7 Grounds Why Businesses should opt for Fulfillment Services

E-commerce websites are on a rampage, both in terms of new launches and those that already exist. The latter is on the roll because of the double-digit growth rate. And the reason is that these online shops have finally hit the bull’s eye in terms of product range, customer browsing experience, and visitor trust. Yet another feather in their success cap is delivering the ordered goods in minimum time.

This brings up a vital question. How do eCommerce portals or e-shops manage to deliver goods within 24–48 hours, sometimes even on the same day? This answer lies in the delivery mechanism which plays a crucial role in the timely distribution and customer satisfaction.

Order Flow For Fulfillment Services

This delivery mechanism is also termed as fulfillment services. Before we actually delve into this issue and the reasons why businesses should opt for fulfillment services let us analyze the chain of actions which typically take place in an eCommerce business model; right from the customer ordering a product to the time, it is delivered and even after that, in case of defective goods which needs to be replaced. Mentioned below is the typical flow of order servicing.

a. Online seller places orders with various suppliers/vendors and stores it in its warehouse.

b. It then receives orders typically from online customers.

c. The order is packaged and shipped.

d. Depending upon the payment method which could be credit card, PayPal, or cash on delivery the order is received by the customer, and payment made in case it is ordered under the COD option.

e. Finally, if the product is defective it is returned by the customer which is taken back and replaced with a fresh one.

The entire post order mechanism was once handled by the seller itself which led to severe dispatch and inventory issues. Not any more. Today, most online sellers exploit the fulfillment company’s services. Mentioned below are 7 grounds why businesses should opt for fulfillment services.

1. Cost Reduction

Online sellers are up to their necks with huge inventories. Apart from listing and booking orders these entities also have manage other business chores such as accounting, marketing, and putting growth plans into action. Increasing the burden of delivering the ordered items will not only prove fatal from a long-term perspective but will also increase the cost in terms of buying bigger warehouses, enhancing labor, and associated expenses.

The delivery mechanism is best left with the service fulfillment vendor who allows sellers to send the outsourced products directly to the concerned vendor’s distribution warehouses. The vendor receives these goods, segregates, stores, packs, and dispatches products to customers for a fixed amount. And the entire inventory is fed into the warehouse management software which makes previewing or analyzing stock an easy chore for both the fulfillment company and the seller. All this means reduced shipping costs.

2. Growth

Running an eCommerce business is tough. Online merchants have many chores to perform to stay afloat or improve their bottom lines. In such a scenario many of them reach stagnation quickly; one of the reasons for this stagnancy is the delivery system or logistic support.

Therefore it makes sense to hire service fulfillment service providers or vendors. It offers two distinct advantages. Instead of investing in unproductive business mechanisms, the same could be used to increase sales through aggressive marketing and advertising or acquire similar portals that are up for sale. Handling an increased customer base is not an easy task. However, your service fulfillment vendor will accomplish this task with great ease thereby offering your customer an enjoyable purchase experience.

3. Focus

A competitive and large product base is what turns online selling into a success story. In such a scenario internet sellers need to focus on product development and procurement. To put it in simple words the seller needs to focus on its core tasks.

4. Efficiency

By hiring a service fulfillment vendor online sellers turn efficient. These entities concentrate on user experience and product development while the warehousing, inventory, packing, and dispatch is left on the shoulders of the fulfillment vendor, which does an excellent job through its integrated inventory management. From a seller’s point of view, it means efficient exploitation of assets which in turn increases its operative value.

5. Seasonal Savings

Seasonal “sales spike” is synonymous with Christmas, New Year, and Valentine’s celebration. By hiring fulfillment services, online sellers need not recruit extra hands during these times. This simply means savings on manpower, extra warehousing costs, and also a minimum backlog of orders. Local and global service fulfillment vendors exploit a variety of methods and technologies for quicker order processing and thereby improve the performance of the online business enterprise.

6. Return Policy

Return policy forms one of the most crucial features of any eCommerce business. Customers typically feel good about web enterprise that offers this facility. By opting for fulfillment services, online sellers can establish an efficient internal and external “Return Policy”. While the latter is associated with customer rejection, the former is related to defective goods delivered by the supplier.

7. Reduced Inventory

Opting for fulfillment services invariably results in optimum inventory. The reason is because of the efficient delivery system. For example, your pack and dispatch vendor will make arrangement to send an ordered product from another warehouse if the one closest to the point of delivery runs out of stock. It means products which are not fast-moving are juggled and there is no need to keep a huge stock of such goods. Efficient and accurate dispatch is one of the salient features of eCommerce fulfillment services. Once the product arrives from a particular eCommerce entity the same is disbursed to various locations based on how often that product is ordered.

It is then counted, inspected for damage, tagged, and stored in specific bins. The numbers are then fed to the warehouse management software which is linked to the client-server. It also means your products are always available or in stock, and that too at the most efficient threshold.

Originally published at Entrepreneur News and Startup Guide.