When it comes to eCommerce retailers, there are several moving parts to orchestrate and direct. Managing inventory, marketing the brand, updating the website, creating social media content, making sales, and fulfilling orders are just a few of the many responsibilities an eCommerce retailer maintains on a daily basis. Naturally, it becomes challenging to manage everything and still have time to dream up the next big initiative for the business. That’s where outsourcing certain aspects of your business becomes a valuable strategy.
When considering which aspects of your business can be outsourced, think about what you do well versus what is the most time-consuming and requires the most manpower. For many eCommerce stores, storing product and fulfilling orders is one of the first things that come to mind when considering outsourcing. The outsourcing of order fulfillment is often done at a fulfillment center. Fulfillment centers provide many services to businesses, corporations, and eCommerce retailers. Here, we discuss what a fulfillment warehouse or fulfillment partner is, how they differ from a standalone warehouse, what goes into the order fulfillment process, and how it can help your eCommerce business boost customer satisfaction.
What Does Fulfillment Mean?
When it comes to warehouses, 3PL providers, and eCommerce, fulfillment is a critical part of getting the job done. In some cases, like with 3PL providers, it’s the only thing they do. Fulfillment is the act of packing and shipping orders, a component that eCommerce businesses outsource to help improve shipping timelines and fulfillment accuracy.
What is the Difference Between Warehouse and Fulfillment Center?
Many times, the terms warehouse and fulfillment center are used interchangeably. Several individuals and businesses think of these terms as synonymous, but they are, in fact, quite different from one another. A warehouse and a fulfillment center are both large buildings that store inventory, but beyond that, they each have benefits that can help businesses, depending on a company’s unique needs. So, what is the difference between warehouse and fulfillment?
A warehouse refers to a building where goods or products are stored for long periods of time. Typically, businesses use a warehouse to store items they do not need access to very often. These are often seasonal products or merchandise that are non-perishable. Storing these items in a warehouse allows businesses to access these products when they need them, but frees up space in the store or other areas for different products that are more regularly restocked. Some large businesses have their own warehouses, while smaller businesses often rent space in a warehouse when they need the additional storage.
Fulfillment centers store products for a shorter amount of time before the product is shipped out. These are also known as 3PL providers. They work with retailers, eCommerce brands, and other companies to fulfill customer orders. The goal of a fulfillment center is where the big difference between fulfillment and warehouse lies: they need to get the product out as quickly as possible when a customer places an order. Inventory doesn’t sit for very long in a fulfillment warehouse and should move out the door quickly.
Some of the key differences between a warehouse and a fulfillment center include the timeline for inventory storage. As mentioned, inventory sits in a warehouse much longer than in a fulfillment center, in most scenarios. A warehouse is used for storage, whereas a fulfillment center is used for shipping, and of course, fulfilling orders.
Another difference between the two is the goal of the facility; with a warehouse, the primary goal is storage, but with a fulfillment center, the goal is packaging and shipping out orders in a timely manner.
Finally, differences between warehouses and fulfillment centers can often come down to the technology they utilize. Because a warehouse is used for storage, there is little technology, and almost always less sophisticated. Some businesses may employ technology to manage the quantity and location of products. With this being said, a fulfillment center typically uses several different technology platforms and services for processing orders, organizing transportation, and other additional tasks to help store, pack, and ship orders.
What Do Fulfillment Centers Do?
Simply stated, a fulfillment center assists businesses in getting their orders out the door and into the hands of their customers. Oftentimes, businesses don’t have the time or personnel it requires to package, ship, or even store orders in a timely fashion. This is where a fulfillment center comes in!
A fulfillment center helps eCommerce shops outsource their warehouse and shipping needs, and fulfills customer orders in a quick and efficient fashion. The way a fulfillment center operates allows online brands to store their products, meaning they don’t have to handle the inventory or store the products themselves. Typically, working with a fulfillment partner means working with your own dedicated account manager who will provide up-to-date insight and metrics on demand.
Sellers send their products to the fulfillment warehouse where they are then inventoried and managed in preparation for fulfillment. When a customer places an order on the seller’s website, the fulfillment center packs and ships it off to the customer automatically. Fulfillment centers help to make shipping easier for eCommerce brands with an online store.
What is Order Fulfillment in a Warehouse?
Because the function of fulfillment centers is in the name, people often think that’s all they do. However, there is so much more that goes on with order fulfillment in a warehouse. There are several different activities that can take place in fulfillment warehouses, providing these services to any company who outsources to them. Order fulfillment in warehouses involves seven steps:
- Receiving inventory from a seller
- Short-term storage of the product
- Picking an order from the inventory
- Packing the order in a timely manner
- Shipping out the order
- Handling order returns and/or exchanges
These seven steps make up the duties of a fulfillment center on a daily basis. Each step takes away one item from the task list of an eCommerce business, allowing business owners to focus on other aspects of the business that can help them grow. By outsourcing fulfillment needs to a fulfillment center, companies can focus on creating new products or improving existing ones, inciting new business initiatives, and growing their business in ways they wouldn’t otherwise be able to.
6 Benefits of Using Fulfillment Centers
For busy businesses, fulfillment centers can and do remove added stress. Businesses seek out the services of fulfillment centers for different reasons, but each finds ways to improve their business and service to their customers through using a third party for order fulfillment. Here are six of the top benefits eCommerce companies find when using fulfillment centers for their business:
- No warehouse leases: You don’t have to lease (or own) a warehouse to store your products when they haven’t been purchased or shipped yet. A fulfillment center handles the short-term storage needs for you. This frees up some of your expenses to focus on other aspects of your business, instead of the additional cost of having a warehouse hold your products. The cost of order fulfillment services is all-inclusive of the seven steps discussed above, so you get more for your money.
- Less staffing needs: You won’t need to hire order fulfillment staff. You can have fewer people on payroll because the packing and shipping of orders is handled by an outside organization, leaving your staff to focus on servicing your customers.
- Efficient order fulfillment: Fulfillment companies have systems, processes, and technologies in place to make the order fulfillment process streamlined. When an order is placed, a fulfillment company will use its proven processes to ensure the order is picked and packed quickly and shipped to your customer in a timely manner.
- Shipping options: For many eCommerce businesses, there are limited shipping options available to them. However, when a company works with an established fulfillment provider, more cost-effective shipping options are available to them, including expedited shipping choices for last-minute shoppers. You may also have the ability to expand to different locations, like shipping internationally for customers in different countries.
- More time for business owners and employees: When the outsourced provider ships orders and handles fulfillment needs, business owners and their employees can find more time to provide customer service, work on marketing or accounting initiatives, or other important operational tasks. Fewer hours will be spent on the time-consuming activities of packing and shipping orders. This allows many eCommerce brands to expand their product offering and grow their businesses.
- Inventory organizing: Keeping inventory organized is a big job. A fulfillment warehouse ensures that all SKUs are sorted into their correct place and can easily be grabbed when items are ready to go out.
These benefits can help any eCommerce brand find more time, money, and energy to focus on other important aspects of their business, which is exactly what we want to help you achieve. Find the time you need to focus on what’s most important to you and your business by partnering with a reliable fulfillment center to pick, pack, and ship orders to your customers. Rakuten Super Logistics has assisted and supported businesses just like yours with their fulfillment needs with quick, accurate order fulfillment.
Contact us today to learn more about our services and receive a personalized quote.
Rakuten Super Logistics is a leading eCommerce order fulfillment company that provides the scalability, flexibility, and cost savings retailers demand.
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