If you are running an ecommerce store, it is likely that you have heard about fulfillment as an answer to your logistics and inventory management issues as your company scales. While order fulfillment from your main facilities is an inexpensive way to launch, volume sales require infrastructure and overhead that makes it difficult to keep up without dedicated staff or a service provider. Fulfillment is simply the service that handles the “pick, pack, ship” process for your customers.
Steps in the Process
When you enlist a fulfillment provider to handle your orders and inventory, the process has a few stages.
- After signing up with your provider, someone with your organization will need to authorize fulfillment in your ecommerce app or storefront.
- You ship your inventory to the warehouse, where it is put into the inventory management system.
- When customers order, the warehouse assigns staff to pick, pack, and ship the items.
- Use your sales reports and information from your provider to restock when necessary.
With most providers folding in shipping label expenses and packaging as add-on services, fulfillment becomes a one-step solution to ecommerce logistics issues for just about any growing online business.
Advantages of Order Fulfillment
Beyond the simplification offered by these services, there are a few other tangible advantages that make them a great choice for startup entrepreneurs and existing small businesses.
- Fulfillment providers often provide discounts with shipping carriers that are deeper than those you might otherwise receive on your own.
- Packing material costs also scale similarly, with volume discounts when you use more.
- Tiered pricing from many providers means eventually your packing material and shipping savings may offset the cost of the fulfillment service itself.
- Lower volume customers enjoy simplified overhead by streamlining their personnel and avoiding a dedicated order fulfillment staffer.
- The need for less warehouse space at your facilities also offers opportunities for streamlining overhead.
As your online storefront grows, keep in mind how order fulfillment offers you the opportunity to streamline your logistics while also gaining better control over your inventory management.