How an order fulfillment company will help your e-Commerce?
- 1. What is an order fulfillment company?
- 2. Services of a fulfillment center
- 2.1. 1.- Receiving
- 2.2. 2.- Organizing
- 2.3. 3.- Order management
- 2.4. 4.- Inventory management
- 2.5. 5.- Picking & packing
- 2.6. 6.- Transportation logistics
- 3. Benefits of fulfillment services to eCommerce
Nowadays, countless strategies help entrepreneurs and companies to improve their logistics processes, from the automation of the production line to hiring an order fulfillment company to take care of the picking, packing, and shipping of the request in their eCommerce.
However, not many organizations know the importance of having an alliance with this type of company; that’s why the team of Búho Logistics has prepared this article.
Hereunder you will learn what is an order fulfillment company, its role within your business, and the benefits you can take advantage of for the growth of your organization.
What is an order fulfillment company?
First of all, we need to clarify what is an order fulfillment company, also known as a fulfillment service provider or fulfillment center.
They are specialized in third-party logistics (3pl) since they handle the storage, processing, and shipping of customer orders on behalf of businesses.
Specifically, they provide services focused on the management of the logistics and operations involved in fulfilling orders, allowing companies to outsource these tasks and focus on other aspects of their operations.
These strategies can be implemented not only for traditional businesses but also for eCommerces, this is a new model of commerce that is continuously evolving that’s why these companies tend to rely on fulfillment centers.
Services of a fulfillment center
Now, how can an order fulfillment company help your e-Commerce business? Depending on your enterprise's needs there are particular services that you can have access to, hereunder we will explain them in further detail:
The order fulfillment process begins with an online purchase. That item has to be located, packed, and shipped to the customer. Fulfillment strategies may vary slightly from one organization to another but they all involve these elements:
One of the main services of a fulfillment center is the reception and storage of their customer merchandise, since not every company has the infrastructure necessary to have their inventory within their perimeters, that’s why they tend to outsource warehouses.
However, sometimes these warehouses don’t have the requirements to maintain safe products, here is where a fulfillment company enters, since they are specialized in logistics processes they have the equipment necessary to protect your merchandise.
So, the first step in the order fulfillment process is receiving the products which are delivered to the warehouse from the clients. In most cases, products are received in large shipments and then stored in the warehouse until they are needed.
Secondly, they have different storage strategies to organize the products when they are received in the warehouse.
These strategies consist in putting the merchandise according to its characteristics and in a safe environment depending on their needs. For example, heavy products may be stored on the last shelf while the light ones can be on the top of the racks.
3.- Order management
As e-Commerces need plugins and IT solutions to offer an optimal user experience, also order fulfillment strategies for e-Commerce require them.
These usually handle the constant flow of orders and turn them into a list of priorities for the next step in the process. Without an order management tool, any eCommerce operation would quickly get lost in the chaos of tracking so many orders at once. Or it can result in the hiring of a huge staff to complete the same task as the automation which results in a higher logistics cost.
4.- Inventory management
For e-Commerce, it is highly important to know the quantities of every item you have available, the ones that are in stock, the ones that are sold, and the amount you need to produce to meet the demand.
Even though the operators of a fulfillment center have the expertise and knowledge to manage the inventory, they rely on tech solutions to deal with the complexity of the stock, providing real-time insights into e-Commerce fulfillment.
5.- Picking & packing
Finally, thanks to the IT solutions for inventory management, a fulfillment center has robot technology to reduce the intense effort of the process since this step in order fulfillment involves the removal of items from their storage space to send them to packing stations. Here, the products are ensemble in their respective orders and are prepared with the appropriate packaging.
6.- Transportation logistics
Finally, when the order is ready to ship it needs to be sent. A fulfillment center has alliances with courier services to access special prices for the distribution of orders. Most fulfillment services end with this step, however, others have reverse logistics to help you with any problem regarding client attention and problems with the delivery of the products.
Benefits of fulfillment services to eCommerce
Now returning a bit to the impact of order fulfillment centers in e-Commerce there are several advantages you can benefit from.
1.- Scalability solutions
As we mention, e-Commerces are always evolving, that’s why fulfillment centers provide flexibility to scale your business operations as the demand raises. In other words, an order fulfillment company can adequate their operations to handle higher order volumes, this scalability allows your business to meet customer demand.
2.- Cost Efficiency
This is one of the first benefits you can verify, an order fulfillment company can help reduce operational costs for eCommerce businesses since they take care of the storage, inventory management, order processing, and shipping tasks rather than the company investing in hiring and training staff just to handle logistics operations.
3.- Expand your reach and market
Order fulfillment centers often have multiple warehouse locations strategically positioned in different regions or countries. How is this a benefit? Well, this allows you to store your inventory closer to your customers, enabling faster and more cost-effective shipping.
This can help you expand your e-Commerce business's geographic reach, target new markets, and serve customers in various locations without the need for setting up multiple warehouses yourself.
Now that you know more about the role of order fulfillment centers in your business, and most importantly in e-Commerces, share this article with your colleagues and on your social media. Also, do not forget to stay pendant to our blog to learn more about the trends and updates on third-party logistics.