Fulfillment at eCommerce starts with an incoming request. From that point, it goes on to the creation of an inventory, preparing warehouse space for the product and then fulfilling orders. Depending on the online merchant, fulfillment will range, but generally the procedure involves the following:
Receiving Inventory After your customer makes an order through your website, they’ll typically be given a link to a downloadable PDF file that contains all of the information they need to place their order. From there, it’s up to you to enter the order data and create a temporary warehouse inventory. Your warehouse will hold all product receiving inventory until you receive your shipment.
Fulfillment Center Once you have an inventory, it’s time to fulfill them. If you choose to utilize a third-party service for your Fulfillment, it could take several steps to move inventory from your warehouse to your customer. The majority of businesses use Fulfillment centers, which act as an agent between your online store and your customers. Fulfillment centers act as a liaison between your online retail store and your outside vendors. Once an order is placed, you transfer the information to a fulfillment center. The Fulfillment center will then take over the complex responsibilities involved in moving inventory from your warehouse to your customers.
Real-time Inventory On the flip side, many eCommerce merchants choose to maintain inventories themselves. This frees up a lot of time for the merchant, since they don’t have to wait for the fulfillment company to ship the items to their customers. With real-time inventory, the company is able to immediately reflect any changes in inventory levels.
Dropshipping of Fulfillment A new question that arises is whether Fulfillment or Dropshipping is better for eCommerce stores. Both delivery systems are great options, so it comes down to how your business will benefit from either one. Fulfillment centers typically offer higher per item shipping rates, which can lead to higher costs for your business. For eCommerce stores, though, this extra cost may not be a big deal. ECommerce sellers only pay for items that have been shipped, and Dropshipping companies do not have to worry about paying the shipping costs on items that have not been shipped.
On the other hand, Fulfillment Centers generally has more staff, greater warehouse space, and access to more products. Fulfillment centers are able to quickly fulfill orders, and may have more options available to their customers. On the other hand, eCommerce merchants do not need to worry about stocking inventory, stocking shelves, or storing products in a warehouse. They may also save money with Fulfillment, as they do not have to pay to rent a storage facility or hire out extra employees to fill in storage space.
The Choice of a Fulfillment Service vs. a Dropshipping Service A final, related issue that is often brought up is whether it makes sense to choose a Fulfillment Service over a Dropshipping Service. The truth is that the two are actually very similar. Fulfillment centers typically charge more, but many eCommerce merchants find that the additional cost is worth it. Dropshipping is usually the choice of small retailers and startup sellers, since it is usually more affordable than traditional Fulfillment, and allows the seller to control expenses completely.
A good rule of thumb is to think of Fulfillment as an “upsell” for an eCommerce retailer’s product listing. Fulfillment centers can take care of all of the inventory needs of an eCommerce retailer, including shipping, receiving, and fulfilling orders. The retailer merely passes the order off to a fulfillment center, which handles all of the tedious details such as packing and shipping the product to the customer. Fulfillment centers charge a fee for their services, however they usually offer generous discounts for their workmanship and customer service.
