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Different Types of Fulfillment Service Provider and Their Benefits

Fulfillment Service

Fulfillment companies offer a cost-effective solution for warehousing and moving the inventory of businesses. Client companies pass on order details to fulfillment companies. These specialized distributors ensure the right product is sent to the customer in minimum time through efficient shipping channels. As fulfillment companies store inventories of multiple clients, they can offer bulk discounts as the overheads get distributed.

Types of Fulfillment Providers:

There are many types of e-commerce fulfillment services in the market. Depending on the business needs, companies can partner with the best provider that fulfills their requirements. Fulfillment companies are categorized as follows:

1.Marketing fulfillment firms

They work with businesses that have launched large scale promotions to sell goods. Businesses get the advantage of bulk mail discounts along with custom printing to tailor mail pieces to specific customer profiles.

2.Inventory management providers

These handle inventory warehousing and distribution for businesses, especially those that offer both retail and wholesale sales. These warehouses are typically located near commercial centers to facilitate faster shipping.

3.Automated order processing providers

These companies offer storage and shipping of direct-to-consumer products without the involvement of business. The providers usually cater to e-commerce websites and call centers that demand immediate picking, packing, and shipping of orders to customers.

4.Drop-shipping providers

Drop-shipping specialists accept orders for products that are not manufactured by the client business. This facility enables businesses to offer complementary products and accessories to their customers without adding more vendors to their supply chain.

5.Return and exchange processing providers

Businesses hire these specialists to outsource labor-intensive customer service functions such as inspection of returned goods, sending replacements, and handling customer credits.

6.Desirable qualities in fulfillment providers

There are countless fulfillment providers in the market. Companies should examine the services of providers in the following areas to select the best fulfillment partner for their business:

* Customer service: Businesses should get feedback on the quality of fulfillment services from previous clients of the provider. Customers hold businesses responsible for poorly packed, broken, or incorrectly labeled shipments, not the fulfillment provider.

* Financial fitness: Fulfillment providers should be able to furnish financial statements to convince customers of their financial soundness. The bankruptcy of providers can lead to seizure of client business’ inventory.

* Testimonials: Businesses should ask providers about previous and current clients and get references from them. Many fulfillment companies publish client testimonials on their websites.

* Compatibility with third-party logistics tools: Fulfillment providers should use systems that integrate with popular third-party logistics software. This convenience tips the scales in favor of the fulfillment provider that can integrate with the business’ logistics software with minimum effort.

How much do fulfillment providers cost?

The charges of fulfillment services vary with the type of service. Providers may charge a flat fee per shipment, a fixed fee per order, or a cut of the customer sales. Outsourcing fulfillment services help businesses to maximize profits by reducing the overhead of warehousing and shipping.

With fulfillment providers interacting with customers for shipments, returns, and replacements, businesses can divert their employees towards more revenue-generating pursuits. Hiring and looking for the ideal location is easy, however finding the perfect location for the company’s logistic needs would require a multitude of processes, and without proper planning, expansion can be a problem.


Benefits of Outsourcing:

Outsourcing one’s logistic needs will not only boost production, but it can also reduce operating expenses and lead times. Streamlining the whole process allows companies to provide quality products while ensuring excellent customer service.

  • Inventory

One of the key benefits of outsourcing the company’s products is that one can monitor their products worldwide through remote access. Many warehouse companies allow business owners to stock their products in the warehouse facility and integrate these in a logistic software so owners would be able to view real-time statistics of their product(s).

  • Reduction of Lead Time


Since all processes from ordering to packing to shipping are handled in one place, business owners are assured that products are delivered to clients in a given time frame. Many companies that offer fulfillment services provide cost-effective shipping rates allowing business owners to choose and negotiate reduced shipping costs without sacrificing customer service.

  • Reduced Operational Cost

As companies begin to compete globally, businesses must have a physical presence in that place. This would require not only lengthy processes in terms of procuring commercial spaces and hiring staff but also backtrack the company. Nowadays, however, companies can sell their products across the world without having a physical store setup.

Thanks to the power of online business or e-commerce, companies can now reach new markets without physically setting up a store. Customers who are interested in purchasing can just order online, and companies would ship the product or have one of their drop shipping partners ship the goods for them.

  • Returns

Another benefit of outsourcing is that all returns are handled by one company. Since all stocks are located and shipped from one place, returns are easily inspected for damages. Restocking of returned products and reselling them are done efficiently, thus reducing inventory losses.

Proper disposal of damaged goods is also sometimes included, which makes it easier for companies to minimize losses and ensure legal compliance should there be any problem with local authorities.