When you sell something for your business you then need to fulfill the order with the customer which usually means that you must pack and ship them the item they purchased. However, many people choose to outsource this to a fulfillment service so that they do not have to deal with inventory and shipping.
Fulfillment services will involve all aspects of the products that you decide to sell including receiving, warehousing, inventorying, shipping, record keeping of all incoming and outgoing items, and customer inquiries. This all takes place with what is known as a fulfillment house.
The fulfillment house will store all of the items that you have shipped to them that you wish to sell and then pack and ship those items for you as they sell. This saves you from having to pay for warehouse space yourself and all the extras that come along with it such as electricity. This also allows you to operate from a much smaller workplace which in turn will reduce you overhead costs.
Once an item sells you will usually use e-commerce to let the fulfillment service know that they need to ship something. Once they get the order they will then take the item from inventory, package the item and then ship the item to the customer. After the item ships the fulfillment service will update the inventory and you will usually be notified as to what has shipped and what is left in inventory on a regular basis.
The cost of using a fulfillment service will depend on how much you store with them and how much you ship. If you store a good number of items with them then it stands to reason that you will pay more for their services. You will also have to pay all the shipping fees and are likely to be charged a handling fee as well. If you ship a lot of items on a regular basis you can usually get a shipping discount with one of the major carriers.
While it is indeed wonderful to have all of your shipping needs met by a fulfillment house, such a luxury does come with disadvantages. Most fulfillment services will not claim responsibility for items lost or damaged when en route to the customer. This can leave your business with a bad reputation and not that of the fulfillment service.
Additionally many services are not responsible for what is known as shrinkage or loss of products by theft or otherwise unless it can be proven that they were responsible. In this way it is always best to maintain a good inventory record with your fulfillment service and if a fulfillment service doesn’t have a good inventory system in place, then don’t use them.
When you find the right service to suit your fulfillment needs it can save you a ton of time and in the end it can even save you money. Because you will not have to worry about fulfilling all of the orders that come in you can then focus on growing your business and hopefully increasing the number of items that will ship and thus expand your bottom line.
Freight Dynamics provides the fulfillment services since 1994 to handle the storage, assembly, kitting, pick, pack, ship services, drop shipping, labeling, custom packaging, third party shipping, and a wide array of customized personalized services as requested by our customers.