If you're reading this blog post, you'll know that there are many challenges to running your own online store; one is handling the storing, packing, and shipping of your products.
When you’re still a tiny business selling products from your home, you might be able to manage this yourself. However, once your order numbers grow and you want to expand your inventory a big way, this suddenly becomes a more significant challenge.
Whether you work alone or with staff, the fulfillment process is bound to take heaps of time away from other, more important, money-making tasks.
Fortunately, plenty of third-party solutions can handle the entire fulfillment process for you. With that said, here we're going to look at how to choose an ecommerce fulfillment service.
There's lots of ground to cover, so grab a cup of java and let's dive straight in!
When Should You Consider Engaging An eCommerce Fulfillment Service?
Before going any further, let’s establish whether you’re in a position to benefit from an ecommerce fulfillment service.
Of course, fulfillment is an ongoing expense, so you need to calculate whether your business is ready to shoulder this burden.
The best indicator for whether using an ecommerce fulfillment service is worth your hard-earned cash is if you're spending several hours each day packing and shipping your products. However, there comes the point where this is no longer manageable for your small business, and, as a result, fulfillment gets in the way of other essential tasks. At this stage, hiring a third-party fulfillment company is a no-brainer.
Utilizing a third-party fulfillment company might also be a good idea if you live in an inconvenient location and want to benefit from faster shipping to your customers. Maybe you have an international audience, or you want to offer a superior customer experience with two-day shipping for most of your customers. In either instance, employing a third-party fulfillment company might be the solution.
Another reason to consider third-party fulfillment is space. Finding a third party with access to a bigger warehouse makes sense if you order inventory in bulk and don’t have your own storage solution.
Finally, in some cases, partnering with an eCommerce fulfillment service might be the most cost-effective solution. For example, utilizing a third party could be cheaper if you spend lots of money on packaging, transport, and shipping. Typically, third-party fulfillment providers can access wholesale pricing and shipping discounts, keeping costs lower overall.
Ecommerce Fulfillment Services Without Inventory
This article mainly focuses on eCommerce fulfillment services for sellers who manage their own inventory. However, even new sellers with no inventory might benefit from third-party fulfillment services.
Cue the dropshipping business model.
Dropshipping relies on a third-party supplier to manufacture, warehouse, pack, and ship products on the seller's behalf. When merchants work with a dropshipping supplier, they pick the product(s) they wish to sell from their product catalog. Then, instead of investing in inventory upfront, the seller only pays for the item once a customer has placed an order.
When choosing a dropshipping supplier, there are a few things to consider. Most importantly, product quality, seller reviews, product variety, whether the dropshipping supplier integrates with your chosen eCommerce platform, etc.
Check out some of our guides on dropshipping if you’re interested in learning more!
- Dropshipping Definition: The Best Way to Setup a Dropshipping Business Quickly
- 10 Best Shopify Dropshipping Apps + Full Tutorial on How to Start Dropshiping
- What are the Best Dropshipping Suppliers in 2023
How to Choose an Ecommerce Fulfillment Service
If you’ve decided that outsourcing your fulfillment is the right next step for you, it’s time to talk about what to consider before you strike a deal. So, below are a few crucial tips for choosing the right ecommerce fulfillment company for your business:
Understand Your Business and Customer Needs
While all eCommerce fulfillment services handle the fulfillment of your orders, you might have more nuanced requirements for the process.
So think carefully about what you and your customers need before opting into a fulfillment service partnership. For example, some companies offer end-to-end logistics with a lot of flexibility. In contrast, others might only provide basic storage, picking, packing, and shipping.
That said, here are a few things that might be useful or even essential for your business:
Returns are a significant factor in customer satisfaction. In fact, 92% of consumers will buy from you again if returns are easy, and many want free return shipping. Unfroatunetly, you can’t completely erase the possibility that an item will arrive damaged. So, it’s vital you can set up some sort of returns and refund system.
The right third-party fulfillment service could help by re-inserting non-faulty returns into your inventory and issuing replacements where necessary. They might also organize the pickup of returned items or provide shipping labels for returns.
However, not all eCommerce fulfillment services do! It’s also worth noting that the responsibility fulfillment providers take for damaged or missing items varies. So be sure to clarify these finer points before signing the dotted line. Lastly, you’ll also want to find out what costs to expect if you want to process a refund.
Suppose you have a vast and complex inventory and generate a high volume of sales. In that case, you might also require inventory management from your fulfillment service. Not least to, keep an eye on stock and update your website accordingly to announce limited or no availability.
Top Tip: If a provider doesn’t offer inventory management, they might integrate with third-party inventory management tools, so watch out for this as you consider your options.
Custom Product Requirements
Not every order is as straightforward as picking one item off a shelf and sending it out to a customer. You might want to sell product kits or bundles that require your fulfillment service to package multiple items.
For example, perhaps your products require regular wipedowns or need storing in a refrigerated space? Maybe you want your fulfillment service to handle subscription boxes, or you’re keen to use custom packaging or insert note cards into your packages to better brand yourself.
If you have unique needs, get in touch with potential partners to discuss what they can offer.
Another major consideration when choosing an ecommerce fulfillment service is where their warehouses are located, where they can ship to, and how quickly they can ship orders to your customers.
You’ll want to ensure that most of your audience is covered by its shipping network.
Some logistics providers have warehouses in multiple parts of the US and worldwide, enabling them to ship more locally and, therefore, faster. In addition, some solutions can split your inventory between these locations to cover a wider area.
Cost is a significant consideration for any eCommerce merchant, especially if you’re just starting to grow your business. However, as you weigh up expenses, we urge you to prioritize quality over low prices.
Remember that once you start outsourcing your fulfillment, part of the customer experience will rely on a third party. So if something goes wrong, your customers will associate that negative experience with you. With your reputation on the line, it’s often more cost-effective in the long run to ensure as few mistakes as possible come to pass.
Often for a little extra, you can rely on the following:
- Branded and high-quality packaging
- 24/7 customer support
- Batch order support
- Guaranteed fast delivery times (even during busy periods)
Technology and Integrations
As your business grows, your fulfillment provider is likely not the only third-party service you’ll work with. As such, you’ll have data from several sources to bring together. So ideally, you should find an eCommerce fulfillment service that integrates with your existing tech stack.
You might require integrations with the following:
- Accounting tools
- Inventory management software
- Shipment tracking tools
- Your returns and refunds portals
- The sales channels you use
Undeniably the most essential integration is your eCommerce store, so make sure that there’s a plugin or app available that makes order-syncing easy.
Another consideration is the technology that comes with the fulfillment provider. For example, advanced eCommerce fulfillment services often provide a dashboard with analytics about your orders and inventory. Finding a partner with an intuitive dashboard will make it much easier for you to keep tabs on your fulfillment process. It might even give you better insight into your business operations/sales/marketing efforts.
Our Recommendations for eCommerce Fulfillment Services
Now you have a clearer idea of what to look for, we’d like to introduce some of the most popular fulfillment solutions on the market:
ShipBob offers global eCommerce fulfillment. Over 7,000 companies already rely on its assistance – so they must be doing something right! It can handle orders from the US, UK, Canada, Australia, and the EU and integrates with various eCommerce platforms, including WooCommerce, Shopify, Amazon, eBay, and Squarespace.
Getting started with ShipBob is simple. First, integrate your store via the app, import your product catalog, and send ShipBob your inventory.
- Express two-day shipping across the US
- You can create custom packaging for your products.
- End-to-end managed freight and inventory distribution programs are available.
- Omni-fulfillment is available. I.e., they can fulfill sales from various channels, including online marketplaces.
- Offers wholesale order fulfillment
If you’re curious about their pricing, Shipbob offers a calculator on their pricing page to help you get a rough idea of what to expect. However, getting in touch with the team for an exact quote is best.
Further reading 📚
ShipMonk not only ships to all areas of the US but also has a warehouse in the UK. Like ShipBob, it’s an omnichannel fulfillment solution that handles every aspect of fulfillment. The platform integrates with online marketplaces like Amazon, Walmart, eBay, and Target, as well as a wide variety of eCommerce platforms, including Shopify, WooCommerce, BigCommerce, and many more.
- Facilitates custom packaging and gift messages
- Fulfills subscription boxes and crowdfunding orders
- There’s a reporting suite that alerts you to low stock and informs you of total orders and items shipped.
- An automated claims portal allows your customers to register issues and initiate returns.
- There are over 100 integrations.
You can find a pricing calculator on ShipMonk’s website.
Pricing is determined by how many items you ship in an order. They use a tiered pick-and-pack fee that starts at a charge of $3 for the first item when you process less than 500 monthly orders. Then, every subsequent item within the same order is charged $0.75. The more orders you process, the less you pay for pick fees.
If you wish to add promotional inserts to your packages, be prepared to pay $0.20 per insert. There’s also a $2 charge per return processing.
Additionally, there are monthly storage fees, starting from $1 for a small bin and going up to $25 for a pallet.
Further reading 📚
Deliverr is another US-based ecommerce fulfillment service. It has 40+ warehouses across the US and ensures that 95% of US customers can enjoy two-day shipping. The platform integrates with Amazon, eBay, Shopify, Instagram, Facebook, Walmart, and BigCommerce, and works with all major carriers.
Getting set up with Deliverr takes 5-10 days once you’ve signed up.
- You can display fast-shipping tags when you opt for express two-day shipping.
- Offers international shipping and freight shipping solutions
- You can opt for value-added services like kitting, bagging, variety packs, wipedowns, etc.
Deliverr’s pricing is based on the size and dimensions of your product, starting from $4.15 for a small item up to $16.33 for extra large items. This cost includes the receiving, picking, packing, and order handling of your products.
Additionally, there’s a storage cost of $0.75 per cubic foot per month, which increases to $2.40 during the holiday season from October to December.
Faster two-day shipping (rather than standard shipping (of five to seven days)) also costs extra.
Further reading 📚
Conclusion: How to Choose an eCommerce Fulfillment Service
All in all, quality, reliability, speed, and cost are significant considerations when choosing the right ecommerce fulfillment service for your business.
In this article, I’ve introduced some of the most popular solutions that I think are worth considering as part of your research. To recap, I think ShipBob and Deliverr are both great if you want to offer two-day shipping across the US. However, the former also provides custom packaging. In contrast, the latter has more transparent pricing and doesn’t require any minimum order quantities.
Alternatively, consider ShipMonk if you want to ship in the EU. It’s also the best solution for fulfilling crowdfunded orders and subscription boxes.
Care for more info about eCommerce fulfillment and other eCommerce topics? Take a look at some of these other helpful guides:
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