What are Fulfillment Services?
10 Things to Know About Fulfillment Services
How Does It Work?
Fulfillment Terms & Definitions
Questions to Ask Fulfillment Companies
How to Choose a Fulfillment Provider

What are Fulfillment Services?

As strange as it sounds, you can actually make a profit off of shipping and handling costs. How? By outsourcing to a fulfillment center, you can have your shipping and handling done for cheaper than what it would cost you to do it. A fulfillment center is responsible for operations such as storing, warehousing, packing, shipping, order processing, returns, and even product assembly. Outsourcing to a fulfillment center is a great option for those who are running a business online or at home where storage space is at a minimum and shipping everything you takes too much time away from other operations.

10 Things to Know About Fulfillment Services

1. You “can” outsource everything- A fulfillment service can store your products in a warehouse, manage your in-stock products, take orders, take customer payment, package and ship your inventory, and even directly work with customers. Essentially you can outsource anything, or keep some tasks for yourself, or even use a virtual assistant to handle other processes.

2. Shipping- If not done correctly, shipping can become quite expensive. A fulfillment center is likely to have negotiated discounts with mail deliverers because they tend to ship out large quantities of goods. It is good to find a fulfillment center that is close to a majority of your customers to cut down on shipping costs even more. When you do find a fulfillment center that works well for you, ask what kind of deals you can get, and then try to negotiate your own deal. Since you should be shipping out large volumes of products, you could possibly negotiate a lower price.

3. Turn around times- The process for fulfilling an order, from the initial order to the delivery can take a while sometimes. Some businesses can charge more for an expedited service should the customer request it, or they can simply charge you for having speedy turn around times.

4. Communication and customer service- A fulfillment center with a good customer service program generally means that you will spend less time having to answer questions or spending money fixing problems. Having an order tracking system, along with an automated customer communication program will be a good way to keep customers up to date and answer numerous questions. Check with what companies use your possible fulfillment company and see what they have to say about them. Ask questions such as how is their punctuality, are they easy to communicate with, how many complaints they receive monthly, and anything else that would give you a good view of their quality of work. These people will be interacting with your customers frequently, they should be held to high standards.

5. Warehouses- If your products can be susceptible to weather then you need to make sure that the elements inside the warehouse are kept under control. You should however automatically assume that the weather at the warehouse will be very hot, cold, dry, humid, or whatever would be bad for your products. You should inquire about climate control within the warehouse so that your products are kept in great condition. Another thing that should be considered is the shipping itself. If your products are oversized or too heavy, that could complicate things. You should go over all the details such as fragility of your products before any actions are taken.

6. Fees- The contract you sign with a fulfillment company will more than likely be filled with different types of fees. Set-up fees, processing fees, returning fees, storage fees, etc. A fulfillment company will want to be paid for the work they do for you, so anything that will cost them money will cost you money. It is important to have a detailed list of expectations from both parties so there are no surprises to either camp.

7. Contract Terms- Most companies will push for a long-term contract in order to make more money. Should the fulfillment company work out to your liking, this could be a good thing, however you should always leave an exit route for yourself should things not work out the way you wanted them to.

8. Insurance- It is essential to have documentation of who is responsible should something happen to your products while they are being managed by them. Of course it would be in your best interests that they would be responsible and that your insurance will cover it.

9. Cash flow- Obviously you will want to pay the fulfillment company after you have been paid yourself, however they will usually want to be paid sooner. Payment terms should be negotiated in the beginning of your relationship, however they can be built over time once you have established a good credit history with them.

10. Credit card processing- You should know beforehand how long it usually takes for the funds to be transferred to your account after a credit card has been authorized. The time can range between 1-30 days are more; this of course will have a large impact on your cash inflow. The rates will differ depending on your business type. For example if you have a signature as opposed to a phone order, the rates will be lower due to less risk of the customer backing out on the order. Depending on how long your company has been around for, you may get a maximum monthly charge to reduce their risk. You can however get around this by having a bond in place with the company.

Pages:1, 2, 3,

=============================================================================