What is a fulfilment company?
Essentially an e-commerce fulfilment company is an outsourced warehouse, packing and delivery service for your business. We will go through how they work in more detail below, put simply a fulfilment company will store, pick, pack and dispatch your products to your customers on your behalf. A lot of fulfilment businesses will also deal with shipping questions from your customers and the returns process.
Why would you use e-commerce fulfilment company in the first place?
There are many reasons a business might decide to use a fulfilment company to manage fulfilling their orders. They can offer a great solution for high street and small businesses expanding their sales online and who have not got to the point of renting or buying warehouse space.
Due to their vast size and daily operation, fulfilment companies can offer same day dispatch for your items, allowing you to offer faster delivery options to your customers. A smaller business may not be able to offer international shipping to their customers even if there is a demand, using a fulfilment company can allow a business to ship internationally at a competitive rate.
If a product sees seasonal sales peaks and troughs, fulfilment companies can keep businesses from needing to use temp staff to assist with an influx of orders.
How does it work?
When choosing a fulfilment company to work with, there are many conversations to be had about costs, storage, packaging and the returns process and responsibility. Once you have chosen a provider to work with, they will usually work with you to connect their system to your e-commerce website. This allows the orders to be processed, picked and packed by the fulfilment company.
Once everything has been discussed, agreed and connected the fulfilment centre receive a delivery of products, which are scanned into an inventory system and are ready to be stored and delivered to your customers.
Pros
E-commerce fulfilment companies can be a fantastic solution for many e-commerce businesses, allowing them to save on shipping costs and deliver products to customers much faster. Outsourcing fulfilment can also lower operating costs, implement better inventory systems and take the hassle of dealing with returns off your hands.
Depending on the provider, you may find yourself paying per delivery, which makes using a fulfilment company an affordable option. Taking order fulfilment entirely off your plate can also grant you more time to focus on other aspects of your business, for example expansion. It can also be easier to scale your business when using a fulfilment company.
Many fulfilment companies have the space to store large numbers of stock (at a charge), which can allow a business to order from suppliers at a lower cost per item.
Cons
Usually you cannot send products in branded packaging when you use a fulfilment company, but this is completely dependent on the company you choose. When looking for a company to work with, make sure you are aware of all costs, there can be hidden storage fees for stock that is held for a certain amount of time.
If you do decide to employ the services of a fulfilment company, you need to be comfortable handing over full control of your fulfilment process, including returns and damaged product policy. As with any warehouse operation, fulfilment companies rely on human processing during certain points of the process. This can and most likely will lead to an error every now and again.
It is a completely personal choice for your business whether to use a fulfilment company or not, educating and researching your options is a great way to find the best fit for your business. If you decide to keep your fulfilment in house, we can help you create the perfect warehouse space, contact us right here.
