Jan
21
eCommerce customers expect quick, accurate delivery. A bad fulfillment experience may lose you a customer and tarnish your reputation. Fulfillment, or the entire process from receiving an order to delivering it to your customer, is absolutely critical. Despite its importance, fulfillment is often overlooked. In order to satisfy customers and keep up with the competition, your fulfillment strategy must be sound. There are three main ways to handle fulfillment, so how do you know which is best for your eCommerce business? Read on to find out.
In-house Fulfillment
The first option for fulfillment is to do it yourself. Many startups and small businesses start with this strategy. In-house fulfillment means that your company handles every single aspect of fulfillment. You take the orders, pick, pack, and deliver the products without any third-party intervention.
Advantages
When you fulfill inhouse, you have more control over the process. You have direct contact with the inventory and can more clearly see any problems with orders or where challenges arise from.
This process is also very cost-effective since your own workforce handles all of the tasks. The only additional cost is the shipping service you pay for.
Drawbacks
However, in-house fulfillment is very time consuming and will demand a lot of time and energy from your employees. You must also physically hold all of the inventory which requires either renting a warehouse or cluttering up your home/garage. As your business grows and the orde volume increases, your workforce will have to spend more time on fulfillment instead of other business tasks.
Who’s it best for?
In-house fulfillment is a viable option for small eCommerce businesses that sell out of their homes or with a team that can handle fulfillment based on their typical number of orders. In-house fulfillment is cost-effective and has a low overhead, so it is often the best option for startups and very small eCommerce businesses. Once you grow a sizeable amount, it is time to consider one of the other two options.
Dropshipping
You can also partner with a drop shipper. This involves sourcing your products through a supplier and essentially advertising with your eCommerce channels. Your business still handles marketing, customer service, and social media, but the dropship partner is in charge of fulfillment. When a customer places an order, the drop shipper receives it, picks, packs, and delivers.
Advantages
Dropshipping is ideal for helping your business grow. It is very simple and easy to add drop shippers products to your online store. Since you aren’t producing the products, you can shop around for the best supplier. Additionally, you do not have money bound in inventory, warehousing, or other fulfillment overhead costs.
Drawbacks
However, you have minimal control over fulfillment when you partner with a drop shipper. Customers may blame or bad-mouth your business if there is an issue with the product, even though the drop-shipper is responsible for the product quality. You can not control the stock, and will often have to wait a long time for restocks. Since you are really selling their products, you will not have any of your branding on the packaging making it difficult to increase brand awareness and loyalty.
Who’s it best for?
Dropshipping is a great way for newer eCommerce businesses to sell a variety of items. If you are launching a new business or a merchant wanting to diversify your product lines, dropshipping could be a great fulfillment option. Since you are selling products from a supplier, dropshipping tends to work best for niche businesses with less competition.
Third-Party Fulfillment
Another option for fulfillment is outsourcing. You can use third-party fulfillment (3PL) to fulfill orders. When you outsource fulfillment, you typically make or buy your products, store them in a warehouse, and hire a 3PL to pick, pack, and ship them. You may also have the option to store your products in the 3PL warehouse, with programs like Amazon FBA.
Advantages
Outsourcing fulfillment gives your team more time to handle essential business tasks like marketing, product development, and customer service. 3PL is flexible, allowing you to outsource the parts you would like. You can outsource just shipping, or picking and packing as well.
Disadvantages
This method is often the most expensive. You also do not have control over how your products are packaged and shipped which can affect quality control. Additionally, you must communicate back and forth with your 3PL partner and trust their work.
Who’s is best for?
Typically, businesses that are more focused on the acquisition will leave inventory and shipping to a 3PL partner. If you sell a unique product and do not have the time to self-fulfill, partnering with a 3PL is ideal.
Conclusion
In order to choose the fulfillment strategy that is best for your business, you must analyze the pros and cons of each of the three main methods. Think about the qualities of your business (your products, your budget, your workforce) to determine the best option for you. Remember, your fulfillment strategy can certainly change as your business does.
Regardless of how you choose to fulfill orders, Listing Mirror is here to simplify the process. We can connect to your existing fulfillment process including your own warehouse, Amazon FBA or a third-party logistics provider or order fulfillment. Sync all of your channels for easy, accurate inventory syncing. Use Inventory Mirror for unparalleled warehouse management and inventory tracking. Choose the fulfillment method that is best for your business and get started with Listing Mirror for listing management, order fulfillment, inventory syncing, and warehouse management. Contact us to learn more, start your free demo, or register today!
Erin Wawok
Erin is the Co-Founder of Listing Mirror.