When a business is unable to fulfil their own orders in-house or is challenged with keeping up with customer demand, there is the option of choosing a fulfilment partner. There are several factors to consider before choosing.
What is a Fulfilment warehouse?
A fulfilment warehouse is a third-party firm that handle your product’s picking, packing and distribution side of your business. You will send your stock to fulfilment warehouses from your supplier, the fulfilment warehouse shall then store your stock and then pick, pack, and send off your products whenever an order is processed. Fulfilment warehouses can also offer the processing of returns.
Factors you should consider when choosing a fulfilment partner
Location- This is not the most important aspect to look for however is still something to consider when choosing a fulfilment partner. Choosing a fulfilment warehouse which is centrally located and close to main transport links such as motorways and airports will aid in distribution making the whole process much faster and streamlined. There are many benefits to having a centrally located fulfilment partner. The distance your orders need to travel is directly linked to costs. When your products travel further distances, this increases drive time and the costs sent to drivers. Faster distribution means happy customers which can result in repeat business. Brexit made distribution more of a hassle when dealing with businesses based in Europe, and vice versa. It had been estimated that £575 billion of annual trade between the UK and the EU would be at stake which was caused by impacts of duties, tariffs, and other barriers. Partnering with a fulfilment warehouse within the UK or EU, depending on where you are based, can significantly reduce the issues you will face when distributing.
Integration- This is particularly useful for eCommerce businesses. If you conduct your business through a website you made, or a website platform such as Shopify or Woo Commerce, it is integral that your store’s orders integrate with a third-party fulfilment partner’s order and distribution software. Ecommerce fulfilment UK partners can allow you to integrate your sales channels, be that a website or marketplace with their software. This software could handle product listings, orders, inventory, stock, and shipping from one place. This allows you to run a business smoothly with complete visibility. The integration of a fulfilment warehouses software can aid your business in several ways. Tracking inventory, setting sales rules, giving customers correct shipping costs, and time estimates. These aids can help businesses focus on sales and generating revenue without the concern of distributing goods to customers. This aspect of fulfilment is especially beneficial for eCommerce businesses that lack the ability to store and distribute goods to the same standard as other businesses that have that infrastructure. Nowadays anything can be ordered and delivered within a day, businesses that cannot provide this will be less desirable.
The benefits of an integrated system
- Eliminating manual data entry
- Ensuring accurate inventory counts
- Enabling automatic notifications for order shipping and restocking
- Simplifying business management
- Improving reports and analysis
- Easier to adapt to market change or customer demand
Stock Profile- Check the profile of your stock. It is important to know the dimensions and weight of your product and if that aligns with your chosen fulfilment partner. It is necessary to match your products profile with the capabilities of your fulfilment partner. If they lack the ability or knowledge to store, pick, pack, and distribute your product it will negatively impact your own business.
Costs & Fees-
- Set-up Fees- Most fulfilment warehouses charge set-up fees. This is because the process can be both labour and time costly and is something to consider when choosing your fulfilment partner
- Storage & Warehousing- Costs surrounding storage and warehousing are usually based on how much room your stock takes up within the fulfilment warehouse and will vary on how it is charged for. From the number of pallet spaces to the per cubic feet, this varies from warehouse to warehouse. Storage, as well, varies from warehouse to warehouse. Receive quotes from potential fulfilment partners to compare which one best suit you and your current costs.
- Picking & packing/ Order Processing- Picking and packing fees are a standard cost for each of your business’s eCommerce orders. Additional fees may be charged for extra items packaged however you can expect to be charged that at a reduced rate. When you reach the stage of obtaining quotes from your potential fulfilment partner it is common for them to ask your average number of monthly orders: the volume of orders play a role in picking and packing rates, the higher volume will get you reduced rates on picking and packing, if you have a low volume, you may receive higher order processing rates.
- Goods-In & Return Costs- Goods-In fees are also common in most fulfilment warehouses, however, the costs are relatively low to cover the unloading and unpacking of products, they are usually charged by box, SKU or by pallet. Return fees are also common for fulfilment warehouses as the warehouse will be handling everything on the customer facing side of your business. Dealing with returns, replacements, and refunds. Make sure to check what a fulfilment warehouse will charge for returned products.
- Minimum Fees- Minimum fees can be put in place by a fulfilment warehouse once partnering up. This is usually to save them from running at a loss by ensuring your business meets their minimum order requirements. These costs will be low, but it is up to you to make sure your average monthly orders will exceed the fulfilment warehouses minimum fees.
Ecommerce Fulfilment UK
How does eCommerce fulfilment work?
When a customer places an order through a sales channel, eCommerce software will produce a despatch note which will enable you to pick the correct products from your inventory. Products are then packed and despatched to the customer via a chosen courier.
The Growth of eCommerce
In 2021 eCommerce had a market value of £4.9 trillion and is predicted to increase to £6.4 trillion by 2024. Sales on mobile devices will make up £3.79 trillion of market value by 2022. Over the recent pandemic eCommerce has grown exponentially and is down to young consumers who have spent 67% more money online shopping. With the inability to shop physically, online shopping became the soul service in the industry that could still sell products. Ecommerce businesses can personalise shopping experiences for their customers which more than 50% of shoppers say is most important as well as 57% of shoppers expressing a willingness to purchase products from new, and independent, businesses. Ecommerce is shifting existing businesses and by 2022, over 120,000 stores will be using augmented reality technologies ultimately enriching the buying experience.
What makes us a suitable eCommerce fulfilment partner for you
Here at OnLogistics we are partnered with several companies that take advantage of our fulfilment services. These companies stock a range of products from: fitness tech, fitness apparel, home furniture, and bathroom appliances. What makes us a good choice for your fulfilment needs is that we incorporate all factors mentioned in this blog. We are located in between Birmingham airport and the M42 which enables quick and easy distribution due to access to many transport links. An easy software system already integrated, tried and tested with current partners that will streamline your supply chain and complete visibility of the distribution processes. As well as sound customer service to promote repeat business. We have already been fulfilling the needs of our current partners with a high level of professionality with little to no issues so far. Our costs are competitive and like any fulfilment operation is flexible to change depending on product volume.
One of our trusted partners, eWarehousing, work with us to support businesses supplying clothing products to appliance and fitness tech eCommerce companies. OnLogistics support a range of businesses with fulfilment of their products, incorporating everything that has been mentioned in this blog.
If you are interested in taking us on as your fulfilment partner, feel free to request a key feature document for a free consultation here, or contact us- firstname.lastname@example.org