What Is An Order Fulfillment Center?
E-commerce has become an essential service to our modern society. Rather than visiting brick-and-mortar stores, many consumers prefer the ease and convenience of shopping online. They can get anything they want delivered right to their door.
To that end, most online shoppers rarely consider the journey their purchase takes. What is this magical, invisible force behind e-commerce? Order Fulfillment centers.
Order fulfillment centers keep the world of e-commerce running smoothly through the use of supply chain optimization. To learn about the benefits of order fulfillment centers, keep reading.
What is an Order Fulfillment Center?
In the past, warehouses stored inventory until it was shipped to retail stores. With online shopping, retail stores are often cut out of the order fulfillment process. Instead, products are sent directly from the warehouse to customers’ doorsteps.
These modern warehouses are better known as order fulfillment centers since they provide a full-suite of fulfillment services. These supply chain tasks include:
Receiving inventory from manufacturers/suppliers
Storing inventory in a secure facility
Picking and packing products once they’re been ordered
Shipping these items direct to customers
Addressing customer service inquiries from brands
Managing the product returns process
Order fulfillment centers are run by third-party logistics (3PL) providers.
What is a Third-Party Logistics (3PL) Provider?
As a business owner, you probably don’t have time to manage an order fulfillment center on your own. You have other core business functions to attend to, like growing your business!
Rather than renting out your own warehouse, hiring staff, and negotiating with shipping carriers, paying healthcare, retirements and general overhead operational expenses, you can let a 3PL fulfillment partner do this work for you.
3PL providers run thriving order fulfillment centers that are ready-made to carry out order fulfillment services. They’re filled with a dedicated staff of logistics experts. Thus, they will ensure your inventory is taken care of properly and that your customers are satisfied.
How Does a Fulfillment Center Work?
Fulfillment centers make sure your packages are delivered to customers efficiently and accurately through their own warehousing and delivery operations.
Here’s a breakdown of the order fulfillment process:
You send your inventory to the fulfillment center.
They scan your inventory and store it in their warehouse facility.
Once a customer completes a purchase on your website, or partner website, the 3PL staff member picks the correct item from the inventory stockpile.
Next, they pack the item for shipping and prepare the shipping label.
Soon after, they ship the order and provide your customer with a tracking number.
If the product gets returned, they accept the item back into their warehouse.
Their customer support team responds to all customer inquiries.
Behind the scenes, order fulfillment centers also negotiate with shipping carriers and packaging vendors to score the best prices. Since they operate on a large scale, they’re able to lock into much lower rates than you ever could as an individual business.
The Benefits of Using an Order Fulfillment Center
By using Verde Fulfillment USA you’ll enjoy these benefits:
Ease of outsourcing – Your business requires your full attention. By outsourcing to Verde Fulfillment USA you can let us take care of the fulfillment as you focus on other pressing business matters, like growing your business!
Lower operational costs – Managing a fulfillment center is a complex operation. It comes with high operational costs, including rent, utilities, labor, training, supplies, software, employee benefits and more. If you opened your own warehouse, you’d have to pay for each of these expenses in full. In contrast, by using an established fulfillment solution, you’re only charged a small fraction of these costs.
Simplified shipping at scale – If you run a small e-commerce business, you can get away with stopping by the post office every couple of days to ship packages. However, once your business grows, this is no longer feasible. Your business needs fulfillment staff and infrastructure to manage shipments strategically. Verde Fulfillment USA provides just that.
Cheaper shipping costs – Shipping carriers give lower rates to customers who ship in high volumes, like Verde. Individual businesses ship much lower volumes than fulfillment centers, which combine multiple businesses shipping volumes into one. In other words, fulfillment centers enjoy economies of scale that enable them to negotiate outstanding rates with shipping carriers. By using Verde Fulfillment USA, you can ship your products using these low rates.
Faster shipping times – Fulfillment centers have the space, software, and staff to get shipments out expediently. They also choose their location strategically for this purpose. In turn, we enable you to offer your customers fast, 2-day shipping.
Fewer mistakes – During the shipping process, mistakes happen. Sometimes a product gets shipped to the wrong person or the wrong item gets sent out. When you outsource to a Verde, this doesn’t happen. Verde uses advanced inventory tracking software to prevent mistakes from happening in the first place.
Advanced software solutions – Fulfillment centers can afford to invest in the latest logistics technology. This advanced web-based software tracks the precise location of your inventory as it travels throughout the fulfillment center and to your customer’s door. In turn, Verde always knows exactly where each item is. Our web-based software integrates with your e-commerce platform, so you and your customers can track shipments.
Outstanding customer service – Fulfillment centers also provide customer service for brands. Many 3PLs have dedicated customer service teams that devote their entire attention to satisfying you, and thus your customers indirectly. By outsourcing this department to a fulfillment center, it can save your business a ton of time, money, and hassle.
Logistical expertise – Logistics is complex and challenging. It takes a lot of experience to ensure optimal order processing and inventory management. Verde has the expertise to ensure your shipments are handled properly, even during peak shopping seasons.
With so many benefits, fulfillment centers are an incredible tool for any e-commerce business looking to sustain its success and provide its customers with a flawless shipping experience. And Verde Fulfillment USA should be your choice.
What is the Difference Between a Fulfillment Center and a Distribution Center?
Now that you understand what a fulfillment center is and what it has to offer, you may be wondering how it differs from a distribution center.
What is a Distribution Center?
Like fulfillment centers, distribution centers handle order fulfillment and shipments. However, they are run by the business or brand itself, rather than a third-party provider.
One benefit of distribution centers is that they give companies more hands-on control over their shipping process. However, they also come with high operating costs and require a lot of work to manage. Most distribution centers are run by multi-million dollar brands.
As a result, most companies are better served by outsourcing to an order fulfillment center service.
What is an Amazon Fulfillment Center?
The e-commerce powerhouse Amazon has over 175 dedicated fulfillment centers worldwide, primarily concentrated in North America and Europe. These fulfillment centers allow Amazon to offer rapid shipping.
If you sell on Amazon, you know this service is quite expensive. In turn, many e-commerce companies prefer to use a 3PL fulfillment company instead of Amazon for their fulfillment needs.
Why Choose a 3PL Fulfillment Center over Amazon FBA?
Some notable drawbacks of Amazon FBA include:
Costly fees – Amazon FBA comes with many fees for storage, fulfillment, and other unexpected costs. Over time, these add up and cut into your profit margins.
Strict preparation guidelines – Amazon’s fulfillment centers only accept inventory that’s packed according to their extremely strict guidelines. If your manufacturer or supplier can’t prepare your inventory properly, you may have to hire a third-party to change them to Amazon’s standards. This can easily make Amazon FBA unaffordable and inefficient.
Lack of branding control – Amazon ships all their packages in a uniform way, using their own branding. If you’d prefer to use your custom branding design, you’re out of luck.
Impersonal customer support – As an Amazon FBA customer, if you need to call Amazon’s customer support, you’ll probably talk to a different representative every time, if you can even reach one. That is not how you offer quality customer support.
Verde Fulfillment USA doesn’t come with these drawbacks. Instead, we offer you flexibility, control, and personalized accommodations.
While 3PLs charge for their services, they’re often much more affordable than Amazon FBA. You won’t have to worry about Amazon’s strict packing guidelines or use Amazon’s branding. Best of all, you’ll get to work with a dedicated Verde Client Coordinator that understands your business and develops a lasting relationship with your team.
Verde Fulfillment: A Top-Notch 3PL and Order Fulfillment Center
If you’re ready to partner with a 3PL, look no further than Verde Fulfillment USA. Verde is an e-commerce fulfillment expert that will work closely with your business to help you achieve your goals and extended growth.
Verde Fulfillment USA has over 82 different integrations available, making it easy to connect our services with your business model. We also use eco-friendly packaging materials so you can run a more sustainable business. Most notably, each of our clients gets matched with a dedicated Client Coordinator. This way, they can develop a valuable, two-way relationship and stay in the loop about the status of their inventory, orders, etc.
Verde Fulfillment USA offers super fast and cheap shipping, with a 2-day guarantee within the US. In turn, your customers can enjoy speedy shipments. Lastly, over half of Verde Fulfillment’s clients are international, so we have extensive experience with worldwide order fulfillment. Reach out to Verde Fulfillment today!