It is likely that you have already considered your warehousing, shipping, and fulfillment needs whether you are starting an e-commerce business or already have been selling products for a while. The most exciting part of the job is to make sales. After an order has been placed, what happens next? 

There needs to be a way for your product to end up in the hands of the customer.

In order for this to happen, three things need to take place:

  1. The product you are selling comes from a dropshipper who will fulfill all orders for you.
  2. Whether you work independently or as a team, you fulfill your own orders.
  3. In order to handle your warehouse and fulfillment requirements, you will be working with a logistics company.

Packing and shipping your own orders has obvious benefits: it is flexible and affordable. It is for this reason that there is a tendency among businesses just starting out and businesses with unique packaging need to handle their own logistics. Any business struggling with cash flow, regardless of the age or industry, would be better off handling things in-house if it had any cash flow problems. When you are short on cash, you will need to spend your time more wisely.

However, if you have a fast-growing business and have the cash on hand for outsourcing, you are likely to be interested in looking into third-party warehousing and fulfillment. It is possible to store your product with logistics companies, as well as pack and ship your orders.

You may find it intimidating if you’ve never worked with a logistics company before, especially if you’re new to the business. This article will help you understand the entire process from start to finish.

Fulfillment services: what are they?

Fulfillment services are third-party warehouses that handle your orders in a timely manner and ship them for you. The fulfillment center handles these tasks on your behalf. e-commerce fulfillment services are an ideal solution for companies that do not want to deal with shipping themselves or have outgrown their current warehousing capabilities to the point where they are no longer able to ship orders themselves.

In addition to large third-party fulfillment providers, such as Shopify Fulfillment Network, there are also smaller regional logistics providers, such as Colorado Fulfillment Co. and Ecommerce South Florida. Having an inventory allocation solution from a provider who provides a central view of your data and the possibility to assign inventory across different warehouses will be your best choice if you’re scaling fast and looking to optimize your fulfillment strategy. Find out more about Shopify Fulfillment Network by visiting the Shopify website.

How do fulfillment centers work?

In spite of the fact that each fulfillment center operates slightly differently, they all serve the same purpose: they serve as a central point of control for all the order preparations and shipping processes that incur on your order. Fulfillment centers also serve as warehouses for storing inventory, so you can keep your product on hand.

With multiple fulfillment centers, fulfillment service providers can serve clients in several geographic locations more quickly than with just one. With this, e-commerce companies can offer fast and affordable shipping to a wide range of customers.

What is the cost of fulfillment services?

Deliveries are typically charged by the hour or per pallet/unit for fulfillment services. There are many costs associated with providing goods and shipping them: receiving, storing, picking and packing, shipping, kitting or bundling, returns, custom packaging, gift services, and setup. It is then that they charge transaction fees (e.g., receiving, shipping) as well as recurring fees (e.g., storage).