Tag Archives: packing

Seven Advantages to Outsourcing Fulfillment

21 May

Outsourcing order fulfillment has many advantages. Here are just a few to consider when looking at considering whether to keep fulfillment in-house or to outsource it.

1) Focus on business

Unless you own a fulfillment company, fulfillment isn’t your primary function. By outsourcing fulfillment, you gain time to spend on primary functions such as sales, marketing, supply chain, and innovation. Let the experts deal with storage, shipping, software, and other fulfillment-related requirements.

2) Financial considerations

There are financial advantages to outsourcing fulfillment. The costs of setting up a warehouse, staffing, managing, securing, and developing technological solutions is daunting.

3) Facilities

Start-up companies may not have adequate storage facilities or the funds to build them.

Fulfillment Services

Warehousing and Fulfillment Services

Fulfillment companies typically have thousands of square feet of warehouse space. Companies that warehouse their own inventory have additional expenses, too, such as staff and utilities. A fulfillment company distributes this expense through storage fees to multiple clients which results in a storage fee that is less than an individual company would pay to do it in-house.

4) Shipping costs

Unless a producer ships thousands of items per month, they don’t get the beneficial “bulk” shipping rates available to many fulfillment companies. The price these companies pay often deviate from standard shipping prices by 30% or more. In some companies, the savings associated with shipping bulk rates provided by fulfillment companies can outweigh the charges of the fulfillment company itself. You may also be able to negotiate a flat-rate for shipping—a single fee based on weight and service, as opposed to weight, service, and destination. This makes shipping expenses predictable, which makes budgeting easier.

5) Shipping materials costs

Similar in concept to the savings associated with shipping costs, shipping materials bought in bulk also are purchased at more favorable rates. When compared to the cost of purchasing supplies for shipping through retail outlets, savings can amount to 50%. Of course, this depends on the fulfillment company.

Often, fulfillment companies include the packaging fee in the cost of shipping, or per order. This is how fulfillment providers can quote “free packaging.” Most order fulfillment service providers make a list of standard cartons available to their clients. A company whose product doesn’t fit one these packages may need to provide their own packaging or pay an additional fee.

6) Behind-the-scenes fulfillment services

There are many hidden aspects to running an e-commerce business. Don’t forget to look at these services when making your decision.

  • Receiving and unpacking merchandise
  • Receiving orders via mail order, email, phone or phone
  • Processing of credit cards
  • Handling of returns, including inspecting merchandise and restocking
  • Preparing documentation for international shipments
  • Generating reports
  • Updating customer databases
  • Issuing customer credits
  • Maintaining inventory
  • Making bank deposits
  • Answering customer service phone calls, e-mail correspondence

7) E-commerce software need

Fulfillment houses develop intelligent e-commerce systems to help manage the many elements within the business. The e-commerce system is adaptable and may be able to integrate into clients’ ordering system. Some fulfillment houses may even host commerce sites themselves. The software also enables integration into respective couriers’ systems to provide clients with live information about package deliveries.

As you can see, fulfillment isn’t for the faint-of heart. Why not let the experts take care of this for you while you focus on growing your business?



Questions About Fulfillment? We Have Answers!

26 Feb

Here are answers to most commonly asked questions about order fulfillment.

What is Fulfillment Outsourcing?

The definition of fulfillment is the process of receiving, packaging and shipping orders for goods. Any company that sells products directly to consumers via phone sales, their website, or through mail order must provide fulfillment to process these orders. Some companies choose to perform these services in-house with a staff of employees that receive the orders, process them, and mail them to their customers while other companies outsource this function to a third-party full-service fulfillment house.

Full-service fulfillment companies offer an end-to-end solution: they take your products from warehouse shelves, pack them, hand them to shippers and then send an automated e-mail response to your customers to let them know their packages are in transit. They can also supply current inventory levels to your website, reorder products, offer call-center services, send notices of shipping, and handle returns.

What Services Do Fulfillment Houses Provide?

Order Processing Services: Whether the orders are received via phone, mail, or web, the fulfillment house processes the order and ships it. This service is the key element to the utilization of a third-party fulfillment service.

Return Processing: Fulfillment houses also provide the service of accepting and processing returned or damaged items.

Storage: Fulfillment houses store your merchandise and provide security/insurance for the items that are located in their locations.

Product Assembly: Fulfillment houses provide the service of assembling or kitting products for their customers. Fees dependent upon the complexity of the assembly are usually associated with this service.

Inbound Call Center Services: Fulfillment houses provide inbound call center services to handle phone inquiries.

CD/DVD Replication Services: As part of their array of services, many Fulfillment houses offer the service of CD/DVD replication.

Contract Packaging: Often times, Fulfillment houses will package products in specialized or customized wrapping per your specifications.

Rebate/Sweepstakes Services: Fulfillment houses will provide services to their clients to process rebates or sweepstakes.

What are the Benefits of Fulfillment Outsourcing?

While there are many benefits to outsourcing fulfillment processes to a third-party fulfillment house, some of the most important reasons include:

1. The ability to concentrate on your core business. Not being involved in the day-to-day process of fulfilling orders enables personnel to focus on marketing your products, thereby improving sales and increasing revenue.

2. Staffing concerns are shifted from your company to the fulfillment service. During peak seasons, your fulfillment provider will manage staffing and space concerns.

3. Controlled costs. Since you will only be paying the fulfillment house for the work they perform for your company (fulfillment of orders, assembly of products, storage etc), you are able to project costs and maintain the specific margins needed to ensure profitability.

4. Warehouse space is no longer a concern since this will be passed on to the fulfillment house. It is the fulfillment company’s responsibility to provide enough space for busy times and seasonal needs.

5. Many of today’s successful companies including General Electric, Pepsi, Merck, Home Depot, Wal-Mart, McDonalds,  and Amway have discovered that outsourcing gives them a competitive advantage.

How Do I Select The Right Fulfillment House?

When choosing what fulfillment service to partner with, keep the following criteria in mind:

1. Make certain you have a clear-cut understanding of exactly what services you require and make sure you and the vendor you choose are on the same page.

2. Be certain to ask for references, preferably from other clients that sell similar product lines to yours. All reputable fulfillment houses will be able to provide references from customers who use their services.

3. Evaluate the geographic location of the fulfillment house. While some companies prefer to work with a fulfillment service that is in relative proximity to their physical location, others prefer to work with one in a centralized location to maximize their shipping savings.

4. Discuss manpower concerns with potential fulfillment vendors. Fulfillment houses often times employ a core group of permanent employees and supplement staff with temporary workers during peak periods. Discuss any concerns about safety and security with prospective companies.

5. Accuracy rates are very important in fulfillment (see Why is Accuracy Important in Fulfillment?). Make sure to ask any potential fulfillment sources for their current accuracy rates.

In summary, there are several reasons to outsource fulfillment work and there are many quality fulfillment houses from which to choose. Make sure the fulfillment provider you choose has the tools, staff, and experience to do the very best job possible. After all, each packages shipped on your behalf is a reflection of your company.