Negosentro.com | A fulfillment company refers to a corporation that’s in the business of acting as a third-party warehouse. Their primary obligation is to prepare and ship the orders that are made by clients through your company. In essence, it’s like outsourcing the shipping process, especially if this is something that you don’t want to do yourself. It also might be because your business still doesn’t have the right and good enough logistics for it.
If you want to stay competitive in today’s e-commerce industries, you must be able to manage your inventory effectively. This means that you’re minimizing wasted products and maximizing products. Hiring a fulfillment company to perform the shipping processes for you helps achieve that goal.
There are many other advantages that your business can gain through hiring a fulfillment company. This includes:
- They Create Optimized Fulfillment Processes
Fulfillment companies are better versed in the order and shipping process than your company is. This is because it’s a skill that they’ve mastered, specialized, and trained well in. They have this level of expertise that you don’t. Hence the fulfillment company can come up with a more optimized fulfillment process. This means that your business is operating at its best level of efficiency, with the least possible cost.
The process includes:
- Classifying inventory. This step involves picking by size and frequency of orders.
- Matching inventory to storage technology. This involves using a variety of equipment technologies such as pallet rack, vertical lift modules, and carousels, shelving, drawer systems, horizontal carousels, and pick modules.
- Slotting inventory with storage technology. This helps determine the most appropriate slot of each product in a warehouse to achieve maximum storage capacity.
- Mapping processes and workflow. This is to achieve the goal of maximizing output and reducing labor work and costs.
- Integrating business systems. When business systems are better integrated and matched, the visibility of products in your warehouse is maximized. This results in tremendous time savings of having to look for various items manually.
- They Take Care Of The Storage Of Products
When you’re running a business that sells products, one of the most difficult challenges that you’ll ever encounter has to do with the proper storage and handling of your products. Not only does this take up a lot of your workforce, but it can also result in higher costs when you have to do it yourself. Also, storage is not just about storing the products per se.
It encompasses a lot of concepts like the following:
- Storing your products appropriately to avoid spoilage
- Storing your products in a system that works for you (first-in, first-out or alphabetical)
- Storing your products in such a way that chemicals don’t interact and mix
- Storing products for better reach and faster identification
All these, a third party fulfillment company is well versed in. After all, it’s what they studied and mastered as the primary service of their business. It’s best to leave it in the hands of an expert, to avoid wasting products due to spoilage, for instance.
- They Can Fight For Lower Shipping Costs
Fulfillment companies have a strong network of connections with national, regional, and international shipping companies. Through their frequent transactions, they can form better deals to fight for lower shipping costs. Often, this is also because of the volume of their shipping requests because of the nature of their business. When they perform all the shipping activities for many businesses, they can receive special discounts for bulk shipping.
Lower shipping costs is a good thing for businesses, as it invites more customers to order from you versus other online shops. When shopping online, the shipping fee is always one of the top-most considerations of shoppers. When it’s too expensive, they’ll always look for the business with the cheapest offer. Your business should be that one that offers the lowest shipping costs.
When you have to do the shipping yourself, you may not be able to reach the required quantity to avail of special discounts.
- They Take Away The Need For You To Sign Long-Term Contracts
When you’re operating at a lousy season, long-term leases are often your hindrance to change warehouses. Alternatively, perhaps for whatever reason, you’ll have to close a business. When you choose to avail of a fulfillment company, your business will sign lesser contracts with other partners. To begin with, you’ll no longer have to lease a warehouse. Second, you’ll have more inferior employee contracts to maintain. Third, you also will no longer have the need to partner with a logistics company. The lesser contracts you draft and are bound with, the better. This means that should a rainy season come for your business, you’ll also have lesser worries about rescinding all the other contracts.
Hiring a fulfillment company is, in essence, creating that delicate balance between efficient and streamlined processes, and cost-efficiency. It’s always about providing the best results and service to your clients. Maximizing profits for your business is also a plus. Engaging in the services of a fulfillment company is one of the most cost-effective inventory storage solutions to increase effectiveness for your business.