International Fulfillment Center | Global Order Fulfillment Solutions
International fulfillment centers are very useful, but what is an international fulfillment center exactly? This guide explains everything you need to know to get going fast.
According to The Balance Small Business, e-commerce sales rose between 2016 and 2017 from $390 billion to $453 billion? This was a 16 percent increase in only one year of sales in the e-commerce industry.
If you run an e-commerce company and you want your sales to become global, then you’re probably interested in learning about how you can use a global fulfillment center.
You might have questions about the process of using one, such as:
- “What is international fulfillment?”
- “What do global fulfillment centers do?”
- “How much do their services cost?”
- “What’s the difference between global fulfillment and distribution?”
How will you know if you’re better off fulfilling orders yourself when you’re shipping internationally or having someone else do the work for you?
That’s why we’ve put together this article. Once you have all the information you need about international fulfillment services and centers, you can decide if using one is right for you.
This way, you can save money and get more orders out. Read on to learn more.
What Is International Fulfillment?
If you’re considering using this order fulfillment type, you need to know what international fulfillment is.
Basically, this is a type of international shipping service that saves you both money and time. The reason it’s so effective is because of the limits many e-commerce business owners have when it comes to international distribution.
When you’re sending products to international customers, you have two main challenges you face:
- Longer delivery times
- Higher shipping costs
Depending on where your international customer lives, you might have to pay additional fees such as duties and taxes. Additionally, fulfillment times may take even longer if you’re shipping to a country that has a complicated mail system.
Global Shipping During the COVID-19 Pandemic
There’s an additional reason why it’s important to use an international fulfillment center if you’re an e-commerce business owner. This is that international shipping has slowed significantly because of the COVID-19 Pandemic.
In fact, according to Digital Commerce 360, some orders have seen a rise of 40% as a result of the pandemic when it comes to fulfillment times. This is in part because of the change in processes to keep people safe while packing up items that are sent internationally.
Additionally, this is due to the fact that many countries are scaling back or suspending service when it comes to shipments, both domestic and international.
The International Fulfillment Solution
For the reasons above, using an international fulfillment service center makes it possible for you to ship internationally—even during a pandemic when it seems nearly impossible.
When you use international fulfillment, there are many benefits, from optimized international shipping to decreased costs over time. Let’s review these benefits.
Optimized International Shipping
Instead of losing money each time you ship internationally, international fulfillment makes it possible for you to ship your items within a country at domestic prices. This also saves you money if you’re getting your products from Asia, since they’re sent between two countries instead of throughout three.
Minimal Management Without Warehouse Costs
If you do shipping in-house, you know how much time this process can take up. It’s also costly because you often have to pay someone else to handle it. If you’re paying for warehouse costs, this only drives up money and time spent.
With international fulfillment, you don’t have to worry about these losses.
Decreased Costs Over Time
Even though you’ll have to pay a fee when you first start using a fulfillment service center, you’ll save money over time.
This is because, once you’ve paid the setup fee, your costs will start to go down significantly. There will be no more duties, taxes, shipping costs to pay.
Also, your customers will be happier because of fewer delays, which means they’ll order from you more often. This will drive up your sales and the money you make overall.
What Do Global Fulfillment Centers Do?
If you’re thinking of using global fulfillment center services, it helps to know what they do for you. This way, you can decide if it’s a worthwhile investment for your e-commerce business.
When it comes to what global fulfillment centers do, there are five steps they take. These steps are:
- inventory storage
- order processing
- returns processing
Let’s take a closer look at each of these steps.
The receiving process is the first step that a global fulfillment center takes when working for you. Once the products have been shipped (either from you or from where they are manufactured), they count the inventory.
Then, they inspect it for damage. Next, they add the items to their inventory.
Finally, they apply a barcode or physical SKU to each unit received.
2. Inventory Storage
The next step is inventory storage. When they do this, they decide which items go where, after which they organize them by SKU.
Often these global fulfillment centers will place “hot SKUs”—popular items—into a bin that’s close to the packaging stations. This way they will be easily accessible whenever they are ordered, which is often. This is an effective type of order distribution.
3. Order Processing
Next, they do order processing. This is the process that occurs when one of your customers has ordered the item.
First, they pick the product out. Then, they pack it. The packing process can be complex, as they have to take considerations such as fragility, weight, and dimensions into account.
The next step is shipping. Instead of having to worry about how your items will reach your customers and how much you’ll have to pay in taxes, customs, and fees, the global fulfillment center does this for you.
They’ll make decisions such as deciding what the most efficient way to ship is and how much postage is required for each package sent.
5. Returns Processing
These centers will also simplify the returns process by doing it themselves. They will take the steps of counting returned items, inspecting the return for accuracy, and inspecting the items for damage.
They’ll also handle re-entering the item into the fulfillment software and replacing the item into storage.
How Much Does an International Fulfillment Service Cost?
If you’re considering using an international fulfillment service, then you need to figure out how much you would pay. This includes initial setup fees, intake and receiving fees, storage fees, order fulfillment charges, and more.
Initial Fees, Intake and Receiving Fees, and Storage Fees
To set up your partnership with the fulfillment center, you first have to pay initial setup fees. This is a one-time payment between $100 and $1,000. Then, you have to pay intake and receiving fees. These are either per-unit or by-the-hour.
Per-unit fees are usually between $5 and $15 per pallet. You might also pay around $.25 per item. As for by-the-hour costs, these are usually somewhere between $20 an hour and $50 an hour.
Storage fees are either $5 to $15 for each pallet, $.30 to $.55 for each cubic foot, or $1 to $2.50 for each storage bin.
Order Fulfillment and Shipping Charges
Order fulfillment charges, also called pick and pack fees, is the charge you pay for the service of your item being found and packed.
For B2C merchants, this is usually a little under $3 for each item. For B2B merchants, this is usually a little under $3.75 for each item. Shipping charges can vary because they depend on your item’s carrier charges, weight, and size.
There are additional charges that can vary depending on which international fulfillment service provider you choose. These include return fees, kitting fees, account management fees, and volume discounts you can sometimes get.
What Is the Difference Between Global Fulfillment and Distribution?
You may be asking yourself, “What is the difference between global fulfillment and distribution?” Because these two are quite similar and are popular among e-commerce business leaders, it can be confusing to know which one is right for you.
With a fulfillment center, you’re getting the services of having a place to keep your products and that fulfills your orders. They will do many steps for you such as kitting and assembly, custom packaging, and fast shipping.
They are better for B2C businesses.
With a distribution center, you’re also getting the services of having a place to keep your products, and that fulfills your orders. They have fewer services available, but they are efficient because they often ship in bulk.
They are better for B2B businesses.
Need Help Choosing the Right Fulfillment Center?
Now that you’ve learned all about how partnering with an international fulfillment center can help you run your e-commerce business more smoothly, you might need help choosing the right fulfillment center.
Maybe you want to learn about different centers for different regions, or you want to find out which one is the best financial fit for you.
Whatever you need help with, we’re here to help. At Fulfilltopia, we’re experts when it comes to fulfillment center services. We also offer those services. To learn more about how we can help you, contact us here.