Benefits of using a fulfillment center
Published by iLogistics USA Team
What are the top advantages to online sellers that use a fulfillment company?
Eliminate storing inventory and packing boxes
Unless you’re a brick-and-mortar retailer, managing a physical space may not be ideal. It’s no surprise that many ecommerce businesses want to avoid the hassle of storing inventory or dealing with warehousing.
Furthermore, if you don’t want to pack boxes and run to the post office every day, a fulfillment center is a great alternative. The number one sign that it’s time to use a fulfillment center is no longer being able to keep up with your increasing order volume. Fulfillment providers help you spend less time worrying about packing supplies and post office lines and give you more time back to grow your business.
Focus on the big picture
While packing boxes and shipping customer orders are critical to meeting consumer expectations, they are generally tasks that can be easily outsourced. Entrepreneurs and ecommerce store managers have an endless to-do list, so they must stay laser-focused on the tasks that only they can do and those that will help them scale and make money.
Taking the time spent on order fulfillment and instead focus on marketing, customer service, and product management can help ecommerce businesses be more strategic and less operational. There will never be enough time in the day but using a professional fulfillment center can help sellers be more proactive in other areas of the business.
Leave it to the experts
Logistics can be challenging, and a fulfillment center is a complex machine with many moving pieces that must simultaneously work together. From order processing and inventory management to preparations for peak shopping seasons, fulfillment companies are domain experts and have seen it all.
A single fulfillment center handles operations for countless ecommerce businesses and ships millions of orders out regularly. Because of this, their volume and experience make them a strategic partner.
Fulfillment companies can also drive greater efficiencies in everything from the low shipping rates they negotiate with carriers to the number, size, and locations of their fulfillment centers — all to be utilized by the ecommerce businesses they work with.
Automate warehousing and fulfillment
Modern fulfillment companies keep technology at the center of their fulfillment services. This means that every step of the fulfillment process is automatically documented in real-time for ecommerce businesses to know the status of their inventory and each order in the fulfillment center without having to be there.
This is possible when fulfillment solutions have built-in integrations with ecommerce platforms and marketplaces. This connection enables each customer order to be automatically sent to fulfillment center to get picked, packed, and shipped out. Once shipped, tracking info is pushed back to the ecommerce store and shared with the customer.
Fulfillment center Frequently Asked Questions (FAQs)
Get answers to some of your burning questions about fulfillment centers!
Do fulfillment centers handle inventory management?
Yes! iLogistics USA Fulfillment centers receive inventory, sort and shelf products in their respective bin, shelf, or pallet locations, and keep track of units on-hand. The goal of warehousing inventory in a fulfillment center is to turn over stock quickly and ship orders out as efficiently as possible. Most fulfillment centers will provide technology to help ecommerce businesses manage their inventory from afar, including inventory tracking tools that help you know when to proactively reorder product to prevent stockouts.
How many square feet do I need?
If you choose to self-fulfill your customer orders, the total square footage you need to manage your inventory will depend on several factors. One is the amount of unique SKUs you have. For example, if you sell shirts on your ecommerce store, each size and color will need its own storage location.
Two is your order volume. If you are only shipping 150 orders a month, you may be able to keep your inventory in your basement, garage, etc. But if you are shipping several thousand customer orders a month, you will need the space to scale your fulfillment operation and store excess inventory. You will always want enough extra inventory on hand to prevent stockouts.
Finally, you will need to understand your growth plans to ensure you don’t move into or lease a space that you will immediately outgrow.
Thanks to ecommerce, warehouse space is becoming more difficult to find these days. And it can be expensive to rent or purchase warehouse space in the locations where your customers reside, such as shipping to major cities. If you work with a fulfillment company, each fulfillment center will likely have hundreds of thousands of square feet shared among ecommerce businesses.
Can a fulfillment center do one- or two-day delivery?
Yes, many fulfillment centers offer expedited delivery options, including same-day and two-day shipping. The exact services will depend on the geographic location of the fulfillment center, the technology and operations in place, and the carriers used.
How does order processing work?
iLogistics USA order are processed after a customer makes a purchase on your ecommerce store. The ecommerce platform that powers the store will send the order details to the technology used at the fulfillment center. This alerts fulfillment center staff to retrieve the ordered products, pack them into a box, label the package, and get the order shipped.
From there, tracking information can be pushed back to the ecommerce platform and shared with the customer so they know where their order is every step of the way.
What is a good price for fulfillment solutions?
When self-fulfilling customer orders, iLogistics USA will be responsible for procuring and paying for your warehouse space and equipment, staff salaries, warehouse management system, workers comp and liability insurance, boxes and packing supplies, postage, and more. Given the many direct and indirect logistics costs, the exact cost is often underestimated. The cost of outsourcing fulfillment will vary among fulfillment companies, but typically your fees will include receiving your inventory, warehousing or storing items, and shipping products. Depending on the fulfillment provider, there may also be individual fees for each task, such as picking, packing, among other line items.
Outsourcing fulfillment services may end up being more expensive than self-fulfillment, but it often is done to save time. Since each fulfillment company prices their services slightly differently, iLogistics USA will need to examine the entire fulfillment cost, taking every possible fee into consideration.
What kind of customer service should I expect?
While iLogistics USA strive for perfection, fulfillment services and shipping are prone to errors. With shipping carriers, your customers will experience damaged, lost, or stolen packages at some point. While inevitable, it’s how you, with support from iLogistics USA, will help your customer through this process that will ultimately influence their experience.
iLogistics USA should empower you to run your ecommerce business with the right tools and guidance. Depending on your order volume, you may have a dedicated account manager. Otherwise, expect a team to support your business and answer any questions you have.
The service you receive may also depend on whether the iLogistics USA staffs their own fulfillment center or works with outside staff.
Regardless, you should expect transparency and visibility into any fulfillment company’s performance.
iLogistics USA can provide a Fulfillment solution for your business in Miami, Florida. Give us a call to learn how we can help you maximize the efficiency of your operation. See what we can do for you by calling 1-305-909-0400 and as always, a team member will be happy to assist you.