Growing an online store involves much more than increasing sales. As order volume rises, businesses must manage inventory, process orders, pack products, arrange shipping, and handle returns efficiently. These tasks can become increasingly difficult to manage in-house.
An ecommerce fulfillment center can help growing businesses manage these operational demands by handling many of the processes involved in getting products from storage to customers. Outsourcing fulfillment can allow an online business to focus more of its time and resources on sales, marketing, product development, and customer relationships.
1. Creates More Space for Growth
Managing inventory from an office, garage, retail location, or small warehouse can become challenging as product volumes increase. Storage space may become crowded, while employees spend more time locating and preparing orders.
An ecommerce fulfillment center provides dedicated warehouse space for storing inventory. As your business grows, having an organized storage and fulfillment operation can make it easier to handle increasing order volumes without constantly reorganizing your own workspace.
This can be particularly useful for businesses experiencing seasonal demand or launching new products.
2. Streamlines Order Processing
Order fulfillment involves several steps, including receiving an order, locating the correct products, picking items, packing them, and preparing them for shipment.
Fulfillment centers typically use established workflows and inventory-management technology to coordinate these tasks. Depending on the provider, systems may integrate with an online store or marketplace, allowing orders to move into the fulfillment process automatically.
A streamlined workflow can reduce the amount of manual work required from an ecommerce business.
3. Improves Inventory Management
Accurate inventory information is essential when an online store is growing. Selling products that are actually out of stock can create customer-service problems, while holding excessive inventory can tie up valuable capital.
Many fulfillment providers use warehouse-management systems to track inventory as products are received, stored, picked, and shipped.
Better visibility into inventory can help businesses monitor stock levels and make more informed purchasing decisions.
4. Supports Faster Shipping
Customers increasingly expect convenient and reliable delivery options. An ecommerce fulfillment center can help businesses manage shipping more efficiently by processing orders and handing them to carriers from a dedicated fulfillment facility.
Some providers operate multiple fulfillment locations, which may allow inventory to be positioned closer to customers. Depending on the business model and fulfillment network, this can potentially reduce shipping distances and delivery times.
Businesses should compare the provider’s warehouse locations and carrier options before making a decision.
5. Makes Seasonal Demand Easier to Manage
Many ecommerce businesses experience fluctuations in sales throughout the year. Holidays, promotions, product launches, and seasonal trends can produce sudden increases in order volume.
Handling these spikes internally may require temporary workers, additional storage, and extra equipment.
A fulfillment partner may already have processes and staff designed to accommodate changing order volumes. This can give businesses greater flexibility during busy periods without requiring them to permanently expand their own operations.
6. Simplifies Returns
Returns are an unavoidable part of ecommerce. Managing them requires receiving returned products, inspecting items, updating inventory, and determining whether products can be resold.
Depending on the provider, an ecommerce fulfillment center may offer return-processing services as part of its fulfillment solution.
A structured returns process can help businesses manage returned inventory while providing customers with a more organized experience.
7. Helps Control Operational Costs
Running an internal fulfillment operation involves expenses such as warehouse rent, equipment, software, utilities, packaging supplies, and labor.
Outsourcing can replace some of these fixed costs with fulfillment fees based on storage, orders, services, or other factors. Whether outsourcing is more cost-effective depends on order volume, product characteristics, and the provider’s pricing structure.
Businesses should calculate their complete in-house fulfillment costs before comparing them with third-party fulfillment rates.
8. Lets Your Team Focus on the Business
Perhaps one of the biggest advantages of using an ecommerce fulfillment center is the ability to shift attention away from repetitive logistics tasks.
Instead of spending most of their time packing boxes and managing inventory, business owners and employees can focus on activities that directly support growth, such as marketing, customer service, product development, and expanding into new markets.
What Should You Look For in a Fulfillment Partner?
Before choosing a provider, consider warehouse locations, pricing, technology integrations, shipping options, inventory tracking, order accuracy, returns management, customer support, and scalability.
It is also important to understand the provider’s fees. Ask about storage charges, pick-and-pack costs, receiving fees, shipping expenses, returns, special handling, and account or technology fees.