What Is a Fulfillment Center, and How Can It Benefit Your Ecommerce Business?

What Is a Fulfillment Center, and How Can It Benefit Your Ecommerce Business?
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Introduction

With the Covid-19 pandemic forcing the nature of businesses online, e-commerce has become a booming industry thanks to huge demand. Now, it is more than important to understand the concept of e-commerce fulfillment. Remember that your knowledge will help your e-commerce business avoid inefficiencies and achieve growth in various ways.

After understanding your business’s needs, you are more likely to choose the right e-commerce fulfillment company that will grant your e-commerce business a competitive advantage over your competition (think faster processing and shipping time!) This ultimately leads to satisfied customers and increased sales—which is the one thing many e-commerce business owners like you are striving for. But before we get into how to choose a fulfillment service provider and its benefits, you might wonder what exactly is e-commerce fulfillment?

What is e-commerce Fulfillment

E-commerce fulfillment refers to the entire process that begins with customers ordering a product online, all the way to the product arriving in front of their doorsteps. Typically, an e-commerce fulfillment can be either handled in-house by the e-commerce business themselves or outsourced to a fulfillment company. The fulfillment process is a systematic supply chain that starts from storage and order management, all the way to packing, shipping, and handling returns. While the process may seem lengthy, fulfillment centres have highly advanced and efficient inventory management systems alongside trained personnel that know how to handle the fulfillment process swiftly.

Now, what can fulfillment companies do for your e-commerce business?

  1. Storing your products/components in their warehouse
  2. Assembling/picking your products for orders
  3. Packing and labeling orders for shipping
  4. Transporting your orders to customers
  5. Documenting order receipts
  6. Manage customer returns

Today, unlocking your e-commerce potential has never been easier. Let’s look at the benefits you can enjoy from e-commerce fulfillment along with its ability to grow your business much rapidly compared to in-house fulfillment.

Top 10 benefits for your e-commerce business

1. Free Up Space

We understand that many e-commerce businesses (especially startups) work from their homes or small spaces that often have a limited area for storage. If you were to stock up on packing supplies such as bubble wrap and packaging boxes, such clutter in your workspace would make it a hassle to focus on other things from packing orders to building marketing campaigns—that are also important for your business. These activities require a dedicated and clutter-free space, and partnering with an e-commerce fulfillment centre helps free up tons of space while potentially saving on other expenses such as warehousing and rental.

2. Leverage on Expertise

Although it is tempting to understand the ins and outs of your business, you should understand that fulfillment is only one part of your business, so it doesn’t mean you should be an expert! It is the reason why fulfillment centres exist, and if you need a strong reason to outsource your fulfillment—their established relationships with e-commerce platforms and expertise in this industry are far unmatched. A partnership with them allows you to leverage their existing expertise, notably their knowledge in handling orders and warehousing systems, all at a considerably lower price when compared to fulfilling orders in-house.

3. Lower Shipping Costs

Fulfillment centres often have an established network of domestic and international centres with state-of-the-art facilities. This means that you can benefit from bulk delivery discounts that result in savings while enjoying the efficiency offered by your chosen e-commerce fulfillment partner. If your products are stored in multiple fulfillment centres in different regions, your shipping costs will be lowered while delivery times are reduced—meaning faster delivery times to your customers. Now, who doesn’t want to be greeted with satisfied reviews on their

4. Reduce Staff Needed

While having good employees can benefit your business, a constrained budget might limit your ability to employ talented individuals. Also, if your business sells products that require special care or handling, it may be costly to hire additional dedicated personnel. By outsourcing your e-commerce fulfillment, not only does it help loosen up your budget as you can allocate your resources elsewhere, but it also takes your mind off damaged products in-house as e-commerce fulfillment centres are manned by skilled staff. These individuals often possess expertise in handling special care goods, so worry not when outsourcing your e-commerce fulfillment.

5. Reduce Operating Cost

Did you know that to fulfill an order in-house, costs 70% of your order’s value? To better maximize your profits and minimize your costs, consider outsourcing your order fulfillment to e-commerce fulfillment companies. As these centres often have the technologies and well-trained professionals to handle your orders, you can relax and focus on other aspects of your business such as customer inquiries. In addition, your overheads such as electricity and rent will be eliminated as there is no need to rent your own warehouse to store your inventory. In the long-term, your business will enjoy cost-savings benefits.

6. Improve Customer Service

Aside from reducing your operating costs, knowing that your orders are handled by trained professionals and efficient inventory management systems means that your orders will be packed and shipped out quickly. This ensures that your customers would be satisfied by the fast shipping timeline, which increases the chances of them ordering from your business again. Moreover, many e-commerce fulfillment centres offer special services such as same-day deliveries, next-day deliveries, or extended service centres—which are all perfect for handling any urgent deliveries from customers.

7. Focus on Core Business Activities

As an e-commerce business, there are a lot of operations that you should focus on— including delivery. However, with limited resources and energy, having a trusted e-commerce fulfillment partner for your business would greatly reduce your burden while allowing you to focus on other strategic projects. Gone are the days where you must handle each delivery by yourself, as your fulfillment partner’s capacity and logistical expertise help you take care of the fulfillment process. Once again, you’ll be able to develop more time and energy to other core competencies which is beneficial for your business’s long-term strategy and growth.

8. Avoid Seasonal & Sale Fluctuations

With the pandemic shifting the nature of businesses online, demand for your products will fluctuate in between normal days and holiday or sales seasons. It is especially during times like these where the importance of fulfilling customers’ orders in time comes into play— which can be easily achieved if you have chosen the right e-commerce fulfillment company. Having a ready amount of inventory in your e0commerce fulfillment partner’s warehouse allows you to meet your customer’s demands during both peak seasons—such as major holidays and monthly sales, and enjoy cost-saving benefits during off-seasons as you do not need to worry about any unused storage space.

9. Access to Latest and Better Technology

Technology has been a huge factor contributing to the success of e-commerce, especially with inventory management systems being discussed frequently in this guide. These systems are the key for fulfillment centres in storing and processing goods efficiently, and these sophisticated systems are often a huge financial investment incurred by the fulfillment centres. As an e-commerce business, you would want to partner with a fulfillment company with state-of-the-art facilities and gain access to their cutting-edge technology—all to streamline your fulfillment process and meet customer needs at an affordable price.

10. Better Business Outreach

For small businesses, expanding to new markets has been a great challenge considering the many difficulties they have to overcome. Nowadays, it is much easier to venture into new or overseas markets with the nature of e-commerce businesses and fulfillment centres. As many fulfillment centres are equipped with advanced technologies and have a deep understanding of both the domestic and international market, they provide a great advantage for your business when you partner with them. After all, wouldn’t you want to see your own e-commerce business expand and grow in this booming industry?

Conclusion

Although trying to keep up with fulfillment orders may seem like a difficult task, in reality, it is hassle-free when partnered with a reliable and experienced fulfillment centre. At iStore iSend, rest assured that your orders are in the right hands as we pride ourselves on providing an outstanding e-commerce fulfillment experience for you and your customers.

If you’re ready to hand off fulfillment, we have an established network of fulfillment centres in Malaysia and many Asian countries that are ready to take your e-commerce business to the next level. In addition, our specialized ODIN technology that integrates with the leading e-commerce platforms helps automate the fulfillment process from your online stores. Enjoy worry-free and affordable fulfillment services at iStore iSend as we strive beyond boundaries to satisfy both you and your customers.

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