Fulfillment distribution is a key aspect that can make or break your business-customer relationship.
Even one misstep, such as a lost package, can lose a customer forever. You could potentially lose big on the CLV of that customer
As an online businesses, you need to consider the most effective and efficient fulfillment solution when packaging and shipping your products around the world.
Your two options are either to provide the fulfillment logistics in-house or outsource to a 3rd party fulfillment warehouse.
Especially if you’re experiencing exponential growth with your online business, it may be time to look into a 3rd party fulfillment provider.
In this article, we will discuss everything you need to know when it comes to a 3rd party fulfillment center service and how you and your business can benefit from it.
What is a fulfillment warehouse?
When it comes to e-commerce, order fulfillment plays an important role.
It determines how and when a customer receives a product they have purchased from you, along with other storage and shipping logistics.
A fulfillment warehouse serves as a large storage facility that houses your inventory for a long period of time.
Businesses often lease fulfillment warehouse space.
What is a fulfillment center?
On the other hand, a fulfillment center not only provides the space for inventory, but fulfills all customer orders — packing the order and shipping it to the customer’s address and dealing with returns/exchanges.
Whether it’s business-to-business (B2B) or business-to-consumer (B2C) orders, fulfillment centers can process them.
All of this helps alleviate stress on your end, helping you focus on other aspects of your growing business.
How a fulfillment center works
How will a fulfillment center work for your business?
The process usually involves many integrating actions and steps for a product to transfer from an inventory shelf to a customer’s shelf.
First, your inventory must be delivered to the warehouse, where the fulfillment center will receive it, sort it, and store it in your designated section of the warehouse.
When a customer places an order with you, the information is sent — usually through online integration software — to the fulfillment center and they begin prepping the item to be shipped.
Using the order information, the center locates the item in the warehouse inventory and brings it to a packing station for the item to be properly packaged.
It’s here where the product may have a final quality assessment.
The center may also insert a packing slip for the customer.
Next, the package is weighed and the center works on the shipping logistics.
Once the shipping carrier and price is determined, the center prints the label and it’s picked up by the shipping provider.
The center will also send a notification to the customer that their item has been shipped, along with the tracking number.
Additionally, fulfillment centers will offer return management services to help with customers looking to either return merchandise or exchange it.
Things to consider with a fulfillment center provider
Do your research and find a fulfillment center that is the most cost-effective for your business.
From set-up fees to storage fees, receiving fees, and actual fulfillment fees — there is a lot that goes into the price of a fulfillment center.
Because of the various direct and indirect costs, prices will vary from fulfillment service organizations.
A good rule of thumb? You should always compare the cost of a fulfillment center compared to fulfilling the orders in-house and see how it can save you money.
Think about how much storage space you’ll need.
Especially if you have a lot of variations of your product, you’ll need more storage space.
Also take note of the space, how they organize other inventory, along with how they battle natural elements, such as flooding and temperature changes.
Customer service offered
Fulfilment centers should offer top notch customer service to both your organization and your clients.
A great way to check this is to take note of your first interaction with them and see how well they respond to your questions.
The more helpful they are with your business, the better they will be with your customers.
Fulfillment center benefits
There are many benefits that come with using a fulfillment center to process online orders. They include:
Using a fulfillment center can help ease the pain of your day-to-day business and help improve scalability.
This can be especially helpful if you have a steady influx of orders and may no longer have the manpower to package and ship every order.
Plus, by automating the fulfillment part of your business, it allows you to focus on other important aspects of your business.
In return, this can help you maintain quality work in all departments while continuing to grow your business.
Best of all, through a fulfillment center, you can focus on growing your business and products and sell even more.
Lower cost of operation
In the long run, when you hire a 3rd party fulfillment service, it can help lower the cost of your operations.
Think about how much you’re currently spending in packing supplies and shipping fees.
When you hire a fulfillment center, they can actually offer cheaper prices in addition to the manual labor they provide to carry out your customer orders.
For instance, 3rd party fulfillment centers have access to better freight and shipping rates, especially if they service multiple organizations.
Discounts can range from 15% to 35% off regular shipping rates.
Chances are, in-house, you don’t have access to advance fulfillment technology or worse, technology that can’t handle more than a certain amount of orders a day.
With a fulfillment center, they offer the most advanced technology when it comes to monitoring inventory, shipping, and accounting.
This fulfillment technology can also integrate with your established management tools and sales channels.
Access to fulfillment experts
In addition to advanced technology, 3rd party fulfillment centers come with experts that know the best way to handle your inventory, organize it, and ship it in the most effective way.
They also know how to effectively handle your customer base and make sure they are satisfied.
Again, be sure to check customer service ratings of your potential fulfillment center and confirm that it is high quality.
How ClickFunnels can help
Now it’s easier than ever to automate the fulfillment piece of your sales funnel.
When you add a 3rd party fulfillment service, such as ShipStation — now partnered with ShipZoom — to your sales funnel, you can connect your product in ClickFunnels with your ShipStation account for automatic order fulfillment.
Furthermore, Clickfunnels makes it simple for any entrepreneur to build their own marketing funnels in just minutes, all without needing to rely on a team of techies.
With Clickfunnels, everything you need to build and launch your funnel is pre-developed and automatically pieced together for your organization, so you have a seamless and fast set up.
What has your experience been with 3rd party fulfillment services? What tips would you give someone researching 3rd party fulfillment services? Sound off in the comments below!