A fulfillment center, also known as third-party logistics (3PLs), is an excellent way to extend your fulfillment capabilities.
It is now simpler than ever to discover the goods they desire at the lowest price, thanks to online shopping. Ecommerce businesses are taking advantage of virtually unlimited scalability. And a global client base while brick-and-mortar stores recede into the background.
If you’ve been thinking about partnering with an expert in fulfillment operations, then you’ve come to the right place.
Keep on reading for our full breakdown of everything you need to know about fulfillment centers. We’ll also explore the key seven benefits of switching to a fulfillment center.
What Is a Fulfillment Center?
Let’s start with the basics.
A fulfillment center is a location where online merchants process and fulfill client orders. Consider the usual order fulfillment procedure for a small to mid-sized online company to help you understand.
When a client makes an order, you collect the ordered goods from your inventory. Then, package them, and send them to the customer through a shipping company.
You might spend most of your time packaging goods and delivering them to the proper shipping carrier. This depends on how successful your company is.
The more orders you have, the more likely you will make a mistake while selecting and delivering goods. If you attempt to manage your inventory on your own, you risk making expensive errors. And ending up with numerous products on backorder, which is a recipe for a disgruntled customer.
Order Processing: The Process
Let’s look at how this process could play out if you opt to use a fulfillment center.
When a client makes an order, the information is sent to a third-party logistics provider. Or, a fulfillment center. Because the center already has your inventory on hand, they just accept the order, collect the goods, and package them.
After that, the order is sent to a shipping company for delivery to the client. It’s the same procedure, but it relieves you of the stress and, in many instances, gets the job done faster and more effectively.
A fulfillment center is a facility that specializes in quickly, efficiently and cost-effectively filling orders. You can discover more here if you’re interested in taking a deeper dive into the process.
Business-to-customer (B2C) and bigger business-to-business (B2B) orders may both be processed in fulfillment centers. B2B orders are often submitted straight to a store, while B2C orders are delivered to the customer’s house.
The Benefits of Using an Order Fulfillment Service
Now you have a foundational understanding of how a fulfillment center works. It’s time to discover why even bother looking for a fulfillment partner in the first place.
Let’s take them one at a time.
- Cuts Down Operating Costs
Using an order fulfillment service provider may help you save money on infrastructure and logistics. Seasonal variations are common in most companies, and this is particularly true in order fulfillment.
During busy seasons, more employees may be required, and rent and storage costs are likely to rise. Many companies lack the financial resources to employ temporary staff or invest in additional facilities. Both you’ll need for order fulfillment.
You may avoid the need for additional infrastructure by utilizing an order fulfillment service. Which lowers your operational expenses.
- Reduces Shipping Costs
Because of partnerships with regional, national, and worldwide shipping firms, most order fulfillment businesses may offer reduced delivery rates.
It’s worth taking advantage of the savings that an order fulfillment service may provide.
Furthermore, several order fulfillment firms have facilities throughout the nation. Allowing for lower shipping costs and faster delivery times. Make sure you choose a fulfillment provider that works well with your sales channels.
- Trustworthy Customer Service
Improvements in customer service may have a significant effect on a company’s efficiency.
An order fulfillment service’s call center that maintains client contact is a significant advantage. You may save time and money by using customer service that is easily accessible and also handles return and refund procedures.
Order fulfillment firms provide peace of mind by ensuring that your customers are served promptly.
- Increase Your Market Share
Small and fledgling shops often struggle to grow their businesses nationwide or internationally. Tariffs on international commerce and problems of compliance may be complicated and intimidating.
Due to its distribution networks and worldwide experience, an order fulfillment service should enable your company to ship anywhere in the globe.
You may take your business to the next level by utilizing a fulfillment company’s platform. Specifically, to boost sales in new locations and regions, including selling on Amazon.
- Provide Custom Packaging
A great fulfillment center works both inside and outside of the box! Most eCommerce merchants’ customers will see their goods for the first time when it arrives at their door. And, a damaged brown box covered in duct tape isn’t going to cut it these days.
Customized packaging options allow you to design your own shipping boxes in addition to coupons and inserts. Also, upgrading your packaging to keep it fresh and exciting every time someone buys something.
This can be based on demographics, spending habits, birthdays or anniversaries, and more. This increases consumer loyalty and transforms them into brand champions.
- Use Their Technology to Your Advantage
From inventory management to shipment tracking. Payment processing to customer data protection technology provides numerous advantages to eCommerce businesses.
Obtaining these systems, of course, requires a significant financial investment. And there is a learning curve. Many fulfillment centers, on the other hand, already have this cutting-edge software. This allows eCommerce merchants to get the most cutting-edge software for very little money.
- Save Time
Working with an order fulfillment service provider allows you to concentrate on developing your company.
Other departments of the company, such as marketing, promotions, and sales. Those will have more time to concentrate on particular objectives instead of being burdened with orders to complete.
Ready to Streamline Your Order Processing?
Dealing with business orders doesn’t have to be as complex as rocket science.
We hope that our guide has shed some light on the top seven benefits of using a fulfillment center, as well as how the whole logistical process works.
And, if you liked reading our article, then you’ll love checking out our additional tips and tricks. All of those (and more) will be available to you in our business section.