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.
