Making The Decision To Use A Fulfillment Center: What You Need To Know

Given the current state of the economy, launching your home-based or ecommerce business is probably a more daunting proposition than ever before. Yet for the true entrepreneur, building such an enterprise means ignoring the often-chilly business climate and reaching out for new opportunities to help their business grow and flourish.

A great part of building a small business depends to a large degree on how successfully a small business can handle its logistics, or shipping, customer service, and delivery needs. For ecommerce boutiques and other such inventory vendors, creating reliable logistics systems is a crucial part of building a good customer service reputation and profile within the larger ecommerce community.

Many small and ecommerce business owners in recent years have begun turning to product fulfillment services as a way to amplify and bolster their business growth. Product fulfillment services, often simply referred to as distribution service centers or third party fulfillment providers, provide the logistics support and customer service needs for a variety of different ecommerce clients at once, shipping and providing tracking information to customers in exchange for a small, pre-negotiated fee paid for by the ecommerce merchant.

What Benefits Does A Fulfillment Center Provide?

The main advantage of using a fulfillment center is the ability to solve several different ecommerce logistics problems with a single business agreement. It’s a sad truth that many thriving ecommerce businesses see their rate of growth plateau or even fall off once the demand for their products exceeds their abilities to effectively meet that demand.
By contracting with an order fulfillment service, business owners have their logistical needs met without the necessary heavy investment of time and energy that would otherwise inevitably be required. The ecommerce operator or operator is then free to concentrate on other areas of business growth.

Another important service provided by third-party fulfillment providers lies in the area of warehousing. Fulfillment centers store inventory for individual ecommerce merchants, often stocking up on their products and merchandise months in advance. With a hefty amount of inventory to move, the ecommerce business owner can aggressively move forward with sales initiatives.

The Costs Far Outweigh The Benefits

Fulfillment centers often work on a contractual basis, accepting a small fee per unit sold from each ecommerce business with which it enters into a pre-arranged partnership. These agreements often vary between the fulfillment center and the particular ecommerce business owner, and may change or fluctuate and sales rise or recede over time.