What is the fulfillment process?
After you have produced an order of CDs or DVDs, the next step is fulfillment and distribution to the products out.
The fulfillment process is when an order for a product is received-the “fulfillment” of the order. This includes warehousing, finding the item ordered, packaging it, and shipping it to the right address.
Warehousing
Your fulfillment center should store your inventory for you off-site. They will generally order new products from you when they run low, and most will allow you to monitor the inventory online.
Order processing
When your business receives an order from a customer, your company passes it on to the fulfillment center, usually online-invoices can be emailed or organized into spreadsheets, which are automatically sent on. Some fulfillment centers can even provide e-commerce storefront that can be integrated to your website, so the online purchase will be sent to the processing center directly. The fulfillment center will then select the item from your inventory and make sure it gets to the right address. Packing and shipping is automated at most of the larger fulfillment centers.
Shipping
Most fulfillment companies will use shipping companies such as the USPS, UPS, DHL and FedEx. Often a fulfillment house, because of its high volume, can offer shipping discounts that their clients would not be able to get on their own.
Advantages
Many clients may not have adequate funds for storage facilities to store merchandise. Fulfillment companies typically have thousands of square footage for storage, and the storage costs they pass on to clients will typically be less than the clients would pay to store the products on their own.
Unless your company is shipping thousands of products per month, you will not get the “bulk” shipping rates available to fulfillment companies. The amount of savings can often be 30% or more. In some cases, the savings associated with shipping bulk rates can outweigh the costs of the fulfillment company itself, making the fulfillment costs effectively zero.
Similar to the savings associated with shipping costs, shipping materials (i.e. envelopes, boxes, labels, etc.) bought in bulk by a fulfillment company also are purchased at lower rates. Compared to purchasing supplies for shipping through places like Office Depot, savings can amount to up to 50%. Your potential savings depends on the fulfillment company.
For companies of all sizes, including small startups, using the services of a fulfillment house can be a cost effective solution, saving you money and taking a bothersome task off your plate.
A great solution we like to recommend is Fulfillment by Amazon, it does everything we mentioned above, from storing your merchandise, order processing, pick and pack, to shipping. For a more customized solution please contact our sales representative.
