Ecommerce Fulfillment Services – The Key to Growing Your Business
As a business owner, you have a lot on your plate.
One day you’re selecting the products for your next launch, and the next day you’re dealing with an upset customer.
To keep your business going and to dedicate undivided attention to the things you do best, it’s important to find ways to optimize your operations and reduce your workload. One way you can do this is by using an ecommerce fulfillment service to sell your products.
What are ecommerce fulfillment services, and what are some ways you can use them to grow your business? In this blog, we’re discussing all of that and more.
What is eCommerce Fulfillment?
Ecommerce fulfillment services are designed specifically for ecommerce businesses that sell products on their website but don’t have their own warehouse for inventory storage and distribution. They provide warehouses and fulfillment centers that help store inventory and ship products to customers.
eCommerce fulfillment providers typically have warehouses with conveyors that automate the packing and shipping process and move around the warehouse to fulfill orders quickly and efficiently.
Types of eCommerce Fulfillment Models
There are three main types of fulfillment models that eCommerce business owners can choose from:
- In-house order fulfillment or fulfillment by merchant (FBM)
- Drop shipping
- Third-party fulfillment services (3PL)
We’ll explore each of these options below:
In-house Order Fulfillment or Fulfillment by Merchant (FBM)
In-house order fulfillment, or FBM, is a fulfillment process where the store owner keeps their inventory and ships it out to customers with their own packaging and labeling. They handle all aspects of fulfillment, including returns, exchanges, and customer service issues.
This model requires more upfront investment than drop shipping but offers more control over how inventory is handled across all sales channels. It’s widely used by small or home-based businesses. It’s very time-consuming, and as businesses scale, the sellers will eventually switch to a different model.
Drop shipping is a process where the store owner doesn’t manufacture or keep any inventory but only orders the items from suppliers when a customer places an order. The supplier then handles the shipment of the product to the customer. In this model, the store owner isn’t responsible for handling returns or other customer service issues.
The model is affordable, requires zero overhead costs, and has global accessibility, but it provides zero control over product quality, customization, and customer experience.
Third-Party Fulfillment (3PL)
The third-party fulfillment (3PL) model is where a company outsources its fulfillment to a third-party logistics company. The 3PL company handles customer service, warehousing, order processing, and shipping.
The 3PL model is popular with companies with high order volumes that need to scale their operations without investing in expensive equipment or managing their own warehouses and fleet.
It also helps them reduce the overhead cost of labor. Fulfillment by Amazon (FBA) is one of the classic examples of a 3PL model where Amazon handles all aspects of fulfillment, including delivery, returns, refunds, and warehouse space against a fee.
Choosing the Right Model for Your Business
Before you decide on which model is best suited for your business right now, consider answering the following questions to help you make an informed decision:
- Does your product need any specialized fulfillment equipment or vehicle?
- What is the location of your business?
- What is your business' shipping radius?
- Do you offer fast or overnight shipping to customers?
- What is your average order volume in a day/month?
- How many (and how frequently) do you get returns?
- Does your product need expert installation?
Answering the above questions can help you determine how much support you need in this area and guide you in choosing the right model.
How Can eCommerce Fulfillment Services Help Your Business Grow?
Before we dive into how eCommerce fulfillment services can help your business grow, there’s one very important benefit that many business owners overlook:
As a business owner who wears multiple hats, your time is so valuable. Ecommerce fulfillment services can help you free up your time so that you can focus on other aspects of your business that are more pressing and demand more strategic attention.
If you're spending all your time packing and delivering orders, you're not able to focus on things that move the needle on your business growth.
Now, here are some ways eCommerce fulfillment companies help your business grow:
Save Money as You Scale
If your fulfillment operation is inefficient, it can cost you a lot of money in terms of labor, shipping, returns, and other costs. A good fulfillment partner will help you streamline your operation so that you can save money.
You’ll also save huge capital investment in the early stages of your growth, as spending money on purchasing or leasing your own warehouse and managing your own fleet is very costly.
Grow Faster and Smoother
At each stage of your business growth, you open a can of worms that sometimes becomes difficult to deal with. And if you're growing quickly, it can be difficult to keep up with the demand, customer returns, or refund requests.
A fulfillment partner can help you manage the influx of orders so that you can continue to grow without missing a beat.
If you're looking to take your ecommerce business to the next level, consider partnering with a fulfillment service. They can help you save time and money and scale your operation so that you can continue to grow.
What to Consider When Looking for an eCommerce Fulfillment Service Provider
There are many factors to consider when looking for the right partner. Here are some important factors to keep in mind:
Shipping and Storage Capabilities
One of the most important factors to consider when choosing an eCommerce fulfillment service provider is their shipping and storage capabilities. This is extremely important if your products need any special storage equipment. For example, if you sell medicines or skincare items that need to be stored at a certain temperature, make sure that the provider you choose can fulfill those requirements so your customers receive the right quality product.
Order Fulfillment Services
Another important factor to consider is the order fulfillment services that the provider offers. Make sure that the provider you choose offers the services that you need, such as order tracking, returns processing, and customer support. Many industries have a large influx of returns and refunds, so make sure your provider has a good reverse logistics process in place as well.
Pricing is another important factor to consider. More than half of customers have abandoned online shopping baskets because of delivery costs. Make sure you get quotes from multiple providers to compare prices and find the best deal.
Choose a fulfillment center with a proven track record of excellent customer service. This is important because your customers associate the delivery experience with your product, and any mishaps the provider makes comes back at you and hurts your brand image.
Reputation and Portfolio
Make sure that the provider has a good reputation. You can check online reviews to see what others say about them. Look through their portfolio to see if they’ve served your industry. This shows their expertise in your field and understanding of any specialized services you may need in the future.
Scalability as You Grow
Make sure that the eCommerce fulfillment partner you choose is scalable. You want to be able to increase or decrease your storage and shipping capabilities as your business grows or demand changes.
Sometimes ecommerce companies grow faster than you realize. If the provider you work with doesn’t have the flexibility to cater to your business needs, it will put you in a difficult position, and you might have to restart your search again in a few months.
Security and Compliance
Working with a company that ensures security and compliance with all laws and regulations is critical. You want to be sure that your customers’ personal information is safe and that your provider follows all the local and international rules and regulations.
As a business, your impact on the environment is another thing you should keep in mind. Make sure you choose the fulfillment center that cares about your carbon footprint as much as you do. Look for sustainable packaging options and alternate fuel vehicles to manage the deliveries.
Grow Your Business at Your Pace with Ziing
Compared to the investment you need to purchase and manage a warehouse and fleet, a third-party provider can help you scale your business up or down according to demand without breaking the bank.
Ziing offers custom data-driven logistics solutions designed with SMEs in mind. We can help you receive, cross-dock, stage, or store products for delivery. Our balance of flexibility and cost-effectiveness can set your business up for continued growth.
Reach out to us here – and let's get started.