What are fulfillment centers and how do they work? Is your small or medium-sized ecommerce company ready to outsource fulfillment? Find out here!
A growing ecommerce business has limited resources to package and ship bulk orders in time. As the orders keep rolling in, you are at your own mercy to ensure customer satisfaction and manage a business without external help.
Eventually, there comes a time when you have to decide between expanding your warehousing capacity and outsourcing it to a fulfillment center. Expansion means more work for you. On the other hand, outsourcing will take some tasks off your hand, giving you more time to focus on your business.
What Are Fulfillment Centers and How Do They Work?
A fulfillment center partners with a vendor to process and ship products to customers. They handle the logistics of the order delivery from start to finish.
They eliminate the need for you to maintain a warehouse, package the product, verify the address, and deliver it to the right customer. You do not need a physical space for your products, or inventory management, because the fulfillment center takes care of the operations.
Many companies offer fulfillment services to businesses that want to outsource their logistics. Most people know about Fulfillment by Amazon, which is a reliable platform for sellers who manage online stores. There are fulfillment centers that serve physical stores too. Despite their diverse customer profiles, fulfillment centers perform the same task—to offer third-party services to vendors. Outsourcing fulfillment and inventory management assures a better customer experience.
Difference between a Fulfillment Center and a Warehouse
People often use the two terms interchangeably, but they are different. A fulfillment center stores products that are readily shipped to customers who have purchased them. The inventory does not remain with a fulfillment center for a long period. On the other hand, a warehouse keeps inventory for the long term. Customer purchase is not a part of warehouse services. Additionally, they do not pick, label, or package the products for shipping.
The interchangeable nature of the two terms sometimes makes businesses hire the wrong service for their inventory. Let us simplify it for you. If you need to store products long-term without immediate access, you need a third-party service provider for warehousing services. For short-term stay, labeling, packaging, and shipping of products, you can hire a fulfillment center services.
How Does a Fulfillment Center Work?
A fulfillment center has a warehouse where they keep the inventory. It’s important to know that a fulfillment center can be a warehouse, but a warehouse is not a fulfillment center.
Fulfillment centers have lively energy, unlike a warehouse. People are always on call, working around the clock to meet deadlines and ship orders on time. After a customer purchases a product, the fulfillment center’s job is to process the purchase and prepare it for shipping.
The fulfillment center also deals with inventory management. They must track incoming inventory, manage customer returns, and keep their business partners updated. Since there are many tasks to accomplish and little room for mistakes, most fulfillment centers are outfitted with modern technology to process orders and manage inventory.
They also handle mispicks and misships—terms that represent incorrect products for fulfillment and wrong items delivered.
Fulfillment centers are more popular with ecommerce business sellers. No matter how big or small an ecommerce company is, they benefit from outsourcing the inventory. Ecommerce retailers do not have to concern themselves with returns or shipping errors—they can focus on their business and find customers for their products. Fulfillment centers handle expedited shipping, free shipping, or whatever the customer needs to receive their product promptly.
Why Work with a Fulfillment Center?
Working with a fulfillment center benefits a retailer or ecommerce business in many ways. Here are some benefits:
- More Products to Offer: The space limitation brings a business to a fulfillment center’s doors. Lack of physical space means a business cannot have as many products as they like. However, fulfillment centers solve this problem by offering an area large enough to keep as many products as the vendor desires.
- Faster Processing Time: When fulfillment is part of a seller’s business, it’s not often prioritized. Sellers have many tasks to manage within their business. In contrast, a fulfillment center prioritizes and ships orders faster than most sellers.
- No Need for Physical Location:Outsourcing inventory management and order processing eliminates the need for a physical location. Sellers can manage their business online or have a small office for limited employees.
- Limited Staff:As mentioned above, fulfillment centers reduce the cost of managing large teams and renting physical locations. You can only hire essential staff and let a third party handle the logistics.
- More Time for Business Growth:When sellers are not worried about day-to-day shipment operations, they have time to focus on strategic development and business growth. Fulfillment centers manage day-to-day operations and give companies a chance to focus on expanding the business.
Need a Fulfillment Company? Hire 3PL Bridge!
Now you know what are fulfillment centers and how do they work. Hiring a fulfillment company is the right decision for a company facing issues owing to lower staff and limited physical space. However, deciding which fulfillment center service meets your expectations can take a while.
There’s no need to worry about finding the right fulfillment company—we’ll do it for you! At 3PL Bridge, we tell our clients to make a switch when fulfillment interrupts the core business, inventory management is impossible to handle, and you are not ready to hire new staff. These situations demand that you hire a third-party company to fulfill orders and keep your customers satisfied.
With a network of reliable third-party logistics companies, 3PL Bridge meets your current and future needs. We save you countless hours of researching and finding the most cost-effective solution for your fulfillment needs.
Get in touch with 3PL Bridge today and find the top 5 fulfillment center matches for your logistical needs!
