In the US, about 700 parcels are shipped every second, and this rate is expected to increase as more and more consumers shop online. Due to the growing popularity of e-commerce, new players are drawn to the industry, ready to seize the opportunity and launch a lucrative online business.
But here is the catch. There are many moving parts involved in running a successful online store, and one of them is delivery, which must be both speedy and reliable. E-commerce business owners, all in unison, agree that finding the best order fulfillment company is a challenge.
In this guide, we will go over all the things you must consider when looking for an e-commerce fulfillment services provider so you have a clear set of criteria to help you identify the best fit for your business.
What Is a Fulfillment Company?
Before we get into the specifics of how to find the best order fulfillment partner for your e-commerce store, let’s first define what an order fulfillment company is.
A fulfillment company is an enterprise that provides end-to-end or partial order processing services to businesses that are looking to outsource this function. E-commerce fulfillment service providers can handle responsibilities related to inventory management, order preparation, packaging, labeling, customer returns, and much more.
What Does a Fulfillment Company Do?
A fulfillment company can perform a variety of functions and can act as an extension of your e-commerce business.
Some of the areas that fulfillment providers cover are
- Inventory management;
- Order processing;
- Pick and pack services;
- Labeling;
- Managing customer returns;
- Kitting and assembly items;
- Subscription box fulfillment.
The Advantages of Using Third-Party Fulfillment Services
A Solution for Outgrown Warehousing Capacity
Handling shipping in-house makes sense when you are starting and your volumes are low. But as soon as you grow, you can no longer cope with the demand. Rather than investing in additional facilities, technology, and storage space, you can simply contract a third-party order fulfillment company that will take care of everything.
Cost Reduction
Order fulfillment can be expensive. The average price depends on your industry, product, labor costs, packaging, size, and weight, among other factors. In addition, the expense of big-box logistics warehouses has recently increased by 10%, adding to even more significant overheads. Meanwhile, e-commerce order fulfillment companies can provide pocket-friendly solutions as per your needs and required services.
Focus on Core Competencies
Finding the right order fulfillment partner means that you can focus on what you do best, whether it is sourcing new products for your online store, running marketing or ad campaigns, and acquiring customers without the headache of processing your orders.
Boost Customer Satisfaction
Just like you should focus on expanding your business and doing what you do best, third-party fulfillment providers create value by handling your orders. And since they are experts in what they do, you can achieve higher customer satisfaction.
Statistically, 13% of online shoppers never return if their delivery is late; therefore, you need specialists to handle this part of your business.
Factors to Evaluate When Looking for an Order Fulfillment Company
Considering you decided to outsource your order fulfillment to a third-party provider, here are some of the primary criteria you can apply to find the right fit for your business.
-
Pricing
Pricing is a delicate matter when looking for the right e-commerce fulfillment company. Cheap does not mean good. An unsatisfactory and poor delivery experience could disappoint your loyal customers and earn you a bad reputation.
Depending on the provider, they might charge you per SKU, pallet, item, or by the hour, with additional costs involved. Go for the one that offers the most value for the buck without hidden fees.
-
Industry Expertise
This is an important one. You do want to partner only with the specialists in your industry to ensure the minimum number of logistical errors and maximum customer satisfaction. Search for an e-commerce fulfillment provider that is known for its experience in your industry and has solid recommendations.
-
Integration Capabilities With Your Ecommerce Platform
Whether your e-commerce store is on Amazon, Shopify, WooCommerce, or Magento, you want your fulfillment partner to integrate seamlessly with your existing platform. Ensure their software is compatible with your in-house tools.
Order fulfillment providers such as Phase V integrate with all major e-commerce platforms, so you do not have to worry about potential software incompatibility.
-
Technology Stack
Perform due diligence and find out what technological solutions different order fulfillment providers use. Do they have data-powered dashboards for easy-to-access analytics? Do they provide systems that allow you to track the entire journey from your customer ordering the product to delivery? Can you get access to real-time inventory?
No matter the metrics you track, having access to valuable data is critical. 63% of businesses say that using big data and analytics provides them with a competitive edge, so ensure that your provider has the most modern solutions.
-
Are They Prepared for Increased Demand or Disruptions?
The pandemic has demonstrated how fragile global supply chains can be. Likewise, peak periods, such as holidays or even weather conditions, can all influence the quality of the service that different fulfillment companies provide.
Establish early on what measures they have in place to manage force majeure situations and minimize the impact on your operations and your customers.
Conclusion: Work with Experts in Their Field
Finding the right third-party logistics provider is more than just reducing costs. It is also about increased efficiency, experience, technology, process optimization, and scalability.
Define your fulfillment needs, do in-depth research and choose your order fulfillment partner wisely.
Want to work with e-commerce fulfillment professionals who have been around for over 35 years and have helped thousands of businesses thrive and grow exponentially?
Talk to the Phase V team. It does not cost you anything!
