How Do Fulfilment Centres Work?
Fulfilment centres are third-party logistics providers (3PL) that handle, process and ship products. Fulfilment centres deal with the logistics required to fulfil a customer’s order. This eliminates the need for in-house processing, packaging, addressing, and shipping.
The Step-by-Step Guide to Fulfilment
The first step is finding the right fulfilment provider. Experience and expertise are crucial here. A provider that can offer a bespoke quote and solutions specific to your business needs is preferable. Key factors to consider are locations relevant to your customer base and prices that match your budget.
Onboarding with fulfilment providers
The next step is onboarding with the fulfilment provider. This includes software setups and integrations with your sales channels.
Fulfilment centres physically store your inventory and can receive straight from your suppliers. A fulfilment centre’s expertise and digital warehouse systems greatly optimise your storage.
Online integrations allow fulfilment providers to directly receive online orders in an instant. When an order is placed, the provider receives all the essential information from the seller. As this process is automatic, it relieves sellers of the need for manual processing.
Processing and Packaging Orders
Products are then picked, packed, labelled and shipped. Transparent providers that offer real-time tracking give confidence to you and your customers. A fulfilment centre’s digital approach ensures accuracy and efficiency, whilst removing human error.
Fulfilment centres can provide varying levels of packaging services. For example, Fulfilment by Amazon will only use Amazon-branded packaging. Other providers offer bespoke packaging solutions, with options for your own branding. A logistics partner experienced in co-packaging can add value to your service and customers’ experience. This may be provisions for bundles and kit-building to inserts and promotional items.
Processing Payments and Returns for Online Orders
Depending on the provider, some aspects of fulfilling orders may still be the responsibility of the seller. For example, delivery and product issues may have to be handled by the seller. Something to consider when choosing a fulfilment partner is if they handle and process returns. Most fulfilment providers don’t offer payment processing and often must be handled separately.
Fulfilment Centres vs. Warehousing
In some cases, the term “fulfilment warehouse” is used interchangeably with “fulfilment centre.” This can lead to some confusion since fulfilment centres differ from traditional warehouses.
In a traditional warehouse, inventory is stored for an extended period and may not be accessible immediately. Warehouses only provide storage services. Without providing picking, labelling, packaging, or shipping services that fulfilment centres do. Storage warehouses are only useful for excess inventory that needs to be stored or seasonal products that sell only at certain times of the year. Fulfilment centres store inventory for shorter periods of time and are optimised for rapid delivery to customers.
Unlocking the potential of your fulfilment experience
ECommerce providers need flexibility and choice to get the most out of fulfilment centres. They must be able to integrate their e-commerce platform with any fulfilment provider they choose. The level of experience and software of a fulfilment provider are deciding factors in the optimisation of your business.
The best eCommerce retailers prioritise customer convenience with a range of fulfilment options. For customers to receive orders as quickly as possible, this flexibility is essential. This requires fulfilment providers that are flexible and adaptable in the services they provide.
Fulfilment centres can vary as much as the services they can provide. With the knowledge of how they work and key factors to consider, you can optimise your operations. A fulfilment centre that offers bespoke services specific to your needs and requirements is pivotal in choosing the correct provider.
If you ship products to customers then there comes a time when ‘doing it yourself’ is actually holding your business back! Concentrate on GROWING your business and outsource your order fulfilment operations to experts who have the infrastructure and skill to let you deal with taking more sales!
Thoughts on business growth opportunities from Yorkshire Powerhouse
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