Third Party Fulfillment Centers can help create more flexibility in your supply chain and streamline operations. Learn more about when and why online sellers choose to partner with a third party fulfillment company.
Third Party Fulfillment Centers can help create more flexibility in your supply chain and streamline operations. Learn more about when and why online sellers choose to partner with a third party fulfillment company.
Emerging brands often run into hurdles like reliable, fast eCommerce shipping or avoiding stock outs to keep customers satisfied. But how can you know if now is the time to partner with a third party fulfillment company?
In this blog, we’ll answer these FAQs:
A fulfillment center is more than just a warehouse. It is a full-service fulfillment provider that processes incoming orders, picks and packs products, and then ships them directly to your end customer. Your fulfillment center may be inside your living room, you may own and operate your own fulfillment network, or you may choose to outsource order fulfillment to a third party fulfillment company.
The right third party fulfillment company should use a partnership approach that eases your operational burden of delivering products so you can focus on the parts of your business that you know best.
Third Party Logistics (otherwise known as 3PL) is an outsourced fulfillment solution. A third party logistics provider may have multiple fulfillment centers that are connected by a warehouse management system (WMS).
A fulfillment center is more than just a warehouse. It is a full-service fulfillment provider that processes incoming orders, picks and packs products, and then ships them directly to your end customer. Your fulfillment center may be inside your living room, you may own and operate your own fulfillment network, or you may choose to outsource order fulfillment to a third party fulfillment company.
The right third party fulfillment company should use a partnership approach that eases your operational burden of delivering products so you can focus on the parts of your business that you know best.
If you are successfully managing your fulfillment in-house, you may wonder why you would choose to outsource to a third party provider. However, even the most sophisticated companies may choose to partner with a third party fulfillment company for any the following reasons:
Children’s furniture brand, ECR4Kids, was successfully operating multiple fulfillment centers in-house to fulfill their largely B2B orders. However, when they moved into direct to consumer (D2C) sales, they quickly realized that their facilities weren’t set up to meet consumer expectations for delivery.
They chose to outsource their D2C order volume to Ware2Go for a short trial period. When they saw how much more efficient their business was with a third party fulfillment partner, they chose to exit their in-house facilities and outsource all of their fulfillment to Ware2Go.
As previously mentioned, a fulfillment center is much more than a warehouse. A full-service third party fulfillment center should offer the following services:
In the beginning, most merchants fulfill all of their orders from a single fulfillment center. However, as they grow, they find that their consumers are spread out all over the country. If they continue to fulfill from a single fulfillment center, they end up shipping a percentage of their orders all the way across the country. These long-zone shipments are costly and don’t meet consumer expectations for fast shipping.
Distributing inventory to multiple fulfillment centers across the country lowers the time in transit (TNT) to the end customer, lowering the cost of delivery and enabling faster shipping promises. Many merchants know they should be distributing their inventory but knowing how many fulfillment centers they need and where to position them can be a barrier to entry.
Ware2Go’s free tool, NetworkVu, uses your own sales and shipping data to recommend a custom fulfillment network for your business. It displays multiple scenarios so you can see how adding additional warehouses to your network will affect your TNT and your cost of fulfillment. These recommendations can help you decide how many fulfillment centers you need in your fulfillment network and where they should be located to achieve the best possible delivery times to your best customers.
Looking for a third-party fulfillment center for your business? Reach out to one of our fulfillment experts today.