How do Fulfillment Services Providers do Their Job?

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How do Fulfillment Services Providers do Their Job?

How do Fulfillment Services Providers do Their Job?

18 December 2020
, Blog

Moving toward the use of fulfillment services is a big step for many businesses. Fulfillment solutions make it possible for companies to scale their operations and continue expanding their markets. You may be curious, though, about how they do the job so let's take a look.

Warehousing Goods

Generally, fulfillment services providers maintain warehouses with the goods their customers sell. If you run an ecommerce website, for example, you might send the inventory for the site to the fulfillment solutions company's warehouse. When you get an order, you pass it along to the fulfillment end of the operation and they ready the order for shipment and send it out.

Notably, this isn't a huge divergence from how major retailers do the job. Companies like Amazon and Walmart handle fulfillment much the same way, although they generally are large enough that they own the fulfillment side of the business, too.

Conversely, smaller organizations usually don't have the economies of scale required to perform lots of fulfillment on their own. A fulfillment solutions provider achieves an economy of scale by working with numerous customers. They warehouse each customer's items in sections, and then they pull stuff first based on the retailer and then on the details of the order.

Software Integration

Modern warehousing and fulfillment systems are software-intensive. In the previous example of an ecommerce website, the retailer would likely hook into the API for the fulfillment services firm. When a visitor to the website completes an order, the site sends an API call to the fulfillment company's server. Once staff members fulfill the order, another call is sent from the server to the website's host. The site would then normally send a notification that the order has been processed, and there might be subsequent notifications for shipping and tracking.

Packaging and Inserts

Typically, fulfillment companies offer branded packaging and targeted inserts for shipments. This allows you to send boxes that reflect your brand, and it also makes it easy to market to customers with coupons, sales fliers, and product announcements. It's also standard practice to include packing slips and return shipping labels.

Pricing Agreements

Most fulfillment services are priced in one of two ways. If you have very dependable sales, you might seek a flat-rate agreement or something structured on volume. Folks who have more cyclical sales, though, may prefer to use per-item agreements that allow them to scale up during high-demand periods and down during the slow times.

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