Fulfillment

What Is Product Fulfillment?

Also referred to as order fulfillment, product fulfillment is the cycle of processing an order of a product from the point of sale all the way through shipment to the customer which is all part of the distribution stage. This covers from the time a product is ordered from a manufacturer, wholesaler or retailer to the end delivery point. Receiving, packaging and shipping are handled during this process sometimes internally and many times by an outside fulfillment company. Product fulfillment is necessary for any company who sells products, this term is most often associated with eCommerce. Retail fulfillment has been declining since the eCommerce boom.

How Does A Full Service Fulfillment Company Operate?

A fulfillment company, sometimes called a fulfillment house, offers an end-to-end solution for companies. They take the product from the warehouse shelves, pack them, transfer them to shippers, then send an automated email response to customers to notify that their product is in transit with tracking information. They handle your credit card processing, supply current inventory levels to your website, reorder products, offer call center services, send notices of shipping and handle the return process. They often attract clients through referrals. Fulfillment companies operate can warehouse your products as well. Finding a local fulfillment company is recommended but not necessary. It’s always nice to have the ability to drive to the fulfillment house that fulfills your products. Meeting face-to-face is also a plus!

How Can Fulfillment Benefit eCommerce Companies?

If you’re using a hosting company with a shopping cart and credit card functions, you may choose exclusive fulfillment service options that best suit your needs such as eCommerce fulfillment, pick and pack, returns processing and customer service support. In the case of eCommerce, fulfillment houses can be especially effective when handling a large volume of products and for maintaining low internal costs. From storing to shipping your products, a fulfillment company can make your business more efficient.

Should You Outsource Your Fulfillment?

Since the Internet, eCommerce has exploded and hundreds of thousands of companies have taken their businesses online. Many entrepreneurs have also entered the market selling exclusively through website businesses, recognizing the advantages of keeping overhead low and maintaining flexibility. For these types of companies especially, outsourcing fulfillment can be the best option if you have more money than time. If you have limited cashflow, then it may make more sense to process the orders internally.

When shopping for a fulfillment company, make sure you choose the right one that can accommodate your needs. Many will only take on larger volume companies so you want to choose one that caters to the size of your business so you won’t get lost in the shuffle. It is highly efficient to outsource your fulfillment in the days of online shopping.

When Is It Time To Consider Outsourcing?

If you have a business that is more established and still growing, there comes a time when you may want to consider outsourcing to more effectively manage costs. For most eCommerce companies that have been around, the customer base is spread out so shipping from a central location will save time and money in delivery and shipping costs.

A fulfillment company has experts that stay on top of packaging, shipping and delivery costs. They are also effective in handling workflow with a large staff of personnel, something you may want to spend less time on so you can focus more on your core business. The sales part of your business is the most important since that directly affects your bottom line. It may make more sense to hire experts in other areas of your business so you can spend the time you need to boost sales. If the money you are spending is not helping to increase your sales revenues and instead being spent on managing operations, it’s usually a sign that a reversal is needed. Typically as companies grow, warehouse management becomes more costly. Expenses like racking, conveyors, forklifts and warehouse space become increasingly demanding. When sales are dwindling, do you really want to be worried about the these issues? If not, it may be time to plan for a change to outsourcing.