6 Reasons To Use A Fulfillment Warehouse For Your E-Commerce Business
Over the past few decades, the business landscape has undergone tremendous changes.
The Internet, as well as technology, have certainly been the greatest contributors to this shift. As a result, a lot of companies that resisted change have been forced to shut down while new forward-looking businesses emerged.
The e-commerce sector has also experienced its fair share of transformations, with most companies in this category choosing to collaborate with fulfillment warehouses.
Fulfyld Ecommerce Fulfillment is a brilliant example of such a company, offering exceptional fulfillment services to online retailers.
Very few people fully understand the benefits of working with a fulfillment warehouse; for this reason, here’s an in-depth look at this novel yet ingenious mode of operation.
1. Definition Of A Fulfillment Warehouse
A fulfillment warehouse can be described as third-party logistics (3PL), also known as fulfillment providers, that oversee warehouse operations such as inventory and delivery with the aim of fulfilling customer orders of e-commerce businesses.
2. How A Fulfillment Warehouse Functions
E-commerce businesses normally store their inventory in a 3PL warehouse; hence, the fulfillment provider helps the online retailers get their orders to the appropriate customers.
When a purchase is made by a customer, the fulfillment warehouse picks the item, packages, and ships it to the rightful owner.
Most fulfillment warehouses serve both business to customer (B2C) and business to business (B2B) orders. Since most 3PLs handle warehousing very well, many e-commerce firms have opted to work with them.
3. Difference Between Fulfillment Centers And Warehouse
Even though fulfillment centers share a couple of similarities with warehouses, they also tend to differ in a number of ways. The following are some of the notable differences between the two.
- Operations: The daily operations in a warehouse are much less compared to those of a fulfillment provider. This is because typical 3PL handles many aspects of warehouse operations for multiple businesses simultaneously.
- Shipment: Considering how a fulfillment warehouse can have numerous clients, they tend to deliver a lot more orders to customers. As a result, many fulfillment centers have also partnered with shipping companies to facilitate logistical aspects. This also ensures that the orders that have been placed reach the end consumer in record time. Besides that, fulfillment providers are also tasked with handling returned goods.
- Time Factor: Both warehouses and fulfillment providers share the aspect of storage; nevertheless, one of the main purposes of a 3PL is to enable quick turnover of inventory. Considering that a merchant pays for the storage space, slow-moving inventory only means the online retailer would have to cough huge amounts of fees. For this reason, an e-commerce firm has to ensure the fulfillment provider has enough inventory to facilitate the smooth flow of goods.
4. Reasons To Use A Fulfillment Warehouse
If you’re running an e-commerce business, working with a 3PL is surely the best way to go. This is because the advantages that come with such companies are far too great to be ignored.
Here are some of the compelling reasons that might get you onboard to work with fulfillment warehouses.
- Save on Shipping: One of the major expenses for many online retailers normally goes to shipping. A new entrant into the e-commerce sector would find it rather expensive to ship their products due to low volumes. However, when working with a fulfillment provider, the same company can leverage the bulk order prevalent in most 3PLs. Thus, the online retailer would benefit by getting a lower rate on shipping as a result of the partnership.
- Quick Deliveries: Most 3PLs are normally strategically located near end consumers; this ensures that orders reach the intended clients within the stipulated time. Not only will working with a fulfillment company ensure efficiency in your business, but it will also guarantee that your customers receive their orders promptly.
- Reduce the Operational Cost: Choosing to work with a fulfillment warehouse can help you save a lot of money which could be redirected to serve other business purposes. Another factor that has made 3PLs a preferred mode of operation is the cost-sharing aspect; this has enabled many budding businesses to remain afloat. In order to appropriately operate a warehouse, one would have to factor in many aspects such as rent, utilities, and labor, besides maintaining a healthy cash flow. In addition, one would also have to deal with the staff, which is quite tasking. It’s factors like these that have made many online retailers opt for fulfillment services.
- Focus on What’s Important: When you’re in the e-commerce industry, you’re bound to deal with packaging and constant flow of orders. The good news is that such aspects of a business can easily be outsourced nowadays. Considering the demand placed on most entrepreneurs to keep the business running, fulfillment services give them extra time to focus on other important elements of the business. Through redirecting his or her attention to product management, marketing, and customer service, the e-commerce firm can easily attain profitability to the point of scaling up its operation.
5. Leveraging Technology And Automation
Many modern fulfillment providers have greatly invested in technology to facilitate their daily operations.
As a result, every stage of the fulfillment process is automated which allows the e-commerce company to follow through every stage of a particular order.
This eliminates the need for the online retailer to be physically present so as to monitor the order. Such milestones have been reached through the integration between fulfillment providers and e-commerce platforms.
Once an order has been successfully shipped, the 3PL company sends the tracking information back to the online retailer who can then share it with their customers.
6. Working With Experts
Handling logistical issues isn’t an easy task, especially during the festive season when the demand for items is high. When a customer fails to get an order or receives a wrong one for that matter, it can cause disasters to the online company.
Most fulfillment providers know the ins-and-outs of handling logistics; ergo, working with them would be a great partnership since your orders would be managed by experts.
Fulfillment warehouses have certainly revolutionized how many businesses operate. Collaborating with them will definitely present you with numerous benefits as opposed to acquiring the services of a typical warehouse.