Outsourcing may seem like a modern-day concept but the reality is that it’s been around forever. Whether it was hiring a nanny, a gardener or a plumber, one was utilizing and taking advantage of the services and expertise of others.
What are fulfillment services?
Fulfillment services are where fulfillment companies provide the resources to process customer requests for their clients. Most common is for a fulfillment company to run a warehouse that contains all of the client’s products; when an order comes through for the client, the fulfillment company processes it on behalf of the client, locates the item, packs it and then ships it off.
Often a magazine doesn’t mail out the publication itself to its thousands of subscribers – it has someone who does this on their behalf.
Anytime you order something online, you may be receiving a product from a company but they had nothing to do with getting it to you.
What is the pricing structure?
Fulfillment services are no different to banks, auto mechanic or a law offices – when things are of a technical nature, you can be charged for things you are unaware of. There are many types of fees when it comes to fulfillment services so it helps if you are familiar with what you could be paying for.
For instance when it comes to fulfillment rates, some companies may offer no setup fees, no account processing fees, no receiving fees and may offer discounts on inbound freight while others may apply all these charges.
The types of things you’ll be shipping and how you do so will also influence your cost. How relevant are flat-rate shipping options? Do you need overnight, express, priority or next day delivery or is Ground and 2-Day sufficient?
When it comes to fulfillment fees, monthly order volume is a massive determinant. The price per order should decrease as the volume increases otherwise you aren’t getting a discount for buying in bulk.
Even though different fulfillment services may have different fee structures, but the presence or absence of a single fee shouldn’t influence your decision. You need to look at the bigger picture and the total cost.
Mistakes are a part of life and you want to make sure both sides understand what the consequences are and who is responsible for what in the event of them happening.
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Who should consider using fulfillment services?
Whether it’s books, clothes or food, if you ship orders to customers you could consider fulfillment services. By using a fulfillment company you can focus on your business and growing of it – you don’t need to be distracted by issues related to the warehousing, distribution and logistics. There are many issues related to a warehouse be they related to human-resources or logistics. When you don’t know something about a subject and engage with an expert, you are gaining all of their experience and knowledge.
How to choose a fulfillment company?
There are different types of fulfillment services be it ecommerce, third party, literature or mail order. You want to find a fulfillment provider who is going to be the best match for you.
Sometimes choosing the biggest isn’t always the best – it means they just regard you as one of many clients. You want someone who is going to have you as their number one priority.
It is also important that you are on the same page. The fulfillment company needs to know your business inside-out so it can implement this knowledge when it comes to servicing your customers.
To find some fulfillment candidates, contact Mailing & Fulfillment Services Assn. for advice. Also you can get referrals from business partners or your trade association in your industry. Google “fulfillment services ” online and spend time doing research on some potential fulfillment services.
Seth Boylan is the owner of Xpert Fulfillment, an order fulfillment house with locations in Michigan, Minnesota and Europe. In his spare time he likes to go snowmobiling and trail riding. He has over 10 years of experience in the fulfillment and logistics industry.
**Disclosure of Material Connection:
Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally or believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials.”