Online retailers are always on the lookout for ways to keep budgets lean while still providing stellar customer service.
An e-commerce fulfillment center is an ideal solution to keep costs under control and provide the top-tier service that customers expect.
In this article, we’ll cover what online retailers need to know about e-commerce fulfillment centers, including:
- What is an e-commerce fulfillment center?
- What services does an e-commerce fulfillment center provide?
- How do online retailers benefit from an e-commerce fulfillment center?
What is an E-Commerce Fulfillment Center?
An e-commerce fulfillment center is a third-party business that takes your customers’ orders, picks the products, packs items, and ships them to customers. Fulfillment centers take the responsibility of packaging and logistics off your plate, letting you and your staff focus on other tasks, which frees up a large portion of time and manpower for e-commerce companies.
Customers remain on your website through the checkout process, with the fulfillment center staying in the background, for continuity of their experience.
What Services Does an E-Commerce Fulfillment Center Provide?
Not all e-commerce fulfillment centers are the same as some offer more services than others, but at the bare minimum, a fulfillment center will:
- Receive and store your merchandise.
- Process customers' orders as they come in.
- Pick items for each order.
- Pack goods in a box for shipping.
- Ship the order from their warehouse to the customer.
E-commerce fulfillment needs have grown substantially in the past two years, particularly in response to the increase in e-commerce sales during the pandemic. While the pandemic caused a surge in sales, it also wreaked havoc on global supply chains.
From out-of-stock inventory to shipping delays, more than half of online retailers experienced moderate-to-severe disruption to business operations due to supply chain issues.
As a result of the growth and challenges faced by e-commerce businesses over the past two years, online retailers have flocked to fulfillment centers that offer all-in-one fulfillment services, such as:
- Inventory management.
- Custom shipping solutions.
- International shipping.
- Customs brokerage.
- Importing assistance.
- Print marketing.
- Direct mail marketing.
How Does E-Commerce Businesses Benefit from an E-Commerce Fulfillment Center?
When it comes to cost savings, a fulfillment center can help online retailers save substantially on:
- Warehousing. There is no need to pay for warehouse space, which can be in short supply and may not be needed in equal amounts all year long. It also lets e-commerce sellers keep a larger inventory or broader catalog of merchandise than they might otherwise be able to when handling in-house.
- Labor: No employees are needed to process, pick, or pack orders (or to handle returns, in most instances). Business owners can either allocate the money elsewhere or increase their profit margins.
- Equipment: E-commerce businesses do not need to invest in or maintain equipment, which saves businesses in the long-run.
The benefits of partnering with a fulfillment center go beyond cost savings, though. A fulfillment partner can help improve the customer experience in a variety of ways, including:
- Faster delivery times: Fulfillment centers often have relationships with domestic and international carriers, as well as access to global distribution networks, resulting in faster delivery times and more shipping options (such as overnight delivery or international shipping) to keep customers happy.
- Order accuracy: An e-commerce fulfillment center is well-versed in processing a high volume of orders daily. They also have extensive QA measures in place to ensure order accuracy, greatly reducing or eliminating costly order errors.
- Lower shipping costs: High shipping fees are the main cause of abandoned shopping carts. A fulfillment center can help find or create custom shipping solutions for your business that are reliable, fast and cost-effective.
FAQs About E-Commerce Fulfillment Centers?
What is the difference between a fulfillment center and a 3PL?
The terms “fulfillment center” and “3PL” (third-party logistics facility) are often used interchangeably, but they’re not the same thing. A fulfillment center is a subcategory of a 3PL.
Typically, when talking about a 3PL, businesses are referring to the basic model, where inventory is stored in a warehouse and shipped as orders come in. However, a fulfillment center provides a broader range of services, such as:
- Receiving and sorting.
- Inventory management.
- Printing and inserting of marketing materials.
- Labeling and packaging.
- Kitting and assembly.
- International shipping.
What should I look for in a fulfillment company?
Every e-commerce business is unique, but when looking for a fulfillment center, most vendors keep this criteria in mind:
- Pricing that aligns with your budget, along with transparent fees (e.g., a flat fee plus a per-order rate).
- Branding and packaging options that help you stand out from competitors and show your merchandise to its best advantage. This is critical given the number of influencers who do online unboxings now.
- The ability to integrate your online store with the fulfillment center’s software for fast order fulfillment. Once a customer checks out, the order is automatically sent to the fulfillment center.
- Essential services, like inventory management, global delivery, the printing of promotional materials, kitting, or management of returns and exchanges.
- Flexibility and the opportunity for customization, whether you want to scale your business in the future, go global, or further integrate with your business systems (e.g., CRMs).
Can my business use an e-commerce fulfillment center for international shipping?
Yes, you can send parcels globally through an e-commerce fulfillment center, provided they offer global logistics services. If you currently sell to the U.S., but want to expand to the international marketplace, be sure to select a fulfillment service that offers global shipping.
E-Commerce Fulfillment with GLF
With 20 years of experience in e-commerce fulfillment, GLF takes pride in offering transparent pricing, unmatched reliability and personalized customer service. Our team takes the time upfront to learn your business and work with you as a proactive partner to create personalized solutions that sync with your processes. If you’re looking for an e-commerce fulfillment center to support the continued growth of your business, you’re looking for GLF. Contact our team of fulfillment experts today!