Google

Outsourcing Your Ecommerce Order Fulfillment


When your eCommerce business grows to the point where you can no longer package and ship the orders yourself, it's time to begin outsourcing your order fulfillment. Although all order fulfillment centers offer the same basic services, their individual methods and costs will help you choose one over the other. When selecting an order fulfillment service, keep the following in mind:

Location

Order fulfillment warehouses are located all over the country. It's more important to select a warehouse that is close in proximity to your customers than to select one that is close to your business. For example, if your warehouse is located in California, and most of your customers are located on the East coast, your shipping rates will be higher than if you had a warehouse located in Kansas. Fulfillment centers located in the middle of the country will be able to ship to both the east and west coast for similar prices.

Size

Fulfillment warehouses range from small business with just a few employees to large companies such as UPS. Select a fulfillment service that can meet your daily order fulfillment needs. Do you have consistent orders each day or do your orders spike? If you have orders that spike, be sure to choose a fulfillment center that can handle the extra workload and still ship the orders within the agreed timeline.

Shipping Options

Most fulfillment centers offer a variety of shipping options. Make sure the fulfillment service you select offers all of the shipping options you currently offer your customers and the shipping options that you may want to offer in the future.

Turn-around Time

Each fulfillment warehouse has it's own policy regarding order processing. For example some fulfillment centers will ship all orders that arrive before 1pm on the same business day. If you miss the 1pm deadline, the order is shipped the next business day. This could impact your customers if a next-day order is placed after 1pm. In this case, next day shipping turns out to be two-day shipping.

Order Entry

Order entry methods can be very important when considering a fulfillment service. The most common methods include:

Each method has a different affect on your business. For example, you may save money by manually entering orders into a web-based application, but it can be tedious if your business grows to the point where you have more orders than you have time to enter. You may pay a higher price to automatically email each individual invoice to the warehouse, but it may be worth the extra costs to have orders may be shipped as they arrive. Same day shipping could give you the edge over your competitor. On the other hand, if you have a high volume of orders, you won't want to individually enter each order into a web-based system and may not want to pay the extra charge of having individual orders emailed to the warehouse. If you don't mind shipping the next business day, you can send an Excel spreadsheet containing all of your orders once a day. Choose a warehouse that offers an order entry method that meets your business needs and fits your budget.

Communication

Communication is an important part of every business. There will be times when you need to contact the fulfillment center to modify a customer's address or cancel an order. Select a fulfillment center that is available via phone and email. You should not have to wait more than a few hours for a return email or call from the fulfillment center.

Error Rate

Mistakes will happen. Some customers will receive the wrong items or the items will be shipped to the billing address rather than the shipping address. When interviewing potential fulfillment centers, ask about their error rate and their process for remedying the situation. For example, do they issue UPS call tags to pick up the incorrect item and pay to ship a replacement item? Will they ship the replacement item at a faster rate to compensate the customer?

Costs

Each fulfillment center operates under a different payment schedule. Some use sliding scales and require contracts while others charge per order or per item with no contracts. You will also be charged a base fee to store your inventory at the warehouse and an additional fee per pallet or per item. Be sure you have a clear understanding of the fulfillment center's costs and any contracts.

When choosing a fulfillment center, create a checklist of the features you would like. Interview a member of the warehouse staff, as well as, their references to make sure the warehouse will meet the needs of your growing eCommerce business. When you outsource order fulfillment, the time that you normally spend packaging orders, managing inventory, and dealing with returns, can now be focused on growing your business. Use this time to expand your product line, enhance your online image, promote your business or expand into new markets.

Copyright 2004. Danna Henderson. All Rights Reserved.

About The Author

Danna Henderson started ZIP Baby in order to provide parents with comprehensive breastfeeding information and a large selection of parenting products. For more information visit Breastmilk Banks.

MORE RESOURCES:

RELATED ARTICLES

Google to Compete with PayPal?
PayPal is secure in its domination over the electronic payment industry, at least for now.Following reports that Google planned to launch a new Internet payment service (nicknamed Google Wallet), Eric Schmidt, CEO of Google, denied that Google would be directly competing with PayPal.
Complementary-Relational Linking and How It Could Save Your Internet Business
The concept of linking is that sites with common interests should link to drive more traffic to each other's businesses and to increase their "popularity." Search engines, such as Google, give much higher ranking to sites with high popularity.
Intranet Portal - Business Case ROI
The days of easy money are overIn these post-dot-com days of the 21st Century, the hype attached to IT is well and truly over. The modern Board is deeply suspicious of large IT projects with questionable benefits and a long-term payback period.
Dont Get Ripped Off Getting A Merchant Account
Far too many people get ripped off when setting up a merchant account for their online business. The biggest reason is that they don't understand their options and are intimidated by the whole process.
Accept Credit Cards Online Without a Merchant Account
There are two major ways to accept credit cards on your website. The first and most expensive is to have your own merchant account.
The Rise of Multinational Virtual Corporations
The virtual corporation is the emerging organisational form, which best combines, a fluid ability to adapt to rapidly changing markets and is able to leverage its skills with the complementary skills of other corporations. In the concept's purest form, each company that links up with others to create a virtual corporation will be stripped to its essence.
Online Customer Service - The Cornerstone of a Successful Online Business
Online customer service is still one of the most frequently overlooked aspects of running a successful online business. Yet, in the highly competitive world of Internet business, it could be (and should be) the one thing that sets you apart from your competition!Most Internet businesses that have a drive to succeed focus all of their time and resources on building a great site, and then trying to drive tons of traffic to that site.
How To Start An Internet Business - Content, Content, Content
When it comes to e-commerce, the time-tested cliché is, "Content is king." In this case, the cliché is correct.
Cost Effective Ecommerce Solutions
Ecommerce use to be about spending thousands of dollars on setting up your shop and hundreds of dollars on getting a merchant. My, how things have changed over the years.
Choosing an Ecommerce Shopping Cart
Choosing an online shopping cart is a big decision. Unlike a traditional brick and mortar business, your website is your only chance to impress potential customers.
Why Our Site Was Removed From The ODP
Our website, Best Of The Home, has been listed in the Open Directory Project for over a year. Recently, I conducted a search of the ODP for my site, to update it, and found that it was no longer listed in any category.
How to Boost Conversion Rates, While Lowering Merchant Account Fees!
Using an Address Verification System (AVS) when processing your online credit card transactions can help to reduce the number of fraudulent transactions you receive. However, most online merchants don't know that using AVS can also reduce your number of legitimate orders.
Government Buying and Selling on the Internet
Global Insight, a leading economic and financial forecasting company, (formerly DRI-WEFA), states that all levels of government (federal, state, and local) should see steady increases in the purchases of goods and services through the year 2009.Vendors willing to make the commitment to sell to government can reap the benefits of this projected government spending.
Why Suppliers Should Use B2B Exchanges
Business to business e-commerce is on the rise! Worldwide B2B e-commerce revenues are estimated to reach around US$ 2 trillion in 2004. This is a significant leap from last year's US$ 1.
A Beginners Guide To Setting Up A Successful Online Store
A beginner's guide to setting up a successful online store Online selling is by no means a simple task. To sell products online not only requires making use of high end marketing strategies but also involves lots of planning.
Electronic Commerce and WTO
The Internet may not be useful for all businesses, nor do all have to develop an Internet information strategy. Some businesses are concerned with the start-up costs of connecting such as purchasing hardware and software, subscribing to an Internet connection or service provider, and training staff.
How To Accept Credit Cards Online
Anyone with an online business, whether for auctions, services, or virtually any type of product, has asked the same question at some time during their quest to create the ultimate online business - "How do I accept credit cards?"Since over 90% of all transactions on the Internet involve customers paying by credit card, accepting plastic money rates a must for almost any business.The problem for most small online business owners involves the high cost of setting up and maintaining a credit card merchant account.
Retirement Signature Frames - The Perfect Retirement Gift!
When most people think of a retirement gift, they think of a watch. It's the tried and true gift that companies give employees to say thanks for all the years of hard work.
The Internet Challenge
In spite of the increasing attention on how the Internet is changing the business landscape, many small business owners are still struggling to understand its influence. But unlike the ceaseless blinking of the home VCR, the impact of the Internet cannot be ignored.
The Five Most Commonly Encountered, Off-putting E-commerce Errors
While getting less public handwringing than during holiday season, the "abandoned shopping cart problem" continues to wreak havoc on online sales. Recently I judged a raftload of sites for the Webby Awards (my second time) and for the Inc.