When you first set up your business and decided that you were going to sell things to customers, you probably started thinking about the costs that were going to have to go into a store. You will have to find the location and build it, hire employees and manage them. You will have to make sure that the profits that you make from the sales cover all of the expenses of the operations, and you are going to have to make that happen with sales from a drive-up area. If all of that seemed difficult to manage, you probably started looking into online sales. No store setup beyond a website and an ability to sell to the whole world seemed great. You would be able to process the orders and ship them out from your house or from a small rented room. While this type of business setup was hassle free, it also didn’t take into consideration what would happen if the business grew. If you have more sales than you can process yourself, or if you would just like that spare room back in your house, you are going to have to look into renting a warehouse and hiring employees. But wasn’t that exactly what you were trying to avoid in the first place? What if you predict sales wrong and now have a big bill to cover that you can’t afford? What if you get a warehouse too small and are stuck with it for years? Isn’t there a better solution?
It took a while for ecommerce to fully develop and evolve, but as it has finally come into it’s own as the primary method of shopping there are new services which are springing up in order to take it to the next level. One of these types of services is the concept of “third party order fulfillment.” This means that a completely independent company does the processing of your orders and the inventory management using their employees, allowing you to be completely out of the process. You can concentrate on growing your business and other aspects because the physical aspects are being handled by a professional company that specializes in management of these processes. The best part is that they will probably save you money too.
Shipping fulfillment companies work by creating a software bridge between their systems and your shopping cart. They receive your orders that are placed within their system, and use their own employees to pull that order from inventory that you ship to their warehouses. You pay for the space you use in the warehouse, and by the piece that is processed by their employees. Because you are not paying for wasted warehouse space and employee downtime, you will almost always save money. Because you will no longer be responsible for the process, you will save time. Fulfillment services are a win win for both merchants and customers, who will receive better customer service for a fraction of the total costs, which can translate to lower prices