Choosing The Right eCommerce Fulfillment Center.
Updated: May 9
Choosing an eCommerce fulfillment center for your online business can seem to be a daunting task. You've built a successful online store and have handled the fulfillment operation yourself but as you scale the operation you will need outside help and expertise. Even though your storefront resides in an online world, inevitably the delivery and packaging of your products will be handled in the "brick and mortar" world. It's critical when choosing your fulfillment company that you evaluate both the fulfillment services provided and the eCommerce services required to process your online orders.
Evaluating and Choosing Your Fulfillment Center
Fulfillment services will include receiving merchandise, taking an inventory of products received, warehousing of your products, and finally the delivery of packages to their destination. This is where you have options to outsource some or all of your eCommerce fulfillment services to a third party 3PL provider.
Receiving - The first step in process after choosing an eCommerce Fulfillment Center is ordering goods from your suppliers and shipping them via an LTL (less than truckload), FTL (full truckload) or in a shipping container. The accuracy of accounting for all inventory received starts at the receiving.
Inventorying - The skills of inventory management will directly impact the quality and cost of your fulfillment services. If your inventory is out of stock or inaccurate, you might lose customers. If inventory levels are too high, it will increase the cost of storing your inventory. Accuracy at this point is essential, if inventory counts are wrong you might be left guessing what may or may not need to reorder which will affect your customer retention and overall satisfaction.
Warehousing - The physical real world location that your goods are stored. All eCommerce fulfillment providers will have varying price ranges for storage of inventory. These prices typically vary slightly between 3PL locations but range typically from $10 to $25 per pallet in a warehouse. While fulfillment companies have their warehouses and distribution centers, strategically located and organized many small businesses store goods in their garages or basements until expansion is inevitable.
Shipping - For order fulfillment, goods are delivered to customers through various shipping methods. All eCommerce Fulfilment Centers have relationships with all the major carriers. These relationships allow the 3PL to leverage their shipping volume into drastic price cuts in shipping cost.- When customers specify shipping methods (UPS, USPS, FedEx,) when placing their orders a good fulfillment company will seek the most cost effective solution from the chosen carrier and may adjust the shipping methods for that order delivery.
Returns - Some Fulfillment Centers may provide Customer Service Reps for their clients that can handle returns and refund processing for their clients. If the fulfillment center does not have an in house call center many can provide an outsourced option at your request. However many of today's eCommerce sites allow their store owners the ability to process returns and refunds for each specific order.
Reporting - Well established fulfillment companies usually install and implement the best inventory and fulfillment management software to automate the processes. The ability to track information pertinent to the order fulfillment (inventory counts, customers, and shipping details) will help your businesses to gain real time insights their customers.
Now that you know the right questions to ask and have a better understanding of the 3PL and eCommerce fulfillment world you can better understand your temporary and long term needs. Making a phone call to a reputable and honest eCommerce 3PL service provider will now be a much easier process for you