Discover what are fulfillment services and everything you ever wanted to know about fulfillment services for ecommerce businesses.
A fulfillment service is a third-party warehouse that prepares and ships your orders for you. It does this from its fulfillment center. Ecommerce fulfillment services are ideal for businesses that don’t want to deal with shipping or have outgrown existing warehousing capabilities to a point where they’re unable to ship orders themselves anymore.
There are many larger third-party fulfillment providers, like the Shopify Fulfillment Network, as well as smaller regional options, like Colorado Fulfillment Co. and Ecommerce South Florida. If you’re scaling fast and looking to optimize your fulfillment strategy, working with a provider that offers a central view of your data and smart inventory allocation across multiple warehouses will give you the most flexibility. To learn more about the Shopify Fulfillment Network, visit us here.
What does Fulfillment Mean?
Whether you’re thinking about starting an ecommerce business or you’ve been selling products for a while, you’ve probably thought about warehousing, shipping, and fulfillment.
Sure, making sales is the exciting part. But what happens after the order is placed? Somehow your product needs to end up in customers’ hands.
There are three ways this can happen:
1) You sell a product from a dropshipper who will fulfill orders for you.
2) You fulfill your own orders, either independently or with a team.
3) You work with a logistics company that will handle your warehousing and fulfillment.
There are clear benefits to packing and shipping your own orders: it’s flexible and cheap. For these reasons, businesses that are just starting out, and businesses that have unique ecommerce packaging needs, often handle their own logistics.
And regardless of age or industry, any business struggling with cash flow will be better off handling things in-house. Sometimes you have more time to spend than money.
But if your business is growing quickly and you have the cash on hand to outsource, you may be interested in exploring third-party warehousing and fulfillment.
There are many logistics companies that will store your product and take care of packing and shipping your orders.
Working with logistics companies can be intimidating if you’ve never done it before. In this piece, we’ll take you through every step of the process.
What does a Fulfillment Center Do?
While each fulfillment center operates slightly differently, they all accomplish the same thing: they act as a command center for all your order prepping and shipping needs. Fulfillment centers also double as warehouse spaces for inventory storage, allowing you to hold onto product.
Some fulfillment service providers have multiple fulfillment centers, allowing them to serve different geographic locations more quickly than if they were to have just one. This allows ecommerce companies to deliver fast and affordable shipping to a diverse customer base.
What do Fulfillment Services Cost?
Fulfillment services typically charge by the hour or per unit/pallet. Providers add up costs for receiving, storage, pick and pack, shipping, kitting or bundling, returns, custom packaging, gift services, and setup. They then apply transactional (e.g., receiving, shipping) and recurring (e.g., storage) fees.