Order fulfillment services are a mystery to many merchants, as they have only seen a recent rise in popularity. Predominantly due to the explosion of eCommerce over the past few years, fulfillment services are enabling merchants to become truly virtual, having no need for physical locations of any kind in order to run their businesses from front to back. When eCommerce came onto the scene ten years ago, most traditional merchants did not see it as any threat because the general population did not fully trust that their online purchase would be secure, or that they would receive the goods they had purchased. Others did not feel comfortable buying anything that they could not physically touch or try on, which made eCommerce an uphill battle. As time went on, eCommerce merchants were able to offer an added benefit that outweighed the risks, being the ability to offer the same products you would buy in a traditional location for a fraction of the cost. This was simply due to the fact that the eCommerce merchant did not need to pay for the rents and utilities of a physical space, nor the employees necessary to make sales. All of these tasks were performed by software on websites, the only real necessity for physical spaces and employees coming in the form of the warehouse where inventory was stored and the employees that process the orders for customer shipment. With the advent of fulfillment companies, eCommerce merchants can reduce their prices even more as now the warehouses and fulfillment employees are no longer necessary.
Fulfillment companies utilize software to receive the orders from their client’s customers, and use their own employees to pull the orders from inventory that is stored in a shared warehouse space. The merchant simply arranges for a certain amount of space in the fulfillment company’s warehouse, and pays a fee per piece shipped to customers who order on the merchant website. These orders are generally able to be processed for fees significantly lower than if you had your own employee base and warehouses. An additional benefit is that many fulfillment companies offer warehouse space on both the east and west coasts, allowing the order to always be routed from the warehouse closest to the customer. This saves on shipping charges on every order, as well as getting the customer the order in a fraction of the typical shipping time.
Shipping fulfillment is not for every business, but for those eCommerce merchants who want to become fully virtual, not manage employees or warehouse space, and save money all at the same time, it is a valuable consideration.
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