Before the Internet, if you wanted to sell something, you had to have the physical storage space to hold onto your inventory. Whether it was your storefront, the backroom, or some warehouse off-site, your merchandise had to sit somewhere. Even as the Internet started creating ecommerce channels, the store owner still had to have their own storage space. However, this isn’t the case anymore.
There are plenty of third-party options that allow ecommerce retailers to grow their businesses without the need to own a warehouse. In many cases, the owner of a website might not even touch or see any of the products they sell, especially if they operate in the print-on-demand and dropshipping spaces.
As this model of ecommerce has become more popular, the demand for fulfillment warehousing to support it has also grown. In this article, we’ll explore what fulfillment warehousing is, why ecommerce businesses should consider it (regardless of their own storage capacity), and how fulfillment warehousing can improve your business.
What is Fulfillment Warehousing?
Fulfillment warehousing (or third-party fulfillment) is when a logistics partner stores and ships products on a retailer’s behalf. Fulfillment warehouses are great for brick-and-mortar businesses that want to sell online but don’t want to handle the hassle of handling those shipments. These fulfillment centers are also great for ecommerce start-ups since you don’t need to have your own storage space. All you need is a website to act as the storefront, add items you want to sell, and a fulfillment warehouse can handle the rest – a business model called dropshipping.
Why Should Ecommerce Businesses Consider Third-Party Fulfillment?
By outsourcing fulfillment, you’re dividing your labor in a way that plays to your strengths: you leave the logistics to the experts while you focus on building your brand, finding customers, and searching for the next hot product on the market to sell. Fulfillment warehousing is also handy if you plan on selling in other countries. In some cases, they can lend a physical footprint within a foreign country to minimize tariffs, shipping costs, and other stress that comes with international retailing.
Ways to Improve Your Ecommerce Business with Fulfillment Warehousing
As the social distancing of the past few years has placed more emphasis on ecommerce, fulfillment warehousing has grown to fill that increased demand. While there are many benefits to using a fulfillment center to support your online business, these are some of the top reasons to consider this model:
Improved Order Accuracy
Fulfillment warehousing is steeped in innovation because of what it’s trying to achieve. With your online store hooked up to your fulfillment center, you get all your relevant inventory stats at a glance to know what’s available, if you need to restock, and how fast your orders are shipping out. And because fulfillment warehouses specialize in managing inventory and shipments, you can expect reduced return orders, quicker processing on the return orders that do happen, and happier customers overall.
Greater Storage Capacity and Flexibility
The Internet is a beautiful thing, especially when you can start a new business in your bedroom, basement, or garage. However, just because you can fit yourself and your computer in there doesn’t mean there’s room for your whole inventory. A third-party fulfillment warehouse lets you store your merchandise without any stress.
Even if you have the capital and space for your own warehouse, fulfillment specialists can help ease some of the burden around the holidays and other busy seasons. Depending on the warehouse’s location, it can also help fight against long delivery times, shipping from closer locations to your customers rather than a single warehouse trying to ship to the other side of the country.
Better Shipping Rates and Options
Managing your shipping costs is always a challenge when it comes to ecommerce. If you don’t have the infrastructure to deliver your products directly or hate driving multiple times to the nearest post office, fulfillment warehousing can save you a lot of headaches – and money. Because fulfillment is their business, these warehouses have long-standing relationships with various distributors and delivery companies and can negotiate better shipping rates. In turn, they can pass these savings and options on to you, which drives down your own shipping costs for your customers.
Inventory Security and Protection
Fulfillment warehouses handle the inventories of dozens, if not hundreds, of companies, all with different products, needs, and volumes. Because of this, fulfillment warehouses put an emphasis on security, tracking each unit in their warehouses to prevent damage or theft. Some fulfillment warehouses might have special storage facilities for temperature-sensitive or perishable goods.
Add More Brick to Your Ecommerce Store’s Click with UCanTrade
Fulfillment warehousing is a great way for ecommerce businesses to grow their profit margins without increasing their physical footprint. Even if you have your own warehouse, fulfillment centers can help take some of the burden off you and your staff by handling seasonal demand spikes and far-flung delivery locations. Here at UCanTrade, we’re passionate about helping businesses like yours get their products to their customers as fast and easy as possible. If you’d like to learn more, contact us today and we’ll help you out.
