You handled everything from home when you first launched your eCommerce business, starting it all independently. But eventually, you’ll need to scale up because your company will outgrow your house. Utilizing fulfillment centers is a positive action you can take. Here is a guide on what they are and how to take advantage of them.
What Are Fulfillment Centers?
What is a fulfilment center? They are a warehouse or storefront that stores and ships out stock to customers. They allow stores to have their stock stored and handled elsewhere, rather than the owners handling them all themselves.
Is that not the same thing as a warehouse? You may use the terms interchangeably, but they are very different.
“A warehouse is set up simply to house inventory,” says Simon Turner, an eCommerce writer from Paper Fellows and UK Writings. “It may not be holding stock to be sent directly to customers, but to be sent to other retailers too.”
The fulfilment center, on the other hand, is set up to move inventory directly to the customer. Unlike a warehouse, the longer the stock sits on the shelf in a fulfilment center, the more money is lost. As such, they aim to move stock as quickly as they can.
There’s also a distinction to be made from distribution centers. A distribution center aims to move stock quickly as well, but they send stock to other retailers and businesses rather than customers directly.
Types Of Fulfillment Centers
There are actually different types of fulfilment centers, so you can find one that suits you best. These include:
- Warehouse fulfilment centers: These centers are run out of warehouses, so your stock is held there rather than in your home or garage.
- 3PL fulfilment center: These centers have all fulfilment of orders handled by a third party, rather than you.
- Order fulfilment center: This refers to any place where fulfilment happens, run by anyone and of any size.
Why Use A Fulfillment Center?
Now that you know the basics, you need to know why using a fulfilment center is the next step in scaling up your business. Here’s why you’ll want to consider them:
You don’t need to own a warehouse: If you’re going to move your business out of your home, you’d think the next step would be to get a warehouse. However, it costs money to rent, pay staff, insurance, etc. Instead, you can use a fulfilment center, as you’ll have much lower overhead costs to deal with.
Automate the process: Improving the processes of your business is important, as you want to be faster and more efficient. This is where using a fulfillment center becomes important. You can use them to automate a large part of the order process, such as the ‘pick and pack’ process and stock updates.
Implement fast shipping: Picking the right fulfilment centers is key to getting the most out of them. “Having selection centers across the US can benefit your business” says Fiona Layman, a business blogger from Write My Paper and OXEssays. “As such, you can get goods to your customers much more quickly.”
No need for training: If you were to set up your own warehouse, you’d have to hire and train staff. That’s going to take up a lot of time and energy, not to mention money, and that’s something you may not want to deal with. Instead, you can let the fulfilment center handle all of this for you.
Faster processing: When it’s just you processing orders, it’s always going to be slower than outsourcing the work. You have to handle everything, and picking and packing orders is time consuming. Having a fulfilment center makes the process much faster, as staff will be there handling all of that for you.
There are lots of reasons why you’ll want to look into fulfilment centers for your eCommerce business. Having access to these centers frees you up, and enables you to offer a faster and more efficient shipping service.
