Choosing The Right eCommerce Fulfillment For Your Business
When starting with eCommerce, one of the things you’ll need to learn about is fulfillment.
Fulfillment is getting your products from your warehouse or supplier to customers. It’s a crucial part of your eCommerce business, as it can impact customer satisfaction, shipping costs, and overall profitability. It involves the following processes:
- Inventory Management
- Warehousing and Storage
- Receiving
- Pick & Pack
- Shipping
- Returns
Your company’s ideal eCommerce fulfillment strategy will rely on various circumstances, including how close your suppliers are to your clients and how frequently you ship orders. In any event, you can only decide once you completely comprehend your options.
This post will help you understand the different eCommerce fulfillment strategies ideal for your business and their advantages and disadvantages.
Types Of Order Fulfillment
- In-House eCommerce Order Fulfillment
In-house eCommerce fulfillment means handling product storage, packaging, and shipping for an online store, utilizing the retailer’s internal facilities and staff rather than contracting out to a third-party logistics (3PL) provider.
Your inventory amount will determine whether or not in-house eCommerce fulfillment is the best approach for your business model. In-house order fulfillment is the best choice for your company if your operation is minimal (fewer than 100 orders per month).
Advantages:
- Easiest to implement
- Lowest startup costs
- Increased flexibility
- Control over the entire fulfillment process
Disadvantages:
- Impossible to scale
- Time-consuming
- Limited storage space
- Limited labor
- No shipping discounts
- Dropshipping
Dropshipping is a method for order fulfillment that enables online retailers to contract with a third party, usually a supplier, to acquire, store, and ship their products. This model can be a solution if you’re looking to ship products for your online store without the hassle of having to stock the inventory yourself.
Advantages:
- Lower startup costs
- Lower cost of inventory
- Lower order fulfillment costs
- Easy to update inventory
- Only pay for what you sell
Disadvantages:
- No control over shipping and handling
- Reliant on supplier stock and customer service
- No bulk pricing
- Lower profit margins
- Shorter lead times
- Third-Party Logistics (3PL)
Third-party fulfillment is outsourcing eCommerce logistics procedures such as warehousing, picking and packing, inventory control, order shipping, and return processing. eCommerce merchants may do more because 3PL suppliers have the infrastructure and tools to streamline shipping and fulfillment.
You should choose third-party fulfillment if:
- Taking care of the logistics for fulfillment is becoming more complex.
- The cost of handling order fulfillment is rising.
- Your eCommerce company is relatively small.
- Your slow order delivery is harming customer satisfaction.
- You want to expand your customer base and significantly grow your business.
Advantages:
- Leverage industry expertise
- Reduced operating costs
- A more extensive network of providers
- Greater buying power
- Optimized shipping, handling, and returns
- Improved data insights
- Easy to scale
Disadvantages:
- Finding the ideal 3PL for your company can be challenging.
Conclusion
There is no one size fits all answer for selecting the ideal fulfillment strategy. However, outsourcing the fulfillment process for e-commerce businesses can be an excellent way to effectively and quickly scale your company.
The ideal way to deliver an excellent client experience and expand into new markets without slowing down the business may be to partner with professionals like FreshOne, rather than take on the burden yourself.
With the right team behind you, it’s only a matter of time until you succeed.