If you're an e-tailer, you're undoubtedly well versed in the process of getting your orders to your customers - but what should you do when this starts to eat into your time, leaving you unable to focus on growing your business? Find yourself a fulfilment company!
A fulfilment company will handle the logistics behind your customers' orders: they'll store your products in their warehouse, then package and ship the orders – saving you precious time that can be spent investing in your brand or business. As fulfilment companies can often secure better shipping rates than small businesses, using them to fulfil your orders may also work out to be more cost effective.
With so many different types of fulfilment companies out there to choose from, how do you decide which one will be the best fit for you? Comparing them can be tricky, and even overwhelming at times, especially when you're unsure about which areas need consideration, or which services you should be looking for.
To take some of the stress out of choosing a fulfilment company and selling online in general, we've put together a handy guide that explains the most important things to look out for.
Shipping is one of the most important things to research when choosing a fulfilment company: making sure your customer gets their order intact and on-time can be the difference between getting repeat customers and going out of business.
Explore the different carriers each fulfilment company works with and think about the shipping options you want to offer your customers. Is it important that your orders are delivered quickly, or at the lowest price? If you'll need a next day delivery option, be sure to keep an eye out for same-day dispatch cut-off times. Some carriers offer tracked and signed-for options, too, which is essential if you're selling high-value items.
Consider what you're selling – are your products standard size (a small parcel, for example) or are they oversized? Do your products require delicate handling and packaging additions such as heavy duty shrink wrap? Perhaps you sell goods which some carriers class as dangerous or restricted, like battery-powered electronics or perfume? You'll want to choose a fulfilment company with carriers capable of handling your specific products, as some carriers have restrictions regarding the size and type of items they'll take.
Think about how you'll get your stock to the warehouse - whether your supplier will send it there directly, or you’ll send it by courier. It is also worth considering how you’ll get your stock back if a customer returns something - the amount a fulfilment company deals with returns can vary, so consider whether that is something you'd want to be involved in or hand over completely.
Packaging is a vital part of the shipping service – you'll want to make sure the company knows how to properly pack your goods to avoid damages and breakages.
If you're using Amazon FBA, you'll want to find a company that offers an Amazon Prep Service, as they have strict rules and regulations about the condition of the goods they'll accept.
Making the switch from in-house packaging and shipping to outsourcing via an eCommerce fulfilment company is a big move for your business. But fear not: some careful research will yield information on the company's reputation, how customer-focused they are and whether they're ethical - so you know you'll be making an informed decision.
Ask yourself a few questions before signing up to a company: how long have they been around? Are reviews and references readily available, and if so, are they promising? What is their pick-error rate?
Most of this information may be displayed on their website, however it's a good idea to look elsewhere on sites like Google, Yelp or Trustpilot - this will help you to form a well-rounded opinion on each company.
Look out for any high profile clients, (this suggests that they have a good reputation and can be relied on by major businesses) and ideally try to find out how much experience they have. Are they a brand new start-up or a well-known expert?
A digitally aware start-up may be more apt at keeping up in today's fast-paced e-commerce world, whereas a company with 20+ years of experience will have the maturity to be able to take on any complicated projects or unexpected issues your business may encounter.
Using a fulfilment company will save you time, but can you be sure that it will be cost-effective for your business? Before you decide, it's worth thoroughly reviewing each company's payment terms and fees; not only to see how much they charge, but what they'll be charging you for.
Top tip: companies with transparent, up-front pricing will help you avoid wasting time going back and forth trying to get a quote – plus hidden costs like fuel surcharges or long-term storage fees may not be obvious, or even included in your first quote.
The standard fees a fulfilment company will charge you include:
- Inbound goods - how much they'll charge to receive goods into their warehouse.
- Storage - typically you'll be charged per pallet or per cubic foot of warehouse space, depending on the company, so make sure you know roughly how much space you'll need.
- Order charge/Pick & pack - how much it'll cost for them to locate your product and pack it ready for shipping.
- Packaging - a standard packaging fee, plus in many cases, an additional percentage to cover handling costs.
- Shipping - this cost will vary considerably depending on which courier your fulfilment company is partnered with, and the shipping methods available.
Consider whether you just want the basics, or you'd like extra services – like labelling or custom packaging – which the fulfilment company will likely charge additional fees for.
Some companies will charge management fees, monthly fees and set-up fees, too, which are all important points to consider when working out how much you want to spend per month.
If you're considering using a fulfilment company, it must mean business is good! The question is, can they handle your business when things go from good to great – and beyond that? Keep your business goals in mind when choosing a company, and make sure they can adapt to your needs.
Check out whether the fulfilment company has the potential to grow with you if you're planning on expanding. Say you decide to sell a hundred new product lines, can they increase the amount of storage you have to accommodate this? Or you introduce a new product that requires certain storage conditions (i.e. a secured area) – you'll need to make sure the company can be flexible enough to handle that.
Consider where you're currently selling – are your products only available through one marketplace, or can they only be bought from one country? If so, and you want to expand, you may want to look for a company that offers marketplace management. That means once you've shipped your stock to the fulfilment company, they'll manage your products and list them all for you on different marketplaces – thus opening your business up to new audiences worldwide and increasing your sales.
Don't forget the short term, either: if you know your products fly off the shelves at certain times of the year, be sure that your chosen fulfilment company can handle the spikes in demand!
There are a plethora of fulfilment companies dotted across the globe, so take extra care when researching their location. Choosing by location depends on several factors, including whether or not you have a mixture of orders from all over the country or world.
The location of a fulfilment company in relation to where your products are originating will impact how quickly you can restock your inventory. It will also influence the price you'll pay for the fulfilment services - the closer you are to the warehouse, the more likely you are to benefit from competitive rates.
If, for example, you have heavy products or a wide range of shipping destinations, signing up to a fulfilment company that has multiple warehouses may be ideal. In contrast, if you have a high number of SKUs, using multiple warehouses could result in higher storage fees.
With the rise of same-day delivery options, online sellers are under major pressure to meet the expectations of their customers, and keep up with their competitors. Look out for fulfilment centres located in convenient areas, like near major motorways and shipping hubs. Travel time to shipping partners can make the difference between a few hours and a day's delivery time.
A final point to consider is that if your warehouse operation is located centrally to your clients, your business can operate in a more environmentally-friendly friendly manner. Not only will you be saving money, you'll also be reducing the amount of greenhouse gases required to deliver your product. It goes without saying that they should be operating according to any local authority shipping legislation also.
As well as the physical side of things, it's worth making sure the digital side of the company can keep up with your business - after all, you'll be relying on this technology to keep you in the know, no matter where you are.
Most sellers wouldn't be able to do what they do without their trusty tech, so make no mistakes when choosing a company to fulfil your orders - the technology they use must be state-of-the-art, and no less!
From online stock systems and real time data to tracking information and barcode technology, take note of the various digital processes they use - and ensure they are fast, accurate and can be totally relied upon.
Not only does technology play a huge part in the storage and shipping processes, it allows you to cast an eye over your products and orders without needing to be physically present. Many fulfilment companies will offer 24/7 access to this information, meaning you'll have total peace of mind every step of the way.
Another technological factor to consider when selecting a fulfilment company is their catalogue of integrations. Comprised of multiple shopping carts, payment gateways, sales platforms and order management systems, this all-important information is usually available on the company's website.
Not only do integrations allow a fulfilment centre to export orders into their systems, they ensure stock updates and order shipped notifications to be fed back to you and your customers. This means that your marketplaces, channels (and you!) can be kept up to date with stock and order status without any hassle.
Ask yourself: will you only need to fulfil orders from your own site? Or do you have several channels that you need to process orders for? In your research, finding out how exactly the pick and pack service will handle these multi-channel orders is essential.
Before signing up, double check whether integration with your systems are already in place, and if not, whether they can be set up easily. If you have a bespoke website or use a niche marketplace, for example, using a more flexible fulfilment company is likely to be high up on your priority list.
As you can see, choosing a fulfilment company for your business is no walk in the park! There are plenty of important factors to consider, and weighing up your options can take time. We hope our guide has been useful and we wish you all the best in finding the perfect partner for your business.