Warehousing and Fulfillment Companies: How to Choose the Right One for You
September 19, 2024
September 19, 2024
If you're like most business owners, you're always looking for ways to save money and increase efficiency. One way to do that is by outsourcing your fulfillment warehouse needs to a third party fulfillment center.
How do you choose the right fulfillment center to work with? There are a lot of fulfillment companies out there, and they all claim to be the best! We'll give you some tips on how to choose an order fulfillment company that is right for your business, whether your have seasonal or temporary fulfillment service needs, one online store or many ecommerce businesses or needing a fulfillment center for international shipping.
Warehousing and fulfillment are complementary parts of the same issue: the process of storing and shipping products for your business. Amazon is one of the best known ecommerce brands but it is actually an order fulfillment company; brands store their products at Amazon fulfillment centers and Amazon's AI-based e-commerce fulfillment selects the warehouse nearest to the customer.
You don't need to be Amazon or even an e-commerce business to outsource your warehousing and order fulfillment services; even small businesses would benefit could reduce shipping costs and decrease shipping times by incorporating a fulfillment solution into their supply chain.
If you sell physical products, then you will need to find a warehouse space to store them until they are sold. And once they are sold, you will need to ship them to your customers. This can be a lot of work, and it can be expensive if you do it yourself -- especially if you want to offer same day shipping, two day shipping or need international warehouses because of market expansion. That's why many businesses choose to outsource their fulfillment needs for a monthly fee.
You may be experiencing seasonal overwhelm and need to outsource your order fulfillment temporarily or while building your own warehouse space. There may be some quality control advantages to having your own fulfillment center or perhaps your customer service scores are failing because you need to hire a fulfillment center!
Outsourced fulfillment companies may offer geocentric warehouse locations exclusively offer pick and pack services, making these order fulfillment services experts in the fulfillment process. Third party fulfillment centers often can get the job done for a single fulfillment fee and reduce your fulfillment costs significantly.
If you run an ecommerce business, e-commerce fulfillment services allow you to focus on all the sales and marketing while removing the biggest stumbling block for most small businesses. A warehousing company can bundle fulfillment services to give your customer a premium experience like the large scale ecommerce businesses.
Inventory management and the seemingly simple activity to fulfill orders from your ecommerce store is fraught with pitfalls, risks and hidden costs. It's easy to get overwhelmed with the details of fulfilling orders from your online store or other sales channels.
There are many benefits to outsourcing your fulfillment process. Small businesses can leverage the buying power of the fulfillment network to reduce shipping costs, qualify for FedEx fulfillment or other shipping carriers, or offer free two day shipping with no impact on profitability. It levels the playing field with other ecommerce businesses in your space.
First, outsourcing warehousing to third party fulfillment centers can save you a lot of money. Fulfillment companies have economies of scale that allow them to store and ship products more cheaply than you could on your own.
Second, fulfillment companies can save you a lot of time. Storing and shipping customer orders can be very time-consuming, and it's not something that most business owners have experience with. Free up your own warehouse space with outsourced fulfillment services.
Third, fulfillment centers can improve your customer service. When you outsource your fulfillment process, you will likely have access to more affordable shipping carriers (like FedEx fulfillment) and more warehouse locations to fulfill orders for your online store.
A fulfillment network can help you focus on other aspects of your business -- like marketing and building engagement with your customer. In that regard, outsourcing your ecommerce fulfillment services places your business on par with the big ecommerce companies in your space.
Fourth, fulfillment companies allow you to expand your market in ways you could not do on your own. When you outsource ecommerce fulfillment services, you can offer international shipping and the fulfillment company would be happy to pick and pack and ship customer orders in your brand's custom packaging.
And fifth, fulfillment centers can give you peace of mind. When you outsource your warehousing and fulfillment needs, you know that your products are in good hands and that they will be shipped on time and in good condition.
Now that you know why you need outsourced fulfillment services, you need to know how to choose the best fulfillment company for your particular needs. There are a few things you should look for:
A good reputation: You want to work with a fulfillment company that has a good reputation. Ask around and see what other businesses have to say about the ecommerce fulfillment network you're considering.
Experience: You want to work with a company that has experience. This is especially important if you have a complex fulfillment operation or multiple ecommerce businesses.
Flexibility: You want to work with a company that is flexible and can scale up or down as your needs change. You may need one warehouse space or many warehouse locations.
Customer service: You want to work with a company that has good customer service. This is important because you will be working with them a lot.
Competitive pricing: You want to work with a company that offers competitive pricing. This is important because you want to save money.
When comparing different warehousing and fulfillment companies, here are a few things you should consider:
Services: Not all warehousing and fulfillment companies offer the same services. Some specialize in ecommerce fulfillment, while others focus on business to business fulfillment, while others still focus only on business to consumer fulfillment solutions.
Some offer international shipping, custom packaging, work with different shipping carriers and fulfillment centers (like FedEx fulfillment, UPS, ShipBob, Amazon FBA, ShipMonk, Whitebox, Red Stag fulfillment and others) and provide shipment tracking of customer orders. Make sure you find a fulfillment center that offers the services you need.
Location: The location of the fulfillment centers is important for two reasons. First, you want to make sure your products are stored in a safe place within the warehouse and that the security of the fulfillment center is protected. Second, you want to make sure your products can be shipped quickly and efficiently from the fulfillment center.
Reputation: As we mentioned before, you want to work with an outsource fulfillment company that has a good reputation and high marks for quality control. This is important because it will give you peace of mind.
Ecommerce platforms: Some ecommerce store platforms have licensing that is cost prohibitive for an independent, or require such a high volume to make it impossible to consider on your own, but as part of the third party fulfillment network, you would qualify. Conversely, some fulfillment centers like Fast Fulfillment welcome small business customers.
When calculating the cost of warehousing and fulfillment fees, take these factors into account:
After taking these factors into account, you should have a good idea of how much it will cost to outsource your order fulfillment. You're ready to start interviewing fulfillment centers.
Here are a few tips for reducing the cost of your order fulfillment center:
Negotiate with the fulfillment center. Don't be afraid to negotiate with your fulfillment services provider. Because a number of factors go into a fulfillment service quote, it may be possible to reduce one area you don't need as much or to consider a longer term agreement for a cost savings.
Get multiple quotes: Get quotes from multiple order fulfillment companies. This will give you leverage when negotiating and will help you get the best price possible.
Ask for discounts: Ask your provider for discounts. If you are willing to engage a long-term contract or have a high volume operation, many of the best fulfillment services will consider offering a discount on fulfillment services.
Does the fulfillment network offer transparent pricing? Do they use their own warehouse or sublease from separate third party logistics?
Does your provider offer reverse logistics -- returns, recalls, repairs, repackaging and recycling? Is there a storage fee or fulfillment involved for warehousing your product before it ships from the fulfillment centers?
Try to avoid the biggest providers in the space like red stag fulfillment services. The big providers require upfront fees, hidden charges, minimum warehouse space requirements and other factors where many consider red stag fulfillment be cost prohibitive.
By following these tips in hiring a fulfillment center, you should be able to reduce the fulfillment costs over your retail fulfillment services operation. Meanwhile, you'll find the best solution for your warehouse management and fulfillment strategy.
Now that you know how to choose a fulfillment service company, it's time to get started with your new fulfillment provider. Contact the friendly experts at Fast Fulfillment for more information and a free consultation. You'll be able to focus on running your business while Fast Fulfillment runs your inventory management, warehousing services and fulfillment solutions!