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Fulfillment services are a hot topic these days. From Amazon’s next-day and same-day delivery services to Shopify and other large companies entering the fulfillment market, consumers’ movement towards the convenience of purchasing products online from the comfort of their own homes has brought one of the most mundane industries to the forefront of the business world. Businesses are now looking for any way possible to capitalize on this seismic shift from brick-and-mortar to e-commerce purchases, up to and including investment in fulfillment services businesses and support services with historically low profit margins. As a result, it comes as no surprise to see that many internet companies are trying to take advantage of the popularity of the fulfillment industry by pushing content on their websites to make a quick buck.
Case in point – the onslaught of “best fulfillment services” lists being published on website pages. The number of sites that have released their “top fulfillment company list” has reached epic proportions. Companies that have never covered topics in the business services niche, such as PC Mag, have recently launched their Best E-Commerce Fulfillment Services list. Heck – even fulfillment companies themselves have decided to create a new page on their website where they “recommend” up to 5-10 fulfillment services (including themselves…wink, wink!!)!
In order to steer you in the right direction, we wanted to publish a helpful guide on this topic, covering the following areas:
Before we dive into a full explanation, however, we wanted to include a brief video summary. Below is a summary video that explains the dangers and pitfalls of relying upon “Top Lists” and Fulfillment Network Platforms. Knowing what you’re getting into before blindly relying on online recommendations is paramount for making the best decision for your outsourced fulfillment provider.
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At WarehousingAndFulfillment.com, we strive to be fully unbiased and fully truthful and transparent. Our company is the leading online match-making service for the fulfillment industry. Think of us as the “Match.com” of the fulfillment industry. But we are very different from other sites and lists out there.
Finally, we don’t believe there is a “best” company. There are a lot of “best fulfillment companies” for different businesses and different scenarios. With all of the data we have collected, we would be hard-pressed to tell you that there is one or 5 or 10 best companies. It’s just not true!
So let’s take a deep dive into these supposed best fulfillment company lists and see what’s behind the curtain.
Searching Google for the “top 5 fulfillment company” or “best e-commerce fulfillment companies” is often the first step business owners take. However, while Google can provide you with many of the answers you need on a wide variety of topics, there are a few things to be wary of with this search.
The first question you should always ask yourself when looking at a source for fulfillment recommendations is “why are they doing this”? In most cases, we’re all businesses so it’s normal to understand that there would be a profit motive. However, is that all there is to it? Is there a desire to truly help people make the best decisions, or is it simply to earn the most money possible? Is the payment received justifiable and does the receipt of payment in any way impact the fairness of the selection? Is the review process legitimate?
Currently, there is a trend where many publishers are curating lists with the “top” 3PL companies and you will find several of these lists when using search engines for research. However, with the extensive amount of companies available, these lists aren’t telling the whole story.
Some reports state that there are upwards of 20,000 fulfillment warehouses in the U.S., 20,000! These warehouses vary greatly from one to the next regarding the types of products and services they offer, the conditions of the warehouse climates, the size of their ideal customer, and much more. While select providers will suit your needs perfectly, others will be too big, too small, or unable to provide the services you want.
In theory, a top list would be a helpful resource to narrow down the options. The company creating this list should be very knowledgeable about all of the 3PL companies in the country of interest and they should have researched the pros and cons of the companies. Further, they should identify the different specialties, vet the companies for legitimacy and quality, and create unbiased lists that consider the companies that are best for a variety of needs.
However, that’s not generally how it works.
In most cases, the top lists show the largest and most expensive companies. It’s not uncommon for companies to pay to be featured or ‘sponsored’ on a top list, or have some sort of compensation deal. So you often find a biased list of companies that are great at selling and can afford to pay, rather than those that are truly best at providing the 3PL services for specific needs.
This is of particular concern for small businesses that need more localized solutions. The smaller 3PL companies can’t always compete with the bigger ones and therefore don’t gain as visible of an online presence. Unfortunately, small businesses can then end up paying for more than they need. For example, a small business doesn’t need a global company that specializes in international shipping but may find those as the #1 company on several lists.
If you’ve never run a lead generation company (a company that produces sales leads for other businesses), business-to-business services company or similar business, you may not at all be suspicious of these best fulfillment company lists. In fact, you may think they are a helpful resource – and we can’t blame you. After all, is it plausible that the owners of these sites are simply offering a service to seekers of fulfillment services by truly vetting all of the fulfillment options out there and reporting on the best options? Highly unlikely but it is possible. And after visiting these pages, most of them do appear to be very convincing and seemingly unbiased. But let’s put just a little thought into the matter before taking the bait that the lists can be trusted.
Let’s put on our not-so-naïve hat and admit the first “truth” with regard to these best order fulfillment company lists – there is money to be made by publishing a list that gets a lot of views. If a popular website can rank high organically in the search engines for one of these lists and can get thousands of businesses to view their page, then they can either charge the listed companies a recurring fee for inclusion on the list OR charge them a fee for every time a prospective customer contacts them for a quote. Now, we don’t believe that it is wrong to earn money off of a page. However, what we do think isn’t fair or “right” is to claim that you’re reporting the “best” companies when in fact you haven’t fully researched all of the options out there and/or you’re only taking money from the highest bidder and populating them on the “best” list – which we do believe is what is going on in ‘most’ cases.
One common “type” of referral site that you will stumble upon in a Google search is the directory listing. It can be a website that you’ve never heard of or even a website that appears to be very trustworthy and professional, like the one at pFind.
But upon further inspection, you can clearly see that there is a spot on the website to “submit your product”, which allows a company to pay a fee to list their site. There isn’t necessarily anything wrong with a listing of sites, but it’s important to know that all of the information is directly from the warehouse, and that these sites really don’t hold any value in actually “vetting” the vendors. The only value that is offered is that it gives you a starting place to begin your search. At the end of the day, it is a “pay for play” resource and is not unbiased and no ‘thorough vetting’ is performed on the warehouses.
Here’s another example of the paid listing at Pandia.
They list only 10 of the thousands of warehouses, and of course, list only cursory information that can be found directly on the individual fulfillment company’s website. This is a great example of a very likely “pay for position” resource, with ShipBob winning the top bid to be placed as the TOP PRODUCT.
E-commerce Platforms is a good example of a site that has a top fulfillment company list. At first glance, they at least seem like the operate in the right wheelhouse – they provide information on e-commerce platforms so it’s at least in the realm of possibility that they could potentially offer some substance to some thoughts around fulfillment companies. But after a small review of their page, you can see that their top list of “international” fulfillment companies includes Red Stag and ShipMonk (two companies without international locations), 2 actual fulfillment companies with international locations, and two shipping software companies that don’t even offer fulfillment services. Not so surprisingly, there is only a small paragraph about each of these supposed Top 6 Fulfillment companies, offering no depth of information. This is a prime example of a potential “pay for play” article. Need we say more?
If you’re looking for a truly unbiased recommendation (we say this completely ‘tongue in cheek’), then Shiphero offers a 3PL marketplace (of a whopping 20 providers). Yes, Shiphero – a company trying to earn money by having companies use their warehouse management system (which can be used by companies but was actually built specifically for 3PL warehouses) is offering a listing of “top 3PL warehouses” that USE THEIR 3PL WAREHOUSE SOFTWARE!! Interesting…to say the least.
Shiphero claims that their 3PL network is unbiased and is ranked by reviews, etc. However, after speaking with a few of the fulfillment companies on the list, it appears that this isn’t the case. We’re not exactly sure what their algorithm is for ranking the companies on their directory, however there is a good chance it isn’t based upon the ratings and reviews but rather the potential return on investment that they will receive from the fulfillment companies (see below).
Not only does “recommending” companies that use their warehouse management system negate any potential unbiased component to their recommendation, but it also begs the question – are they getting paid on a commission basis for any business that they bring to these warehouses that they’re recommending. This is a recipe for disaster, as the reviews are biasedand will potentially cost you more than choosing a company direct without a middle man.
In fact, the reality is that Shiphero is getting paid a commission when you use one of their preferred 3PL fulfillment companies. And it’s not a small amount – they are getting a 5% commission from the fulfillment company! This isn’t humorous – it is literally adding 5% to the cost structure of every business using their fulfillment solution. There just isn’t enough margin in fulfillment and shipping to add this cost, and we imagine that once businesses start figuring this out that they will give more than a passing thought at other options.
Some websites may disguise their list of TOP Fulfillment Centers by using informational content to “lure you in”, only to ask for your contact information to view their listing of top fulfillment centers. We found one example of this at Launch Grow Joy, where the author promised to deliver her Top 10 Fulfillment Centers to your email address, including her Personal Favorite, once you provide your contact information. The biggest red flag here is that she’ll be providing you with her personal favorite fulfillment company that she uses (or pays her the most money to be recommended), without knowing anything at all about your company or specific needs. To the website’s credit, the article does provide some useful information about proper selection of a fulfillment center, including the necessity to look for location, credit ratings, years in business, customer testimonials, etc. But the “giant elephant in the room” question remains – how can anyone recommend specifically one company for every company of all different shapes and sizes? We simply don’t know of anyone we would recommend for every case.
Apparently, e-commerce fulfillment has become so popular these days that PC Magazine (yes – the technology product and service review site!) has entered into the mix for recommending their top 10 list. The first red flag is that e-commerce fulfillment is a far different service than most of their recommendations. It’s understandable that they would review and recommend antivirus software, mobile phones, laptops, cameras, and even website hosting…but e-commerce fulfillment services? That is interesting to say the least.
How do they screen? According to PC Magazine, the most important factors when making a decision are:
Furthermore, when you read further into their individual reviews of specific companies, you see that the level and depth of their screening is only surface level at best. The review page for each of the 10 recommendations contains a brief description of their company, a paragraph on their pricing which doesn’t at all describe the full details of their pricing structure, a sentence about where they’re located, a few paragraphs about their inventory and order system, and then a paragraph about why they recommend this company. The most alarming aspect of this review is that it doesn’t contain any information that you wouldn’t be able to get directly from the company’s website.
Our biggest “pet peeve” with these types of lists is that the companies usually have established a bit of “credibility”, meaning that users will typically believe what they say because they view it as a trusted source. Because of this, most people will unknowingly trust the source despite not being very reliable. Unfortunately, this can be very misleading for companies making a huge decision like who to use for warehousing and fulfillment.
Another common type of warehouse listing comes in the format of a listing of warehouses that is associated with a particular product or service company. In the below example from ShipStation (a shipping software company), some product or service providers will list some of the warehouses that use their products and are familiar with them. Common services that offer this type of referral page are shipping companies and web store providers.
For businesses that use the particular product or service, there is some value to potentially speaking with their references, since the 3PL warehouses will likely be familiar with the software or service and thus are competent to help at least on a surface level. However, it is still critical to ask the companies if there is an additional fee for using them rather than going to a company direct, and you’ll still want to perform your own due diligence to ensure that the companies are a “match” on other critical components to your needs.
It seems like every year we have a fulfillment company from our network start a business like ours, stealing our business model, messaging, and pricing and trying to become a matching service like us (although they worked with us many years ago). This year is no different, as EcomBlvd.com chose to enter the fulfillment matching industry. This brand new company (as of late in 2019) charges warehouses $30 per lead (like us), but adds anywhere from $99 to $899 per month to the warehouse’s costs of doing business with them, which no doubt adds to the amount they end up charging customers. Preliminary feedback on this service is that it potentially sells businesses information to other third party service providers without consent and has suspicious at best fulfillment recommendations, which is no surprise given that its co-founders both came from a fulfillment center that didn’t necessarily operate at the highest level.
EFill Source is another lead generation company that popped up in 2015. We’re very familiar with them, as the owner used to use our service and then stole our idea and our contract and started EFill! You can read more about it www.EFillSource.com here. They do have a directory of vendors, which is very small, and is suspect (knowing that they started the company and were running it while also working for a fulfillment company…which begs the question “were they really unbiased with who they referred unsuspecting businesses to?).
Another form of top lists for business services is the “good old fashioned online directory”. A derivative of the historic phone book, online directories have existed since the beginning of the Web. The latest version of these online directories attempts to make the directories out to be more than they really are – listing of companies. While some online directories offer more “data” than others, such as reviews or corporate videos or descriptions of the companies in the directory, the plain fact remains that they are still subject to the same challenges when using them to choose a business partner:
For the most part, these directories are generally geared towards ALL business services, which makes them less inclined to be “experts” in any one given industry, such as outsourced fulfillment services and logistics. Nonetheless, they specialize in everything and most likely publish everyone that wants to be a part of the directory, regardless of quality of service, overall performance, and quality of reviews and ratings.
Some online directories are cleverly disguising themselves as “unbiased” and telling users that they aren’t getting paid for the reviews, like a very new entrant to the online fulfillment matching space (see below):
We say that they cleverly package it as a “free service” where fulfillment companies do not pay them to be recommended, but there is, as always, an ulterior motive. They operate a fulfillment software company as well, and so anyone that decides to use one of their “recommended” fulfillment companies will add to the volume of orders that gets sent through their fulfillment software – earning them more revenue in the end! So not only is their core business growing while they cleverly package this as free, they’re always recommending the fulfillment companies that use their software, which doesn’t necessarily mean that they are the “best fit” or best company to choose.
Finally, in this case, it’s important to note that their fulfillment software, of all software products that we’ve heard about for fulfillment companies, has received some of the worst feedback for performance, customization, and overall ease of use. Many of the fulfillment companies in our network have provided feedback to us over the years regarding what fulfillment software they use – and this company is by far the most frequently sited for a desire to upgrade from and move away from. Currently, their fulfillment software garners only a 3 Star rating on the Web, on 16 reviews.
Online directories can be useful for “quality checking” or “double checking” any short listed fulfillment centers you’re considering – so they’re not useless. However, be very careful about using them as a single source for selection due to the inherent bias behind their business model.
With all this being said, the top lists can provide some useful information. For example, if you don’t know much about what 3PL companies can offer you, the list can help inform you about the range of services available. You can also get ideas on how to handle your growing logistics needs in the future.
However, to get the full picture, including a large number of great companies that don’t make these lists, you need another resource.
Now that we’ve properly concluded that these “Best Fulfillment Center List” sites are littering the internet because they are making companies money, let’s dispel the second myth with these sites – how in the world can someone claim that there is a top 5, 10, 30, or 50 list of fulfillment centers when:
It would take a “boat load” of time to fairly and justly research all of the potential options out there, wouldn’t it!?! Yes, you got that right – there are over 10,000 fulfillment warehouses in the U.S. alone. That’s a ton of healthy competition. Good news is…we’ve been doing the research since 2005.
Also, simply put, how can any one company be the best for everyone? For example, one of the top companies listed on every site is Ship Bob. Ship Bob has some very happy customers out there. But does Ship Bob offer frozen food fulfillment services? No. Does Ship Bob offer class II medical device fulfillment services out of Georgia? No. Do they have locations in Denver, Colorado, Portland, Oregon, or Miami, Florida? No.
The fulfillment industry has so many divergent needs, whether it’s product specific (e.g. apparel, food, etc.), technology driven (e.g. integration with a specific system), location based, or service based (e.g. subscription services, start-up fulfillment, etc). Really, a much better way to approach these types of lists (as we try ourselves in our match-making service) is to segment them on location, services, technology capabilities, and product types. In fact, let’s emphasize the factors that should be considered when creating the right kind of ‘best fulfillment center lists’:
Really the opportunities are endless – you’d probably have to spend a few weekends just reading the top lists to fully grasp the best companies for every scenario out there. This is why we think that listing the best fulfillment companies on a website page is the wrong approach. We believe you should be able to come to an expert, describe your circumstances and needs, and be matched with the right, hand-picked companies that best fit your needs. Oh wait – that’s the service we offer!
Interestingly enough, most of the “top lists” have the same companies listed – go figure! Why is this? Because these are the companies that are most savvy with their internet marketing and/or are able and willing to pay the most for the position and advertising. Most of these companies are larger companies, have VC funding, have large marketing budgets, or focus on large volume shippers. Some of these companies have marketing budgets larger than the yearly revenue of smaller fulfillment firms, and some of these companies have an entire marketing staff that outnumbers the executive team of a regional, one-location fulfillment center.
When we studied these lists, we found the SAME companies were the only ones on all of the major lists we found:
And what information will you find about these companies on these best fulfillment list sites? Not much – and certainly less than you would if you went to their own website. In most cases, these websites only contain cursory information about each of the “best” firms – usually a brief description of their company and a few of the services that they offer. One of the sites listed the fulfillment center’s location. One site had a single sentence for each company on a “pro”, “con” and “bottom line” about each company (not the depth of information that you really need to fully quality a company).
If a company truly is the best, it’s likely that they will have achieved the best online reviews from objective sources. So we put this criteria to the test and researched these “best” companies to see if their reviews were in fact better than other fulfillment warehouses.
We studied independent review sites in order to see what they were ‘rated and reviewed’ in order to find out if this list truly included the best companies. Not to our surprise, only 8 of the above companies had a review on an independent website that was greater than 4 stars. That’s 8 out of 42 total (or less than 20% of the companies that achieved what would be expected in terms of one of the best performances)! More surprising, however, was that we found 8 companies with reviews around 3 out of 5 stars (which is not great), and 16 companies without any reviews at all on any major sites. From what we’ve seen, it’s not uncommon for a smaller fulfillment companies to not have any online reviews. It’s not uncommon to see some negative reviews as well. But for a company to claim that these fulfillment services providers are “the best”, you would certainly think that they would be consistently getting 4.5+ star reviews.
Okay, so for those of you that just really like research – we decided to research the companies that showed up most frequently on the “Best fulfillment company lists” and see for ourselves what we could find about them. Furthermore, we’ll include information that we’ve uncovered in our analysis if we have additional scope on the companies as well.
Important to note, reviews were pulled on 3/15/2020.
In terms of Reviews, Rakuten pulled a 3.9 stars out of 5 on Google, out of 7 reviews listed. On Webretailer, they didn’t fair as well with a 2.5 out of 5 star rating, some of the ratings of which included terminology such as “The worst 3PL ever,” “do not work with RSL,” and “just stay away from RSL if you want to succeed in your business.” And Yelp reviews are even worse – totaling a 1.5 Star rating out of 5 stars.
What we know about Rakuten Super Logistics: From our experience, RSL loves working with large companies – those that send out tons of orders per month. This is a company that may not be the best fit if you don’t ship high volumes.
Easyship is one example of a company that would be extremely misleading when it comes to online reviews. Easyship has very high ratings – 4.2 stars from Trustpilot, 4.6 from Capterra, and 4.7 from Shopify, for example. However, the problem is that these reviews are almost exclusively directed towards their core business – shipping software, not fulfillment services.
What we know about Easyship: Fulfillment is new for Easyship, which isn’t necessarily a bad thing but it is a consideration. It takes time to iron out kinks when it comes to operating a completely new business, so there may be some hiccups if you use them. Furthermore, the part that scares us the most about them is that they seem to be offering a very streamlined pricing (they only offer a few charges and don’t have all of the charges a typical fulfillment company charges). The reality is that fulfillment is a very low margin business, and when companies charge significantly less it can be a red flag – in some cases businesses use this tactic to get new customers and then change their pricing later. Not to say this is what is happening here, but it is worth having a conversation.
Okay, so we’re completely baffled by this one – if you perform a web search for Fulfillment by Amazon reviews, you’ll get next to know reviews and results related to the actual reviews! We only found one site that gave reviews – a 4.1 star review out of 2 total reviews. Yes, you heard that right – 2 reviews from the world’s largest online retailer and arguably the largest fulfillment company in the world. Something doesn’t quite sound right, to say the least.
What we know about Fulfillment by Amazon: FBA, from what we’ve heard, it a quality fulfillment service. However, they require that you ship in their boxes without much if any flexibility (which is critical for smaller businesses), has extremely clunky customer service, and comes at a very high price tag versus a single location regional fulfillment company.
As a company that has been around for quite some time, we expected to see a lot of reviews for Shipwire, and we weren’t disappointed. However, the feelings weren’t warm and fuzzy when we uncovered a 3.1 rating from Trustpilot off of 164 reviews (a great sample base), a 1.4 star rating from Capterra, and a 2.4 rating from Shopify. Granted, as a large organization that has been around for a long time, you would expect to see quite a few more negative reviews than most companies.
Shipbob is another example of a large company that has experienced a great deal of growth (they’ve received a great deal of venture capital funding). Furthermore, they’re a newer company having only started a few years back. And while they may have had a few hiccups along the way, the trends in reviews seem to be moving more in a positive direction. While their Yelp review averages a 3 out of 5 stars (47 total reviews), other sources are trending up, such as Trustpilot at 4.1 and G2 review at 4.4 (only 17 reviews). There have been some more recent negative reviews, so it’s at least worth digging in to speak with them futher in order to gain more comfortability with moving forward.
What we know about Shipbob: Shipbob is one of only a few multi-location companies that will still help smaller businesses with lower volumes. Most multiple location fulfillment centers only work with larger companies with higher order volumes.
In our experience, Red Stag is one of the fulfillment companies on these lists that truly belongs to be included. They are an upstanding group of individuals and deliver a top notch service. The only drawback is that they are extremely focused, which isn’t a knock on them but rather some simple guidance because they aren’t able to help everyone. They specialize in higher order volumes and like to work with companies that sell products that are heavier in weight. As a smaller company, they don’t have a wealth of reviews – 3.0 on Google on only 2 reviews and 4.9 on Webretailer with 9 total reviews.
When we searched for reviews for Fulfillify, we came up empty. Fulfillify is a division of Complemar, which also doesn’t really have online reviews (other than Indeed and employee related reviews rather than customer facing reviews).
What we know about Complemar: Complemar is a long-standing and larger fulfillment provider that has multiple locations. They tend to enjoy doing business with larger organizations that have higher order volumes.
IDS Fulfillment is another example of a company that just doesn’t have much in the way of reviews. With multiple locations and omni-channel fulfillment capabilities, they look like an interesting company to speak with further. However, there’s just not a wealth of information about them to be found online.
With our 15+ years in fulfillment, we just plain haven’t heard of this company. Furthermore, we weren’t able to uncover any online reviews either. What was also interesting is that at the time of preparation of this article we tried to pull up their website and it looks like it was hacked. Hopefully they will get that back up and running and we will try to check back on them when we revisit these assessments.
Having worked with Max and his team in the past, we’ve heard some good things about them. They are a smaller outfit, and quite frankly don’t have many reviews either that we could find (8 5 star votes on Facebook). But they do focus on a very targeted area – mostly Shopify fulfillment as well as some crowdfunding fulfillment as well. For fulfillment with a higher touch point with management, it could be a good option.
The only online reviews we could find for Fulfillment by Sears were on the Shopify App store, which gave them a 3.9 star rating out of 5 stars (although 4 of the 14 reviews were 1 star, which is a concern).
What we know about Fulfillment by Sears: Fulfillment by Sears focuses on larger volume businesses that ship more orders than most small and growing businesses.
Strangely enough, while searching for Xpert Fulfillment, we found that their reviews (although very limited) were quite positive. They received a 4.9 star review from Google and 5 star review from Facebook (on 6 votes). We mention that this is strange because we’ve never heard of them. Based out of Michigan, they may be worth speaking with further if you prefer a Midwest US location. The only concern is that 6 reviews isn’t much.
eFulfillment Service is a direct competitor of the formerly mentioned Xpert Fulfillment, as they both reside in Michigan. eFulfillment Service has been around a lot longer and is a larger company, and so we expected to see quite a few more reviews and weren’t disappointed. On Google, eFulfillment Service rated high – 4.5 stars out of 5, although reviews on G2 (2.3 stars) and Webretailer (2 stars) weren’t as favorable. We’ve personally heard both good and bad about eFulfillment Service and are relatively neutral on whether or not they would be included on a best of the best list.
By all accounts Fulfillrite appears to be a relatively good option for companies looking to outsource – a 4.6 Trustpilot rating.
What we know about Fulfillrite: Having worked with Fulfillrite in the past, the only challenge that we see is that they are very, very particular in terms of the companies that they choose to work with. They prefer companies that sell smaller items and are lower in weight. With a location in New Jersey, they could be an option for companies that need a northeast US fulfillment center.
Another company that we’re not familiar with, but that appears to have received good reviews, Floship offers fulfillment out of Hong Kong. This isn’t an option for a lot of companies, but for those that can afford longer transit times, etc., the 4.7 out of 5 star rating on 48 reviews from Trustpilot indicate that their service is quite solid from reviewers of their service.
It’s important to note that Whiplash isn’t a fulfillment service itself, but rather a software that connects multiple fulfillment services around the globe. Partner fulfillment companies use their software and then fulfill orders based upon orders routed to their individual location.
What we know about Whiplash: Like other “on demand” type of fulfillment solutions, the model sounds good at first site but doesn’t necessarily pass the “inspection test” by looking under the hood. Having received feedback from companies in our network that have used this service, we can tell you that service levels aren’t as great based upon the setup. Think about it – if Whiplash demands that the individual fulfillment company fulfill the orders through their platform at a lower rate than they would otherwise charge, there just isn’t as much profit involved for the fulfillment center than customers that they generate on their own. Therefore, there certainly could be a bias and preference for the fulfillment center towards their own customers rather than the Whiplash network clients. We’re not a big fan of adding additional layers into a small margin business like fulfilment, and this is a dangerous approach that ultimately hurts the end consumer.
Symphony Commerce achieved a 3.3 star review out of 5 on Google from 8 reviews. 3 of the 8 reviews are extremely poor. We weren’t able to find much more about this company based out of San Francisco.
Fulfillment.com hasn’t received a great deal of feedback, receiving only 1 review on Ecommerce Platforms and 2 total ratings on Webretailer. Quite frankly, our searches didn’t uncover a great deal of info on Fulfillment.com.
A search for FedEx Fulfillment reviews didn’t pull up a lot of information. In fact, the only site that had reviews was FitSmallBusiness. We saw a 1.5 star rating out of 5 stars, which is alarming.
What we know about FedEx Fulfillment: In our limited experience with FedEx fulfillment, historically they have focused on very large companies that ship thousands of orders per month.
Shipstation is a great example of what happens on these lists sometimes – companies get included that aren’t really a traditional fulfillment company. Shipstation is a shipping software company, and they appear to do a pretty good job of it, garnering a 4.7 star rating from Getapp and a 4.5 star rating from Software Advice. However, they don’t offer fulfillment themselves, but rather have some partner fulfillment companies that integrate with their service. As mentioned with integrations, be careful that this doesn’t impact your pricing, as most of these scenarios are paid referrals where the software company earns a commission on deals that they pass to the partner fulfillment service. This isn’t always the case, but we’ve seen it so many times that it’s important to investigate further. Not to mention that you really have to look into the company that you’re really getting fulfillment from, which is an altogether different company.
So why did we conduct this silly exercise? Other than trying to pass the time on a Sunday afternoon, it served to show us that maybe 5 of these 20 companies would be worth further investigation. However, even 5 of them that looked more interesting may not at all be the best fit for YOUR company. For example, if you need someone centrally located, you may not find any of these 5 the right match. Depending upon your specific needs, they companies may not meet them – whether it’s that you require B2B EDI service, special climate controls, food grade condition, or a wealth of other specialized needs.
NO company is the best for everyone, and if there are over 10,000 fulfillment companies out there, then there is no way a top 20 list could even scratch the surface of getting you in touch with all of the right options in your decision-making process.
And if these companies are getting all of the exposure, we thought it would be great to provide a few companies that should be included on these lists but aren’t so you can see the alternative as well. These are some examples of companies that don’t have the marketing dollars to show up at the top of the search engines but that we’ve found do a stellar job in shipping orders.
Now that we’ve taken a look at who is on the majority of the best fulfillment company lists, we should take a few moments to discuss who isn’t on the lists. Funny enough, most of the 726 warehouses in our pre-screened network didn’t make the cut (yet, they’re helping out tons of businesses – at the time of initial publication we’ve helped over 50,000 companies find a fulfillment warehouse).
No one on the lists that we searched for was a true regional fulfillment company that focused on start-ups. In our experience, most companies researching the Web for a fulfillment option are small or start-up companies – so they will be extremely shocked to find that most all of the companies on the above-mentioned list will turn them away.
No one on the lists we found was an FDA compliant and DEA approved pharmaceutical grade fulfillment center. No one on the list was from Colorado, or Arizona, or Delaware or Oregon, among MANY other states. No one on the list is a fulfillment service that also offers print-on-demand for t-shirts and other apparel products. No one on the list offers clamp trucks for oversize paper goods, or overhead cranes or foreign trade zone status.
And we could go on and on…
Just as important (as noted above) – no one on the list has perfect reviews. Many of them have a number of negative reviews, which doesn’t at all mean that they are a “bad performing” company – just imperfect. And no one on the list really has a claim to “the best” without really narrowing down what we’re talking about.
Ultimately, the “best” fulfillment company for you is very likely NOT TO BE ON any of these lists. Which is why we even exist – to learn about all of the options out there and collect data on them all, and then match them to you and help you get quotes.
There are some great fulfillment companies out there that perhaps don’t have as much money to spend on advertising like some of the venture backed firms, or maybe are just plain smaller and therefore haven’t found great exposure online. These are companies that you’ll probably be hard pressed to find by searching for, but that do a wonderful job of helping companies – not only by performing high quality fulfillment services but also by knocking customer service out of the proverbial ballpark.
This list isn’t exhaustive, but we included it here so that you have a few really good examples of companies that won’t show up on the “popular” lists but that are more than comparable to any “top fulfillment company.” Finally, they show the value of a service like WarehousingAndFulfillment.com, which has a virtual treasure trove of companies just like these to help connect you with throughout the US, Canada and Europe.
With a 4.7 star review on Google and Our Serviceworks lives up to its name.
For over 30 years, Dallas, Texas-based Our Serviceworks has provided Outsourced Fulfillment and Customer Care services nationally and internationally to businesses of all size. Founded in 1988, Our Serviceworks (OSW) employs highly skilled personnel utilizing the latest logistics technologies and processes to offer clients a variety of fulfillment services; including B2B, B2C, eCommerce, subscription management and omni-channel distribution. OSW prides itself on adopting your brand philosophies to provide top-notch fulfillment and customer service with the goal of delighting you and your customers.
One of the longest standing companies in our network of fulfillment providers, Sweetwater has a wealth of experience in this industry. Sweetwater Logistics was founded in 2009 in Charlotte, North Carolina. Founder and President Steve Thomson chose Charlotte as a home base for the logistics company because of its prime location, with shipments leaving Charlotte reaching 80 percent of the United States population within 2 days. This access is a big deal to Sweetwater, which not only strives to get your products into your customers hands as soon as possible – they strive to get 99.8% of orders placed before 3:30 pm out the door the same day they’re placed. It may seem like quite a feat, but it’s a goal Sweetwater says they’ve never once missed in their ten-year history.
Everyone’s a star in Nashville, Tennessee – including the highly rated logistics company Warehousing Pro. Warehousing Pro may only have one location, but their reviews make this superstar business stand out from the crowd. Warehousing Pro offers storage, fulfillment and logistics services all under one roof. Warehousing Pro serves businesses of all sizes, offering everything from cross docking to load reworking to short term, long term and even seasonal storage services. With reasonable pricing and no hidden fees, Warehouse Pro offers up front pricing and services that can be customized to fit the customers individual business needs.
GOLD3PL prides itself on being the ‘gold’ standard in third-party logistics. With its home base in the Dallas suburb of Irving, Texas, this family-owned and operated logistics company is just eight miles from DFW International Airport and only 14 miles from downtown Dallas. GOLD3PL offers logistics services within a 500-mile radius of the Dallas metroplex.
Now that you’re aware of the challenges of relying on “top lists” when searching for a fulfillment company. So where do you turn?
Are you ready to outsource your business’s shipping fulfillment to a 3PL company but aren’t sure which one to hire? As with any partner in business, it’s critical to choose a reliable, top-notch provider that will seamlessly deliver the same quality of service as you. The right one won’t drop the ball and will free up resources so you can focus on other areas. But where do you find the company that can fit your needs to a “T” when you don’t have any company that you’re currently aware of that can meet your needs? Should you:
When you’re looking for a new fulfillment provider, you may find yourself turning straight to Google and checking out the search results to get a better idea of who you want to turn to. Around 33% of the search traffic on any given results page goes to the first site listed. Less than 10% of searchers make it past that first page. While Google has some great algorithms in place that help ensure that you’re getting excellent results in that first page, the best fulfillment provider for you might not be on page one of Google.
1. Page one is made up of the providers with the biggest ad budget. Google’s algorithm is based on a variety of factors, from links back to the page to the content created by a specific website. Building those things is part of a solid inbound marketing plan, but it takes both time and money to accomplish those things. Paid ads can also help boost organic search placement. That means that for the most part, the companies that you’ll find on Google’s first page are the companies with the biggest advertising budget–not necessarily the companies who will be best at handling your needs.
2. Page one is typically made up of the providers who have been established the longest. Established companies are great. They have a lot of experience in fulfillment and know how to handle plenty of the common problems that may arise throughout your experience. They’ve also had more time to create the content that improves their SEO, which is what gets them those great organic search rankings. The biggest fulfillment providers, however, aren’t always necessarily the best ones for your specific needs. With a smaller company, you’ll get more individualized attention. You’ll be more likely to deal with a single individual who knows all about your account, and when there is a problem, it will be less difficult to hunt down the person who knows the solution.
3. There are thousands of companies to choose from. Fulfillment companies come in a variety of shapes and sizes with many different offerings. There may be specific things that you want from your fulfillment provider, such as:
It may be difficult to find the company that you’re looking for through Google alone–especially if you’re basing your decision on that first page of search results, which will only hold around 10-15 companies out of the thousands that could potentially handle your fulfillment needs.
4. You’re looking for a company that specializes in fulfillment, not advertising. If you were looking for a marketing professional to handle your inbound marketing needs, finding a company that ranks on the first page of Google’s search results would be important. Being able to accomplish that, however, requires marketing expertise that many fulfillment companies simply don’t have. You want them to be focused on fulfillment, not on fixing up their latest marketing efforts!
There are plenty of hidden gems that will never appear on the first page of Google’s search results. Only a handful of the thousands of available companies can claim those key positions, and those aren’t necessarily the companies with the most experience or the greatest customer service. They just happen to be the ones that have the biggest marketing budget available, the largest content library, and the best ability to get themselves seen. When what you want is a fulfillment company that will go the extra mile for you and your customers, don’t turn to the first page of Google! Instead, contact us to learn more about how we can help you make the most of your fulfillment services.
One business model that has recently emerged looks at warehouse space via the scope of the “sharing economy” and offers to find any amount of space, from small to large, for companies that need it.
The way they do this is by matching those businesses who need space and those who have it have sprung up via software-based solutions. You have a need, and the software finds a vendor who has open space. It’s essentially an AirBnB for short-term warehouse space rather than short-term vacation rentals. Sounds good so far, right?
The problem with these companies is that they make a commission when they successfully match up those with extra and those with not enough. Because they only get paid if they successfully match you, they may find a warehousing solution for you that doesn’t meet your needs or meet your expectations for quality and timeliness. You don’t want to be the equivalent of the guest who shows up to his AirBnB rental with family in tow to find it’s actually a party den in a run-down neighborhood.
Plus, they get paid for as long as you use the service! Furthermore, each time you need more or different warehouse space, you pay a commission fee to the matchmaking service. This can add up over time. You’re essentially paying for flexibility, even if you don’t need it. Over the long haul, ask yourself this question – Do you really think that you’re going to be getting the best price for service when the warehouse has to cover the costs of commissions for the brokerage service? The answer is a resounding “no”!
Finally, warehouse space isn’t all equal. Your choice of a warehouse facility can speed you up or slow you down. By treating warehouse space as a simple commodity, without regard to the actual service provided by the warehouse, you may make a critical error that will impact your delivery times and customer service.
Of course, there is the option of contacting fulfillment centers one at a time, trying to vet them yourself. But in order to make sure they’re a good company, you’ll have to contact current and prior customers, view their online reviews and BBB reports, investigate their financial information to see if they’re an ongoing concern, speak with them in-depth to determine if they have the right experience for your needs, demo their software and technology, and on and on….
In the last few years, there have been a new wave of warehouse marketplaces that have popped up as well. These companies claim to be the Airbnb of Warehouse Space. On demand warehousing has become the “cool phrase” to throw around in the logistics industry, making an otherwise boring industry sound sexy. Venture capitalists are throwing millions of dollars at start-ups such as Flexe, Stord, and Flow, and even UPS has recently started their own Ware2Go platform.
Essentially, they’ve created redundant software (we say “redundant” because 3PL warehouses already have this type of software available if you end up using a 3PL warehouse through their service, which in most cases you will) that allows any warehouse to participate in their network, using a single warehouse management and order tracking system. Because they’re a marketplace, they don’t offer warehousing services – they just simply provide a single technology platform that every participating warehouse uses. At first glance this sounds interesting, but it comes with many downfalls.
The only way these Airbnb of warehouse marketplace companies work is to charge the warehouse a commission – oftentimes 10-200% of sales (Yes, we’ve seen cases where they’re charging 2 times cost of the 3PL fees!). While they claim that they’ve negotiated better rates with the warehouses and are therefore able to pass enormous savings onto you, the reality is that it’s just not possible in this industry. Warehousing is such a high volume, low margin business that there’s just really not that much room available to layer additional commissions into the equation.
Either one of two things is happening:
If the on demand company is forcing the warehouse to earn less than what they’d normally charge you, it’s important to ask yourself a very important question:
Is it a smart business decision to pay someone less than what they truly feel they need to earn in order to properly service your account? Do you think this will negatively impact your service level? (we’ll help you here – YES it will negatively impact your service level!)
To more clearly understand how negotiated rates in the warehousing world may not warrant rates that are competitive with direct rates from a specific warehouse, let’s further inspect negotiated shipping rates of warehouses and compare that to Air BNB warehouse solutions. In the case of shipping rates (for example, small parcel FedEx rates), a warehouse will go to FedEx with the combined volume of shipping all of their customer’s orders. In some cases, these volumes can be very high, and FedEx will willingly offer them discounted rates in order to win “all” of their business. In the case of an Air BNB solution that works with 500+ warehouses (this is the claim of many of them), each warehouse will only be awarded certain volume from the Air BNB warehouse provider, rather than the entire volume of fulfillment and warehousing across the platform. Therefore, the negotiated rates with each specific warehouse will be far less than if one warehouse was to run all of the volume through their one warehouse.
To further illustrate this concept, let’s take the case of a fulfillment warehouse in Atlanta, GA. Atlanta GA is a decent market for a warehouse in the southeast, but based upon our experience of requests throughout the US, it’s a less commonly requested area for warehousing. Thus, the potential deal flow in Atlanta will only be a fraction of the deal flow of warehousing opportunities throughout the US, and certainly less than either other single markets, such as Los Angeles or Chicago. Therefore, a warehouse in Atlanta will not be given all of the warehouse deals that the Air BNB solution has in its pipeline, and rather will only be given a small fraction of the deals in their pipeline. Ask yourself this simple question – Can the Air BNB solution really convince the Atlanta warehouse to give them bare bones pricing when it’s only giving them a small sample of business in their local market (especially given that 3PL warehouses is such a low margin, high volume business)?
There’s only one way – for whatever space they have available in the corner of their warehouse and with the thought that they probably won’t service the business to the degree that they service their other customers that operate at a better overall margin.
A few tangible examples of how the pricing structure might work out:
Bottom line, you’ll be paying higher rates than if you do a good job of negotiating direct with a warehouse yourself OR you’ll compromise service!
Furthermore, each warehouse already has their own warehouse management system, their own processes, and their own procedures – so using the warehouse marketplace software is secondary to their core business. Add to this fact that they’re more than likely earning less money on your account than another account they acquired through their own marketing, and you have a recipe for disaster – they don’t have as much incentive to provide you as good of service as a customer they got on their own. Margins are even smaller for any companies they acquire through online warehouse space marketplaces, so your service will suffer in the end.
We haven’t even touched on the topic of non-3PL warehouses that opt into the Air BNB warehouse network. These companies have an entirely different business (for example, they may sell clothing). By opting into the Air BNB warehouse network, they figure that they can use some of their excess space and make a few extra bucks. Do you really want someone that isn’t necessarily well versed in 3PL warehousing to handle your goods? Also, do you really want someone taking care of one of the most critical aspects of your business that is really only offering it to make extra money on the side? In cases where the warehousing is very simple and non-critical, this might work, but we have yet to come across many e-commerce businesses that would consider their business simple or non-critical. In other words, there’s a significant different between someone letting a house guest stay in their home for a weekend and a company using it’s spare time to run fulfillment operations.
There are other companies that offer a fulfillment software that you can use along with one or more of their fulfillment warehouses in their network. An example of this is Whiplash – a company that provides the software and access to fulfillment warehouses and operates in a very similar fashion to on-demand warehousing. All of the same problems come into play, from pricing challenges to service level issues. It’s important to understand the potential challenges of using this type of service before signing on the dotted line. In our network of vetted fulfillment providers, we have some that have had some experience with companies such as Whiplash. When we spoke with them about it, they indicated that we were “spot on” with our assessment of pricing and service challenges. In fact, we found out that companies of this nature will charge a fairly low rate for fulfillment, giving the fulfillment company about two-thirds of the revenue – forcing them to provide service at a lower price than they would normally even charge their standard customers. It should come as no surprise that they choose to provide a higher quality service to their direct customers.
And to boot – invariably the customer “finds out” that the service is being provided by a local fulfillment center, looks up their contact information online, and then contacts them direct for any service issues and questions because the time lag for answered questions is too long (e.g. they have to contact the on-demand fulfillment service, who in turn has to contact the warehouse, who in turn has to answer the on-demand company’s questions, which can finally be conveyed back to the customer). But the local warehouse can’t afford to provide additional service at such a low margin pricing structure and so everything falls apart.
In our opinion, on-demand warehousing works for one scenario – temporary or seasonal overflow scenarios where it’s simple pallet in/pallet out without any sophisticated needs or when you simply can’t find any viable options in a local market. In this case, it’s very difficult to make a mistake. The on-demand warehousing provider does offer some value by serving as the connection between you and a network of potential warehouses with excess space. But when things get any trickier than this, there are far too many challenges that can ruin performance. Even still, temporary or seasonal warehouse space will cost you more almost 100% of the time using the on-demand platform than if you were simply able to find the warehouse space on your own.
WarehousingAndFulfillment.com saw the gaping need for an unbiased, comprehensive curation of 3PL fulfillment companies. From small to large; global to local. It is a colossal task for one person to wade through thousands of companies and identify the right ones for them, so we have dedicated our business to doing that work for you.
We have performed exhaustive research to create a list of top fulfillment services companies. An important part of our process is thoroughly researching and analyzing each company according to our 5-point analysis. We ensure that each company meets our standards, checking their financial stability along with reviews from customers. If a company isn’t up to par, they will be rejected. As a result, we have a network that can help many types of businesses with varying needs.
To find the right fulfillment company for your particular business, you simply fill out one form. After that, we will go to work to match your business with compatible companies and will provide you with quotes. Note that this service is free. We charge all fulfillment providers the same small per lead fee, so there is no bias – and absolutely no way that it will impact the pricing they give you. We will not recommend one over another for any reason except compatibility with your business needs.
In our experience, there’s a better way of connecting you with the right companies. Rather than listing a few of the total companies out there, we’ve vetted and approved a small fraction of all of the providers out there and then we learn about your specific needs and hand-pick a few options that we feel best suit your needs. Previously, we mentioned the following categories for search criteria: Product based, Location Based, Technology Based and Service Based. But the reality in our system is that we have over 100 criteria that we use to match your business with the Best Fulfillment Center. Some of these criteria include:
Of course, we know the best fulfillment companies for each location in the US and Canada and Europe.
“We’ve spoken extensively with the warehouses in our network, received feedback about them, and in some cases even visited their facilities – so we do really get to know them and can quickly short-list companies with the best matches,” said Will Schneider, founder of WarehousingAndFulfillment.com.
Now, you’re more than welcome to go out there and search, and search, and search for the right fulfillment option for your business. At least take our word for it – you most likely won’t find the best company for your business on the first page of the search engines or even on one of these lists. You will probably have to dig pretty deep to find the perfect match. OR – you are more than welcome to fill out a form on our site and get matched with hand-picked fulfillment firms that have been vetted by former fulfillment executives. One way or another, we’re happy to help you with any questions. Just let us know and we will do our best to assist you.
If you’d like to get matched to the best fulfillment companies for YOUR particular situation and business in your desired location, just fill out a quick form on our site and a fulfillment expert will guide you through the process and get you hand-picked matches that really are best for your company:
|Fulfillment Centers in Alabama||Fulfillment Centers in Kentucky||Fulfillment Centers in North Dakota|
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Finally, for those of you that aren’t as familiar with Fulfillment Services and Fulfillment Centers, we wanted to provide some additional information so that you can determine if outsourcing fulfillment is best for your business. Below is a comprehensive resource to help newbies navigate the fulfillment landscape.
A Fulfillment Center Company, also referred to as a Fulfillment Service, Fulfillment House, or Third-Party Logistics Provider (3PL), is a warehouse company that possesses the ability to manage your inventory, orders, packaging, shipments, and returns. Most businesses that utilize a fulfillment center are online, small businesses with daily shipments to customers located throughout a local region, the entire US or internationally. Some mid-size and large companies use them, too. With most consumers taking advantage of e-commerce, these services are becoming essential for the success and growth of small businesses today.
A fulfillment center will have one or several order fulfillment centers strategically located throughout the US. Some 3PLs will have several warehouses for shorter delivery times, whereas others will only have a local warehouse for fulfillment and distribution. These fulfillment companies have many clients under the same roof and manage hundreds to thousands of shipments each day. They also take on the financial risk of the operations and staffing requirements, so you do not have to.
The range of services at a fulfillment center vary based on your needs. If you are interested in all services offered by a fulfillment center, this will include everything involved in the shipping process, such as inbound receipt of goods from suppliers or manufacturers, warehousing storage, order processing, picking, and packing, labeling, arranging shipping, loading the truck, providing the proper documentation for each order, and tracking the shipment, as well as handling returns. The 3PL also provides all the equipment and tools necessary to prepare each shipment and the labor required to fulfill each order.
Fulfillment centers also take over all the administrative, technological, and operational expenses of the warehousing and shipping processes typically incurred by businesses. Fulfillment centers negotiate rates with carriers based on all their client base for far better rates than individual businesses can secure. They choose the best packaging for each type of shipment. The best fulfillment companies will constantly upgrade equipment and technology to ensure shipments are as efficient at cost-effective as possible. And they also take on the lease or own the warehouse and hire the employees that will complete all fulfillment activities. Some fulfillment centers specialize in certain products, which others specialize in certain services, such as e-commerce fulfillment.
While many logistics company force you to fit into their box of processes and procedures, some fulfillment centers offer specialized services that can be tailored to meet your company’s specific needs. What kind of touches can you think of that you might want to add to your packages? It might be a hand-written note, or it might be gift packaging. Perhaps, you have delicate materials to package in a unique and beautiful way. If you are looking for a fulfillment center that will perform similar tasks for you, and even if you are not sure yet what you want, make sure to look for one that offers additional kitting services and that offers flexibility in packaging. Many companies, especially the larger companies, simply won’t allow you to change or deviate from their standard way of processing orders. While this helps in some ways to reduce potential errors, it can be crippling to smaller and growing companies that simply must provide a customized experience to their customers in order to grow and remain competitive.
Whatever your business, you know customer satisfaction and retention are key. As a crucial component of customer satisfaction, how do you make the customer feel as if you care about them – that they matter to you? A solid fulfillment center strategy, including some of these small touches can make all the difference. Imagine yourself in the customer’s shoes, receiving that little handwritten note. Imagine being aware that your delivery is special and unique. This is what separates successful online retailers – they think about every single detail from the time the order is placed until it reaches the customers. A highly flexible and unique fulfillment experience is becoming increasingly more important, especially as online retailing grows at an exponential clip.
Logistics and shipping are two essential aspects of getting a product to the customer.
Logistics is the process of organizing and planning the movement of goods to meet production goals. Logistics includes services such as order management, transportation planning, inventory management, and packaging. Shipping is the physical transport of goods from one place to another by truck, rail, ship, or air.
Fulfillment and shipping work together, but there is a difference. Fulfillment services include the process of receiving an order and getting it ready for shipping, including picking and packing the orders, labeling the orders, and updating inventory. Shipping is the actual act of sending the goods to the customer.
A warehouse is where goods are stored until they are ready to be shipped. Manufacturers use warehouses, like any party that moves products around, such as exporters, importers, transportation businesses, and wholesalers.
You’ll often find them on the outskirts of a town near industrial parks. Almost any building can serve as a warehouse if it’s large enough to hold the product. Still, a good warehouse should have climate control, ample shelving, heavy machinery to lift and move objects, and an inventory management system.
Most warehouses also have areas for truck loading to back up into the loading dock so workers can unload the product directly into the warehouse.
A fulfillment center is a type of warehouse used to process orders and prepare them for shipping. These facilities are usually smaller than warehouses and aim for quick order processing. They often have staff on site to help with customer service and returns. A good fulfillment center will also have an inventory management system and the ability to ship orders quickly.
Fulfillment houses are designed for efficiency. These centers help orders get into the hands of the customers as quickly as possible. For many online retailers or eCommerce businesses, fulfillment centers help them meet their warehouse and shipping needs while saving money on physical space.
Some key differences between the two include:
• Warehouses are a longer-term storage solution, while fulfillment centers provide temporary storage before orders go out to customers.
• Warehouses only handle storage, while fulfillment centers handle fulfillment services from order pickup to packing, labeling, shipping, and return management.
• Warehouse operations are static, while fulfillment center operations are complex and activities are constantly happening.
• Warehouses usually only work with one business, while a fulfillment center can serve multiple companies at once.
Finding the right fulfillment company fit for you is critical. Some products require special handling or packaging, which can increase the cost of shipping. Other products may be fragile and need gentle handling. The best fulfillment company will have experience dealing with your type of product.
For example, if your product is apparel, and you have tons of styles and different SKUs, there’s a much higher potential for error. The worst conclusion is a customer ordering a Medium and getting a Small! You’ll want to find fulfillment companies with specialized experience handling this high volume of similar SKUs.
Another example would be food-related products. Anything food- or drug-related will need to meet strict FDA regulations, so you’ll need a fulfillment company that can help you meet those standards with climate control, etc.
A third example is a company that creates hazardous materials. Products containing hazardous materials require safety data sheets (SDSs) to be managed through every step of the logistics process, including fulfillment, so finding a company with experience handling such sensitive data and products is essential.
Your choice of technology can also impact the best fulfillment companies for you. If you use advanced technologies like RFID or barcodes, you will need a fulfillment company with tons of experience using those specific technologies. That way, there’s no drop in productivity or unnecessary roadblocks to overcome.
The key is finding a fulfillment company that has experience with the specific technologies you use. You can typically find companies specializing in certain niches, making them familiar with specific technologies. Examples include:
• Ecommerce – Require fulfillment centers that work with shopping cart software such as Shopify, BigCommerce, Magento, Xcart, etc.
• B2B – Require fulfillment centers familiar with enterprise software such as Netsuite or EDI software for Big Box retailer shipments
In addition to finding a fulfillment center with experience using your industry-specific software, all businesses will need their fulfillment company to integrate with their warehouse software to make syncing inventory simple. Other software you’ll need to integrate includes financial software, like QuickBooks.
Real-time reporting is the last technology to consider when selecting your fulfillment company. Reporting software helps you keep up with the progress of your orders to ensure they make it to their destination – and keep you in the loop the entire time.
Your current order volume will also help determine which fulfillment company is best for you. If you’re a small business with less than 100 orders per month, you likely won’t need the same level of service as a business fulfilling 5,000 orders daily.
A smaller operation or a startup can get by using an in-house team or working with a local third-party logistics provider that can offer a lower number of services but at a lower price point.
If you have a high volume of orders, you’ll need to find fulfillment companies that can scale with you to avoid disruptions in your business. Most fulfillment houses start working with companies when they hit the 200-1000 orders-per-month mark.
Once you start surpassing 5,000 orders per month, you may need to switch to a large-volume fulfillment center that can better keep up with your sales.
There are several types of fulfillment centers you’ll come across, with each having its own specialty. Learn about the different types to determine which is best suited for your company’s needs.
Some fulfillment center types include:
• Traditional fulfillment centers
• Pick, pack and ship
• Climate controlled
• Smart warehouses
• Big and bulky
Traditional fulfillment centers are the most common type you’ll find. They store products in their warehouse and pack and ship orders when they receive them. A traditional fulfillment center is good for businesses with a large amount of inventory that needs to be securely stored until it’s shipped out.
The main downside to using a traditional fulfillment center is that you must take care of packing and shipping yourself, which can be time-consuming and expensive if you’re not doing it in-house. You’ll also need to find a way to handle customer service inquiries, returns, and other issues related to your products.
Pick, pack, and ship centers are like traditional fulfillment houses but offer additional fulfillment services like product packing and labeling. Pick, pack, and ship centers are suitable for businesses that want their products professionally packaged and labeled before they’re shipped out.
The main downside to using a pick, pack, and ship center is that you’ll likely have to pay more for their services than you would at a traditional fulfillment center. You’ll also need to find a way to handle customer service inquiries, returns, and other issues related to your products.
If you have products that need storing in a climate-controlled environment, you’ll need to find a fulfillment center that offers this type of storage. Climate-controlled storage is typically more expensive than traditional storage, but it’s necessary for products sensitive to temperature and humidity changes.
Smart warehouses are the newest type of fulfillment center on the market. They use technology like artificial intelligence (AI) and robotics to store, pack, and ship orders. Smart warehouses are good for businesses that want their orders fulfilled quickly and efficiently.
If you have products that are large or bulky, you’ll need to find a fulfillment center that specializes in warehouse storage and shipping these types of items. These centers have specialty equipment to heavy large, heavy items and trained laborers.
You might wonder how a fulfillment center makes money since they’re not selling any product. What they sell is the service of fulfillment, which comprises several other smaller services. Companies who use a fulfillment center will be responsible for paying for each of these services, usually in one comprehensive fee.
You should anticipate paying several different fees when working with a fulfillment center partner, including:
• Initial set-up fees to begin working together
• Fees for storage
• Fees for receiving orders
• Fees for picking and packing orders
• Fees for shipping the orders
• Fees for returned items
• Other fees may vary
The cost of a fulfillment center will vary greatly based on the 3PL you select and the types of services you require. There are four main fulfillment fees or costs that most centers charge and that make of most of your bill: Receiving, Storage, Order Fulfillment and Shipping.
First, most companies will charge a fee to receive your inventory. They may also charge you for inbound shipments based on the carrier you use. If you select one of their carrier partners, they often provide a discount. Second, you will be charged a monthly storage fee at nearly all fulfillment centers, which usually comes in the form of a fee per pallet stored per month or a cubic foot charge per month or a fee per bin used per month. Third, you will also charged for picking and packing services – usually either a flat fee per order or a fee per order plus a fee per item. Fourth, all outbound shipments will incur a shipping fee and may have a discounted rate based on the negotiations of the fulfillment center with their partner carriers.
As part of the cost structure, each fulfillment center will charge for their services differently. They may charge per shipment, per order, per item, per pallet, per weight and more. You may be required to have a minimum number of shipments per week or month for most 3PLs; however, a few 3PLs do not have a minimum order to utilize their warehouse and fulfillment services. And keep in mind that most centers offer specialty services, such as gift packaging, stock preparation, light assembly/kitting, returns processing and branded packaging. These additional services come with a corresponding cost.
The pros and cons for each business choosing the services of a fulfillment center will vary. One of the greatest benefits is that, despite the cost, outsourcing these services allows you to focus on growing your business. As a small business or a startup, it may not be possible to do everything exceptionally well and warehousing, managing inventory and shipping are highly critical areas of the business that can make or break profits.
By using fulfillment services, you can focus on your strengths to ensure high levels of customer satisfaction in all areas of your business. This will result in repeat business and long-term sustainability for your business. While you still pay for fulfillment services, they absorb most of the capital requirements for these processes that small businesses and startups often cannot afford to do well without investment. Fulfillment houses also take away the fixed cost associated with a warehouse lease, making it variable and based upon usage. Furthermore, fulfillment centers relieve the burden of managing logistics.
Fulfillment centers offer many benefits; however, they are not without some challenges and concerns. You may not be able to choose the carriers you prefer. Each fulfillment center has a designated group of carriers selected by the 3PL. You do not have a say in their carrier partners. It is important to note that many fulfillment centers do not provide insurance to cover your goods whilst being stored onsite or during transport. You still must arrange to protect your goods at an additional cost. And many fulfillment centers utilize a fee per activity invoicing method, which means there will be many line items on your invoice and can oftentimes be cumbersome to manage. Finally, some businesses require very specific needs for their products, whether its strict climate controls, sophisticated packaging and kitting requirements, or other nuances. In these cases, it can be more challenging to find a company that can customize their service to your every need.
At some point in your shipping process, the cost of using a fulfillment center will be more than doing it in-house. You must decide whether these costs are worth the need to dedicate your existing personnel to growing your business or if it is time to hire your own people for inventory and shipping to save money. The decision between in-house fulfillment and outsourcing fulfillment is a difficult one, and very important.
Choosing the best fulfillment center for your company requires a great deal of planning and thought process. Each fulfillment center specializes in different services, such as the type of business to which they cater and the locations of the fulfillment centers. If you have clients across the country, you want to select a 3PL that has several fulfillment centers that are located close to your client base. If you have international sales, be sure the center has the capability to ship globally.
And make sure the fulfillment centers can store and ship your commodities. As an example, some fulfillment centers will not be able to store hazardous materials or ship large break bulk items. Be sure to choose the right fulfillment center for you based on your needs and do not forget to ponder the cost of the services. It may not be in the best interest of all small businesses and startups to use such services until they can afford to do so or until they have a higher weekly order count. However, most businesses will absolutely benefit from the right fulfillment center that caters to their unique needs.
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