Fulfillment Center : How to Boost Your Business in 2022

Sharline Shaw

Are you trying to reach more customers? Owning an ecommerce store is a perfect way to do this. Yet, a fulfillment center will hasten the process for you.

A fulfillment center allows flawless product exchange between manufacturers and consumers. They store products briefly and do the custom packaging while you handle the sales.

We’ve explored various partnering corporations as sourcing professionals for over a decade. With our experience, we’ll give you insights into why a fulfillment center is essential to your business. And how to source the best one.

Also, you’ll see how to use this distribution tool to aid your enterprise.

fulfillment center

What is a Fulfillment Center?

A fulfillment center is a third-party logistics (3PL) provider. It is inclusive in a company’s supply chain. Business owners hire these services to transport customer orders through their ecommerce platforms. They receive orders, process them, and hand them off.

They are direct links to customers and retailers from the seller. Sometimes, companies own theirs and oversee the processes within the organization. The outsourced company manages sellers’ merchandise and ship orders to the rightful consumers.

Renowned ecommerce retailers have a network of these merchants to maximize sales. In doing this, they save space by putting out their goods for sale. This characteristic care for inventory makes them necessary for sellers and their customers.

Why Use a Fulfillment Center?

There are several gaps a fulfillment center can fill in a company’s supply cycle. Considering production without sales is a fruitless effort.

Small-scale ecommerce retailers and sellers are fond of doubling as these merchants. But, it can be challenging. The fulfillment process is that of outstanding commitment. For a business, this commitment is to the customers. And it involves the optimization of their time and needs.

Another merit is flexibility and scalability. Fulfillment companies can always scale their services to meet customer demand volume. Besides, you only pay for the service your business uses. Should your production increase, they’ll find ways to accommodate more inventory.

These merchants are experts with good knowledge in order processing. Be assured that they are up to the task, considering the complexity of the procedure.

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Fulfillment Centers Process

Some steps ensure a successful order fulfillment process for your recipients. Let’s discuss the fulfillment process.

fulfillment center process

1.Delivery of Orders to Your Fulfillment Center

Getting your inventory to your fulfillment center marks the start of the process. There are several means this can happen. First, you can link your supplier to your fulfillment center if you run a reselling business. While you track your shipment, ensure you step up with your merchant to know if they get the products.

Also, you can send your stock to your fulfillment center if your company is in charge of production. Notify your partner company beforehand about the incoming delivery. Upon arrival, they get tagged for drop-off.

2.Sorting and Grouping of Your Products

As soon as your goods make it to your fulfillment center, they help collect and sort them. The procedure entails checking in your product and scrutinizing for possible damages. Once they notice irregularities, they contact you to inform you about them.

After settling everything with your delivery, a tagging system aids its grouping. There is an organized arrangement of box stacks for distribution like a warehouse.

3.Temporary Storage of Inventory

While they complete the check-in process for your supply, a worker will move it in for storage. Unlike a typical warehouse, fulfillment centers have simple warehouse space. The simplicity is all about the limited storage space.

You can make available due stocks to meet up consumers’ demand. Logistics services will provide you with the data you need to keep restocking. Extra shipping costs cover a product that needs extra security. Or one affected by specific weather conditions.

4.Sending of Consumer Orders to Your Fulfillment Company

This step begins the expert-customer relationship. A fulfillment center operates to simplify connectivity. This is irrespective of the type of order placement in place. If you don’t have one, they can provide a medium to enable manual orders for your customer. For example, they can accept orders via email or telephone.

5.Processing and Shipment of Orders

Once the company receives an order request, they package the shipment for delivery. Order processing entails retrieval of the products from the store. Cross-checking items with order requests. Sealing, labeling, and dispatching. Customized boxes and kitting services are also obtainable.

They tour the shortest route to optimize delivery and ease consumer expectancy. Immediately after they ship the products, they’ll update you through your ecommerce platform.

6.Processing of Customer Returns

When consumers aren’t satisfied with the delivery, they can send it back. Fulfillment providers make this return process less burdensome. Some offer this as a different service. The staff will handle your product if it has a defined mailing description.

Sometimes, return reports can have an automatic refund. This depends on your company’s policies. 

Benefits of a Fulfillment Center

Logistics providers serve much significance. And it depends on the type and scope of your business. Below are some of their benefits.

fulfillment center warhouse

Third-Party Inventory Management and Shipping

You don’t have to do the job yourself. The fulfillment centers have incorporations in place to supervise your merchandise. From when you deliver the goods to them till it reaches your customer, they’re in charge of everything.

An own warehouse is not needed

Instead of purchasing an extra space, they help store your excess inventory. This plays an essential role in new establishments. Moreover, it minimizes the enormous costs of securing and maintaining a warehouse.

Discounted Shipping Fees

Fulfillment centers help you find shipping carriers or shipping companies at reasonable prices. This way, you save up on every shipment you make. Yet, special offers like free shipping for some goods help save cash.

Extended Reach

Of the approximate 8 billion people globally, about 25% use the online store. Continuous use of the internet will make this percentage increase soon enough.

As a business, you can meet that global stance. Fulfillment centers can help you please your customers around the world. Also, they’ll give you international recognition that’ll grow your customers.

Return Processing Privilege

Your fulfillment provider will help you dispatch rejected orders back to the seller. You can contact their customer service division to connect to a manufacturer. This conserves both the manufacturer and consumer a lot of time and money.

Quick Delivery

Delivery delays are not a thing with fulfillment companies. They have a timely manner of ensuring orders are en route. Collection of copious information about the destination of such goods is one way to do this. And while they put goods out for delivery, they see that they land at the consumer’s doorstep.

Special Delivery Time & Bonuses

As a manufacturer, you may not be open for business all days of the week. A fulfillment company offers rare delivery periods like mid-nights and weekends. Sometimes, there are other value added services as parts of these distribution services.

Reduced Cost of Operation

If you own your shipment, the overhead cost will increase. It isn’t cheap to rent warehouse space, recruit staff, package, and ship. Outsourcing fulfillment services will erase this cost.

It’ll also amount to a lesser work weight for you and your employees. In the long run, your ecommerce business will yield a good output with this supply chain management.

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Fulfillment Center for Small Business.

Startups also have a fair share of advantages with fulfillment centers. Like big firms and companies, these benefits are about the same. They relieve supply and manage store inventory. They also offer storage and save time, among many others.

Most fulfillment centers online are more suitable for small businesses. Though, they have their peculiar modes of operation. Some have exclusive fulfillment services for beginners. And others for their registered clients. Running at lower costs, you can ship goods for as low as a few cents.

Opting for a 3PL is a smart option if you’re launching your business and would like to maximize sales. The majority of these vendors have virtual operations. You can sign up to these online vendors and subscribe to place your order.

You can use the same fulfillment vendor as your customers as a seller. It allows them to have a common ground for communication. Most of these merchants don’t ask for an upfront fee deposition. Likewise, you’re not required to go into a long-term contract. The websites are user-centered and straightforward.

Few offer free trials to enable you to check out their services. If you like them, you can make them your collaborators.

A Fulfillment Center Compared to a Warehouse

We’ve been discussing fulfillment centers for quite a while now. You may wonder if it relates to a warehouse or not. Now is about time to identify the differences.

What is a warehouse? It is a large building used to store large quantities of goods until it’s time for redistribution. Often, the consignment is to wholesalers, retailers, or distribution centers.

Fulfillment services and warehouses share the same inventory storage function. Yet, they differ a lot.

Warehouse space has long term storage for inventory than a fulfillment center. One reason for this is the frequency of pickups. Fulfillment centers have more placement of orders. In contrast, orders are less forthcoming with a warehouse.

Another distinguishing factor is their customers. A warehouse has a structure that serves Business-to-Business (B2B) customers. An example is freight companies and automobile dealers. For fulfillment centers, they give ties between manufacturers and consumers.

Warehouse shipments deal with shipping carriers and intermodal providers. Often, this is usually a longer process. In contrast, fulfillment centers maximize the online retailing medium. And it fosters swift deliveries to clients irrespective of distance.

A Fulfillment Center Compared to a Distribution Center

Fulfillment and distribution centers may appear synonymous. This is because the two store products and put them off for shipment.

Distribution centers receive, store, and distribute goods according to orders. They serve the business to consumer connection.

The difference between these two still revolves around their mode of operations. The extent of storage function. With cost and services. A fulfillment center offers direct delivery to customers. Distribution centers are only involved in businesses, i.e. (B2B).

Like the warehouse, distribution centers have larger capacities for storage but lesser orders. Also, they are cheaper compared to fulfillment centers. However, the latter has a more cost effective space. Distribution centers process out unpackaged products, unlike the fulfillment centers.

Besides, distribution facilities expose your inventory to target prospects. Fulfillment center operations include customer services that network manufacturers with consumers.

Basically, the disparity is about the fewer services of a distribution center. Again, is its long term storage tendency. That’s in contrast to the value added services of a fulfillment center.

choose fulfillment center

How to Choose Fulfillment Centers

Your choice will show how keen you’re on consumer satisfaction as a business owner. For example, you may have difficulty keeping up with orders or managing your products. These are enough reasons to opt for a fulfillment center.

Before you choose, there are some details you should note for a worthwhile pick. Some of these factors are as follows.

1.Do your research

As innumerable as the choices are, so are their differences. You should compare fulfillment companies to see which one is favorable. A viable option is the one near your customers.

2.Reconsider your existing shipping process

Review your inventory alongside the shipping processes. Think about it in a way that you forecast potential problems and possible solutions. Then, examine your third-party logistics to see if they can solve these challenges.

3.Cross out as many on your list as possible, leaving you no more than three

At this point, you do not need the long list anymore. You should cancel out unsuitable ones. Check the companies left on a deeper level afterward. For example, assess if it’s a professional fulfillment center.

4.Make extra findings of your final choice

Don’t forget the impact of your preference on consumers. You owe them the necessary efforts to select based on vital metrics. Not with your guts.

A fulfillment center that has similar or mutual principles as yours will suffice. As a result, there’ll be consistency enhancement and a positive customer experience.

5.Don’t exclude technological compatibility

Your 3PL can integrate functions through your company’s existing management software. That’s if you have one already. It prevents you from an absolute change to the fulfillment center’s software.

The delivery staff will track orders and customers’ data through this operational software.

6.Discuss and negotiate the price

Third-party delivery providers have different functions. Sometimes, it depends on whether your business is a big one. You can work out pricing with their customer service division. Moreover, before signing a contract online, understand it and ask questions.

7.Think consumer satisfaction

Customer satisfaction is everything and a customer completes the supply chain. Look for reviews of companies to see how good they are with customers. That is how to tell which one to entrust with your delivery operations.

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FAQs

1.Will the fulfillment center help my business?

Yes, it will. With third party logistics companies, you have many beneficial options. These include extended customer reach, buyer satisfaction, and inventory maintenance. You also get free spacing, increased scalability, and reduced operating costs.

2.What is the delivery speed of the fulfillment center?

Fulfillment centers ship orders at stipulated times. Although depending on the type of product, delivery periods may differ. Still, you can trust them to meet deadlines.

3.How can I find the fulfillment center?

The easiest way to do this is to know your customer base. Once you’ve identified it, choose a fulfillment center within the vicinity. If none is within the area, search in neighboring streets.

What’s Next?

There is more to how effectively you can manage inventory. And one thing you don’t want to do is to commit the task to a random fulfillment company.

The ecommerce business space now has a steady growth with great competition. Fulfillment centers are alternative channels to improve your relationship with your customers.

If you’d like to get your goods across to your customers, we’ll help you. Visit our services page to improve your order handling with our game-changing logistics processes.

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sharline

Article by:

Sharline Shaw

Hey I'm Sharline, the founder of Leeline Sourcing. With 10 years of experience in the field of sourcing in China, we help 2000+ clients import from China,Alibaba,1688 to Amazon FBA or shopify. If you have any questions about sourcing , pls feel free to contact us.