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What makes it challenging is that many of them can mean the same thing, with slight and subtle differences, such as:
But don’t worry, we can point you in the right direction if you don’t know which is the best for you! Because it’s sometimes confusing to differentiate between these different types of services, we decided to create a comprehensive listing of the various fulfillment services along with a brief description. Take a look at this thorough list of fulfillment services 3PL’s offer so that you see the depth of help you can receive by outsourcing fulfillment.
Due to the explosive growth of e-commerce sales, most of the best fulfillment centers now offer e-commerce fulfillment. E-commerce fulfillment companies link directly to your online shopping cart, receive your orders automatically into their WMS (warehouse management system), and process orders that are shipped direct to consumers. The best e-commerce fulfillment companies can not only link to your Web store, but will also be able to integrate with other online sales channels, such as Amazon, eBay, Jets.com, Walmart.com, Facebook, etc.
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Retail fulfillment centers ship inventory to big box stores (such as Amazon, Home Depot, Best Buy, etc.) or Mom and Pop shops (smaller specialty retailers with brick and mortar presence). These orders are larger than B2C online orders, and oftentimes require very specific packaging and labeling with are detailed many times in routing guides and instructions for each specific retailer. Adding to the difficulty of retail fulfillment is that many retailers charge you fees when orders are shipped incorrectly to their DC’s (distribution centers). The fees, otherwise known as “chargebacks” can be extremely taxing, so finding a fulfillment center that is highly competent in retail fulfillment is essential. Furthermore, larger retailers usually require the exchange of order information be completed using EDI (electronic data interchange) software.
Multi-Channel fulfillment simply means that a fulfillment company can fulfill to an assortment of different sales channels, including direct to consumer, business to business (to retail), etc. Fulfilling orders to multiple channels isn’t a “cakewalk”, so it requires a very highly skilled fulfillment center that has years of experience with the nuances of both B2B and B2C shipping.
Due to the popularity of Amazon, FBA (Fulfillment by Amazon) prep has grown in popularity. In this scenario, a fulfillment center receives product, prepares products for delivery to Amazon DC’s by applying appropriate labels, etc., and sometimes even stores products on a longer-term basis in order for companies to avoid Amazon’s long-term storage fees. Because Amazon ultimately earns most of the fulfillment and shipping fees, many fulfillment providers don’t offer this service. We created a list of companies that do offer FBA Prep services which you can view.
Crowdsourcing through sites like Kickstarter and IndieGogo means shipping items to people as a ‘thank you’ for giving money. Sometimes the ‘thank you’ gifts will include the product or a prototype of the product, as well as swag and apparel. Unlike ongoing fulfillment and shipping of orders, crowdsourcing fulfillment is usually done one-time in a large batch after the crowdfunding has been completed and the funding goal has been achieved.
Subscription box fulfillment (otherwise known as auto shipping) takes place when a company ships out product on a recurring basis (usually monthly). An example of this type of fulfillment is the Dollar Shave club, where a razor is sent to customers each month. Subscription box fulfillment centers have to be very well versed at batch shipping, receiving an updated list of monthly orders. Furthermore, great flexibility is required to not only meet different and oftentimes very ornate packaging and insert requirements, but to also work with a wide range of products and high SKU count.
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Are you selling products through sites like Etsy, or Daily Deals? Flash sales on these sites require expedited shipping that might become impossible to fulfill if attempting it on your own. Outsourcing to a fulfillment center dealing in social and flash sales is to your advantage. Fulfillment centers that are very technologically savvy and have ability to integrate online with different social media channels offer the best service.
You may prefer using drop-shipping procedures where you purchase an item from a third-party retailer and then have them ship it to consumers. Since it doesn’t involve physical inventory on your part, a fulfillment company isn’t necessary in this case.
Direct mail campaigns are still popular to help promote businesses. Not all fulfillment businesses specialize in direct mail services, which can include in-house printing of promotional materials, letter services, and mailing of letter and envelope sized items rather than larger packages.
While the above-mentioned fulfillment services describe a lot of the main areas covered in fulfillment, there are some general warehousing services that also need explanation. Below we’ve including some of these warehouse services with a brief explanation.
Warehousing is the process of simply storing your goods. Warehouses will either store them on the floor, on pallets, in racks or in bins. Some companies only require storage of product for a short or long term. For companies that require fulfillment, warehousing is needed to store inventory in the warehouse so that orders can be shipped once customers place orders.
This might be a new shipping term for you, yet it’s important to know. Kitting and assembly services are what you do when you group, supply, and package products all as one unit. You’ll want this service to help cut down on shipping costs for your regular customers. Sometimes items need to be kitted together in a bundle or group before they can be shipped to customers.
With cross docking, you’re shipping products directly to consumers without any storage time. This means a fulfillment center that loads shipments from one truck or rail line to the next without storing it in a facility in-between or without storing it more than a short period of time.
Finding a fulfillment center with freight forwarding experience is equally important. Freight forwarding is the process of arranging all of the shipping form your overseas manufacturer or supplier to the warehouse location. It involves bringing the goods into the country of destination, clearing customs, and moving the product from the port to the warehouse.
Many fulfillment houses offer customer returns services, which is where they receive returns at their warehouse, inspect them for damage, and prepare them for either destruction or re-entry into inventory. Returns have become such an important aspect of fulfillment since online e-commerce companies offer favorable returns processing to ‘win the sale.’
Unlike returns processing, call center services are frequently offered as a service by most fulfilment warehouses. Only a small percentage of fulfillment warehouses offer inbound ecommerce call center services and order taking services. It can be beneficial to have everything under one roof, so that there is only one point of contact. However, if you wish to diversify your risk, using a separate call center company helps if you ever have a problem with either one of the two unique services.
Contract packaging is additionally important in a fulfillment center as a source for providing unique packaging services. Your products may have an unusual shape and require packaging that’s different from what’s typical. A fulfillment warehouse that offers contract packaging services will be able to help you purchase cartons and other packaging materials in order to prepare your goods for shipping. It’s important to note that some companies require more sophisticated packaging and bottle filling services, which most fulfillment centers don’t perform. In this case, you might need a specialized contract packager.
Take some time to think about other important roles you need your fulfillment center to take on. A small list to get you thinking:
Those of you opening a small business can benefit greatly from a fulfillment center providing services for startups like yours. First, you probably can’t afford to put together your own fulfillment facility. Even if you do attempt it, you’ll end up being overwhelmed. But only some of the fulfillment centers help start-ups, while most have very high monthly minimums or other volume restrictions.
What if your small business suddenly experiences a large volume of orders? It can easily happen if you receive a lot of publicity. A top-tier fulfillment center can handle a sudden influx of orders and expedite all shipping.
Whether you’re a B2B or B2C business, you’re going to need a fulfillment center that understands the unique differences and skills needed. In B2B, you need reliable shipment methods to business customers. Even if you’re in B2C, customers now want their deliveries yesterday rather than a day late.
Maybe you’re looking to corner international markets. Dealing with the complexities of international shipping absolutely requires a knowledgeable 3PL in your corner, including faster shipping methods.
Your business may require specialized things like high SKU counts to keep track of inventory. Any good 3PL can handle these requirements for you so you don’t lose track and end up telling customers you’re out of stock.
When you vet your fulfillment center, find out whether they offer integration on various levels. They should have capability to integrate with inventory (using ERP software such as Skubana), and with billing (using financial software like Quickbooks).
They should also integrate well with shipping software like Shipstation. Plus, they should successfully integrate with a full ERP software like Netsuite or Brightpearl.
Knowing your fulfillment center can integrate easily like this with their technology proves their worth indefinitely as your business grows to enterprise level.
Want to learn more about the terminology? View our dictionary of fulfillment terms below.
Here are some commonly used words in the fulfillment industry and their respective definitions:
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