What is fulfillment anyway?
Fulfillment is the complete process of receiving, processing, packing, picking, and shipping orders to customers.. While larger companies usually have the capacity to handle fulfillment themselves, most Ecommerce businesses and start ups often turn that aspect of the business over to companies that specialize in fulfillment.
What services do fulfillment companies provide?
Shipping a customer’s order is typically more involved than simply putting items in a box and shipping them out. Fulfillment companies usually take care of:
- Receiving and warehousing product or its components
- Producing or assembling the product, such as building floor displays or kitting
- Packing out orders in an envelope or box
- Labeling orders for shipment
- Shipping orders out using a major carrier, such as FedEx, UPS, or the U.S. Postal Service
- Providing tracking information to customers
- Processing payment and transferring funds
- Inventory management
- Return order management
Does it make sense for your company to outsource?
The decision to outsource fulfillment ultimately comes down to time and money. If your company suddenly receives a large influx of orders, does your team have the time and resources available to manufacture, pack, and ship product quickly enough to keep customers satisfied? Or would it be more efficient to hand over the entire process, and responsibility, to a company that specializes in fulfillment?
Another related issue is space. Does your business have enough warehouse space to stock large enough quantities of your product(s) to satisfy fluctuating customer demand? Or would that space be used more effectively in other ways? Dedicating valuable floor space to manufacturing may reduce your per unit costs via increased output and efficiency. How would this increased productivity translate to your competitiveness in the marketplace? These are all important things to consider.
Below is a usage case that we often see come up with customers who outsource their manufacturing overseas.
A customer received their product from an overseas manufacturer. The product was labeled incorrectly, and required additional packaging materials required by their US based retailers. The customer lacked the labor to do this in-house, and turned the job over to 5 Star Packaging.
Our fulfillment specialists were able to relabel and repack the job in 2 days. We were able to create a packaging solution that satisfied the needs of both the retailer and the manufacturer. The customer was able to make their delivery on time, and avoid potential fees and charge-backs incurred for delivering non-conforming products to the retailer.