Using a fulfillment company might not be the first choice of some business owners but there is no denying the positive impact using an order fulfillment company has on a retail business. Order fulfillment is a crucial part of any mail order or direct distribution enterprise. Order fulfillment, sometimes also called logistics management, is a complicated and complex series of procedures that have nevertheless become so important that their efficient management has become something of a business science.
Today, many third party logistics providers offer product inventory reception, storage, processing and shipping as a bundle of services to client small businesses both in the brick and mortar real world and in the growing commercial sector of ecommerce. Especially for businesses that operate on a two-tiered level, brick and mortar as well as online, such services can save fortunes in operating and payroll costs.
How Third Party Fulfillment Works
The logistics management provider accepts inventory on its client businesses’ behalf, most often directly from the wholesaler or manufacturer. The product inventory is then stored in the company’s storage facilities, which are often precisely and expertly climate controlled for maximum inventory stabilization.
When a product sample is ready for shipment, the provider company packages, ships, and provides tracking information both to the client business and to the customer, making sure that the route to the delivery address is clear and easy to follow.
Many small businesses, including recent startup and especially small businesses, lack the resources, the budget, or the know how to create transportation, shipping, and logistics networks on their own. By outsourcing to a third party fulfillment house, they spare themselves the months or years needed to build their own logistics infrastructure. They literally gain expert fulfillment staffing and resources overnight when they sign with a third party provider.
Making the Right Choice In Providers
When you choose to outsource your fulfillment management to a third party independent company, you’ll want to first look carefully at the company’s track record with previous customers. Seeking out testimonials, which vouch for the provider’s reliability and accuracy, is an invaluable means of vetting your potential companies.
Remember too that while third party providers normally charge a percentage of each product sold as their fulfillment service fee, that percentage may also sometimes rise or fall over time. The outsourcing agreement is legally binding, so business owners should choose the provider with which they feel the most comfortable engaging in a long-term business relationship.