Order Fulfillment – How it all Works in 2019?
Ecommerce stores can reach customers worldwide. But where do they store the inventory and fulfill orders? Discover how an order fulfillment center works in 2019.
E-commerce is poised to become the leading sector of global retail sales by 2021. As the industry expands, it puts more pressure on e-commerce stores to keep items stocked and delivered in a timely fashion.
Some e-commerce businesses already struggle with product fulfillment. This will only become more difficult with increasing customer demand.
If you own an online storefront, you know how difficult it is to stay on top of online orders. Late shipping or shipping errors can impact your store’s image and reduce cash flow.
An order fulfillment center is one way an e-commerce store can maximize sales and keep up with shipping demands.
What is an Order Fulfillment Center?
Many e-commerce retailers choose to handle the shipping and order logistics on their own. But with increased growth, they may eventually find it impossible to manage without assistance. That’s where an order fulfillment center can help.
E-commerce businesses store their inventory at order fulfillment centers. When a customer makes a purchase, the fulfillment center gets notified. They’ll package the purchase and send it off for shipping. Order fulfillment centers can also process returns.
In short, an order fulfillment center manages the packaging and shipping for e-commerce businesses. They are essentially warehouses with advanced and specialized fulfillment services.
How Does an Order Fulfillment Center Work?
On your end, you only need to make sure the fulfillment center has enough inventory to handle orders. When you ship your inventory to the order fulfillment center, they will log the items in their warehouse database. E-commerce businesses can keep an eye on their inventory, usually in real time.
Most storefronts have easy integration with fulfillment center logistics. When a customer purchases an item from your storefront, the fulfillment center will process the order without any input from you.
If a customer refunds a purchase, they’ll receive the item and inspect its condition. If it’s still sellable, they’ll put it back in the inventory for future customers to buy.
Best of all, you can still personalize orders at an order fulfillment center. Some centers will use your own labeled packaging, while others will add custom packaging slips to brand your company.
For more information, check out these fulfillment starter tips.
What Are the Benefits of an Order Fulfillment Center?
E-commerce storefronts reduce their burden by outsourcing the order fulfillment process to a third party. That may sound enticing enough.
However, there are other benefits that make order fulfillment centers a worthwhile expenditure.
- Physical Storage
Many e-commerce storefronts run their business from their own homes. This means that their products and materials are competing for space.
With an order fulfillment center, they no longer have to keep their inventory stashed at home and can free up space for more materials.
- Faster Shipping
Order fulfillment centers will process a customer request as soon as possible. Depending on the location of the fulfillment center, they could offer next-day or two-day shipping. Since consumers demand fast shipping, it’s an important way to stay competitive.
Since it isn’t always possible to package and ship dozens of items a day, order fulfillment centers can help you deliver items faster. They often have special rates with postal services, which will save you in shipping costs.
- Reduced Burden
Managing an inventory is one of the most time-consuming and demanding aspects of owning an e-commerce business. By offloading the task to an order fulfillment center, you’ll have more time to make meaningful improvements to your business.
- Flexible Pricing
E-commerce retailers renew their lease on a monthly basis. If a retailer only wants to use an order fulfillment center for their peak months, they’ll have the freedom to do so.
However, the space your inventory consumes determines the cost of an order fulfillment center. During the off-season, you could store less product and therefore pay a lower rate.
- Less Management
An alternative to an order fulfillment center is hiring your own employees. But employees come at a high cost, not to mention they’ll require time to supervise and train. It’s also unlikely they’ll be as efficient or offer the same quality service of a fulfillment center.
If you do choose to hire your own employees, an order fulfillment center can help your budding business during the transition.
- More Money
In general, an order fulfillment center can save you money. You’ll avoid the cost of paying employees and enjoy the benefit of reduced shipping and packaging rates.
If you can’t keep up with shipping fulfillment alone, you’re likely losing out on customers who cancel orders, get the wrong order, or leave bad reviews.
How to Choose an Order Fulfillment Center
The best order fulfillment centers will have a variety of locations across the country. These are useful in speeding up local shipping times. Some centers are near shipping ports, giving your company access to the global market.
Decide which locations are right for you and your future e-commerce plans. Contact several and get a good sense of their prices and services. With these in mind, you’ll know which fulfillment center offers the biggest bang for your buck.
Fulfill Your Orders With Fulfilltopia
Are you considering the expertise of an order fulfillment center? Fulfilltopia is on the East Coast, which holds 70% of the US population. Since we’re ten minutes from the second largest port on the East Coast, you’ll also save on international shipping fees.
For more information or a free quote, see how our order fulfillment center can help your e-commerce business.