Outsourcing Your Ecommerce Order Fulfillmen


When your eCommerce business grows to the point where you can no longer package and ship the orders yourself, it's time to begin outsourcing your order fulfillment. Although all order fulfillment centers offer the same basic services, their individual methods and costs will help you choose one over the other. When selecting an order fulfillment service, keep the following in mind:

Location

Order fulfillment warehouses are located all over the country. It's more important to select a warehouse that is close in proximity to your customers than to select one that is close to your business. For example, if your warehouse is located in California, and most of your customers are located on the East coast, your shipping rates will be higher than if you had a warehouse located in Kansas. Fulfillment centers located in the middle of the country will be able to ship to both the east and west coast for similar prices.

Size

Fulfillment warehouses range from small business with just a few employees to large companies such as UPS. Select a fulfillment service that can meet your daily order fulfillment needs. Do you have consistent orders each day or do your orders spike? If you have orders that spike, be sure to choose a fulfillment center that can handle the extra workload and still ship the orders within the agreed timeline.

Shipping Options

Most fulfillment centers offer a variety of shipping options. Make sure the fulfillment service you select offers all of the shipping options you currently offer your customers and the shipping options that you may want to offer in the future.

Turn-around Time

Each fulfillment warehouse has it's own policy regarding order processing. For example some fulfillment centers will ship all orders that arrive before 1pm on the same business day. If you miss the 1pm deadline, the order is shipped the next business day. This could impact your customers if a next-day order is placed after 1pm. In this case, next day shipping turns out to be two-day shipping.

Order Entry

Order entry methods can be very important when considering a fulfillment service. The most common methods include:

  • Forwarding individual order invoices to the warehouse

  • Entering each order on the fulfillment center's web-based system

  • Emailing an Excel spreadsheet with all order once a day

Each method has a different affect on your business. For example, you may save money by manually entering orders into a web-based application, but it can be tedious if your business grows to the point where you have more orders than you have time to enter. You may pay a higher price to automatically email each individual invoice to the warehouse, but it may be worth the extra costs to have orders may be shipped as they arrive. Same day shipping could give you the edge over your competitor. On the other hand, if you have a high volume of orders, you won't want to individually enter each order into a web-based system and may not want to pay the extra charge of having individual orders emailed to the warehouse. If you don't mind shipping the next business day, you can send an Excel spreadsheet containing all of your orders once a day. Choose a warehouse that offers an order entry method that meets your business needs and fits your budget.

Communication

Communication is an important part of every business. There will be times when you need to contact the fulfillment center to modify a customer's address or cancel an order. Select a fulfillment center that is available via phone and email. You should not have to wait more than a few hours for a return email or call from the fulfillment center.

Error Rate

Mistakes will happen. Some customers will receive the wrong items or the items will be shipped to the billing address rather than the shipping address. When interviewing potential fulfillment centers, ask about their error rate and their process for remedying the situation. For example, do they issue UPS call tags to pick up the incorrect item and pay to ship a replacement item? Will they ship the replacement item at a faster rate to compensate the customer?

Costs

Each fulfillment center operates under a different payment schedule. Some use sliding scales and require contracts while others charge per order or per item with no contracts. You will also be charged a base fee to store your inventory at the warehouse and an additional fee per pallet or per item. Be sure you have a clear understanding of the fulfillment center's costs and any contracts.

When choosing a fulfillment center, create a checklist of the features you would like. Interview a member of the warehouse staff, as well as, their references to make sure the warehouse will meet the needs of your growing eCommerce business. When you outsource order fulfillment, the time that you normally spend packaging orders, managing inventory, and dealing with returns, can now be focused on growing your business. Use this time to expand your product line, enhance your online image, promote your business or expand into new markets.

Copyright 2004. Danna Henderson. All Rights Reserved.

About The Author

Danna Henderson started ZIP Baby in order to provide parents with comprehensive breastfeeding information and a large selection of parenting products.


More Resources

Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exiting

More E-Commerce Information:

Related Articles

The Five Steps of E-Commerce
You set up a retail business, you advertise in your local newspaper, you get customers coming into your store, and you receive payment at the cash register. Create an online store, and.
Increasing E-commerce Website Sales
With consumers purchasing billions of dollars of merchandise online each and every year, the Internet has become the key to financial security. The e-commerce business has consistently thrived well above all other online enterprises, and continues to flourish.
Intranet Portals - Search and Taxonomies
Knowledge Management for beginnersKnowledge Management (KM) can be defined simply as the process through which organizations generate value from their intellectual and knowledge-based assets. Knowledge assets are often grouped into two categories:(1) Explicit KnowledgeGenerally, everything and anything that can be documented, archived and codified.
Intranet Project - RAD or Waterfall?
Building BridgesI have often used the analogy of building a bridge to explain to business colleagues the difference between Rapid Application Development (RAD) and Waterfall.Let's say that we are in the middle ages and the Mayor of Kingston-upon-Thames is evaluating whether or not to build a bridge over the river to the north side, to replace the current ferry.
Simple Steps to Start a Profitable Member Only, Subscription Web Site
Having a successful member only, paid membership site is one of the best ways to make money online. A successful membership site can give you the steady income of a CEO ?.
Make That 3 Billion
My previous article I wrote called "One Point Two Billion" attracted quite some attention, the downloads through all the article syndication services has been astronomicalcompared to any other articles I wrote which are still withthem.It seems the numbers game is popular not only with theaccountancy profession, but with just about anyone runninga website who is interested in more sales from anywhere in the world.
7 Key Steps To Reduce Refunds and Chargebacks
One sure-fire way to loosing out big time on your business profits is from incidences of excessive refunds and chargeback requests. If the number is high in any period you could risk loosing your third party merchant account altogether.
How Measuring Key Performance Indicators Can Improve E-Commerce Strategy - Part Two
Why time spent on your site is importantAll websites regardless of type should measure this KPI, simply because all websites can use it as a gauge to see how compelling their offers are as well as check web site performance. It doesn't matter whether you're running a content portal or an e-commerce sales operation, time spent on your pages is an important metric to measure.
How to Start a Business on the Internet
So you want to start a business? Good for you. Really, I mean that sincerely.
Shopping Cart Abandonment - Discover 5 Things you can do to Lower Cart Abandonment
A common frustration among merchants who sell online via a shopping cart is the percentage of people who abandon their cart and leave the site never to return. This is known as the shopping cart abandonment rate.
Business Online - Blind Hunt
Do you sell something online? Do you have a business in the Internet? Have you read the "How to generate more traffic and convert it to sales" articles? Have you played the "Be #1 in SEO" game?Now, you are ready to believe - nobody knows how to do it absolutely right.Nobody can know everything.
Intranet - The Benefits Realisation Plan
The Millennium ExperienceA successful project is one that delivers on-spec ('quality'), time and cost. Right? Well consider these two projects?The Millennium Dome was delivered on time for the 31 December 1999 and safely within a budget (fixed in 1998) of £289 million.
Creating Legal Framework for E-commerce Taxation; non-tax statutes
We have to make amendments in existing substantive and procedural laws to make it compactable with changing technological advancement of e-commerce?Amending Contract Act, 1872I recommend the amendments in section 3 and 4 of contract Act 1872 so as to make the compactable with section 13, 14 and 15, of the electronic transaction ordinance 2002 related with attribute of communication, acknowledgement of receipt and time and place of the communication between the parties. Either additional section should be added for acceptance device of 'electronic communication', or words be added in matter connected with electronic communication relevant section 13,14 and 15 be evoked while interpretation of section 3 and 4 of contract Act 1872.
Getting Started: Creating a Business Plan
You're excited. You have a great idea for a profitable online business.
Bringing the World to Your Door
According to Internet.com, by the year 2008 nearly 30% of offline purchases will be influenced by online research.
10 Reasons To Survey Your Visitors, Subscribers And Customers
1. To find out what type of content visitors want to see on your web site.
Getting Started in ECommerce - Part One
In 2004, Enquiro.com conducted a study of the search behaviors of men vs.
Building eCommerce Websites That Work - Part 1
You want to succeed at eCommerce? Welcome to a very big family. Right off, let's be clear - there are lots of ways to do business on the internet.
Dont give up on your business!
Summer must be when many work at home Mom start to think that their business is a flop and begin to look for a new opportunity. This is fine if your business is truly a flop - but chances are, you just need to take a look at it from a fresh perspective.
Online Payments Make It Easy For Your Customers To Buy
In the last column we discussed the process of credit card enabling your brick-and-mortar business. I pointed out that research has shown that accepting credit cards can help increase revenue and speed up cash flow.