Home Businesses Need Fulfillment Service Providers

The home-based enterprise is the business model of tomorrow’s economy, and for many online entrepreneurs the need for qualified logistics management will only grow as their business expands. As the home-based business develops its customer base, the inventory needed to satisfy their demands can quickly overwhelm the resources available to the business itself.

Warehousing, palette storage, and wholesale fulfillment are all highly specialized business skill sets. Small business owners not familiar with proper management of such costs as warehouse overhead (lease, taxes, utility costs) and staff training may quickly find themselves struggling to keep their business afloat.

Making The Decision To Outsource

Small businesses should shop carefully for a third party logistics provider. These companies specialize in assuming control of most of a business’ logistics and order and gift fulfillment duties. Such duties can include the aspects of warehousing mentioned above as well as palette storage, cold storage, and warehouse staff training.

The selection of a third party logistics provider should involve a number of factors, principally the payment structure used to compensate the fulfillment service company for its performances. The basic business arrangement between a small business and a fulfillment service provider typically takes the form of a clearly-defined partnership. This partnership is legally binding, and becomes finalized only after a period of negotiation. Small businesses should remember they have several rights and obligations during the negotiation process, and should thoroughly review potential service contracts before committing to a particular fulfillment service.

Once A Fulfillment Service Provider Is Selected

Perhaps the biggest advantage fulfillment service providers bring to the small and/or home based business is the ability to drop ship merchandise to the customers. Drop shipping involves receiving inventory directly from the manufacturer or wholesaler, then packaging and shipping it to the customer directly. These shipped packages from the fulfillment service provider but bearing the client home business’ label and imprint. This means the customer is aware only of the home or ecommerce business in the transaction, with the fulfillment service assuming the role of “silent partner” in every transaction.

Developing the Fulfillment Service – Client Business Relationship Over Time

As the small business grows, it may choose to revisit and reevaluate its agreement with a fulfillment service provider, amending or revising the contract as situations warrant. Fulfillment services are routinely able to accommodate even the most rapid growth of their small business client, so a review of the contract agreements may actually not be necessary.