Frequently Asked Questions
- Delivery Duty Paid
- FBA - Amazon
Crowdfunding fulfillment services refer to the process of delivering rewards to your backers. During a crowdfunding campaign, shipping and fulfillment may not be among the things that you focus on. However, you should factor these elements into your calculations. Otherwise, your campaign may end up losing funds, starting your business off on the wrong foot.
For example, determining appropriate donor levels for each perk is contingent upon the amount of money you need to devote to ongoing business operations, versus the amount of money needed to procure and deliver the perks to backers.
One of the most undervalued costs in correctly pricing rewards is fulfillment and shipping. It’s easy enough to understand how much your product costs, but correctly factoring the cost to pick and pack the perk and ship the perk to your backer is a bit trickier. This is where crowdfunding fulfillment companies come in – they can help you understand all the costs involved in crowdfunding fulfillment so that you don’t lose money. Common fulfillment and shipping costs include:
- Receiving the perks into the warehouse
- Storing the perks
- Picking and packing the perks
- Shipping the perks to the backer
Getting your costs right aren’t the only challenge in the fulfillment process – equally important is quickly processing the orders once the perks arrive and shipping them to backers as fast as possible. Shipping a large batch of shipments in a very short time window without making any mistakes is what crowdfunding fulfillment companies help you perform.
When choosing a crowdfunding fulfillment service provider, there are several factors you need to consider including.
- Specialization (Types of products the company typically handles)
- Platform integration
- Financial minimums to manage your campaign
- Add-on services the company provides
- Ability to fulfill orders through other channels once the campaign has ended
Other factors you can consider include:
Time to Fill Orders
The time between receiving shipments in the fulfillment warehouse and sending orders to the backers is among the biggest bottlenecks with crowdfunding fulfillment. This “time-to-fill” should be short – ideally less than a week. You need to consider this factor since some fulfillment services take even more than two weeks.
The only assurance that your crowdfunding campaign is on the right track is looking for a provider who communicates efficiently. A lot of complicated questions arise during the packing and shipping of individual orders, which creates room for ambiguity and error. Therefore, you need a company that is prompt to answer you throughout the process.
Furthermore, most fulfillment providers specialize in fulfillment only, rather than offering customer care services. Searching out a crowdfunding fulfillment provider that also offers customer care services not only provides an additional layer of insulation from any potential issues with shipping perks, but also allows you to begin building your brand with a cohesive fulfilment and customer service approach from the beginning of your business.
Experience in Crowdfunding
Fulfillment warehouses face unique challenges when handling crowdfunding campaigns. Creators often do not have experience and have a lot of questions. Besides, orders come in bulk, with some being international that need proper handling of customs and VAT. Therefore, you need a fulfillment company that has experience in handling crowdfunding campaigns, which are distinctively different from traditional fulfillment services.
Crowdfunding fulfillment services are a popular option among businesses and entrepreneurs for several reasons. They ensure faster shipping and at a lower cost, eliminating the need to lease warehouse equipment and space, and avoid money wasted on errors that can arise with self-fulfillment (in house fulfillment). More importantly, crowd fulfillment services improve supporters’ overall experience and make them more likely to support your crowdfunding projects and ongoing business operations.
But for excellent crowdfunding fulfillment services, you must go for an experienced company such as Our Service Works (OSW). With over three decades of experience in fulfillment, you can rest assured that you are working with a partner who gives the best service and at the best price. Whether you are looking to partner for Kickstarter fulfillment or Indiegogo fulfillment, we plan the processing and shipping of your incentives to ensure your success in the crowdfunding campaign – and we supplement the fulfillment and shipping with our customer care services so that questions can be answered quickly. Contact our team today for help in warehousing, fulfillment, and shipping services.
Delivery Duty Paid (DDP) is a type of delivery whereby the sender or seller takes the responsibility of paying the duties. The seller pays for all costs of shipping goods to the destination country of a buyer. These costs include any stipulated import duties and taxes, including Goods and Services Tax (GST).
In DDP, the senders typically pay any VAT unless otherwise specified. If you wish to implement DDP shipping, you must confirm any VAT requirements before you sell your products online to calculate their full impact on shipping costs and profit margin.
DDP also includes customs clearance; that is, the sellers pay for customs clearance. Online merchants who wish to embrace DDP should also carry out thorough research early on and account for the extra cost of customs clearance and its effect on the overall delivery costs and profits.
On the other hand, an online merchant may opt for Delivery Duty Unpaid (DDU), whereby the customer gets contacted as soon as their shipment arrives and has to settle any costs themselves before the customs can release the shipment and deliver it to the customer.
DDU shipping has no processing fees on top of the required duty and thus may seem to be a cheaper shipment option at checkout. But it is the sender’s responsibility to inform the customers that the duties will apply when the goods arrive in customs. Any miscommunication could lead to angry customers.
Most of the time, customers are not even aware they need to pay for duties. It often becomes a surprise when they receive a call from customs requesting payment. In fact, it can negatively affect your customer experience. Even worse, it may become more expensive when customs forward the shipment to an independent customs broker who may add storage, late payment, and brokerage fees. Independent customs brokers have different fee structures; thus, it is nearly impossible to establish what the final cost will be.
DDP shipment may be more expensive upfront since express couriers charge an additional fee to process payments to customs on your behalf. However, the fee may be several times lower than DDU brokerage fees and are also fixed.
Some couriers can even pay additional fees in advance on your behalf, ensuring that the clearing at the customs and delivery happens without the customs having to reach out to your customer and directly collecting the additional fees.
Sometimes, customers may decide to abandon the shipment in customs, especially when they encounter additional fees they never expected. DDP shipping helps curb such incidents since you may lose your product, sale and even pay extra fees if you want the shipment back. Therefore, DDP shipping remains the best for a smoother delivery experience.
It ensures safe shipping by air or sea freight.
Safe shipping by sea or air can be a challenge depending on the type of shipment and the destination country. DDP shipping ensures the senders do not take customers’ money and go into hiding without delivering.
It protects the buyer from scams.
DDP helps protect buyers from scammers. DPP shipping is a time-consuming and costly process that keeps away swindlers. The seller takes responsibility for all the costs and risks of delivering the shipment, thus striving to ensure the customers get the products they ordered.
It improves the purchasing experience.
DPP improves the purchasing experience since the customers do not have to worry about paying the fees. If the burden remains on the buyer, chances are it may not happen since they are not aware of these international fees.
It ensures safe shipping across countries.
Countries have specific laws governing transport, import duties, and shipping fees. Considering that anything can go wrong when delivering packages, DDP ensures the seller is diligent and ships only through the best and safest routes.
If you wish to implement the delivery duty terms, you should actively communicate your expectations with your customers on your web store. Give an in-depth explanation of how you will handle taxes and duties on the following sections of your website:
- Email confirmations
- Product pages
- Frequently asked question’s page
- Within the shipping policy
- Store checkout
Ecommerce customer support refers to how ecommerce businesses assist their customers, from making online purchases to resolving issues post sale. The main aim of ecommerce customer support is to help online businesses improve their customer experience to keep their customers loyal, while attracting new customers. In this fast-paced online ecosystem, ecommerce customer support is quickly becoming a necessary requirement for success for any online business. Data from Microsoft indicates that about 95% of consumers feel customer service is essential in maintaining brand loyalty.
Technology is the main difference between modern ecommerce customer support and traditional customer service. Unlike traditional brick-and-mortar customer support, ecommerce customer support isn’t conducted via face-to-face interactions. Rather, e-commerce businesses are charged with establishing positive interactions via phone and online methods. The end goal is the same – answering questions about company products and resolving issues throughout the purchase process. But establishing rapport, building your brand, and ensuring customer loyalty is challenging to conduct without being in person and requires skill sets that are distinctly different than in brick-and-mortar environments.
The e-commerce landscape is constantly changing and evolving, and therefore online merchants must adapt to meet these changes and exceed customer expectations. The following best practices can help your business over-perform when it comes to e-commerce customer support services:
Personalize Your Support Channels
Make it easy for your customers to choose their preferred method of communication if necessary. Whether on your website, your social media channels, or packing slips and marketing materials, it is imperative to outline the different options for communication. By clearly articulating the methods they can contact you, customers can choose their preferred method. Personalization is a key first step in providing exceptional service.
Remaining organized is a key to success for any thriving ecommerce customer support. While you might have a highly motivated team and a proven process, you won’t be able to last without organization.
Fortunately, being organized isn’t as scary as it may sound; it translates to keeping track of customer conversations and having the right tools to keep everyone on the same page.
Self-Service is Important
The main aim of having an ecommerce business in the first place is to allow people to make their own choices. It explains why over 60% of U.S. consumers say they prefer automated services. You can facilitate self-service by creating an easy-to-navigate website, having a mobile app, and a working self-service portal.
Most customers usually look for lines with the least resistance, and they will not hesitate to quit if they find yours too complicated.
Customer Reviews Are Vital
Before deciding to purchase something from your online store, a customer is likely to look at what previous buyers of the same product have to say. The truth is, everybody has something to say, so give your customers a platform to tell what they think about your products.
Falling on the Sword and Being Authentic
If there is an issue, customers expect you to admit your failures and take accountability for any mistakes. Projecting kindness and authenticity when a customer is upset is difficult, but more than attainable with adequate training. Other steps that you can take to improve your customer support are meeting your customers on their terms, improving your response time, and measuring & optimizing your service.
Fulfillment refers to picking, packing, shipping, and delivery of products to your customers. With proper ecommerce customer support, the fulfillment process is more manageable, leading to higher customer satisfaction levels.
If you are looking for a fulfillment company that offers you the best of both, Our Serviceworks has got you covered. We are one of the few companies that has both fulfillment and customer care services under one roof. We specialize in providing top-notch fulfillment and customer care solutions to help you maintain a healthy relationship with your customers. Contact us to learn more about our services.
E-commerce fulfillment refers to the entire process involved in delivering products to buyers after they order them online – whether the purchase takes place on your own website or an online marketplace. From receiving and storing inventory to processing orders, picking products, and packing boxes, to delivering items to the buyer’s addresses, e-commerce fulfillment spans the entire logistics function.
The ecommerce fulfillment process has six basic components, including:
- Receiving product into your warehouse
- Managing inventory
- Fulfilling and shipping orders
- Processing returns
- Supporting customers throughout the process
- Integrating order platforms with inventory and fulfillment systems
Receiving and inventory management are critical steps in the e-commerce fulfillment process. Receiving involves counting all incoming product and verifying whether it matches your inbound purchase order (PO), and ensuring that inventory is safe, secure, and properly accounted for until fulfilled and shipped. If counts are incorrect at this stage in the game, inventory counts will be inaccurate and can lead to unexpected stock outs.
Inventory is safeguarded by have strict controls over receiving and fulfillment, as well as periodically performing cycle and/or yearly counts to ensure accuracy. Most e-commerce fulfillment companies will also have an inventory management system in places that allows you to always check your inventory levels.
As orders are placed on your e-commerce channels, warehouse staff must then pick the orders, pack them, and ship them. Modern warehouses utilize technology to pick the orders without error, including bar code scanning and other technologies. E-commerce orders are usually smaller in nature, usually consisting of only one item or a few items total.
The process isn’t complete, however, once your customer receives his or her order. E-commerce fulfillment strategies must also account for returns processing, as well as servicing customers’ questions, requests, and complaints.
To successfully compete in the hotly contested online sales marketplace, fulfillment warehouses must employ robust technology. Your e-commerce store must integrate flawlessly with your fulfillment center, whether it is in house or outsourced. That is, orders should reach the people who pack and ship items seamlessly and without manual intervention. Similarly, integrations should be used for all online platforms on which you sell – not just your own website.
Your fulfillment warehouse should utilize one of the following methods for sending orders from the web store (or other marketplaces online) to your warehouse staff:
- Web services
- CSV or FTP uploads
In a similar fashion, shipping tracking information must be relayed back to your customers, and your stock levels and inventory must be trackable. To meet these demands, most companies utilize an inventory and order management system. Outsourced fulfillment providers have robust warehouse management systems (WMS) that they utilize, and they offer the ability to ‘link’ to their WMS seamlessly using a technology integration.
There are several options you can utilize for managing your fulfillment function. You can handle the e-commerce fulfillment service by yourself (commonly referred to as “in house fulfillment”), utilize a drop shipping service, or outsource the entire fulfillment service to a third-party fulfillment company. Outsourcing is a popular choice since it makes your business agile and helps reduce expense and risk. With outsourced fulfillment, you can contract or expand your warehouse space depending on your business demands.
Drop shipping is ideally suited for a pure startup company that wants to minimize risks. Under a drop shipping model, the producer of the product, or supplier, handles the fulfillment and shipping of orders from their facility, usually on an order-by-order basis. In other words, when an order is placed for your product, the order information is routed to the drop shipper (supplier) who then ships that order directly to your customer.
With the drop shipping model, you aren’t required to purchase a bulk of product up front. Instead, the drop shipper simply charges you a price per unit for the product itself and for all the fulfillment and shipping related charges. With no up-front investment required for inventory, you can instead invest money in other areas of the business. Furthermore, the drop shipper handles all the fulfillment, so you don’t have to. You can sit back and let the manufacturer handle the entire fulfillment process. Drop shipping is especially useful for testing out products before a full-scale launch.
Alternatively, there are some downsides to using a drop shipper. First and foremost, drop shippers are usually experts in producing products, but aren’t necessarily the best at delivering high quality fulfillment and shipping services. Therefore, you may experience issues such as late shipments. Second, in exchange for the ability to purchase a product on a one-off basis, you will pay a much higher cost per unit for the product. For example, your product for a single unit of the product will be much higher than if you negotiated a lower price for a larger set of goods from the supplier (commonly referred to as “bulk pricing”).
Unfortunately, with drop shipping you’ll lack control over the fulfillment process, shipping, and handling of the products. Other disadvantages of drop shipping include lower profit margins, shorter lead times, and lack of bulk pricing.
In self-fulfillment, your business conducts the order fulfillment process through its own labor, assets, and facilities and without the assistance from a third-party fulfillment company. Whether conducted out of an apartment, home, garage, or full-fledged warehouse, in house fulfillment requires a space to store and fulfill orders, at least minimal inventory and shipping software to support operations, and labor to perform the necessary tasks. In cases of bootstrapping, oftentimes founders will do all of the shipping and fulfillment until they can afford to outsource logistics operations.
The self-fulfillment strategy is easy to implement, gives you control over the whole fulfillment process, and has lower startup costs (especially since you don’t necessarily have to pay yourself a wage). However, it has some major challenges and limitations.
The biggest problem with using an in-house fulfillment strategy is that it forces you to invest an enormous amount of time on fulfillment and shipping functions, rather than other potentially more important functions such as product design, sales, and marketing services. In addition, in house fulfillment carries with it the following potential problems:
- Entering a leased space and the risks and fixed costs associated with taking on a long-term lease.
- Managing warehouse and shipping staff
- Lacking the necessary knowledge to avoid fulfillment and logistics issues
Outsourcing your operations to a fulfillment center is a great model that needs supply chain management. A third-party logistics manages various supply chain functions on your behalf, so that you can focus on your core business functions.
Outsourced fulfillment services include:
- Freight forwarding (managing incoming shipments from your supplier to the warehouse)
- Receiving product into the warehouse (counting it, verifying accuracy of quantities and quality of products, loading it into their online system and physically placing it in their warehouse in racks and bins)
- Inventory storage and management
- Pick and packing of orders
- Shipping orders
This model suits e-commerce retailers who do not have the resources to handle the inventory by themselves, or who would rather not deal with the rigors of the fulfillment process. It frees up time, resources and enables your staff to concentrate on other things such as business development and marketing. Furthermore, fulfillment centers will help you achieve cost savings by:
- Changing fixed leased costs into variable costs where you only pay for what you use
- Lower other fulfillment and shipping costs such as packaging and boxes, labor, and technology costs
Furthermore, you can benefit from the data insights, shipping network, value-added tools, and industry expertise of ecommerce fulfillment companies. Because fulfilling orders is the lifeblood of their business, they are experts at what they do. In short, it is like having an expert in-house fulfillment team but without the associated costs and headache of managing it yourself.
Partnering with the best e-commerce fulfillment companies has multiple advantages, including ease of scaling, increased buying power, and reduced operating costs while leveraging industry expertise.
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
- Return management and processing
For more information on the specifics of fulfillment pricing, read our in-depth article here.
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.
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.
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:
- 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
- Damaged item handling
- Loose product preparation
- Items forwarding
- Container handling
- Expiration labeling
- Product tracking technology
- Order fulfillment
- Shipping Services
- Bubble/shrink wrapping
- Product assembly
- Suffocation warning labels
- Import/export management
- eCommerce fulfillment
- Package design/marketing
- Promotional inserts
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.
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
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.
Often referred to as Distribution Centers (DCs), fulfillment centers are spaces where retailers, manufacturers, and other organizations store their inventories before distributing them to their customers. They form the last stage of product distribution to end customers, making them extremely vital in the overall customer experience.
In addition to receiving and storage, fulfillment centers help e-commerce merchants and manufacturers by handling all the picking, packaging, fulfillment, and shipping of orders to end customers. This helps alleviate the pain and pressure of performing these tedious tasks in-house.
Common services offered by fulfillment centers include:
- Receiving products from suppliers and manufacturers
- Inventorying and warehousing products in their physical warehouse
- Picking, packing, and shipping orders to customers
- Kitting and light assembly services to support the fulfillment function
- Handling and processing customer returns
- Managing inventory and order information online via reporting
- And in some cases, like OSW, offer superior customer care support services
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.
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.
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)
You can distinguish between fulfillment centers and warehouses by analyzing their operations. The main role of a warehouse is to simply store product or equipment or materials, whether for a short-term period or for a longer period. Common examples of when companies utilize straight warehousing space include:
- Storing excess inventory
- Storing goods during a warehouse transition
- Cross-docking goods to meet short-term transition periods along the supply chain
- Storing goods in a local market to meet geographic sales needs
- Seasonal storage
Fulfillment centers, on the other hand, do more than just store products and goods at their warehouse. In addition, they help retailers to ship their products to their customers worldwide. Today, most E-commerce giants rely on fulfillment centers to provide same-day delivery services.
It is important to note that fulfillment centers store inventory for the shortest time possible and deal directly with the customer, unlike warehouses, which can store products for extended periods without dealing with the customers directly.
Our Serviceworks is a fulfillment company that clearly understands the difference between a fulfillment center and a warehouse. We offer best-in-class fulfillment services to our customers. We do not operate as a standalone warehouse service, as our focus is on omni-channel fulfillment services, with capabilities in both B2B and B2C fulfillment operations.
What sets us apart from the competition is that we offer customer care services for a complete, end-to-end customer experience, which ensures that your passion, tone, and voice are clearly delivered with each order shipped. With our experienced and well-trained staff, we form a critical link between your brand and your customers to keep your customer relationships thriving in this hyper-competitive landscape.
Contact us today to get started.
Order fulfillment involves the entire process spanning from order placement, packing, and shipping, to delivery of the product ordered from a website by a customer. The process is only considered complete when the customer finally receives the product(s) ordered. Additionally, in some cases the client may decide (for a variety of reasons) to return the product or have questions about the brand. It’s important to handle such situations expeditiously and professionally to maintain customer loyalty.
Order fulfillment isn’t a one-off process. It involves a series of steps. Efficiency in the handling of these processes determines the success of a business venture. The steps involved include:
Important Steps in the Order Fulfillment Process
The entire process of order fulfillment begins with receiving your products into storage. In fact, receiving is arguably the most important step in the fulfillment process – if you get this step wrong all subsequent steps are at risk. At this point, it’s important to ascertain that the products are in excellent condition and received into inventory in the correct quantity. Products should be carefully inspected, barcodes and quantities should be recorded in a warehouse management system (WMS) and then assigned to a specific storage location for later retrieval when ordered.
In some cases, products may be ordered and shipped relatively quickly and in others, storage many be required for an intermediate period prior to being ordered for delivery. Warehouses come in all sizes and conditions, so it’s important that your products are stored in an environment most conducive to them and ready for immediately ready for shipment while awaiting orders. Warehousing storage environments range from dry to climate controlled to refrigerated and frozen.
Order processing begins when your customer’s order is received into your web shopping cart. These orders are ideally then electronically sent to the and order management system to begin the actual fulfillment process. An efficient and effective order processing system enables instantaneous order receipt and rapid resource deployment to immediately begin the process of fulfilling your orders.
Shopping cart integration is imperative to minimize errors and maximize efficiencies between your online shop and your outsourced order fulfillment company. Integration can be conducted via:
- Web service (a method of exchanging information over the Web)
- API (an application programming interface which is simply another method of linking two systems together over the Web and may include a third-party integration service like Zapier)
- FTP/CSV upload (a more manual method where a CSV file is uploaded for each order and this file is transferred to the fulfillment company)
Many order fulfillment companies utilize sophisticated WMS (warehouse management systems) that have pre-existing integrations with most web stores.
The picking process is the entire process whereby the warehouse staff prints, pulls, and picks the order and prepares it for shipping. Picking should ideally use a system generated picking slip to select the specific products ordered by the client. This slip identifies the location of each product in the facility and oftentimes uses a barcode scanning technology to ensure the accuracy of each item picked.
During the packing process, individuals should be trained to select the appropriate quantity and type of void fill materials to provide protection during transit while adding the least additional weight to the overall package. This keeps products well-protected during transit while helping contain overall shipping fees.
The shipment method used depends on the destination of the product, targeted receipt time and client preferences. Most companies utilize all the major shipping companies but generally concentrating volumes between them to achieve the best rates.
Warehouses located on either coast will have an extended delivery times and expense shipping to opposite end of the country.
Warehouses centrally located are generally able to provide faster, more economical options across the entire country. At this stage, you will also receive electronic shipment confirmation and shipment tracking information to provide to your customer. The order fulfillment process is complete when the customer receives and accepts the product and confirmation of receipt is provided.
Some customers may decide to return products received for any number of reasons. You will need to offer this service as well. Your brand will be well-served to handle returns from your customer with professional, effective, and efficient processes that leave the customer satisfied with overall process and ongoing commitment to your brand.
Customer Service Support
Some customers may have questions during the ordering process or post-sale. Quick responses and guidance will reinforce your brand and build customer loyalty through every interaction. Having great customer support is a must whether you handle this internally or rely on a professional team experienced in order fulfillment.
There are several different order fulfillment models and options available to you as an online merchant. You should choose what works for your individual situation. The more efficient the model, the easier it will be for your business to prosper.
In-House Order Fulfillment Model
In this case, a business employs its people to handle the order fulfillment process. In simple terms, the company receives, stores, packs, and ships the commodities using its employees. The model is ideal for a firm with the capacity to handle all these processes efficiently.
It is mainly an option for small companies that are just starting up or very large ones with sufficient financial scale and operational scope to manage varied functional costs effectively. As the scale of operation increases, most small to mid-sized companies decide to outsource order fulfillment services with a reliable third parties.
The in-house model has ongoing fixed costs and new investments irrespective of order volume or other business conditions. For example, leased costs are fixed under an in-house management, whereas they become variable (you only get charged for what you use) under an outsourced order fulfilment model.
Outsourced Order Fulfillment (3PL)
As a business owner, you may decide to handle the order fulfillment process through third-party logistics (3PL). It could be because you don’t have adequate storage space, specialized personnel, and systems to handle the order fulfillment.
Costs associated with this model are almost entirely variable; as your volume increases or decreases, fulfillment expenses will correspondingly increase or decrease. Moreover, this arrangement places the responsibility and accountability for the entire order fulfillment process with your vendor partner, relieving you of fixed financial costs and daily operational responsibility. It will allow you to manage the business relationship with your provider, holding them accountable for operational performance on an ongoing basis. This will allow you to focus on brand marketing, product development and acquisition and overall supplier management.
In drop-shipping, inventory management isn’t necessary. Under the drop-shipping model, your product supplier ships orders on an as needed basis. Your cost per unit is significantly higher, but under this methodology you do not have to purchase a bulk of product.
Furthermore, you are relying upon a product manufacturer / supplier to fulfill orders to your customers, which comes with risks. However, when businesses are starting up, testing the waters may best be done using this method.
Businesses that want to be hands-off in the order fulfillment process choose this model. As a business owner, your greatest challenge will be to market the goods and bring in company sales. Start-ups prefer this model because it’s less costly and involves significantly lower risk.
When you choose this model, you should be aware that you aren’t in control of the order fulfillment services. Inefficiency during the shipment process may hurt your brand name.
Order fulfillment costs aren’t “cookie-cutter”. Costs depend on specific factors, including the type of model you choose. If you choose 3PL, the cost includes the expenses involved in receiving the inventory, storage charges, packing costs, and shipment charges. Essentially, the order fulfillment provider charges you a fee for every service they perform for you during the month.
The Main Challenges of Order Fulfillment
The process of order fulfillment comes with its challenges. First, inventory management may become a problem. For instance, the demand for the product may be higher than the rate of production. If customers don’t get the products they are looking for, you may lose them to your competitors. To attain success, you should always have adequate stock. A robust inventory management system will guide you through this process. Many 3PL’s have cloud-based systems that provide detailed reporting and par-level alerts helping you always maintain the correct amount of stock.
At times, you may also experience the problem of overstocking/understocking. Conduct extensive market research and understand the demand level of the product to adequately stock your product. Alternatively, where the demand is low, a robust marketing campaign can help.
A slow shipping process can also make customers avoid your products. To increase efficiency, you should hire the best order fulfillment services. Order fulfillment companies can generally process orders on a same day basis if they are received by a certain cut-off time, and their relationship with shipping carriers put them in a better position to take advantage of shipping discounts and options and avoid potential problems that arise in the broader business environment. With proper planning, they ensure customers receive their products at the right time.