Resources for Order Fulfillment

Business Guide to Order Fulfillment: Services That Deliver Your Product To The Customer

As a business grows and develops the number of tasks that must be performed increases. Numerous businesses, both small and large, have found it easier and more efficient to outsource tasks not related to their core competencies. The businesses that fill this gap are called order fulfillment companies. They take the burden out of storing, packaging, labeling, and shipping your products so that your can focus on your burgeoning business and crafting a quality product. Most recently, ecommerce businesses have begun to realize the potential of order fulfillment companies, creating a large market.

Benefits

Order fulfillment services have allowed small business owners to compete more effectively with larger companies and corporations. Larger companies have begun using order fulfillment businesses to make their own production more efficient and cost effective.

No Space, No Problem

Increased storage space at third party warehouses allows businesses to continue growing spatially, as well as financially. Outsourcing these operations frees up additional space that can be used for other purposes. This means that you can achieve a greater quantity and variety of goods. If you are worried about keeping track of your inventory, do not fret. Most order fulfillment services offer some form of web-based application that allows businesses to view their current inventories and their inventory’s history.

Share the Burden

Simply put, order fulfillment services allow for further division of labor, so your company can concentrate of making quality products with your entire staff’s participation. Without the need to package and ship goods, more employees become available to work on other tasks. Viewed from another angle, by outsourcing your order fulfillment needs, your business no longer needs a shipping staff, allowing your business to save more money, and freeing up capital is always a good thing.

Lower Shipping Fees

Due to the high volume of shipped goods that order fulfillment service send out, they are often able to negotiate better rates with various carriers. This saves both you and your customers money.

Instant Order Fulfillment

Order fulfillment warehouses almost always favor the use of email for shipping requests. This means that from the time your customers place their order to the time their goods are packed takes only a few minutes. This allows you to give the customer your quality products faster than ever before.

Free to Do More

Most importantly, since the order fulfillment companies will take care of tracking your inventory, deal with returns and exchanges, and package orders, you can focus more on your business. This time should be used to promote your business, expand into new markets, enhance your website, expand your product line, or just take sit down and take a deep breath.

Pitfalls

While order fulfillment companies have a lot to offer you and your business, there are several things to consider before deciding to use one.

Off-Site Inventory

When you agree to outsource your order fulfillment needs, you are also choosing to give up some control. Some business owners would rather micromanage the successful completion and delivery of their goods. Order fulfillment companies would probably not be a wise choice for individuals with this mindset. There is still room for this service in such businesses though. If space ever becomes an issue, it is possible to only outsource a small percentage of your inventory, so you can free up space and keep your business moving. Attempting to break into the international market is another instance in which order fulfillment services are extremely helpful, if not necessary. Take a small percentage of your goods to a nearby country that you think would be interested in your products. This will allow your business to acclimate itself to outsourcing while simultaneously breaking into a new market.

Clear Communication

As you might imagine, excellent communication is extremely important when the majority, if not all, of your inventory is not physically present in your workspace. Inventory details, how to handle it, and when it is going to arrive should all be explicitly stated between both parties so that no unfortunate misunderstandings occur resulting in a financial loss for all parties.

The Cost of Efficiency

Order fulfillment services are not free. Remember that you are dealing with another business. An agreement can almost always be reached regarding the appropriate price, but it will always cost you. When deliberating, always compare the cost of doing it yourself with the cost of outsourcing. Do not forget to include the hourly wages that your staff is paid while they are engaged in order fulfillment processes. This will give you an adequate picture of whether or not outsourcing is feasible for your business or not.

Pricing

Always remember to compare the cost of doing it yourself with the cost of any third-party outsourcing.

How Much?

Each order fulfillment operation has its own payment schedule and practices. Some require contracts and work with a sliding scale, while others have no contract requirements and charge per order or per item. There will be a base storage fee for keeping your goods housed in their warehouses. Always be sure to read any contracts carefully. Make sure that you have a clear understanding of any potential fees and bring up any points of contention. It is a good idea to create a list of features that you believe your business will require before contacting an order fulfillment service.

With a third-party, order fulfillment service taking some of the pressure off of you and your business, concentrate of expansion and promotion. Third-party outsourcing is a great way to free up space, time, and energy for other more pressing matters. Always weigh the advantages and disadvantages of outsourcing, and if it is something that you or your business is uncomfortable with, just do not do it. When making your decision, think about your customers as well and what is in their best interests.