Outsourcing fulfillment needs can be an incredibly effective practice, saving you time and money while allowing you to concentrate on ways to generate more income. Holding on to your profits, however, means educating yourself about distribution center functions.
In eCommerce, fulfillment services get purchased products to consumers. Unfortunately, for many companies (and their customers), faults in the fulfillment process result in time delays, lost products, unhappy consumers and, ultimately, lost business. The problem may be in-house, where a company chooses to do its own fulfillment, but does it poorly. However, outsourced services sometimes fail to perform, which is why you need to carefully vet order fulfillment services prior to signing on with them.
What are Order Fulfillment Services?
When a customer buys something from a website, the merchandise is physically located somewhere (or should be – selling imaginary items is an entirely different problem). When first starting out, many merchants keep inventory in their own facilities. If business is good, however, their inventory needs quickly outgrow their space. A distribution center with state-of-the-art facilities and practices becomes the ideal place for their inventory.
Choosing the wrong order fulfillment warehouse can kill business profits quickly, due to increased risk of lost products, damage to items, poor handling of items, inconsistent shipping, and more. You need an operation that receives incoming orders and turns them around rapidly, keeping you in the black, keeping your customers happy and keeping them coming back for more. The warehouse must have a well-trained work force and back office and a good record for responding not only to your customers’ inquiries and concerns but also to yours.
Incoming Orders
Any warehouse fulfillment operation worth its salt must have up-to-date technology to receive and store orders, with the means to track the order from receipt through the entire shipping process, all the way to when the item lands at your customer’s door. Only outsource to a distribution center that has the ability to receive orders through various channels, including telephone, fax, mail, Internet, email or electronic data interchange (EDI).
Inventory Management
Order fulfillment systems and inventory management go hand in hand. The inability to efficiently locate products means no timely shipments. There are many different warehouse management systems (WMS) in use, some better than others. Many warehouse and distribution services have their own proprietary WMS designed specifically for their needs and infrastructure that should be able to handle your products, now and in the future. You want an operation that will grow with you as your business increases.
Location, Location, Location
In the fulfillment and distribution market, “location” is important inside and out. A well-managed warehouse should have a floor plan or map that is set up to place items in the most efficient locations possible. What’s on the outside matters, too, specifically the location of the actual order fulfillment warehouse.
Be sure to ask yourself:
- Is it accessible to shipment methods used by your fabricators/manufacturers?
- Does it have ample access to various shipping options (highway, sea, air, rail)?
- Is the building set in a place not subject to weather extremes, etc.?
- Does the physical plant have sufficient security and maintenance?
Pick and Pack Services
Pick and pack warehousing is the meat and bones of outsourced e-fulfillment. Well-designed pick and pack logistics mean the correct items get to the right customers quickly. Having RF-enabled WMS helps ensure accuracy and labor efficiency. Well-trained staff is crucial for prime pick and pack services. Inventory placement is also important: A good floor plan means that when workers “pick” ordered products from different locations within the warehouse, they can easily get the products prepared for shipping by individual container, pallets or boxes.
There is a lot to consider when choosing a fulfillment company for eCommerce order fulfillment. To make the best choice, you need to look at each step of the fulfillment process. If there is even one weak link in the warehouse’s chain of operations, it can destroy the whole process.