Shopify Fulfillment Centers: How to Successfully Use Them
If you’ve been looking for fast order fulfillment for Shopify, then look no further. Check out Fulfilltopia’s order fulfillment services.
The costs of running a business have many surprises that seem to hit you out of nowhere. Let’s assume that you run an electronics business on Shopify.
You have an ample amount of stock with enough storage space in your garage, but what happens when the holiday season comes?
What do you do when you have a sudden influx of orders that has your merchandise spilling out into your neighbor’s yard?
- Look to rent out storage space
- Stash it at a friends
- Go online and find more information on those fulfillment centers you’ve heard so much about
If you have a store online and need to get rid of the migraines that come with supply chain management, keep reading to see how third-party shipping can help you fulfill your orders.
The Complete Guide to Using Fulfillment Centers for Shopify Orders
So you have your orders ready, and you’ve made a half dozen trips to the post office today alone. You sat in traffic, got a few paper cuts, and had to wait in the long line everyone dreads.
On your drive home, you keep asking yourself, why?!
Everyone knows that running your own business means putting in hours of labor far beyond the typical 9-5 corporate job. They even know it means questioning your drive and fighting the urge to sit back and give up.
But you know there’s a smarter way to get it done.
Beyond the trials and tribulations of starting your business and getting customers, the most time-consuming activity you can participate in is order fulfillment. And since it’s your business, it can certainly be a tough decision to choose the right fulfillment center that ticks all the boxes and find one that you can trust.
Without order fulfillment, you don’t have a business.
Challenges of Order Fulfillment
The order fulfillment process is tedious, and it is easy to make mistakes. Some of the challenges order fulfillment faces include:
- Running out inventory
- Risk of overstocking
- Planning the logistics
- Supply chain execution when stock runs low
The 5 Parts of Order Fulfillment
Customers get more demanding by the day, and having a quick, efficient order fulfillment process is essential to maintaining their expectations as well as your brand image.
When choosing a third-party shipping provider, you must understand the six steps involved in the order fulfillment process to ensure that everything will run smoothly. These steps include:
- Receiving inventory
- Storing inventory
- Processing orders
- Shipping orders
- Processing returns
This means that they can receive your goods and store them in an orderly manner for future orders. It must be stored so that they can easily see what items are available to list for sale on your site.
When choosing third-party shipping providers for your e-commerce, retail, or even subscription fulfillment needs, the first thing they must be capable of efficiently maintaining your inventory.
The second worst thing that can happen for a consumer is if they place an order and are told a few days later that the item’s sold out. But the company still charges your card, so now they have to wait and make sure the charge is canceled or refunded. The first thing is having an order arrive much later than the expected delivery date.
The first step after a customer places an order is to confirm that the item is still available. A reliable third-party shipping company will have a strategy in place that always has the expected number of items available at all times.
This step involves confirming that the payment for the item has gone through and matches the price point you set. This step is critical in making sure there are no problems with billing later on.
If a customer places an order with multiple items or even multiple simultaneous orders, you need to be sure that the products are available. It can get time-consuming if the two products are with two separate companies or even in two different locations within one company.
When it comes to invoicing, it may be beneficial if you have a consolidated invoicing system that uses your customers’ zip codes.
There are several things to consider when it comes to the shipping portion of order fulfillment. First, the customer’s shipping address has to be verified. Second, if you have your inventory stored at two different locations, you may choose one over another because of its proximity to the customer.
Remember, quick shipping can only help to build trust in your brand.
Not only does it build your brand image, but it also helps your bottom line by reducing your shipping costs. Choosing a shipping carrier to deliver your products to your paying customs has a few factors to consider.
You must keep in mind the size, weight, and shipping address to select the most cost-effective delivery option.
A reliable third-party shipping company is capable of any order changes. Order changes include updating an order when the item is out of stock to add a product to the order that the customer decides they need last minute.
Next is the potentially painful part of order fulfillment.
The company takes responsibility for picking, packing, and shipping the product! Remember the multiple trips to the post office and numerous paper cuts we discussed earlier? This is when the benefit of using a third-party shipping solution really shines.
Once your customer receives their order, it’s considered fulfilled.
Every business suffers from unsatisfied customers from time to time. Regardless of how perfect the product and delivery were, some people always find a reason to complain.
When you get an unacceptable or damaged good returned, the third-party shipping solution company handles the return process. This may be refilling the order or simply refunding the customer.
If the return process is a mess, your business could bleed money. There must be an efficient document recording process in place to prevent any issues at a later time.
When a paying customer returns their items, it’s best practice to have the following documented:
- The product
- Number of products returned
- Original price
- Original purchase number
- Reason for return
- Restocking fee
- The amount credited back to the customer for a refund or reshipment
The returns process is essential in building trust for your e-commerce brand. A good return policy can set your business up for long-term customer loyalty and new sales. Zappos is an excellent example of this.
The 50% return rate that Zappos reported is definitely a cause for concern. However, the company showed that the customers with the highest rate of return were also the ones that spent the most money with them. At the end of the day, even with a 50% return rate, since their products involve high-end apparel, their profit margins continue to grow.
Studies showed that 66% of customers read a company’s return policy before ever placing an order.
And if they had a great return experience? It virtually guaranteed a return customer.
Benefits of Order Fulfillment Centers
Clearly, you’ve experienced or heard the horrors of online businesses having issues with order fulfillment, and rightfully so. It’s a challenging process that comes with high demand and attention.
Luckily, order fulfillment centers are here to take a load off your shoulders. They can help you in multiple ways that end up only helping your bottom line.
As we discussed earlier, the shipping portion of order fulfillment these centers take care of as a part of their service lowers your shipping and operational costs. By using their services, you will also be benefiting from not having to get into a long-term lease for a storage facility.
Since online businesses have taken hold of the business world, globalization became more effortless than ever. You can have a fulfillment center in several locations in the US, but what about your customers in Europe?
It’s not uncommon for e-commerce businesses to have multiple fulfillment centers around the globe. This allows them to ship their products to the customers quicker, building their brand’s reputation.
By working with a fulfillment center, you’re not only paying for their services but also their expertise. They’ll have a trained team on hand to answer all of your questions that you don’t have to hire separately.
When you decide to work with a third-party shipping company for your business’ order fulfillment, do your due diligence.
Talk with the team, make sure their claims like faster shipping are legitimate, and that you’re a good fit together. Like any good relationship, communication is critical.
You don’t want to switch companies every other month because you find out later that the way they handle their communications is unsatisfactory. As their potential customer, you have every right to ask all the questions under the sun. If it feels like it’s not a good fit before you sign them on, it probably won’t be in the long run, either.
Communication Is Key
If fast order fulfillment services are what you’re looking for, get in contact with one of our specialists to talk about how we can help reduce your supply chain stress.
With your order fulfillment taken care of, you can focus on what truly matters.
Getting more customers and making more sales.