Friday, March 8, 2019

Order Fulfillment: Using Third Party Fulfillers

There are many services available to store your products and fill customer orders on your behalf. Rather than hiring someone to come to your studio and fill orders, you hire the fulfillment service to accept large shipments of your product and pick, pack, ship, and send notifications to your customers from a separate warehouse location. There are a growing number of ecommerce fulfillment companies offering such services. Because fulfillment companies hire dedicated workers to pick and pack orders and receive volume discounts on shipping costs, they can potentially fulfill orders more efficiently than each individual business can. However, after considering the markup of these costs, the final cost to you is often the same or more than fulfilling directly. Some popular fulfillment services in the USA are ShipBob, FedEx Fulfillment, Amazon, and WhiteBox.

Fulfillment service costs
The direct monetary cost of using a fulfillment service includes setup fees, storage fees, per-order costs, inventory receiving fees, and more. There is also the cost of losing an opportunity for you to interact with your customers through the ‘unboxing’ experience. Because of the time needed to send product to the fulfillment service, you would need to keep more inventory on hand at the fulfillment center than you would when filling orders directly from your studio.

Fulfillment service benefits include the removal of a large space-consuming and time-consuming activity from your operations so you can focus on other items. If you are low on space at your studio, you can send product as it’s produced and use all the available space for production activities. If you don’t yet have a production facility, you can rent temporary space (at a shared commercial kitchen perhaps) and produce enough inventory to send to the fulfillment center, then manage your business from home. This would allow you to scale up without any dedicated studio space at all.

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