are a multitude of providers available, so how do you know which one to choose? To give your business the most room for growth, it’s best to work with a well-established organization. Customers already know them and trust them. This could pay off with increased exposure for your products and boosted sales.
Additionally, it’s a good idea to find a provider that charges one fee, excluding storage, to provide all-inclusive order fulfillment services. It can be frustrating to keep up with each little fee a provider might charge, so look for one that offers a straightforward, easy fee structure.
In today’s world, where instant gratification reigns, customers want their products as soon as possible. If demand has grown so much that you’re struggling to keep up with shipments, outsourced fulfillment could be just what you need to scale your business operations, and experience increased profitability. Reach out to Ship My Orders today for a custom quote and download our guide below to help you ask the right questions when you're shopping for your new fulfillment center partner.