Learn To Delegate: What It Means To Outsource Your eCommerce Fulfillment
In a previous article, we covered the many advantages of incorporating a shipping software into your eCommerce system. However, if you’ve already integrated with a shipping solution and hired a team for picking and packing, you might be facing a different shipping dilemma: finding the space to store your products.
If your products can no longer fit into your garage or office space, it may be time to outsource your fulfillment.
When you outsource fulfillment, you pay a third-party service to house, pick, pack, and ship all of your products. They are responsible for ensuring your products arrive at your customers’ doorsteps in a timely manner and in top condition. This spares you the hassle of organizing shipping details yourself, and you may just save money on warehousing and shipping expenses.
There are hundreds of fulfillment providers out there, and you can, of course, choose to partner with any of them. Here are a few options you might consider.
Fulfillment By Amazon’s Multi-Channel Fulfillment
Amazon’s warehousing and fulfillment strategy is arguably the best in eCommerce, and their famous Prime program is one of the megaseller’s strongest selling points. With Fulfillment By Amazon (FBA) Multi-Channel Fulfillment, you can put Amazon’s powerhouse to work for you. Multi-channel fulfillment lets you fulfill orders from many different sales channels, including your own website.
Not only will FBA give you access to Amazon’s worldwide warehouse system for your online store, but it can also be a benefit to your Amazon seller’s account. Using FBA enables Prime fulfillment options for your products listed on Amazon. Using FBA will also increase your likelihood of being featured in the coveted buy box.
But those are not all of the benefits of FBA. Here are a few of the top reasons you should consider using Amazon’s services for your fulfillment:
- Faster Shipping: Amazon operates over 50 fulfillment centers in the US, and you can distribute your products across multiple warehouses. This means that your products will be stored closer to your customers, which leads to shorter shipping times. Using FBA will also allow you to offer 2-Day Prime Shipping and Free Standard Shipping to customers who purchase on Amazon.
- Amazon provides customer service: When you outsource your fulfillment to Amazon, you outsource every aspect of that fulfillment. If a customer calls in with a concern regarding shipping (or a package that never arrived), Amazon will sort things out on your behalf.
Although FBA is an excellent fulfillment option in many ways, it is not perfect. Here are a few of the cons that come with using FBA:
- Complicated receiving process: Sending products to Amazon’s warehouses is not a simple matter. You must follow Amazon’s very specific rules regarding packaging and labeling. Once your products arrive at Amazon’s warehouses, Amazon may take one to two weeks processing those products before they can begin fulfilling orders. You’ll have to make sure to refill stock in advance.
- Fees: All fulfillment services charge fees, but Amazon’s structure is particularly difficult to decipher. In addition, these fees can be rather steep for merchants selling large, heavy products. Take a look at Amazon’s fee scale to learn more.
- Brand limitations: FBA’s standard approach is to ship your products in their own Amazon-branded boxes, which can be confusing for your customers. Your only alternative is to pay to have your products shipped in plain boxes. You are not able to include any marketing inserts or other branded materials.
As you might assume, FBA is best for merchants who already sell on Amazon in addition to their own online store. Furthermore, FBA is the most profitable for merchants who sell smaller, lightweight products as they incur the lowest fees.
FBA also offers new options for subscription shipments and small and light shipments, which you may want to take a look at. Otherwise, direct your browser to Amazon’s website for more information on FBA Multi-channel Fulfillment.
Other Third-Party Fulfillment Services
While Amazon is the most popular fulfillment service, it is far from the only option. Many merchants have found success with small, local, independent warehouses. And other merchants have benefited from larger fulfillment services. A couple of popular options you may have heard of are Fulfillrite and Shipwire.
Third-party solutions come with the following advantages:
- Integrates with your online store: Popular eCommerce platforms (Shopify, BigCommerce, WooCommerce, etc.) offer pre-built integrations with fulfillment services like Fulfillrite and Shipwire. These integrations will sync your information automatically. Orders placed on your online store will be sent to your fulfillment service automatically to begin the fulfillment process.
- Same-day shipping: Third-party warehouses get shipments out quickly. Look for one that promises to ship items the same day an order is placed.
- More branding options: Third-party fulfillment services ship in unmarked boxes as standard practice. For a fee, you can have your marketing materials included in shipments.
There are downsides to using third-party fulfillment services, of course. Here are a couple of the biggest cons of these fulfillment options:
- Fewer warehouses: Most third-party fulfillment services only offer a handful of warehouses, and some only ship from one warehouse. This often means your products will take longer reaching your customers’ doorsteps.
- Loss of control over your shipping: Outsourcing your fulfillment puts your company’s reputation into someone else’s hands. This is always a risk. Your chosen fulfillment partner may not know exactly how to package your fragile products, leading to damaged items and customer complaints. Note: This is not a very common problem–after all, these businesses specialize in shipping. However, it is more of a risk.
As you look for a fulfillment service for your business, make sure to do your research. Read through current customer reviews, study the terms of service, and call each option for a quote.
Is Outsourcing Right For You?
You’ll probably have to do some number crunching to decide if outsourcing your fulfillment is the right choice for your company. As you consider your options, keep in mind the amount of time it takes your team to fulfill orders, your current product storage expenses, and the potential advantages of storing your products nearer your customers.
If outsourcing seems like it might be the right choice, I recommend you continue your research. Take a look at FBA’s fee scale, terms of service, and conditions. Call up local warehouses for pricing quotes, and see which option will serve your business best.
Take a look at our next article for information on a more extreme form of outsourced fulfillment: dropshipping.
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