Ecommerce fulfillment center offers warehousing, order fulfillment, and drop shipping services. Your outsourcing team should be able to streamline your supply chain to reduce costs while delivering high-quality customer service.
The ever-increasing competition in the ecommerce space has bred customers looking for faster delivery options.
Nowadays, customers are not only finicky about the product quality and customer service but also delivery time. This means small ecommerce businesses need to match the delivery pace offered by giants like Amazon.
The pandemic-induced global ecommerce trend saw a rise that jumped to $26.7 trillion due to Covid-19.
And, as online shopping gets simpler for buyers, they consider shipping cost, delivery time, and even same-day delivery options as deal-breakers.
Unfortunately, for small ecommerce businesses, this means strengthening the supply chain and enhancing last-mile delivery to cater to growing customer demands.
The majority of shoppers would abandon the cart because the order won’t get delivered on time.
If you are a small business facing such a challenge, the best alternative is to engage an ecommerce fulfillment service. This will help you concentrate more on the crucial areas of your growing business.
For small, growing ecommerce businesses, order fulfillment services provide a great opportunity to enhance customer experience and loyalty.
With the top-notch, skilled third-party logistics (3PL) provider, you can give your buyers a convenient and delightful online buying experience.
Managing all the ecommerce operations on your own may be challenging, particularly when a business is taking baby steps.
You may take a look at hot ecommerce trends in 2022 and set sight for 2022 but before that, streamlining your delivery with the help of a fulfillment center may be necessary.
What is a fulfillment center?
Fulfilment Center is often a warehouse used by a 3PL provider who manages orders for multiple merchants, including yours.They also offer to coordinate with the last-mile delivery of your goods to the customers.
Depending on the arrangement, the process begins with you sending the products, or they will pick up.
Typically, when your ecommerce website gets an order, your fulfillment center partner will get notified via custom software.
Partnering up with fulfillment centers in multiple cities would allow your business to grow fast without having to invest in warehouse space and extra workers (for delivery purposes).
Logistics providers like fulfillment centers will safely store, select, package, ship, and most importantly, even handle the returns.
But, it is best to be careful while choosing the fulfillment center because an inefficient partner would hamper the growth of your ecommerce business.
In turn, it may lead to bad reviews and disgruntled consumers due to poorly packed shipments, shipping issues, and delays.
If you successfully choose the right 3PL partner, you can enter the world of advantages it offers. Outsourcing your orders to a well-oiled ecommerce fulfillment center will help you better focus on other areas of your business.
In this post, we will run you through some of the top benefits you can render by partnering with a 3PL for fulfillment centers.
#1. Make more space
Many ecommerce startups operate out of basements, attics, and garages — pretty much anywhere they can keep merchandise and supplies.
These "work areas" frequently devolve into a jumble of plastic wrap, boxes, and other packing items.
At some point, when your business grows with an increase in orders (especially during the holiday season), you may run out of space.
And later, you will be either hunting for a new place or a fulfillment center that'd cost you more due to seasonal demand.
Instead, choosing an ongoing fulfillment center helps you delegate key logistics responsibilities without any hassle. Moreover, it will free up your time and let you concentrate on other critical areas of your business.
#2. Drive scalability
Once you have set up an ecommerce store, a wish to have greater control over every process is legit.
But, the problem is that when your business grows over time with more customers and larger orders, it may become overwhelming. And, failing to provide timely delivery will lead to dissatisfaction amongst newly-acquired customers (or worse, losing existing customers).
You'll be better able to manage a seasonal surge in orders if you outsource fulfillment.
Such a decision will help you scale your ecommerce business without worrying about the logistics issues hindering business growth.
#3. Access better technology & inventory management
Once you accept the customer's order, your team will need to deliver goods within the set date.
A surge in order volume may leave your in-house warehouse management in chaos. Mismanagement and underestimation can complicate order fulfillment and inventory management.
While some customers are tolerant of small enterprises, the majority of the buyers will have high expectations and standards; in product quality, packing, and delivery.
Outsourcing such tasks to fulfillment centers will provide access to dependable technology, ensuring your inventory is constantly current and well handled.
A reputed 3PL partner will help your business function more efficiently. They offer Integration with your retail channels and other management systems like carrier selection and inventory optimization, which form part of the package.
#4. Deliver tailored packaging
You may ask, how does a perfect fulfillment center add value to your business? Well, they think outside of the box and also on the inside!
The first time a buyer interacts with your product is when it reaches their door. Receiving a duct-taped brown box is surely not going to cut it these days.
You need to keep your packaging new and interesting every time a customer makes a purchase.
Depending on their demographics, purchasing habits, or even birthdays and special occasions, custom packaging adds value. These options allow your buyers to build their personalized shipping boxes with a message or a note.
When you partner with the fulfillment center for your small ecommerce business, you are assured of such options. These contribute to building consumer loyalty, encourage them to advocate your brand, and turn to evangelists.
#5. Bring down the operational cost
If you are running an ecommerce business with end-to-end ownership, it would mean bearing the cost of the warehouse and its associated expenses.
This will include hiring personnel, rent, equipment, utilities, and other overhead. Costs per square foot of warehouse space on average have climbed from $6.53 to $7.79 per square foot.
You can eliminate these expenses by roping in a dedicated warehouse fulfillment center as your 3PL partner.
This is because, at such centers, the expenses are shared amongst the vendors who utilize the facility. Additionally, you'll be free of the burden of recruiting, training, and supervising a warehouse staff.
You can also benefit from their reach and network. Many fulfillment centers have a matrix of domestic and international locations, enabling them to provide bulk shipping which saves you the cost.
Moreover, they may outsource it to UPS and FedEx, which charges shipping mostly on a zone basis. Thus, your products need to cross fewer zones to be delivered by storing items in many fulfillment centers.
Ultimately, all these will contribute to plummeting your costs. Now, you can think of passing these savings to customers or even providing free delivery, which affects almost half of US consumers' online purchase choices as shown in the image below.
#6. Get greater flexibility to manage seasonal fluctuations
A fulfillment company will collaborate with your ecommerce business to create a custom solution that meets your unique requirements and your ideas for future business development.
Whether you are running special holiday offers, selling discounted items, or negotiating better carrier rates to save shipping expenses, outsourcing order fulfillment requirements helps you function smoothly.
As an ecommerce entrepreneur, you’ll face order volatility due to holidays and discount offers. When there is a fluctuation, you will need to recruit more people to cope with it. Meaning, you may require additional delivery assets, lease extra storage space, train new staff.
But, once the seasonal effect fades, you are left with surplus assets (including employees) who might not add value in the near future. In the end, you'll have much more than you could ever afford to retain.
You don't have to worry about all of this if you use an order fulfillment service. With such a partnership, you can leverage their expertise and flexibility to accommodate seasonal sales without additional short-term investments.
Ecommerce fulfillment services will have the latest technology, including warehouse robots, ERP for logistics, and automated inventory update notifications. Such powerful tools and techniques coupled with trained staff can ensure running logistics operations effectively.
So, an effective 3PL team eliminates the need to hire more staff and invest in additional assets.
With a 3PL partner in place, you can invest in other aspects of your ecommerce business to increase your search engine rankings, improve your email marketing, and ultimately, boost your customer loyalty.
#7. Resolve challenges and complexities
Outsourcing fulfillment services will ensure simplifying your ecommerce business operations.
Running a successful ecommerce business involves dealing with various challenges, right from website management to competitive last-mile delivery.
Working with a reputable ecommerce fulfillment service center assists you in delivering your items more quickly and effectively. It often has clear objectives and incentives for meeting service level standards.
An experienced company will be able to address any problems that emerge without compromising its service's quality.
This is possible since they have the necessary knowledge, competence, and dedicated professionals to resolve frequent customer queries. Your shipments will also be insured if they are lost, or orders cannot be delivered due to unforeseen contingencies.
#8. Effective order management
You must have experienced a certain pressure caused by customers who received the wrong items. Almost 23% of buyers tend to receive the wrong products. If your inventory is well-organized, you will better accept orders and prevent such mishaps.
However, if things are mislabeled, the delivery crew will wind up having the incorrect product in hand, resulting in the wrong product being delivered to the buyer.
Enter fulfillment services, and they can prevent or at least limit a scenario like this.
They will provide you with services that help manage your warehouse inventory systematically. Having experts for order management ensures that each task in the delivery chain will follow a standard process.
This involves tracking your inventory using barcodes and scanners.
They also provide you with a comprehensive dashboard to monitor and manage your warehouse inventory. Minimize delivery errors with effective order management to win customer loyalty and thereby improve your revenues.
#9. Increase geographic reach
Assume you choose to run and manage your fulfillment in-house; you typically ship orders from a single location.
This might increase your costs when shipping to far-off places. Also, it can delay the deliveries for far-off consumers. You will fall short of meeting customer expectations if they demand economical two-day or even same-day delivery.
Working with a 3PL provider for order fulfillment helps keep your goods in different locations.
As mentioned earlier, they have a wider presence which you can leverage to ensure quick, cost-effective shipment. Since the fulfillment center stores goods near your customers, shipping costs and delivery times for orders will be drastically reduced.
Choosing a fulfillment center for your ecommerce business provides you with access to several fulfillment centers located across your delivery country.
You can also expand your business by tying up with international fulfillment centers to distribute your products while tapping into cost-efficiency strategically.
#10. Improve customer service
Enhancing customer service is crucial yet one of the challenging parts of running an ecommerce business.
Overcoming this challenge would require you to ensure that your shipping assets and processes deliver goods on time, in excellent condition.
This may require more effort to develop a trackable delivery mechanism coupled with powerful packaging that keeps your goods intact. One of the reliable ways to improve a customer's likelihood of re-purchasing from you is to keep them happy and satisfied at each touchpoint.
Unfortunately, particularly with ecommerce, there is a far greater likelihood of encountering difficulties and wanting to return the merchandise. This includes canceling an order due to delays, returning an order due to mishandling by the shipping company or weather effects, amongst various other reasons.
Running a successful ecommerce business would require you to keep an eye on ROI while also ensuring top-notch CX.
Unlock these advantages with 3PL for fulfillment center deliveries are made on schedule, the stock is replenished, and the information is sent to management in real-time by order fulfillment services for startups. With their help, you'll be able to get the most value out of your money.
Each warehouse and fulfillment site serves a distinct role depending on your products, customers, and geographic location.
If you are not sure about whether you can tackle fulfillment effectively, it’s always better to opt for a 3PL partner who can take care of all your order fulfillment requirements. Leverage their economies of scale for more efficient deliveries at a reduced cost.
Decide about outsourcing order fulfillment by talking to different companies and checking their reviews. Ultimately, outsourcing can help you unlock the advantages mentioned above that positively impact your ecommerce business.