Frequently Asked Questions
Everything you need to know about outsourced fulfillment
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FAQs about Fulfillment Companies and Services
Find answers to common questions about our services, processes, and policies.
What is a Warehouse?
What is a Warehouse?
A warehouse, unlike a fulfillment center, usually focuses on providing storage only services or cross docking of goods. Storage is usually conducted on a pallet basis, crate basis, or a square footage basis. While goods will move in and out of the facility, warehouses do not usually focus on the complexities of B2B, B2C, and omnichannel fulfillment services. The size and scope of a warehouse varies depending on its intended use. Today, three major types of warehouses are available.
- On-demand warehouse (provides short-term warehousing on an as needed basis, and usually done in various locations)
- Public warehouse (provides general warehousing services for a multitude of customers)
- Private warehouse (provides warehousing services for a single company)
- Cross dock warehouse (provides short-term warehousing services for a single location)
What are the Benefits of Using a Fulfillment Center?
What are the Benefits of Using a Fulfillment Center?
Some of the reasons you should consider outsourcing your logistics with a fulfillment center include:
They Eliminate Storing Inventory and Managing Fulfillment Staff
Keeping tabs on inventory and managing fulfillment and shipping staff is not easy – both for startup businesses and established ones. Fortunately, fulfillment centers are here to help you handle all the problems associated with product storage, packing, and shipping so you can spend your valuable time on other core functions of your business.
When you use a fulfilment center to manage your inventory, you eliminate the need to pay a fixed warehouse lease cost. In fact, you only pay for the space you use, which means that your warehousing costs become variable instead of fixed. When your inventory draws down, you pay less.
They are Experts at Storage and Fulfillment
Companies that specialize in fulfillment services are experts at everything to do with fulfillment and shipping. They know how to handle various situations that you may not have experience with. While your company may have some competencies or capabilities with inventory management and shipping, fulfillment centers have greater depth and breadth of knowledge, which will help you streamline your operations, avoid pitfalls, and deliver the greatest fulfillment experience for your customers.
They Will Lower Your Overall Logistics Costs
In addition to lowering your storage costs, fulfillment centers can lower your shipping and fulfillment expenses as well. First, because fulfillment centers ship for a multitude of customers, they can obtain extremely aggressive freight rates from the shipping carriers – discounts off published rates that will be lower than what you’re able to achieve on your own. Fulfillment centers pass on some or all these savings to you, leaving you with a net shipping spend that will be lower than if you negotiated with carriers on your own.
Second, fulfillment centers can also help you achieve lower fulfillment costs, including both the labor cost of picking and packing orders, as well as the cost of materials such as boxes and packaging fill.
What Are the Different Types of Fulfillment Centers?
What Are the Different Types of Fulfillment Centers?
All fulfillment centers generally provide the same set of core services to help companies deliver packages both locally and internationally. In terms of these core services (receiving, storage, fulfillment, and shipping), most fulfillment centers do not differ much. However, some fulfillment centers specialize in certain aspects of fulfillment, delivering a more tailored service.
Some examples of fulfillment center specialization include:
- B2B fulfillment companies: they focus on fulfilling orders that are sent to businesses only. These companies are experts in providing EDI (electronic data integration) and retail compliance with major retailers, shipping orders to specialty and boutique businesses, and delivering orders to businesses. Order sizes for B2B shipments tend to be larger, encompassing many SKUs (stock keeping units) and items per order.
- B2C and E-commerce fulfillment companies: they focus on fulfilling orders place by online consumers made through e-commerce web stores, online marketplaces such as Amazon and eBay, and other direct to consumers channels like Kickstarter and Facebook. Individual orders placed by consumers tend to be smaller in nature. B2C e-commerce fulfillment companies may also be referred to as order fulfillment companies or pick and pack fulfillment companies.
- Omni channel fulfillment companies: they focus on fulfilling orders for all sales channels, including both B2B and B2C channels.
- Fulfillment and call center companies in one: they offer both fulfillment and customer care services under one roof, helping to deliver an exceptional customer experience.
Why Choose OSW for Your FBA Prep?
Why Choose OSW for Your FBA Prep?
Outsourcing FBA prep service is a great addition to your business. It takes a large part of the process off your hands, frees up your time to focus on other activities, and, more importantly, ensures you meet Amazon’s FBA requirements. However, you can only realize these benefits when you work with an experienced partner such as Our Serviceworks (OSW).
Our Serviceworks has over three decades of experience working with local and national companies alike. We understand all the ins and outs of Amazon eCommerce. FBA prep customers take advantage of our competitive storage rates and use our industry expertise for FBA prep.
But perhaps the greatest differentiator between OSW and other Amazon Prep alternatives is our attention to superior customer care. Unlike Amazon, where you’ll be lucky to get chat support that addresses your needs, OSW provides customer care services for clients, which complements our fulfillment capabilities. The stakes are high in terms of garnering 5-star reviews from Amazon customers – so you need a capable partner to deliver unparalleled service to ensure customer satisfaction.
Contact OSW today and learn more about warehousing, fulfillment, and shipping services.
How Much Does it Cost to Outsource FBA Prep Services?
How Much Does it Cost to Outsource FBA Prep Services?
For FBA prep, you have three choices, including paying Amazon, doing it yourself, or outsourcing with a third-party prep center. With Amazon, you must consider your monthly shipping and the size of your profit margins. You are eligible only when you meet the minimum threshold of 40 items per month. Even if you meet the threshold, you still must determine if their hefty fees are economical for your business, or if the fees will potentially bring your small margins to zero.
If you decide to do the prep yourself, you will have to factor in costs such as rent, employees, supplies, technology, and management time. Renting a small space will cost you quite a bit by itself ($750 per month at a bare minimum), depending on the location.
Unless your rented warehouse has dock access, you will have to incur lift gate fees when you order from suppliers who ship items on pallets since small spaces don’t usually have loading docks. After renting the space, you need to hire one or more employees each at about $2500 or more per month (including benefits. In short, you can easily spend more than $3000 per month doing FBA prep yourself.
When you outsource FBA prep, you only pay for the space you use, a price that is usually lower than renting your own space. You will not encounter lift-gate fees and can enjoy additional discounts if you commit to longer terms. Furthermore, you won’t need to hire employees; thus, you can rest assured of faster processing times. The cost of outsourcing FBA prep services with a prep center is significantly less expensive than other options.
FBA Prep centers usually charge the following fees:
- Labeling Fees
- Prep Fees
- Stickering Fees
- Box, Bubble Wrap and Pallets Fees
- Inspection Fees
Why Outsource FBA Prep Services?
Why Outsource FBA Prep Services?
Considering the rigorous Amazon’s FBA requirements, most online stores need help from experts. Outsourced FBA prep companies have extensive experience in meeting the demands of Amazon, so you can focus on other aspects of your business rather than wasting time labeling product and managing storage limits.
Outsourced FBA prep companies offer a wealth of benefits, including:
- Ensuring your shipments meet Amazon FBA requirements
When you outsource FBA prep to experts, they ensure your inventory meets all Amazon’s requirements. They have experience working with FBA and are aware of all the requirements involved. You can be sure that your items will be accepted, and your Amazon account does not risk suspension. - Saving your company time by avoiding tedious and laborious tasks
For any business, time remains a precious commodity. It can be a real struggle to get your online business going when receiving deliveries, checking, and prepping them all eats away at your time. There is a wealth of more valuable tasks that need your attention, such as administration, purchasing, and sourcing. Luckily, outsourcing FBA prep services ensure you spend that time elsewhere by taking most of the tedious workload off your hands. You can direct the time towards growing the business further. - Avoiding Amazon’s “peak season” pricing
Standard storage pricing at Amazon is typically more expensive than third-party warehousing. Amazon’s storage rates also increase significantly during the peak season. Amazon puts more emphasis on moving products than storing excess inventory, and therefore implements a punitive pricing model during peak season that favors companies that do not use the storage space in fulfillment centers much. Outsourcing FBA prep can help sellers avoid such high costs when longer term storage services are needed by avoiding Amazon’s increased storage fees. Furthermore, Amazon Prep centers offer scalability by allowing more storage and processing as the business grows in addition to the peak season. - Eliminating the need for more systems
Getting your items out in an efficient and timely manner requires you to streamline the processes. Meeting Amazon’s strict demands will no doubt require the implementation of systems and processes in your shipping function. By working with FBA prep companies, you don’t have to develop any systems or processes since the third party takes care of all that on your behalf. Instead, you have extra time and energy to build your business. - Optimizing spend on packaging materials.
If you have already bought, prepped, packaged, and posted an item to Amazon, you know how many different materials go into ensuring that products are properly packaged. Just imagine doing this at scale. You need boxes, labels, bubble wrap, bags, printers, and ink, and missing any of these materials could significantly impact your business. Outsourcing a prep service means all these requirements are off your hands.
List of FBA Prep Services
List of FBA Prep Services
Amazon FBA prep companies aim to perform all the hefty logistics on your behalf. Generally, when using a prep service, you send shipments directly to the prep center’s address instead of yours, where all the work is performed to get items ready and shipped to FBA warehouses on your behalf.
However, it is worth noting that each prep center has its own unique service offering and niches they excel in, so you need to choose one that meets your needs.
Some of the common services you can expect at an FBA Prep Center include:
- Receiving
- Sticker removal
- Inspection of goods to ensure product is undamaged
- Applying shipping labels
- Storage (to help avoid Amazon’s storage limitations throughout the year)
- Poly bagging
- Repackaging
- Damaged item handling
- Loose product preparation
- Items forwarding
- Container handling
- Expiration labeling
- Product tracking technology
- Order fulfillment
- Shipping Services
- Bubble/shrink wrapping
- Palletizing
- Product assembly
- Suffocation warning labels
- Import/export management
- eCommerce fulfillment
- Package design/marketing
- Promotional inserts
What is FBA Prep?
What is FBA Prep?
FBA prep involves preparing your stock so that it is ready to send into Amazon DC’s. The main elements involved in FBA Prep are packaging, labeling, and inspection. It is crucial that you get your FBA prep right; otherwise, Amazon will reject your inventory, and you will incur steep costs to remedy the stock for reinjection into Amazon.
Not only must you prepare your products to meet the rigorous standards of Amazon FBA, but you must also make sure that stock arrives at Amazon undamaged. If damaged stock is sent to Amazon, chances are it could inadvertently be sent to your customers, resulting in potential customer complaints. When such complaints pile up, they ruin your metrics, suppress your listing, and Amazon may even suspend your account.
This article explains more about FBA prep services and why you should consider outsourcing this critical service with professional fulfillment services rather than taking the risk of jeopardizing your status with Amazon.
Why Choose OSW Ecommerce Fulfillment?
Why Choose OSW Ecommerce Fulfillment?
Efficient eCommerce fulfillment sets your business up for growth, and proper packaging and fast shipment improve your customers’ experience encouraging more purchases and online referrals. Luckily, that is exactly what Our Service Works (OSW) provides your business. We are an experienced fulfillment provider with over thirty years in the industry.
Our top-notch order fulfillment software transforms the handling of your fulfillment to meet the needs of today’s online retail. You can rest assured of reliable shipping, unmatched flexibility, dynamic integration, full visibility of the entire fulfillment process, and customized packaging. Contact us today for all your warehousing, fulfillment, and shipping services.
What are the Costs of Outsourcing?
What are the Costs of Outsourcing?
Fulfillment costs depend on the fulfillment provider you choose and their pricing model. Every fulfillment provider differs slightly in terms of how they charge, but most utilize an activity-based costs methodology where they charge a fee for every service they perform for you. Most e-commerce fulfillment companies’ standard picks and packs fees start from about $2-$3 per order.
Generally, you can determine the total fulfillment costs by adding up all the expenses of a whole fulfillment process. These include:
- Warehouse receiving
- Storing and managing inventory
- Warehouse picking and packing
- Standard or custom packaging
- Shipping
- Return management and processing
For more information on the specifics of fulfillment pricing, read our in-depth article here.
